Karnataka High Court
Mr. Giri Devanur vs State By Cubbon Park Police Station on 27 March, 2023
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CRL.P No. 7002 of 2019
C/W CRL.P No. 5616 of 2019
CRL.P No. 5756 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF MARCH, 2023
BEFORE
THE HON'BLE MR JUSTICE R. NATARAJ
CRIMINAL PETITION NO. 7002 OF 2019
C/W
CRIMINAL PETITION NO. 5616 OF 2019
CRIMINAL PETITION NO. 5756 OF 2019
IN CRL.P.NO.7002/2019:
BETWEEN:
MR. G.A. MANJUNATHA
SON OF LATE G. ANANTHARAMAIAH,
AGED ABOUT 51 YEARS,
RESIDING AT NO.2149,
ADITHI KUMARASWAMY LAYOUT,
BENGALURU-560078
...PETITIONER
(BY SRI. ARVIND KAMATH, SENIOR COUNSEL FOR
SRI. ANAND MUTTALLI, ADVOCATE)
AND:
1. STATE BY CUBBON PARK POLICE STATION
Digitally REPRESENTED BY GOVERNMENT ADVOCATE,
signed by HIGH COURT OF KARNATAKA,
SUMA
BENGALURU.
Location:
HIGH COURT 2. MR. RAVISHANKAR B BHOOPLAPUR
OF NO.26, PRINCETON DRIVE
KARNATAKA
SYOSSET NEW YORK,
NEW YORK-11791
PRESENTLY AT BENGALURU
INDIA MOBILE NO.9945112341
...RESPONDENTS
(BY SRI. R.D. RENUKARADHYA, HIGH COURT GOVERNMENT PLEADER
FOR RESPONDENT NO.1;
SMT. ANJANA C.H., ADVOCATE FOR RESPONDENT NO.2)
THIS CRL.P IS FILED UNDER SECTION 482 OF THE CODE OF
CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE ORDER
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CRL.P No. 7002 of 2019
C/W CRL.P No. 5616 of 2019
CRL.P No. 5756 of 2019
DATED 11.04.2018 PASSED IN C.C.NO.9780/2018 ON THE FILE OF
VIII ADDL.C.M.M., BENGALURU VIDE ANNEXURE-B AND ETC.
IN CRL.P.NO.5616/2019:
BETWEEN:
MR. GIRI DEVANUR
SON OF MR. SAMPATH IYENGAR,
RESIDING AT NO.513, 10TH CROSS
RMV EXTENSION,
SADASHIVANAGAR,
BENGALURU-560080
PRESENTLY RESIDING AT
NO.15, STAFFORD DR
PRINCETON JUNCTION,
NEW JERSEY-08550.
...PETITIONER
(BY SRI. ARVIND KAMATH, SENIOR COUNSEL FOR
SRI. ANAND MUTTALLI, ADVOCATE)
AND:
1. STATE BY CUBBON PARK POLICE STATION
REPRESENTED BY SPP, GOVERNMENT ADVOCATE,
HIGH COURT OF KARNATAKA
BENGALURU-560001.
2. MR. RAVISHANKAR B BHOOPLAPUR
NO.26, PRINCETON DRIVE
SYOSSET, NEW YORK
NEW YORK-11791.
PRESENTLY AT BANGALORE
ROOM NO.507 AND 508,
BARTON CENTER, M.G.ROAD,
BANGALORE-560001.
...RESPONDENTS
(BY SRI. R.D. RENUKARADHYA, HIGH COURT GOVERNMENT PLEADER
FOR RESPONDENT NO.1;
SMT. ANJANA C.H., ADVOCATE FOR RESPONDENT NO.2)
THIS CRL.P IS FILED UNDER SECTION 482 THE CODE OF
CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE ORDER
DATED 11.04.2018 PASSED IN C.C.NO.9780/2018 ON THE FILE OF
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CRL.P No. 7002 of 2019
C/W CRL.P No. 5616 of 2019
CRL.P No. 5756 of 2019
THE HON'BLE 8TH ADDITIONAL CHIEF METROPOLITAN MAGISTRATE
AT BENGALURU AND ETC.
