Layman Borrowers Not Liable For Forgery If Even Bank's Legal Experts Failed To Detect Fabrication In Title Deeds: Allahabad High Court

"If with all his experience and legal acumen the learned Advocate... could not detect any illegality and fabrication in the title documents submitted by the borrowers/bank, then how it was possible for the layman borrowers to detect any such illegality or fabrication?" Allahabad High Court, in a significant ruling dated July 14, 2026, held that criminal proceedings for forgery and cheating cannot be sustained against individuals who were themselves victims of a fraudulent scheme involving fabricated title documents.

A bench of Justice Sandeep Jain observed that when even legal experts fail to detect the fabrication in title deeds during due diligence, layman borrowers cannot be held criminally liable for acting upon such documents in good faith. The court emphasized that for an offense of forgery to be made out, the accused must be the "maker" of the false document with specific criminal intent.

The applicant, Ritesh Jaiswal, moved the High Court under Section 482 CrPC seeking to quash a chargesheet filed under Sections 420, 467, 468, and 471 of the IPC. The prosecution alleged that the applicant, acting as a guarantor, and his parents attempted to secure a bank loan of ₹10 lakhs using forged documents, including a Power of Attorney (POA) purportedly executed by a landowner who had died 17 years prior. The fraud was detected when the bank manager conducted a site visit and was informed by the deceased's heirs that no such authority had been granted to the co-accused, Vikram Asthana, who had entered into a sale agreement with the applicant's parents.

The primary question before the court was whether a guarantor can be held liable for forgery and cheating under the IPC when the fabrication of documents was allegedly carried out by a third party. The court was also called upon to determine if the ingredients of Sections 463 and 464 IPC are attracted against a person who did not create or sign the forged instrument but acted as a bona fide purchaser or guarantor.

Court Explains Ingredients Of Forgery Under Section 463 & 464 IPC

The Court relied extensively on the Supreme Court’s decision in Sheila Sebastian vs. R. Jawaharaj, noting that the offense of forgery necessarily requires the "making of a false document" as substanstiated by Section 464 IPC. The bench observed that a charge of forgery cannot be imposed on a person who is not the actual maker of the document. It was clarified that making a document is distinct from causing it to be made, and unless the accused is the creator or signatory of the false instrument, they cannot be held liable for the offense.

"An offence of forgery cannot lie against a person who has not created it or signed it."

Distinction Between Executing A Deed Without Title And Forgery

Citing Mohd. Ibrahim v. State of Bihar, the Court highlighted the fundamental difference between a person executing a sale deed claiming a property is theirs and a person impersonating the true owner. The bench noted that even if a person dishonestly claims property title that does not vest in them, it does not constitute the execution of a "false document" under Section 464 unless there is impersonation or unauthorized alteration. In the present case, the court found that the applicant had not impersonated anyone nor were they involved in the physical fabrication of the POA.

Layman Borrowers Not Expected To Outperform Legal Professionals In Due Diligence

The Court found it "pertinent" that the bank had obtained a legal opinion from a panel advocate who, after perusing the documents and conducting a search at the sub-registrar's office, certified the title deeds as genuine. Justice Jain remarked that it would be inherently unjust to prosecute a layman for failing to spot a forgery that a trained legal professional with years of experience could not detect. The court noted that the advocate’s report explicitly stated that the borrowers would acquire a marketable title, reinforcing the applicant's claim of bona fide conduct.

"If with all his experience and legal acumen the learned Advocate... could not detect any illegality... then how it was possible for the layman borrowers to detect any such illegality or fabrication?"

Absence Of Mens Rea And Criminal Conspiracy

The bench observed that the applicant’s parents were "befooled" by the main accused, Vikram Asthana, who convinced them he held a valid POA. The court reasoned that no prudent person would pay an advance of ₹50,000 and apply for a bank loan to purchase a property knowing the title was void, as they would stand to gain nothing. Since the applicant was merely a guarantor for a loan that was never actually disbursed, the court held that no liability could be fastened upon him, and no criminal conspiracy was evident from the record.

Negligence Of Heirs In Mutating Revenue Records Contributed To Fraud

The Court also pointed out that while the original owners had died in 1990, their legal heirs failed to mutate their names in the revenue records (Khatauni) for 17 years. This administrative lapse created a misleading impression that the deceased were still alive, which was exploited by the main fraudster and believed by the applicant, his parents, and the bank’s counsel. The bench noted that had the heirs performed their "bounden duty" to update the records, the fraud could not have been perpetrated.

Abuse Of Process To Continue 19-Year-Old Proceedings Against Victim Of Fraud

Invoking the principles laid down in State of Haryana v. Bhajan Lal, the Court held that continuing the criminal proceedings would be an abuse of the process of law. Given that the matter had been pending for nearly 19 years and the allegations, even if taken at face value, did not prima facie constitute an offense against the applicant, the bench determined that no useful purpose would be served by forcing the applicant to face trial at this late stage.

The High Court allowed the application and quashed the chargesheet and all incidental proceedings against Ritesh Jaiswal. While the court could not grant direct relief to the co-accused mother as she was not a party to the petition, it granted her liberty to move a discharge application before the trial court. The trial court was directed to dispose of such an application on merits within two months, with a protection against coercive action in the interim.

Date of Decision: 14 July 2026