Karnataka High Court
Mohan vs State Of Karnataka on 2 November, 2023
Author: Hemant Chandangoudar
Bench: Hemant Chandangoudar
-1-
NC: 2023:KHC:38828
CRL.P No. 2486 of 2022
C/W CRL.P No. 2508 of 2022
CRL.P No. 2516 of 2022
CRL.P No. 2517 of 2022
CRL.P No. 2519 of 2022
CRL.P No. 2521 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF NOVEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR
CRIMINAL PETITION NO. 2486 OF 2022
C/W
CRIMINAL PETITION NO. 2508 OF 2022
CRIMINAL PETITION NO. 2516 OF 2022
CRIMINAL PETITION NO. 2517 OF 2022
CRIMINAL PETITION NO. 2519 OF 2022
CRIMINAL PETITION NO. 2521 OF 2022
IN CRL.P No.2486/2022:
BETWEEN:
MOHAN
S/O LATE ANANTHMOORTHY
Digitally signed by B
K AGED ABOUT 44 YEARS
MAHENDRAKUMAR R/AT No.28, 1ST CROSS
Location: HIGH SATHYAM STREET, MUNEKOLALU
COURT OF
KARNATAKA MARATHAHALLI
BENGALURU - 560 021.
...PETITIONER
(BY SRI. MOHANKUMARA D, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY CID(EO) POLICE STATION
REP BY ITS STATE PUBLIC PROSECUTOR
HIGH COURT COMPLEX
BENGALURU - 560 001.
-2-
NC: 2023:KHC:38828
CRL.P No. 2486 of 2022
C/W CRL.P No. 2508 of 2022
CRL.P No. 2516 of 2022
CRL.P No. 2517 of 2022
CRL.P No. 2519 of 2022
CRL.P No. 2521 of 2022
2. GEETHA RAJ
W/O SHIVAPPA
R/AT NO. 26, 14TH CROSS
SHARADA VILAS ROAD
BENDRENAGAR
BANASHANKARI 2ND STAGE
BENGALURU - 560 010.
...RESPONDENTS
(BY SRI K NAGESHWARAPPA, HCGP FOR R1,
R2 SERVED - UNREPRESENTED)
THIS CRL.P IS FILED U/S. 482 CR.P.C PRAYING TO QUASH
THE ENTIRE PROCEEDINGS IN SPL.C.C.No.397/2015 FOR THE
OFFNECE P/U/S 420 OF IPC AND SECTION 3, 4, 5 OF PRIZES CHIT
MONEY CIRCULATION SCHEMES (BANNING) AND SECTION 9 OF
KARNATAKA PROTECTION OF INTEREST OF DEPOSITORS IN
FINANCIAL ESTABLISHMENT ACT, PENDING ON THE FILE OF THE
LEARNED XLVII A.C.C AND SJ AND SPECIAL JUDGE FOR CBI CASES,
BENGALURU.
IN CRL.P. No.2508/2022:
BETWEEN:
SUDARSHAN
S/O LATE DR. THIMMEGOWDA
AGED ABOUT 45 YEARS
RA/T No.345, 15TH 'B' CROSS
2ND STAGE, 2ND PHASE
WEST OF CHORD ROAD
MAHALAKSHMI PURAM
BENGALURU - 560 086.
...PETITIONER
(BY SRI MOHANKUMARA D, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY CID(EO) POLICE STATION
-3-
NC: 2023:KHC:38828
CRL.P No. 2486 of 2022
C/W CRL.P No. 2508 of 2022
CRL.P No. 2516 of 2022
CRL.P No. 2517 of 2022
CRL.P No. 2519 of 2022
CRL.P No. 2521 of 2022
REP BY ITS STATE PUBLIC PROSECUTOR
HIGH COURT COMPLEX
BENGALURU - 560 001.
2. CHANDRU P.I
NANDINI LAYOUT PS
NANDHINI LAYOUT
BENGALURU - 560 096.
...RESPONDENTS
(BY SRI K NAGESHWARAPPA, HCGP FOR R1
R2 SERVED AND UNREPRESENTED)
THIS CRL.P IS FILED U/S 482 CR.P.C PRAYING TO QUASH THE
ENTIRE PROCEEDINGS IN SPL.C.C.No.413/2015 FOR THE OFFENCE
P/U/S 420 OF IPC AND SECTION 3, 4, 5 OF PRIZED CHIT MONEY
CIRCULATION SCHEMES (BANNIG) AND SECTION 9 OF KARNATAKA
PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL
ESTABLISHMENT ACT, PENDING ON THE FILE OF THE LEARNED
XLVII ACC AND SJ AND SPECIAL JUDGE FOR CBI CASES (CCH-48)
BANGALORE.