IN CRL.P.NO.5756/2019:
BETWEEN:
SMT. ARCHANA DEVANUR
WIFE OF MR.GIRI DEVANUR,
AGED ABOUT 45 YEARS,
RESIDING AT NO.513, 10TH CROSS,
RMV EXTENSION,
SADHASHIVNAGAR,
BENGLAURU-560 080
PRESENTLY RESIDING AT
NO.15, STAFFORD DR
PRINCETON JUNCTION
NEW JERSEY-08550
...PETITIONER
(BY SRI. ARVIND KAMATH, SENIOR COUNSEL FOR
SRI. ANAND MUTTALLI, ADVOCATE)
AND:
1. STATE BY CUBBON PARK POLICE STATION
REPRESENTED BY GOVERNMENT ADVOCATE,
SPP, HIGH COURT OF KARNATAKA
BENGALURU-560001.
2. MR. RAVISHANKAR B BHOOPLAPUR
BIN BASAVARAJU BHOOPLAPUR,
AGED ABOUT 52 YEARS,
NO.26, PRINCETON DRIVE,
SYOSSET NEW YORK,
NEW YORK-11791
PRESENTLY AT BENGALURU
ROOM NO.507 AND 508,
BARTON CENTER, M.G.ROAD,
BENGALURU-560001.
INDIA MOBILE NO.9945112341
...RESPONDENTS
(BY SRI. R.D. RENUKARADHYA, HIGH COURT GOVERNMENT PLEADER
FOR RESPONDENT NO.1;
SMT. ANJANA C.H., ADVOCATE FOR RESPONDENT NO.2)
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CRL.P No. 7002 of 2019
C/W CRL.P No. 5616 of 2019
CRL.P No. 5756 of 2019
THIS CRL.P IS FILED UNDER SECTION 482 THE CODE OF
CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE ORDER
DATED 11.04.2018 PASSED IN C.C.NO.9780/2018 ON THE FILE OF
VIII ADDL.C.M.M., BENGALURU AND ETC.
THESE PETITIONS COMING ON FOR ADMISSION, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
Crl.P.No.5616/2019 is filed by the accused No.1. Crl.P.No.5756/2019 is filed by the accused No.2, Crl.P.No.7002/2019 is filed by the accused No.5 in C.C.No.9780/2018 pending trial before the VIII Additional Chief Metropolitan Magistrate, Bengaluru (henceforth referred to as 'Trial Court' for short), challenging an order dated 11.04.2018 by which, the Trial Court took cognizance of the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC and directed the registration of a criminal case.
