Karnataka High Court
Aikya Business Solutions Pvt Ltd vs Dr Ravi Raja M E on 4 April, 2024
Author: K.Natarajan
Bench: K.Natarajan
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR JUSTICE K.NATARAJAN
CRIMINAL PETITION NO.7151 OF 2023
CONNECTED WITH
WRIT PETITION NO.18683 OF 2023
CONNECTED WITH
WRIT PETITION NO.19892 OF 2023
CONNECTED WITH
CRIMINAL PETITION NO.10996 OF 2022
IN CRIMINAL PETITION NO. 7151 OF 2023
BETWEEN:
M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.41/7, 'THE GRANDIOS',
3RD FLOOR, 15TH CROSS,
MALLESHWARAM,
BENGALURU - 560 003.
REPRESENTED BY ITS DIRECTOR,
SRI. RAVIKUMAR H M.,
S/O H. N. MAYANNA,
AGED ABOUT 43 YEARS.
...PETITIONER
(BY SRI. RAVI B. NAIK, SENIOR ADVOCATE FOR
SRI. R. P. SOMASHEKHARAIAH, ADVOCATE)
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AND:
DR. RAVI RAJA M E
S/O E. M. PANDIYAN,
AGED ABOUT 55 YEARS,
R/AT NO.3683-1A-42,
10TH CROSS ROAD,
ANJANEYA LAYOUT,
DAVANAGERE - 577 005.
...RESPONDENT
(BY SRI.B.S. SATYANAND, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF CR.P.C. PRAYING TO SET ASIDE THE ORDER DATED
29.02.2020 MADE IN PCR NO.190/2019 ON THE FILE OF
THE JMFC - III, DAVANAGERE UNDER ANNEXURE-L.
IN WRIT PETITION NO. 18683 OF 2023
BETWEEN:
M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.98, RESIDENCY ROAD,
ASHOKNAGAR,
BENGALURU - 560 050.
REPRESENTED BY ITS DIRECTOR,
SRI. RAVIKUMAR H M.,
S/O H. N. MAYANNA,
AGED ABOUT 43 YEARS.
...PETITIONER
(BY SRI. RAVI B. NAIK, SENIOR ADVOCATE FOR
SRI. R. P. SOMASHEKHARAIAH, ADVOCATE)
AND:
DR. RAVI RAJA M E
S/O E. M. PANDIYAN,
AGED ABOUT 55 YEARS,
R/AT NO.3683-1A-42,
3
10TH CROSS ROAD,
ANJANEYA LAYOUT,
DAVANAGERE - 577 005.
...RESPONDENT
(BY SRI. B.S. SATYANAND, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
& 227 OF THE CONSTITUTION OF INDIA READ WITH
SECTION 482 OF CR.P.C. PRAYING TO QUASH THE ORDER
DATED 29/02/2020 ADE IN PCR NO.191/2019 ON THE FILE
OF THE JMFC-III, DAVANAGERE UNDER ANNEXURE-N.
IN WRIT PETITION NO. 19892 OF 2023
BETWEEN:
1. M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.98, RESIDENCY ROAD,
ASHOKNAGAR,
BENGALURU - 560 050.
REPRESENTED BY ITS DIRECTOR,
SRI. RAVIKUMAR H M.,
S/O H. N. MAYANNA,
AGED ABOUT 43 YEARS.
2. M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.98, RESIDENCY ROAD,
ASHOKNAGAR,
BENGALURU - 560 050.
REPRESENTED BY ITS DIRECTOR,
SRI. AJAY VENKATESHAN.,
S/O H. VENKATESHAM,
AGED ABOUT 40 YEARS.
...PETITIONERS
(BY SRI. RAVI B. NAIK, SENIOR ADVOCATE FOR
SRI. R. P. SOMASHEKHARAIAH, ADVOCATE)
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AND:
DR. RAVI RAJA M E
S/O E. M. PANDIYAN,
AGED ABOUT 55 YEARS,
R/AT NO.3683-1A-42,
10TH CROSS ROAD,
ANJANEYA LAYOUT,
DAVANAGERE - 577 005.
...RESPONDENT
(BY SRI. B.S. SATYANAND, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
& 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE EXECUTION AND PROCEEDINGS IN EXECUTION
97/2022 ON THE FILE OF IV ADDITIONAL CIVIL JUDGE AND
JMFC, DAVANAGERE ANNEXURE-U AND V.