IN CRL.P. No.2516/2022:
BETWEEN:
SUDARSHAN
S/O LATE DR. THIMMEGOWDA
AGED ABOUT 45 YEARS
R/AT 345, 15TH B CROSS
2ND STAGE, 2ND PHASE
WEST OF CHORD ROAD
MAHALAKSHMI PURAM
BENGALURU - 560 086.
...PETITIONER
(BY SRI MOHANKUMARA D, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY CID (EO) POLICE STATION
-4-
NC: 2023:KHC:38828
CRL.P No. 2486 of 2022
C/W CRL.P No. 2508 of 2022
CRL.P No. 2516 of 2022
CRL.P No. 2517 of 2022
CRL.P No. 2519 of 2022
CRL.P No. 2521 of 2022
REP BY ITS STATE PUBLIC PROSECUTOR
HIGH COURT COMPLEX
BENGALURU - 560 001.
2. SHOBHA B S
R/AT #2800, 11TH MAIN
'D' BLOCK, RAJAJINAGAR
BENGALURU - 560 010.
...RESPONDENTS
(BY SRI K NAGESHWARAPPA, HCGP FOR R1
SMT.P.V.KALPANA, ADVOCATE FOR R2)
THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE
ENTIRE PROCEEDINGS IN SPL.C.C.No.414/2015 FOR THE OFFENCE
P/U/S 420 OF IPC AND SECTION 3, 4, 5 OF PRIZES CHIT MONEY
CIRCULATION SCHEMS (BANNING) AND SECTION 9 OF KARNATAKA
PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL
ESTABLISHMENT ACT, PENDING ON THE FILE OF XLVII ADDITIONAL
CITY CIVIL AND SESSIONS JUDGE AND SPECIAL JUDGE FOR CBI
CASES (CCH-48), BENGALURU.
IN CRL.P. No.2517/2022:
BETWEEN:
MOHAN
S/O LATE ANANTHMOORTHY
AGED ABOUT 44 YEARS
R/AT No.28, 1ST CROSS
SATHYAM STREET, MUNEKOLALU
MARATHAHALLI
BENGALURU - 560 021.
...PETITIONER
(BY SRI. MOHANKUMARA D, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY CID(EO) POLICE STATION
REP BY ITS STATE PUBLIC PROSECUTOR
-5-
NC: 2023:KHC:38828
CRL.P No. 2486 of 2022
C/W CRL.P No. 2508 of 2022
CRL.P No. 2516 of 2022
CRL.P No. 2517 of 2022
CRL.P No. 2519 of 2022
CRL.P No. 2521 of 2022
HIGH COURT COMPLEX
BENGALURU - 560 001.
2. SHOBHA B S
R/AT #2800, 11TH MAIN
'D' BLOCK, RAJAJINAGAR
BENGALURU - 560 010.
....RESPONDENTS
(BY SRI K NAGESHWARAPPA, HCGP FOR R1,
SMT. P V KALPANA, ADVOCATE FOR R2)
THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE
ENTIRE PROCEEDINGS IN SPL.C.C.No.414/2015 FOR THE OFFENCE
P/U/S 420 OF IPC AND SECTION 3, 4, 5 OF PRIZES CHIT MONEY
CIRCULATION SCHEMS (BANNING) AND SECTION 9 OF KARNATAKA
PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL
ESTABLISHMENT ACT, PENDING ON THE FILE OF XLVII ADDITIONAL
CITY CIVIL AND SESSIONS JUDGE AND SPECIAL JUDGE FOR CBI
CASES (CCH-48), BENGALURU.
IN CRL.P. No.2519/2022:
BETWEEN:
SUDARSHAN
S/O LATE DR. THIMMEGOWDA
AGED ABOUT 45 YEARS
RA/T No.345, 15TH 'B' CROSS
2ND STAGE, 2ND PHASE
WEST OF CHORD ROAD
MAHALAKSHMI PURAM
BENGALURU - 560 086.
...PETITIONER
(BY SRI MOHANKUMARA D, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY CID(EO) POLICE STATION
REP BY ITS STATE PUBLIC PROSECUTOR
-6-
NC: 2023:KHC:38828
CRL.P No. 2486 of 2022
C/W CRL.P No. 2508 of 2022
CRL.P No. 2516 of 2022
CRL.P No. 2517 of 2022
CRL.P No. 2519 of 2022
CRL.P No. 2521 of 2022
HIGH COURT COMPLEX
BENGALURU - 560 001.
2. GEETHA RAJ
W/O SHIVAPPA
R/AT NO. 26, 14TH CROSS
SHARADA VILAS ROAD
BENDRENAGAR
BANASHANKARI 2ND STAGE
BENGALURU - 560 010.
