Karnataka High Court
Sri. Sandeep Gururaj vs State Of Karnataka on 25 May, 2022
Author: M. Nagaprasanna
Bench: M. Nagaprasanna
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF MAY, 2022
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.2866 OF 2022
BETWEEN:
SRI SANDEEP GURURAJ
S/O S.V.GURURAJ
AGED ABOUT 40 YEARS
PRESENTLY RESIDING AT
B-04, V.K.RESIDENCY
DR.SHIVARAMKARANTH ROAD
CHIKKALSANDRA
BENGALURU - 560 061.
... PETITIONER
(BY SRI GAUTAM S.BHARADWAJ, ADVOCATE)
AND:
1. STATE OF KARNATAKA
STATION HOUSE OFFICER
CUBBON PARK P.S.,
BENGALURU - 560 001.
2. M/S LEGAL GLOBAL PROJECTS PVT. LTD.,
HAVING OFFICE AT NO.333
THIMMAIAH ROAD
BENGALURU - 560 052
REPRESENTED BY ITS
AUTHORIZED SIGNATORY.
... RESPONDENTS
(BY SMT.K.P.YASHODHA, HCGP FOR R1;
SRI S.K.VENKATA REDDY, ADVOCATE FOR R2)
2
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN
C.C.NO.8330 OF 2021 ARISING OUT OF CRIME NO. 14/2020
AGAINST THE PETITIONER HEREIN, PENDING ON THE FILE OF IV
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, FOR THE
ALLEGED OFFENSES PUNISHABLE U/S 120B, 406 AND 420 OF
INDIAN PENAL CODE 1860.
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 08.04.2022, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE
FOLLOWING:-
ORDER
The petitioner calls in question proceedings in C.C.No.8330 of 2021 arising out of Crime No.14 of 2020 registered for offences punishable under Sections 120B, 406 and 420 of the IPC.
2. Heard Sri Gautam S.Bharadwaj, learned counsel for the petitioner, Smt K.P.Yashoda, learned High Court Government Pleader for respondent No.1 and Sri S.K.Venkata Reddy, learned counsel for respondent No.2.
3. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows:- 3
The petitioner is accused No.1 in the aforesaid proceedings. The transaction between the complainant and the other accused and the role of petitioner/accused No.1 is in the following manner:
One Sri N.Narasimha Reddy in terms of registered sale deeds purchased property in Sy.Nos.49/P12 and 49/P19 measuring about 1 acre 11 guntas in Jigani Hobli, Anekal Taluk. The aforesaid land became subject matter of agreements to sell and General Power of Attorney in favour of one Sri P.Raveendra/accused No.3. The complainant/Company entered into a Retainership Agreement with M/s Beehive Advisors, owing to the special expertise i.e., consultancy services and M/s Beehive Advisors was to provide consultancy services to the complainant. The petitioner was one of the partners of partnership firm M/s Beehive Advisors. The agreement going wrong between the parties' results in a private complaint being registered by the Company alleging that accused No.1/petitioner introduced accused No.3, a realtor to the complainant. Based on series of correspondences between the complainant and the 4 petitioner, a Term Sheet/MOU was drawn up between the complainant and accused No.3 for the purpose of purchasing land that was held by accused No.3 in terms of the aforesaid agreement of sale. In terms of the Term Sheet several amounts had to be deposited by the complainant/Company for the said purchase. The petitioner is not a party or signatory to the Term Sheet or MOU dated 20-12-2017. The role of the petitioner is holding of escrow account with regard to M/s Beehive Advisors. To the said escrow account on 22-12-2017, 26-12-2017 and 28-12-2017 Rs.50/- lakhs each was deposited which was to be paid to the land owner upon scrutiny and execution of agreements as the petitioner had taken the responsibility of executing these documents as escrow agent and the money was deposited into the escrow account.