IN CRIMINAL PETITION NO. 10996 OF 2022
BETWEEN:
M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.41/7, 'THE GRANDIOS',
3RD FLOOR, 15TH CROSS,
MALLESHWARAM,
BENGALURU - 560 003.
REPRESENTED BY ITS DIRECTOR,
SRI. RAVIKUMAR H M.,
S/O H. N. MAYANNA,
AGED ABOUT 43 YEARS.
...PETITIONERS
(BY SRI. RAVI B. NAIK, SENIOR ADVOCATE FOR
SRI. R. P. SOMASHEKHARAIAH, ADVOCATE)
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AND:
1. THE STATE OF KARNATAKA
BY CYBER, ECONOMICS AND
NARCOTIC CRIME POLICE STATION
VIDYANAGAR,
DAVANAGERE - 577 005.
REPRESENTED BY HCGP,
HIGH COURT OF KARNATAKA,
BENGALURU - 560 001.
2. DR. RAVI RAJA M E
S/O E. M. PANDIYAN,
AGED ABOUT 55 YEARS,
R/AT NO.3683-1A-42,
10TH CROSS ROAD,
ANJANEYA LAYOUT,
DAVANAGERE - 577 005.
...RESPONDENTS
(BY SMT. ANITHA GIRISH N., ADVOCATE FOR R1;
SRI. B.S. SATYANAND, ADVOCATE FOR R2)
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF CR.P.C. PRAYING TO QUASH THE FIR IN
CR.NO.6/2020 UNDER SECTIONS 406, 409, 418, 420,
120(B) R/W 34 OF IPC REGISTERED BY THE RESPONDENT
NO.1 POLICE, UNDER ANNEXURE-D.
THESE PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 18.03.2024 THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:
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RESERVED FOR ORDERS ON: 18.03.2024
PRONOUNCED ON : 04.04.2024
ORDER
Criminal Petition No.7151/2023 is filed by the petitioner-accused under Section 482 of Cr.P.C. for quashing the order dated 29.02.2020 passed in PCR No.190/2019 by the JMFC-III, Davanagere.
2. Writ Petition No.18683/2023 is filed by the same petitioner-accused for quashing the further proceedings in pursuance to the order dated 29.02.2020 made in PCR No.191/2019 by the JMFC-III, Davanagere, on the basis of the order in Execution Petition No.97/2022 pending on the file of the IV Additional Civil Judge and JMFC, Davanagere.
3. Writ Petition No.19892/2023 is filed by the same petitioner-accused for quashing the further proceedings in Ex. P. No.97/2022 on the file of IV Additional Civil judge and JMFC, Davanagere.
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4. Criminal Petition No.10996/2022 is filed by the same petitioner-accused under Section 482 of Cr.P.C. for quashing the FIR in Crime No.6/2020 registered by the Vidyanagar Police, Davanagere, for the offences punishable under Sections 406, 409, 418, 420, 120B read with Section 34 of IPC.
5. All the petitions are arising out of the common dispute between the petitioner and the respondent No.2 and therefore, they are taken together for common disposal.
6. Heard the arguments of learned Senior Counsel for the petitioner, learned counsel for the respondent - de-facto complainant. and learned High Court Government Pleader for the State.
7. The case of the petitioner-accused in Writ Petition No.18683/2023 and Criminal Petition No.7151/2023 is that the respondent filed two PCRs 190/2019 and 191/2019 before the JMFC-III, Davanagere, for the offences punishable under Section 138 of N.I. Act for the dishonour 8 of two cheques issued by the petitioner-M/s. Aikya Business Solutions Pvt. Ltd, Rep. by its Director Ravi Kumar (hereinafter referred to as 'the Company'). After filing of both the private complaints, there said to be some settlement between the petitioner-Company and the complainant. They said to be entered into a memorandum of settlement and a joint memo was prepared by both parties for settling the issues, where the petitioner- Company undertook to pay the amount payable to the respondent-complainant in instalments vide joint memo dated 29.02.2020. Based upon the joint memo, the complainant filed a memo before the Magistrate seeking permission of the Court to withdraw the complaints as the matter was settled out of the Court. Accordingly, both the private complaints in PCR Nos.190/2019 and 191/2019 were dismissed as not pressed and the complainant was permitted to withdraw the case vide order dated 29.02.2020.