...RESPONDENTS
(BY SRI K NAGESHWARAPPA, HCGP FOR R1
R2 SERVED - UNREPRESENTED)
THIS CRL.P IS FILED U/S 482 CR.P.C PRAYING TO QUASH THE
ENTIRE PROCEEDINGS IN SPL.C.C.No.397/2015 FOR THE OFFENCE
P/U/S 420 OF IPC AND SECTION 3, 4, 5 OF PRIZES CHIT MONEY
CIRCULATION SCHEMES (BANNIG) 1978 AND SECTION 9 OF
KARNATAKA PROTECTION OF INTEREST OF DEPOSITORS IN
FINANCIAL ESTABLISHMENT ACT, PENDING ON THE FILE OF THE
LEARNED XLVII ACC AND SJ AND SPECIAL JUDGE FOR CBI CASES
(CCH-48) BANGALORE.
IN CRL.P. No.2521/2022:
BETWEEN:
MOHAN
S/O LATE ANANTHMOORTHY
AGED ABOUT 44 YEARS
R/AT No.28, 1ST CROSS
SATHYAM STREET, MUNEKOLALU
MARATHAHALLI
BENGALURU - 560 021.
...PETITIONER
(BY SRI. MOHANKUMARA D, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY CID(EO) POLICE STATION
-7-
NC: 2023:KHC:38828
CRL.P No. 2486 of 2022
C/W CRL.P No. 2508 of 2022
CRL.P No. 2516 of 2022
CRL.P No. 2517 of 2022
CRL.P No. 2519 of 2022
CRL.P No. 2521 of 2022
REP BY ITS STATE PUBLIC PROSECUTOR
HIGH COURT COMPLEX
BENGALURU - 560 001.
2. CHANDRU P.I
NANDINI LAYOUT PS
NANDHINI LAYOUT
BENGALURU - 560 096.
...RESPONDENTS
(BY SRI K NAGESHWARAPPA, HCGP FOR R1,
R2 SERVED - UNREPRESENTED)
THIS CRL.P IS FILED U/S. 482 CR.P.C PRAYING TO QUASH
THE ENTIRE PROCEEDINGS IN SPL.C.C.No.413/2015 FOR THE
OFFNECE P/U/S 420 OF IPC AND SECTION 3, 4, 5 OF PRIZES CHIT
MONEY CIRCULATION SCHEMES (BANNING),1978 AND SECTION 9
OF KARNATAKA PROTECTION OF INTEREST OF DEPOSITORS IN
FINANCIAL ESTABLISHMENT ACT, 2004 PENDING ON THE FILE OF
THE LEARNED XLVII A.C.C AND SJ AND SPECIAL JUDGE FOR CBI
CASES,(CCH-48) BENGALURU.
THESE PETITIONS COMING ON FOR FURTHER HEARING THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioners accused Nos.5 and 6 who are common in all these petitions have been charge sheeted for the offences under Section 420 of IPC, Sections 3, 4 and 5 of the Prize Chits and Money Circulation Schemes (Banning Act), 1978, Section 9 of the Karnataka Protection of Interest of Depositors in Financial establishments Act, 2004 and Section 58B and 5A of the R.B.I Act.
2. The summary of the charge sheet is that, accused No.1 had started a Company in the name and style of "M/s UNI -8- NC: 2023:KHC:38828 CRL.P No. 2486 of 2022 C/W CRL.P No. 2508 of 2022 CRL.P No. 2516 of 2022 CRL.P No. 2517 of 2022 CRL.P No. 2519 of 2022 CRL.P No. 2521 of 2022 PAY 2U Marketing Private Limited Company". Accused No.1 along with the other accused got registered the Company in Chennai and also opened its Branch Office at Bengaluru and invited the public to invest under various schemes launched by it. All the schemes were shown to the public that the money invested by them would be doubled, for which, large number of depositors invested a total sum of Rs.2,03,29,500/- and the accused in turn returned a sum of Rs.22,15,262/- towards profit on the investment made by the depositors and did not return the balance amount of Rs.1,80,94,238/- and have cheated the depositors. Cognizance taken by the learned Magistrate of the aforesaid offences is impugned in these petitions.
3. Learned counsel for the petitioners submits that accused No.9 against whom similar allegations were made had approached this Court in Crl.P.No.1399/2017 and this Court by order dated 02.01.2023 quashed the impugned proceedings. Therefore, to maintain the parity, the impugned proceedings insofar as it relates to the petitioners herein requires to be quashed.
4. Learned counsel appearing for respondent No.2 submits that the complainant - victim has not stated that these petitioners instigated her to invest the money in the accused No.1 - Company. However, other witnesses have categorically -9- NC: 2023:KHC:38828 CRL.P No. 2486 of 2022 C/W CRL.P No. 2508 of 2022 CRL.P No. 2516 of 2022 CRL.P No. 2517 of 2022 CRL.P No. 2519 of 2022 CRL.P No. 2521 of 2022 stated that at the instigation of the petitioners herein, the investors deposited the money with accused No.1 - Company. Therefore, the petitioners herein conniving with the other accused have cheated the complainant and the public at large. Therefore, the veracity of the allegations against the petitioners herein can be considered at the time of trial and the same cannot in these petitions.