4. On verification, it was noticed by the complainant that the lands afore-quoted were Government lands and did not even belonged to accused No.3. The allegation in the complaint is that accused No.3 along with accused No.2 a partner in M/s 5 Beehive Advisors and wife of the petitioner, had indulged in criminal conspiracy with accused No.1 to cheat the complainant and the transaction is entered into, the subject matter of which is the land which did not even belonged to accused No.3. These transactions and the transfer of money takes place on 22-12-2017, 26-12-2017 and 28-12-2017 and the complaint is registered on 29-02-2020 for offences punishable under Sections 120B, 406 and 420 of the IPC against three accused persons one of whom is the petitioner.
5. Pursuant to the investigation conducted by the Police, a charge sheet is filed on 24-03-2021 with a requisition for filing of supplementary charge sheet later on. The learned Magistrate takes cognizance of the offences in terms of the charge sheet filed on 24-03-2021 and then issued summons to the accused in C.C.No.8330 of 2021 for the offences punishable under the aforesaid provisions. Accused No.3 did not appear before the Court and the learned Magistrate split the charge sheet against accused No.3 and ordered to proceed against the 6 petitioner/accused No.1 and his wife/accused No.2 and the company M/s Beehive Advisors, accused No.4. It is calling in question the aforesaid registration of crime and issuance of summons against the petitioner, the petitioner has knocked the doors of this Court in the subject petition.
6. The learned counsel appearing for the petitioner contends that the entire events have taken place between July 2016 and December 2017 and the complaint came to be registered only on 29-02-2020 against the petitioner, his wife/ accused No.2 and the company/accused No.4 which is after an inordinate delay of nearly 2½ years. This, according to the learned counsel for the petitioner vitiates the proceedings. It is the further contention of the learned counsel that the order taking cognizance suffers from non-application of mind. He would finally submit that the interpretation of an agreement between the parties - either the Term Sheet or the MOU pursuant to which the transactions have happened is a matter which is purely contractual in nature and the criminal law is set 7 in motion for recovery of money which arose out of a contract and would submit that the complaint itself was not maintainable.
7. On the other hand, the learned counsel representing the 2nd respondent would vehemently refute the submissions and contend that it is on the assurance of the petitioner who is the partner in the firm M/s Beehive Advisors, which is owned by the family of the petitioner, the Term Sheet or MOU was drawn up. The transfer of amount on the assurance of the petitioner has happened to the escrow account held by him. It is the contention of the learned counsel that there are several transactions between the parties and one such transaction is the present one. He would submit that the role of the petitioner for being accused No.1 is clearly brought out in the complaint and the product of investigation is the charge sheet. In all, the learned counsel for the 2nd respondent would submit that the petitioner and his company have induced the complainant/company to deposit amounts into their account for 8 the purpose of purchase of lands which did not even belonged to accused No.3 and, therefore, would submit that a clear case of criminal conspiracy, breach of trust and cheating is made out and would submit that it is a matter for trial in which the petitioner along with other accused have to come out clean.
8. I have given my anxious consideration to the submissions made by the respective learned counsel and perused the material on record.
9. The afore-narrated facts with regard to the petitioner being the partner of M/s Beehive Advisors, M/s Beehive Advisors receiving the amount from the complainant/company for the purpose of purchase of lands in terms of the Term Sheet/MOU drawn up between the parties are not in dispute. The role of the petitioner is that of an escrow agent and the account held by M/s Beehive Advisors was an escrow account for the specific purpose of purchase of lands in question. 9
10. The deposit of the amount totaling to Rs.1.5 crores to the escrow account held by the petitioner is also not in dispute. The complaint came to be registered against the petitioner and other partners in the company on 29-02-2020 after several transactions between the petitioner and the complainant/company. The argument of the learned counsel for the petitioner in the first blush would sound acceptable insofar it pertains to delay in the matter. This would get obviated on a perusal of the narration in the complaint. The complaint averments reveal that all was well between the parties up to 2018. The petitioner and other partners of M/s Beehive Advisors were arrested in some other case in the month of December, 2018, when this came to the knowledge of the complainant's company, it is their contention that they tried to contact others of the company of the petitioner and accused No.3.