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8. Subsequently, the petitioner-accused Company did not pay the amount as per the settlement between them. Therefore, the complainant filed execution petition before the IV Additional City Civil Judge, Davanagere in Execution Petition No.97/2022 under Order XXI Rule 11 of CPC for executing the settlement arrived at between the parties in the Criminal Court and the Civil Court at Davanagere, issued the notice to the judgment debtor and also the arrest warrant. Accordingly, the petitioner was arrested and produced before the Court and in turn, he was sent to custody and remanded to the civil prison till 17.08.2023 vide order dated 04.08.2023.
9. Subsequently, he was said to be released on bail after the order passed by this Court in the above said writ petition/Criminal petition. In the meanwhile, the complainant filed a complaint to the Vidyanagar police on 17.01.2020. An FIR was registered by the Vidyanagara police in Crime No.6/2020 for the offences punishable under Sections 406, 409, 418, 420, 120B read with Section 34 of 10 IPC, which is challenged by the petitioner-accused company in Criminal Petition No.10996/2022. The petitioner has filed two petitions for quashing the order of the Magistrate for accepting the joint memo and dismissing the complaint. Based upon the joint memo/settlement, the respondent filed execution petition No.97/2022, which has been challenged in the writ petition. Consequently, the petitioner- accused prays for allowing all the petitions in the above said four cases.
10. The learned Senior Counsel Sri.R.B.Naik, appearing for the petitioner, has contended that both the PCRs have been filed at the belated stage. There was delay in filing the complaint under Section 138 of N.I. Act. The office noted the delay in the office note. In the meanwhile, a joint memo was filed by the complainant and both the complaints have been dismissed as the matter was settled out of the Court. Therefore, there is no executable judgment or decree available for the complainant for filing the Execution Petition No.97/2022, in fact, the complaint 11 came to be dismissed as not pressed. Therefore, there is no executable decree for the purpose of filing any execution before the Civil Court whereas the order was passed by the Criminal Court.
11. The learned Senior Counsel for the petitioner- accused Company further contended that when there is no executable order or decree, filing of the execution petition does not arise. In the execution petition, the trial Court has committed an error in sending the petitioner to the civil prison and even the Magistrate did not take the cognizance of the offence against the petitioner for the offence punishable under Section 138 of the N.I. Act. Such being the case, the question of treating the order of the Magistrate dated 29.02.2020 or decree, does not arise and it is not a decree or a judgment for the purpose of execution. Therefore, the Execution Petition No.97/2022 is not sustainable and liable to be quashed. The learned Senior Counsel further contended that when the petitioner issued a cheque for Rs.20.00 lakhs in one case and Rs.10.00 lakhs in 12 another case, the question of settling the matter for Rs.6.50 crores is not sustainable and even otherwise, the matter is already seized in the Court for the offence punishable under Section 138 of the N.I. Act, therefore, the question of filing the complaint for cheating, for the same cause of action, does not arise. Borrowing money and not returning the same, will not attract Sections 406, 409 and 420 of IPC and there was no entrustment of property. As per the memorandum of settlement, it was stated that the amount was an investment, but in the complaint, it has been stated that it was the loan amount. It is further contended that the complainant has stated in the PCR for the purpose of Section 138 of the N.I. Act it was investment, whereas in the police complaint, he has stated as loan. There is contradictory stand by the complainant. Therefore, the question of continuing the proceedings does not arise. Hence, prayed for allowing the petitions.
12. Per contra, learned counsel for respondent - de- facto complainant objected the petition and contended that 13 the respondent-complainant filed two private complaints before the Magistrate, which was registered as PCR Nos.190/2019 and 191/2010. A notice was issued to the petitioner-accused Company, who was appeared before the Court. Then the petitioner entered into a memorandum of settlement and by signing the same, it was produced before the Court. Accordingly, the joint memo was accepted and the complaint was dismissed. If the petition filed by the petitioner for setting aside the order dated 29.02.2020 is allowed, then the complaint of the complainant will be reopened and it has to be continued. Therefore, the question of allowing these two petitions does not arise. It is further contended that the complainant has paid Rs.5 crores to the petitioner-accused company wherein the Directors are Ravi kumar and one Ajay Venkateshan. After the receipt of the money, they issued two cheques and both the cheques were dishonoured and therefore, the complaint came to be filed under Section 200 Cr.P.C. read with Section 138 of N.I. Act. The complainant also filed a complaint to the police. A case was registered by the police for cheating the 14 complainant and therefore, the matter requires investigation. It is further contended that after the disposal of the two criminal cases in respect of the offence under Section 138 of N.I. Act, which was settled out of the Court based upon the compromise, the complainant filed execution petition. The order of the Magistrate amounts to the decree in view of the settlement and therefore, it is executable. It is also contended that the one criminal petition is filed by the petitioner himself and another criminal case is filed by his father through sworn affidavit, which is not permissible. The petitioner undertook to pay Rs.1 crore 30 lakhs as on 31.3.2020 and Rs.5 crores 45 lakhs to be paid within 31.12.2020, but he has cheated. The entire amount of Rs.5 crores has been cheated by the petitioner-accused. Therefore, prayed for dismissal of the petition. The learned counsel for the respondent also contended that as per the judgments of the Hon'ble Supreme Court in various cases, the complainant can invoke the civil Court for execution of the judgment under Section 138 of N.I. Act. Hence, prayed for dismissal of the petition. 15
13. The learned High Court Government Pleader also objected the petition in respect of quashing the FIR registered against the petitioner.