5. Learned High Court Government Pleader for the State would reiterate the submissions made by respondent No.2.
6. Considered the submissions made by respondent No.2.
7. Admittedly, accused No.5 was the Manager of accused No.1 - company and accused No.6 was the Agent of accused No.1 - Company. Accused Nos.1 to 4 are the Directors of the Company in which the public have invested the money. The allegation is that out of the total sum of Rs.2,03,29,500/- a sum of Rs.22,15,262/- was paid towards profit on the investment made by the depositors and the balance amount of Rs.1,80,94,238/- was not returned to the depositors with an intention to cheat. The petitioners are not responsible for not returning the amount to the depositors and the responsibility is that of the Company and the Directors. There is no material in
- 10 -
NC: 2023:KHC:38828 CRL.P No. 2486 of 2022 C/W CRL.P No. 2508 of 2022 CRL.P No. 2516 of 2022 CRL.P No. 2517 of 2022 CRL.P No. 2519 of 2022 CRL.P No. 2521 of 2022 the charge sheet to substantiate that these petitioners who are the Manager and the Agent of accused No.1 - Company connived with the other accused in inducing the depositors to invest the money. Respondent No.2 herein has also not alleged that these petitioners induced her to invest the money in accused No.1 - Company with an intention to cheat. Except some witnesses who have stated that these petitioners induced several depositors, the essential elements to constitute the commission of cheating is conspicuously absent against these petitioners and the prosecution cannot be allowed to be continued in the absence of any material, only on the ground that they were the Manager and the Agent of the accused No.1
- Company which has allegedly cheated the depositors.
8. The Co-ordinate Bench of this Court in Crl.P.No.1400/2017 quashed the proceedings against Accused No.9 who faced similar allegations, by observing as follows;
"8. A perusal of the alleged statement of C.W.22 - Smt. Shashikala, would go to show that the said witness appears to have stated before the I.O. in clear and specific terms that it was at the instigation of one Sri Thimmaraju (accused No. 10), she had invested some amount which according to her is a sum of Rs. 50,000/- in the said Company. She has stated that it was Muniraju who had enticed her to invest money in the accused No. 1 company. Accordingly, she has invested. Further in her statement she has stated that the present petitioner Smt. Uma was working as Admin. Cum Accountant in
- 11 -
NC: 2023:KHC:38828 CRL.P No. 2486 of 2022 C/W CRL.P No. 2508 of 2022 CRL.P No. 2516 of 2022 CRL.P No. 2517 of 2022 CRL.P No. 2519 of 2022 CRL.P No. 2521 of 2022 the said establishment of accused No. 1. barring this, even CW-22 has not made any specific allegation of any overt act against the present petitioner. Even if said statement of CW-22 is taken to be true, still the allegation is not directly against the present petitioner but it is with respect to some other accused. As such, merely because the present petitioner is said to be working in accused No. 1 Company, by that itself it cannot be held that she was participating in the alleged acts of cheating by the company against the depositors and the alleged commission of the crime.
In the absence of any other material warranting the continuation of the present accused in the criminal case, compelling her to face trial, I am of the view is nothing but harassing her to face criminal trial resulting in the abuse of process of law. Accordingly, there is reason for exercising of the power under Section 482 Cr.P.C. Thus I proceed to pass the following:
9. Therefore, in the absence of any material to establish that the petitioners herein as Manager and Marketing Agent connived with the other accused in inducing the depositors to invest the money with accused No.1 - Company and thereafter, did not return the profit with an intention to cheat, the continuation of the criminal proceedings will not sub- serve the ends of justice and would be abuse of the process of law.
10. Accordingly, the petitions are allowed.
- 12 -
NC: 2023:KHC:38828 CRL.P No. 2486 of 2022 C/W CRL.P No. 2508 of 2022 CRL.P No. 2516 of 2022 CRL.P No. 2517 of 2022 CRL.P No. 2519 of 2022 CRL.P No. 2521 of 2022 The impugned proceedings in Spl.C.C.Nos.397/2015, 413/2015, 414/2015, on the file of learned XLVII Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bengaluru, insofar it relates to Accused Nos.5 and 6 is hereby quashed.
Learned Magistrate to proceed against the other accused in accordance with law, without being influenced by any of the observations made in this order, and the observations made, if any, is for the purpose of the present petitions.
All contentions are kept open.
Sd/-
JUDGE GH List No.: 1 Sl No.: 47