11. It is further contended that accused No.3 every time evaded the calls and it is later the complainant/company did a physical examination of the survey number and on verification of 10 records at the offices of the Government, the complainant/company came to know that they were lands belonging to the Government. The complainant/ company also claims knowledge of accused No.3 being the owner of a small portion of land of 4 guntas and he wrongly represented to the complainant's company through the petitioner that he was the owner of land in Sy.Nos.49/P12 and 49/P19 as afore-quoted and totally a sum of Rs.1,74,00,000/- which had been transferred to the escrow account held by the petitioner and his family is misappropriated by the petitioner.
12. The aforesaid are clear averments in the complaint. The Police, after investigation, have also filed a charge sheet in the matter. The summary of the charge sheet as found in column No.7 clearly demonstrates albeit, prima facie, the role of the petitioner in the entire transaction. Therefore, on all the afore-quoted intricate details of transactions between the parties would without doubt need a full blown proceeding against the petitioner. It is for the petitioner to come out clean in those 11 proceedings, as the entire issue is in the realm of disputed questions of fact, which cannot be gone into at this stage of the proceedings. Insofar as the judgment relied on by the learned counsel appearing for the petitioner in the case of VIJAY KUMAR GHAI AND OTHERS v. STATE OF WEST BENGAL AND OTHERS1 is concerned, it is distinguishable on facts obtaining in the case at hand without much ado, as the case therein was with regard to a dispute pertaining to agreement and breach of promise or contract. The finding of the Apex Court is that a breach of promise de hors dishonest intention cannot amount to criminal breach of trust or cheating as it would be in the realm of contract between the parties. The finding of the Apex Court in the case therein was that the entire origin of the dispute had emanated from the investment made by the complainant in the equity shares which finally culminated into an MOU between the parties. It is the interpretation of the said MOU and its breach that had led to registration of crime against the petitioner therein.
1 2022 SCC Online SC 344 12
13. The case at hand is not the one wherein an agreement is entered and the criminal law is made use of for breach of agreement. Prima facie, on a perusal at the complaint and the charge sheet or the objections filed by the 2nd respondent would indicate offence of criminal breach of trust as an amount of Rs.1.5 crores was transferred to the escrow account held by the petitioner for a particular purpose, which did not come about. The amount held by the petitioner was in trust of the complainant/company. That having been breached, it is for the petitioner to come out clean of the said offence. Accused No.3 was introduced by the petitioner to the complainant/company. Prima facie, the complaint and the charge sheet make out the offence against accused No.3 that he did not hold the subject lands and in terms of the Term sheet or MOU, money is transferred to the escrow account for purchase of land which accused No.3 allegedly did not own. Therefore, it is not a case of plain and simple breach of agreement between the parties. The ingredients of Section 415 of the IPC which are necessary to 13 become an offence punishable under Section 420 of the IPC are clearly alleged in the case at hand.