2. The respondent No.2 lodged a written note dated 23.10.2010 with the respondent No.1 on 26.10.2010 claiming therein that he and 17 others were persons of Indian origin settled in United States of America. He claimed that since he had his roots in Karnataka, he came to Bengaluru during September 2006. His friend Mr. Pradeep Hiremath introduced -5- CRL.P No. 7002 of 2019 C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 the accused No.1 to him when they were having dinner at a hotel in Bengaluru. The accused No.1 introduced Mr. Manohar Nagaraj to him, who purportedly was the Vice-Chairman of a company. Accused No.1 represented that he was a businessman and was Chairman of a company which intended to establish a Special Economic Zone at Bengaluru for Advanced Research and Development Projects. He claimed that the total cost of the project was approximately Rs.1,500 crores. He claimed that he had already acquired the land to an extent of 1000 acres and that he had approached several financial institutions for funding the project and that the same was sanctioned. He further requested the respondent No.2, if he and his friends could invest in the project and that they would be getting huge returns on their investment. The said Mr. Manohar Nagaraj (accused No.3) also joined hands with the accused No.1 and requested the respondent No.2 to invest in their company. The accused Nos.1 and 3 promised that the project was nearing completion and that all sanctions and approvals were obtained and that what was required was the execution of civil works etc. They represented that they were expert businessmen and assured that if the respondent No.2 -6- CRL.P No. 7002 of 2019 C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 and his friends invested, they would get huge return. The respondent No.2 claimed that the accused Nos.1 and 3 invited him to their office at Barton Centre at M.G. Road, Bengaluru, along with Mr. Pradeep Hiremath. Later, all the accused gathered at Barton Centre, M.G. Road, Bengaluru and were introduced by the accused No.1 that they were the promoters of the company. The accused No.1 and six other accused introduced themselves to the respondent No.2 and showed some papers and made him believe that the project was unique with international standard and induced him and his friends to invest money with them. The respondent No.2 claimed that he was impressed by the presentation and he spoke to his friends, who were in USA. His friends gave him a mandate that they were ready to invest the amount and informed him to give the 'in-principle' consent that they would be investing with the accused. Later, the respondent No.2 returned to United States and the accused No.1 informed him that he would be visiting United States and that he would meet the friends of the respondent No.2. The accused No.1 is stated to have gone to United States during December 2006 and met the friends of respondent No.2 at New York. The respondent No.2 and his -7- CRL.P No. 7002 of 2019 C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 friends agreed to invest their money with the accused and transferred a sum of Rs.10,12,63,285/- through an entity created by them named 'Gold Coast Association Investment Club'. The respondent No.2 claimed that the accused acknowledged the receipt of the amount and also issued share certificate and informed them that the project would be commissioned shortly and the date of inauguration would be informed very soon and that the project would be inaugurated by the President of India. The respondent No.2 alleged that after receiving a sum of Rs.10,12,63,285/-, the accused stopped all communication. The respondent No.2 is stated to have come to India with the authority from other 17 investors and met the accused No.1 and other accused and enquired about the project. The accused refused to disclose the details of the project and it was then that the respondent No.2 realized that he was duped. When the respondent No.2 insisted for return of the money, the accused refused to do so. The accused No.1 represented that the project had run into serious difficulty and the acquisition of the land was not complete and told that he would sort out the problems at the earliest. When the respondent No.2 insisted for the return of the money, the -8- CRL.P No. 7002 of 2019 C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 accused No.1 informed that he possessed 50 acres of land, which would be leased in favour of the respondent No.2 and thereafter executed a lease agreement. Thereafter, the respondent No.2 came to know that the land leased did not belong to the accused No.1 or to any other accused. Later, the accused No.1 and the other accused represented that they had paid a sum of Rs.5 crores to the Karnataka Industrial Area Development Board (KIADB) which was to be refunded and therefore informed respondent No.2 to open an account in India so that the same could be transferred to the account. In that regard, he handed over a copy of a letter dated 17.07.2010 addressed by KIADB that a sum of Rs.5,00,00,000/- would be refunded. However, the respondent No.2 came to know that this letter dated 17.07.2010 too was forged and fabricated. The respondent No.2 therefore, alleged that the accused in concert, made him and his friends believe that the accused would establish a big company and made the respondent No.2 and his friends to invest a sum of Rs.10,12,63,285/- and cheated them. Therefore, he requested the jurisdictional police to initiate suitable action against the accused. -9- CRL.P No. 7002 of 2019 C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019