14. Having heard the arguments of learned counsel for the parties, perused the records.
15. On perusal of the records, it reveals that the respondent has filed two private complaints in PCR Nos.190/2019 and 191/2019 for the offences punishable under Section 138 of the N.I. Act against the petitioner for dishonour of cheques for Rs.20 lakhs and Rs.10 lakhs respectively. Along with the complaint, the respondent also filed an application for condonation of delay in filing the complaint. Therefore, the learned Magistrate, without taking cognizance and without recording any sworn statements, issued notice to the accused petitioner. The said complaints were filed on 12.12.2019. 16
16. Subsequently, the very same complainant filed a complaint against the petitioner before Vidyanagar police Davanagere on 20.01.2020 which was registered in crime No.6/2020. Subsequently, it appears that the petitioner and respondent settled their issues and prepared joint compromise memo and reported settlement before the Court on 29.02.2020. The learned counsel for the respondent-complainant also filed a memo for withdrawing the complaint as the matter was settled out of the Court. Accordingly, the learned Magistrate dismissed the complaint as not pressed and permitted the complainant to withdraw the case. For the better understanding, the order of the learned Magistrate, in both the cases, is referred as under:
ORDER The advocate for the complainant has filed a memo praying this Hon'ble Court to permit the complainant to withdraw the application as the complainant and accused settled the matter out of court.
Perused the application. For the reasons stated therein, the application is allowed.17
Hence, this case is dismissed as not pressed and the complainant is permitted to withdraw the case.
17. On careful reading of the order dated 29.02.2020 passed by the learned Magistrate in both the PCRs, it reveals that the complainant-respondent herein withdrawn his complaint before the learned Magistrate as the matter was settled between the parties, out of court settlement and the complaint has been dismissed as withdrawn. That means, there is no complaint before the learned Magistrate and there is no settlement or any compromise allowed by the learned Magistrate in the Court as per Section 320 of Cr.P.C. or Section 147 of the Negotiable instruments Act. Therefore, when there is no settlement or compromise before the Court, there is no question of considering the order of the learned Magistrate that it is an executable order for the purpose of recovery of the amount as fine under Section 421 read with Section 431 of Cr.P.C. by filing any execution. Even otherwise, it is not an executable decree or 18 an award within the meaning of decree as per the provisions of CPC in order to execute the same by filing a civil case under Order XXI Rule 11 of CPC before the Civil Court for execution of the judgment. There is no judgment or decree or an award in the eye of law when the complaint was withdrawn by the complainant before taking the cognizance by the learned Magistrate and the complaint came to be dismissed as not pressed.
18. Therefore, the question of quashing/setting aside the order 29.02.2020 passed in both cases i.e. PCR Nos.190 and 191/2019, as prayed by the learned Senior Counsel for the petitioner, does not arise. On the other hand, if the petition is allowed and the order is set aside then the complaint is required to be restored on the file of the learned Magistrate. When there is no prayer by the respondent by filing any petition for modification of the order or quashing that order, this Court cannot quash that order as it is not an order against the petitioner. 19
19. Therefore, both the Criminal Petition No.7151/2023 and Writ Petition No.18683/2023 for quashing the proceedings or order dated 29.02.2020 passed in PCR No.190/2019 and 191/2019 by the JMFC-III, Davanagere, is liable to be dismissed.