14. Reference being made to the judgment of the Apex court in the case of KAPTAN SINGH v. STATE OF U.P.2 in the circumstances becomes apposite, wherein the Apex Court has held as follows:
"9.1. At the outset, it is required to be noted that in the present case the High Court in exercise of powers under Section 482 CrPC has quashed the criminal proceedings for the offences under Sections 147, 148, 149, 406, 329 and 386 IPC. It is required to be noted that when the High Court in exercise of powers under Section 482 CrPC quashed the criminal proceedings, by the time the investigating officer after recording the statement of the witnesses, statement of the complainant and collecting the evidence from the incident place and after taking statement of the independent witnesses and even statement of the accused persons, has filed the charge-sheet before the learned Magistrate for the offences under Sections 147, 148, 149, 406, 329 and 386 IPC and even the learned Magistrate also took the cognizance. From the impugned judgment and order [Radhey Shyam Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by the High Court, it does not appear that the High Court took into consideration the material collected during the investigation/inquiry and even the statements recorded. If the petition under Section 482 CrPC was at the stage of FIR in that case the allegations in the FIR/complaint only are required to be considered and whether a cognizable offence is disclosed or not is required to be 2 (2021) 9 SCC 35 14 considered. However, thereafter when the statements are recorded, evidence is collected and the charge-sheet is filed after conclusion of the investigation/inquiry the matter stands on different footing and the Court is required to consider the material/evidence collected during the investigation. Even at this stage also, as observed and held by this Court in a catena of decisions, the High Court is not required to go into the merits of the allegations and/or enter into the merits of the case as if the High Court is exercising the appellate jurisdiction and/or conducting the trial. As held by this Court in Dineshbhai Chandubhai Patel [Dineshbhai Chandubhai Patel v. State of Gujarat, (2018) 3 SCC 104 : (2018) 1 SCC (Cri) 683] in order to examine as to whether factual contents of FIR disclose any cognizable offence or not, the High Court cannot act like the investigating agency nor can exercise the powers like an appellate court. It is further observed and held that that question is required to be examined keeping in view, the contents of FIR and prima facie material, if any, requiring no proof. At such stage, the High Court cannot appreciate evidence nor can it draw its own inferences from contents of FIR and material relied on. It is further observed it is more so, when the material relied on is disputed. It is further observed that in such a situation, it becomes the job of the investigating authority at such stage to probe and then of the court to examine questions once the charge-sheet is filed along with such material as to how far and to what extent reliance can be placed on such material.
9.2. In Dhruvaram Murlidhar Sonar [Dhruvaram Murlidhar Sonar v. State of Maharashtra, (2019) 18 SCC 191 : (2020) 3 SCC (Cri) 672] after considering the decisions of this Court in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , it is held by this Court that exercise of 15 powers under Section 482 CrPC to quash the proceedings is an exception and not a rule. It is further observed that inherent jurisdiction under Section 482 CrPC though wide is to be exercised sparingly, carefully and with caution, only when such exercise is justified by tests specifically laid down in the section itself. It is further observed that appreciation of evidence is not permissible at the stage of quashing of proceedings in exercise of powers under Section 482 CrPC. Similar view has been expressed by this Court in Arvind Khanna [CBI v. Arvind Khanna, (2019) 10 SCC 686 :
(2020) 1 SCC (Cri) 94] , Managipet [State of Telangana v. Managipet, (2019) 19 SCC 87 : (2020) 3 SCC (Cri) 702] and in XYZ [XYZ v. State of Gujarat, (2019) 10 SCC 337 : (2020) 1 SCC (Cri) 173] , referred to hereinabove.
9.3. Applying the law laid down by this Court in the aforesaid decisions to the facts of the case on hand, we are of the opinion that the High Court has exceeded its jurisdiction in quashing the criminal proceedings in exercise of powers under Section 482 CrPC.
10. The High Court has failed to appreciate and consider the fact that there are very serious triable issues/allegations which are required to be gone into and considered at the time of trial. The High Court has lost sight of crucial aspects which have emerged during the course of the investigation. The High Court has failed to appreciate and consider the fact that the document i.e. a joint notarised affidavit of Mamta Gupta Accused 2 and Munni Devi under which according to Accused 2 Ms Mamta Gupta, Rs 25 lakhs was paid and the possession was transferred to her itself is seriously disputed. It is required to be noted that in the registered agreement to sell dated 27-10-2010, the sale consideration is stated to be Rs 25 lakhs and with no reference to payment of Rs 25 lakhs to Ms Munni Devi and no reference to handing over the possession. However, in the joint notarised affidavit of the same 16 date i.e. 27-10-2010 sale consideration is stated to be Rs 35 lakhs out of which Rs 25 lakhs is alleged to have been paid and there is a reference to transfer of possession to Accused 2. Whether Rs 25 lakhs has been paid or not the accused have to establish during the trial, because the accused are relying upon the said document and payment of Rs 25 lakhs as mentioned in the joint notarised affidavit dated 27-10-2010. It is also required to be considered that the first agreement to sell in which Rs 25 lakhs is stated to be sale consideration and there is reference to the payment of Rs 10 lakhs by cheques. It is a registered document. The aforesaid are all triable issues/allegations which are required to be considered at the time of trial. The High Court has failed to notice and/or consider the material collected during the investigation.