3. The jurisdictional police registered crime No.253/2010 for the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC and took up investigation. The investigating officer found that a sum of Rs.10,12,63,285/- was invested by the respondent No.2 and his friends and that they had entered into a share transfer agreement by which, 9% shares were allotted to them. The respondent No.2 was appointed as a Director of Gandhi City Company project representing Gold Coast Company. He also found inter alia that Gandhi City company had deposited Rs.5 crores with KIADB by March 2007. He also found that due to the new acquisition norms, the promoter of the project had to secure consent of 70% farmers and only thereafter, would the Government acquire 30% of the land. Consequently, Gandhi City Company had entered into a transaction with M/s.Alpha Infra Build Private Ltd., valued at Rs.175 crores and that Gandhi City Company had paid Rs.14 crores for obtaining consent of owners of 350 acres of land and that they had all executed an agreement in favour of the company. He also found that the State Government of Karnataka had withdrawn the consent for acquisition of 1000 acres of land since part of it was agricultural
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 land, while the remaining was forest land. He found that in view of the global meltdown, the investors in Gandhi City Company backed out resulting in loss in the company. He also found that Gandhi City Company was liquidated and an official liquidator was appointed. He claimed that the complainant namely, respondent No.2 herein failed to produce the documents that were fraudulent and forged by accused No.1 despite giving adequate opportunity. He also found that a sum of Rs.5 crores that was paid to KIADB was transferred to M/s. Alpha Infra Build company and that accused No.1 had not appropriated that amount to himself. He also found that the respondent No.2 had started a company called 'Gold Coast' and had invested in Gandhi City company on partnership basis and that the respondent No.2 deliberately did not disclose the constitution of Gold Coast Company. He also found other circumstances which did not justify prosecuting the accused for the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC. The investigating officer found that the company suffered loss due to various circumstances that could not attributed to the accused and thus, filed a 'B' report before the Trial Court.
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019
4. The Trial Court issued notice to the respondent No.2 who appeared and filed his protest petition against acceptance of the 'B' report. The respondent No.2 was examined as CW.1 and he examined a witness as CW.2 and marked Exs.C1 to C13 and closed his side.
5. The Trial Court in terms of its impugned order dated 11.04.2018 held, "I have gone through the above said documents and at this stage, there is no reason to disbelieve the version of CW.1 and CW.2, recitals of Exs.C1 to C13. As such, at this stage, the complainant has made out grounds to proceed against accused Nos.1 to 7 for the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC. Therefore, I proceed to pass the following ORDER Complainant has made out grounds to proceed against accused Nos.1 to 7 for the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC."
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019
6. Being aggrieved by the said order, the present petitions are filed by the accused Nos.1, 2 and 5.
7. The learned Senior counsel representing the accused Nos.1, 2 and 5 submitted that the Trial Court has committed an error in not applying its mind to the facts and circumstances of the case before arriving at a conclusion that the respondent No.2 has made out a case to proceed against the accused for the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC. He submitted that the Trial Court was bound to consider whether a case was made out to take cognizance particularly, in the light of the fact that the respondent No.2 and his friends had invested in the company as shareholders and the respondent No.2 was appointed as a Director of the company. He also submitted that 9% of the shares of the Gandhi City Company were given to the respondent No.2 and his friends in return for the money that they had invested in the company. He therefore, submits that this was a crucial fact that the Trial Court must have considered before taking cognizance of the offence against the accused. At any rate, he submits that the Trial Court could not have accepted the sworn statement of the respondent No.2
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 without applying itself to the facts and circumstances of the case more particularly, in view of the observations of the investigating officer.
8. Per contra, the learned counsel for the respondent No.2 submitted that the respondent No.2 and his friends were compelled to invest in the company, that was incorporated by the accused persons. She submits that the accused had a deliberate intention from the beginning itself to defraud the respondent No.2 and his friends in as much as, the respondent No.2 and his friends were informed that all the permissions and licences were already taken and that they were only identifying for financiers to take off the civil works. She submitted that this was not the real fact and the accused were all aware of the same. She submits that the accused later executed an agreement of lease in respect of 50 acres of land, which purportedly was belonging to the accused No.1. However, it was later found that neither the accused No.1 nor any of the Directors were owners of the property. She therefore, contended that the accused No.1 had at every stage attempted to defraud the respondent No.2 and his friends. Likewise, she submitted that the accused No.1 thereafter claimed that a sum
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 of Rs.5 crores was to be refunded by the Karnataka Industrial Area Development Board and therefore, instructed the respondent No.2 to open an account so that the amount could be credited into the account. He also furnished a letter addressed by the KIADB which indicated that a sum of Rs.5 crores would be credited to the account of the company. She submits that on verification, this letter was also found to be forged and fabricated and therefore, she submitted that the accused No.1 had a premeditated mind from the date of the transaction to defraud the respondent No.2 and his friends and therefore, the Trial Court rightly took cognizance of the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC.