20. For the above said reasons, when there is no executable order or judgment or decree, in order to execute the same either under Section 421/431 of Cr.P.C., or under Order XXI Rule 11 of CPC, the question of filing the Execution Petition No.97/2022 by the respondent- complainant pending on the file of the IV Additional Civil Judge and JMFC, Davanagere, does not arise. Even the learned executing Judge has not considered the order of the learned Magistrate, and blindly, issued notice and also the petitioner was said to be arrested and sent to the civil prison, which is not in accordance with law when there is no award or decree in favour of the complainant. Therefore, the question of executing the same before the Executing Court does not arise. Therefore, Execution Petition 20 No.97/2022 pending on the file of IV Additional Civil Judge and JMFC, Davanagere, is liable to be quashed.
21. As regards to Criminal Petition No.10996/2022 for quashing the FIR in Crime No.6/2020 registered by Vidyanagar Police Station, Davanagere, where the complainant has stated in the complaint that he has come into contact with the accused, who is the founder director of M/s. Aikya Business Solutions Pvt. Ltd., and the accused approached the complainant for taking loan for a project. Accordingly, Rs.5.00 crores has been paid by the complainant to the accused. The accused promised to return the money within 6-8 months, but not repaid. The said loan was given to the accused by the bank transfer and they refused to repay the money. The accused said to be issued 2-3 cheques, which were dishonoured. The accused approached for settlement and when the complainant went to the office of the accused, he was not present. The accused threatened the complainant for filing a complaint against him. When the complainant sent the office boy, the 21 accused said to be assaulted and abused him. The accused hatched conspiracy against the complainant to avoid repayment of loan. Hence, prayed for filing the complaint for cheating. The said FIR is under challenge.
22. The learned Senior Counsel for the petitioner has contended that there is no criminality as alleged by the complainant. The petitioner was said to be assured to give the interest at 20% p.a. The complainant became the share holder on the unsecured loan. The said amount is a loan, but not investment. Therefore, it cannot be said that it is cheating/misappropriation within the meaning of Section 420 of IPC.
23. The learned Senior Counsel for the petitioner has relied upon the following judgments of the Hon'ble Supreme Court:
(i) SAMIR SAHAY ALIAS SAMEER SAHAY VS. STATE OF UTTAR PRADESH 22 AND ANOTHER reported in (2018) 14 SCC 233;
(ii) PROF. R.K. VIJAYASARATHY AND ANOTHER VS. SUDHA SEETHARAM AND ANOTHER reported in (2019) 16 SCC 739;
(iii) DEEPAK GABA AND OTHERS Vs. STATE OF U.P. AND ANOTHER reported in (2023) 3 SCC 423.
24. The Hon'ble Supreme Court has held and given interpretation in respect of Sections 405, 406 and 420 of IPC. In the present facts and circumstances of the case, the respondent gave the amount of more than Rs.5.00 crores to the petitioner as loan, which was received by the petitioner by online transfer. Subsequently, it was not returned.
Thereafter, two cheques issued by the petitioner to the respondent, were dishonoured. Subsequently, the complaint has been filed under Section 138 of N.I. Act and the petitioner has entered into a settlement with the respondent and undertook to repay the amount and made the respondent-complainant to withdraw the complaint. 23 Later, the amount was not paid. Even, the respondent was unable to execute the settlement agreement. Therefore, it is clear that from the beginning, the petitioner-accused had intention of cheating the respondent-complainant.
25. Considering the facts and circumstances of the case, I am of the view that the police are required to investigate the matter and file the final report and the FIR cannot be quashed, at this stage, since the crores of rupees have been cheated by the petitioner. Therefore, Criminal petition No.10996/2022 is liable to be dismissed.
26. Accordingly, I pass the following order:
(i) Criminal Petition No.7151/2023 for quashing the order dated 29.02.2020 passed in PCR No.190/2019 by the JMFC-III, Davanagere, is hereby dismissed.
(ii) Writ Petition No.18683/2023 for quashing the further proceedings in pursuance to the order dated 29.02.2020 made in PCR No.191/2019 by the JMFC-III, Davanagere, is hereby dismissed.24
(iii) Writ Petition No.19892/2023 is allowed. The execution proceedings in Ex. P. No.97/2022 on the file of IV Additional Civil judge and JMFC, Davanagere, is hereby quashed.
(iv) Criminal Petition No.10996/2022 filed under Section 482 of Cr.P.C., is hereby dismissed.
Sd/-
JUDGE CS CT:SK