11. Now so far as the finding recorded by the High Court that no case is made out for the offence under Section 406 IPC is concerned, it is to be noted that the High Court itself has noted that the joint notarised affidavit dated 27-10-2010 is seriously disputed, however as per the High Court the same is required to be considered in the civil proceedings. There the High Court has committed an error. Even the High Court has failed to notice that another FIR has been lodged against the accused for the offences under Sections 467, 468, 471 IPC with respect to the said alleged joint notarised affidavit. Even according to the accused the possession was handed over to them. However, when the payment of Rs 25 lakhs as mentioned in the joint notarised affidavit is seriously disputed and even one of the cheques out of 5 cheques each of Rs 2 lakhs was dishonoured and according to the accused they were handed over the possession (which is seriously disputed) it can be said to be entrustment of property. Therefore, at this stage to opine that no case is made out for the offence under Section 406 IPC is premature and the aforesaid aspect is to be considered during trial. 17 It is also required to be noted that the first suit was filed by Munni Devi and thereafter subsequent suit came to be filed by the accused and that too for permanent injunction only. Nothing is on record that any suit for specific performance has been filed. Be that as it may, all the aforesaid aspects are required to be considered at the time of trial only.
12. Therefore, the High Court has grossly erred in quashing the criminal proceedings by entering into the merits of the allegations as if the High Court was exercising the appellate jurisdiction and/or conducting the trial. The High Court has exceeded its jurisdiction in quashing the criminal proceedings in exercise of powers under Section 482 CrPC.
13. Even the High Court has erred in observing that original complaint has no locus. The aforesaid observation is made on the premise that the complainant has not placed on record the power of attorney along with the counter filed before the High Court. However, when it is specifically stated in the FIR that Munni Devi has executed the power of attorney and thereafter the investigating officer has conducted the investigation and has recorded the statement of the complainant, accused and the independent witnesses, thereafter whether the complainant is having the power of attorney or not is to be considered during trial.
14. In view of the above and for the reasons stated above, the impugned judgment and order [Radhey Shyam Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by the High Court quashing the criminal proceedings in exercise of powers under Section 482 CrPC is unsustainable and the same deserves to be quashed and set aside and is accordingly quashed and set aside. Now, the trial is to be conducted and proceeded further in accordance with law and on its own 18 merits. It is made clear that the observations made by this Court in the present proceedings are to be treated to be confined to the proceedings under Section 482 CrPC only and the trial court to decide the case in accordance with law and on its own merits and on the basis of the evidence to be laid and without being influenced by any of the observations made by us hereinabove. The present appeal is accordingly allowed."
(Emphasis supplied) Again the Apex Court, in a subsequent judgment, in the case of SARANYA v. BHARATHI3 has held as follows:
"12. In the present case, there is sufficient material on record raising the strong suspicion against Respondent 1 herein -- A-2 also. It has been found that A-2 Respondent 1 herein who was serving in the Secretariat and was in touch with the deceased and the complainant as she used to go to Xerox shop owned by the deceased and she introduced A-1 to the complainant and the deceased. It is specifically alleged that she said that she can manage to get the job/employment for the deceased but for that they have to pay. It is true that as per the case of the prosecution and even as per the statement of the complainant, an amount of Rs 5 lakhs was paid to A-1. However, during the course of the investigation, an amount of Rs 1 lakh 20 thousand has been recovered from the house of Respondent 1 herein -- A-2 at the instance of A-2 herself. It may be true that the so-called confessional statement of Respondent 1 herein is inadmissible in evidence. However, it is to be noted that on the basis of such statement, there was a recovery of Rs 1 lakh 20 thousand from the house of A-2 -- Respondent 1 herein. The other 3 (2021) 8 SCC 583 19 aspect whether the recovered amount of Rs 1 lakh 20 thousand was the same amount which was given by the deceased and the complainant to A-1 is a matter of evidence to be considered during trial. Even the source of Rs 1 lakh 20 thousand might have to be explained by the accused.