9. The learned High Court Government Pleader for the State, on the other hand, submitted that the facts as placed before the Trial Court justified taking cognizance of the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC.
10. I have considered the submissions made by the learned Senior counsel for the petitioners/accused Nos.1, 2 and
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 5 as well as the learned counsel for the respondent No.2 and the learned High Court Government Pleader for the State.
11. The fact that the accused had wanted to establish an Advanced Research Development Project in the form of a Special Economic Zone in 1000 acres of land, was not false. The investigating officer had found that the company had taken sufficient steps in that regard and had also entered into an understanding with an aggregator namely, M/s. Alpha Infra Build Private Ltd., and had passed on Rs.14,00,00,000/- to obtain consent from the owners of 350 acres of land. The investigating officer found that the State Government, which had earlier given permission to acquire 1000 acres of land, withdrew it. The investigating officer also found that as against Rs.10,12,63,285/-, invested by respondent No.2 and his friends the company had transferred 9% of the shares to the respondent No.2, who represented Gold Coast Company. The respondent No.2 was also made as a Director of the company. The investigating officer found various other circumstances, which resulted in the company not taking off. He also found that an official liquidator was appointed, who had invited claims from all concerned. Therefore, in the light of these facts, the
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 Trial Court must have assessed whether the accused were involved in an offence punishable under Section 420 of IPC. The investigating officer found that the respondent No.2 did not place before him materials to establish that certain letters given to him by the company/accused were in fact fabricated and forged. The Trial Court could not have merely restricted its examination to Exs.C1 to C13 that were produced before it, but must have taken a comprehensive view of the matter and must have decided whether a case was made out to prosecute the accused for the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC. The order passed by the Trial Court taking cognizance, is as bald as it could be and there is no indication that the Magistrate had applied his mind to the facts and circumstances of the case. A mere subjective satisfaction of the Magistrate is not enough but the order should spell out reasons why the Magistrate was of the opinion that the investigating agency had made out a case to take cognizance for the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC. In that view of the matter, the order taking cognizance deserves to be interfered with.
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019
12. Consequently, these petitions are allowed. The impugned order dated 11.04.2018 passed by the VIII Additional Chief Metropolitan Magistrate, Bengaluru, in C.C.No.9780/2018 taking cognizance against the accused for the offences punishable under Sections 468, 471, 420 read with Section 34 of IPC is set aside.
13. The case is remitted back to the Trial Court, which shall apply its mind to the documents placed on record by the complainant/objector/respondent No.2 and also consider the 'B' Report and thereafter take a decision whether the documents placed before it constituted offences under Sections 468, 471, 420 read with Section 34 of IPC. While doing so, the Trial Court shall consider the effect of Exs.C6, C7, C9 and C10 that were produced by the complainant along with private complaint and which were not noticed by the investigating officer, who filed the 'B' report. Having regard to the fact that this issue is pending since a long time, the Trial Court shall expedite the examination within three months from the date of receipt of a copy of this order.
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CRL.P No. 7002 of 2019C/W CRL.P No. 5616 of 2019 CRL.P No. 5756 of 2019 In view of disposal of the petitions, pending I.A., if any, does not survive for consideration and the same stands dismissed.
Sd/-
JUDGE PMR List No.: 1 Sl No.: 46