13. It also appears that during the course of the investigation, the investigating officer has collected very important evidence in the form of call details between A-1 and A-2 which are in the proximity of the time of commission of offence and even thereafter. Therefore, in the facts and circumstances of the case, when Respondent 1 herein has been chargesheeted for the offences under Sections 420, 302 read with Section 109 IPC and as observed hereinabove when there is ample material to show at least a prima facie case against Respondent 1 herein -- A-2, the High Court has committed a grave error in quashing the charge-sheet/entire criminal proceedings qua her in exercise of powers under Section 482 CrPC. Quashing the charge-sheet against the accused is not justified. The High Court has evidently ignored what has emerged during the course of investigation. The High Court has entered into the appreciation of the evidence and considered whether on the basis of the evidence, the accused is likely to be convicted or not, which as such is not permissible at all at this stage while considering the application under Section 482 CrPC. The High Court was not as such conducting the trial and/or was not exercising the jurisdiction as an appellate court against the order of conviction or acquittal. Therefore, in the facts and circumstances of the case, the High Court ought not to have quashed the charge-sheet qua Respondent 1 herein -- original Accused 2. 20
14. In view of the above and for the reasons stated above, the present appeal succeeds. The impugned judgment [Bharathi v. State, 2020 SCC OnLine Mad 16030] and order passed by the High Court quashing the charge-sheet/criminal proceedings in PRC No. 250 of 2019 on the file of the learned Metropolitan Magistrate, Egmore, Chennai for the offences under Sections 420, 302 read with Section 109 IPC qua Respondent 1 herein -- original Accused 2 deserves to be quashed and set aside and is accordingly quashed and set aside. Now the learned Magistrate to proceed further with the case, in accordance with law. It goes without saying that any observations made by this Court in the present order shall be confined to while considering the application under Section 482 CrPC and the trial in the aforesaid case shall proceed further on its own merits, in accordance with law on the basis of the evidence laid."
(Emphasis supplied) In the light of the facts narrated hereinabove and the law laid down by the Apex Court in the aforesaid cases, it would become a matter of trial for the petitioner to come out clean, as serious disputed questions of fact being present, cannot be gone into in the case at hand.
15. Even the delay of 2½ years in registering the complaint, which the learned counsel for the petitioner takes it as a preliminary contention, becomes unacceptable in the light 21 of the narration of the aforesaid facts. It is germane to notice the judgment of the Apex Court in the case of SKODA AUTO VOLKSWAGEN (INDIA) (P) LTD. v. STATE OF U.P.4 wherein the Apex court considering these very factors with regard to interpretation of an agreement between the parties therein holds that mere delay on the part of the complainant in registering the complaint cannot by itself be a ground to quash the FIR. The Apex Court holds that it is too well settled a principle of law and would not warrant any reference to precedence. The Apex Court holds as follows:
"18. The mere delay on the part of the third respondent complainant in lodging the complaint, cannot by itself be a ground to quash the FIR. The law is too well settled on this aspect to warrant any reference to precedents. Therefore, the second ground on which the petitioner seeks to quash the FIR cannot be countenanced."
Therefore, none of the grounds urged by the learned counsel appearing for the petitioner would merit acceptance. 4 (2021)5 SCC 795 22
16. Accordingly, the Criminal Petition fails and consequently, meets its dismissal.
It is made clear that the observations made in the course of this order are only for the purpose of consideration of the case of the petitioner for quashment of proceedings under Section 482 of the Cr.P.C. These observations shall not influence or bind further proceedings against the petitioner or any other accused in the matter.
Consequently, I.A.No.1/2022 stands disposed.
Sd/-
JUDGE bkp CT:MJ