Karnataka High Court
Sri Rajendra S/O Banduji Patil vs The State Of Karnataka on 8 February, 2022
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 8th DAY OF FEBRUARY 2022
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
CRIMINAL PETITION No.100114/2022
BETWEEN
1. SRI RAJENDRA S/O BANDUJI PATIL,
AGED ABOUT 60 YEARS,
OCCU: BUSINESS AND AGRICULTURE,
R/O OM SAI DATTA NAGAR,
VISHRAMBAGH, SANGLI,
SANGLI TALUK AND DISTRICT,
MAHARASTRA.
2. SRI. ARUN S/O. BANDU HAWALDAR,
AGED ABOUT 65 YEARS,
OCCU: BUSINESS AND AGRICULTURE,
WARD NO.2, MUDHOL, MUDHOL TALUK,
BAGALKOT DISTRICT.
3. SRI. RAHUL S/O. RAJENDRA PATIL,
AGED ABOUT 30 YEARS,
OCCU. BUSINESS AND AGRICULTURE,
R/O OM SAI DATTA NAGAR,
VISHRAMBAGH, SANGLI,
SANGLI TALUK AND DISTRICT,
MAHARASTRA.
4. SRI. SANDEEP S/O. ARUN HAWALDAR,
AGED ABOUT 37 YEARS, OCCU: BUSINESS,
WARD NO.2, MUDHOL, MUDHOL TALUK,
BAGALKOT DISTRICT.
2
5. SRI. SUDHIR S/O. ARUN HAWALDAR,
AGED ABOUT 35 YEARS, OCCU: BUSINESS AND
AGRICULTURE, WARD NO.2, MUDHOL, MUDHOL TALUK,
BAGALKOT DISTRICT.
6. SRI. SHANKAR S/O. HANAMANT HAWALDAR,
AGED ABOUT 60 YEARS,OCCU: AGRICULTURE,
R/AT SAINAGAR, MUDHOL, MUDHOL TALUK,
BAGALKOT DISTRICT.
7. SRI. ABHIJEET S/O. DINAKAR SADAWARTE,
AGED ABOUT 35 YEARS, OCCU. BUSINESS AND
AGRICULTURE, R/AT. SOLANKURE GALLI,
AKKOL, NIPPANI TALUK, BELGAVI DISTRICT.
...PETITIONERS
(BY SRI B. B. BAJENTRI, SRI VIJAYKUMAR &
SRI J.A PATTAR ADVOCATES)
AND
1. THE STATE OF KARNATAKA,
KATKOL POLICE STATION, BELAGAVI,
REPRESENTED BY ITS
STATE PUBLIC PROSECUTOR,
HIGH COURT OF KARNATAKA,
DHARWAD BENCH, DHARWAD-01.
2. SRI. ANAND KULKARNI S/O ACHUTARAO,
AGED ABOUT 52 YEARS, OCCU: BUSINESS,
R/AT. INDRI BUILDING, PLOT NO. 14, ENGINEERING
COLLEGE HOSTEL ROAD, VIDYAGIRI, BAGALKOT,
BAGALKOT DISTRICT-587102.
...RESPONDENTS
(BY SRI RAMESH CHIGARI, HCGP FOR R1 &
SRI SRIKANT T PATIL & ROHIT S PATIL ADVOCATE FOR R2)
THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C., SEEKING TO
CALL FOR RELEVANT RECORDS TO FIR IN CRIME NO.133/2021 ON
THE FILE OF PRINCIPAL CIVIL JUDGE (JUNIOR DIVISION) AND JMFC
3
COURT, RAMDURG, BELAGAVI DISTRICT, AND QUASH THE FIR IN
CRIME NO.133/2021 ON THE FILE OF PRINCIPAL CIVIL JUDGE
(JUNIOR DIVISION) AND JMFC COURT, RAMDURG, BELAGAVI
DISTRICT, OFFENCE PUNISHABLE U/S 403, 406, 409, 420, 465, 467,
468, 469, 120B OF IPC,1860, AND ALL FURTHER PROCEEDINGS
THEREON, IN SO FAR AS THE PETITIONERS ARE CONCERNED VIDE
ANNEXURE-A, AND QUASH THE COMPLAINT OF 2ND RESPONDENT
DATED 06.08.2021 VIDE ANNEXURE-B IN CRIME NO.133/2021 ON
THE FILE OF PRINCIPAL CIVIL JUDGE (JUNIOR DIVISION) AND JMFC
COURT, RAMDURG, BELAGAVI DISTRICT.
THIS PETITION COMING ON FOR Admission THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
The petitioners have called in question the proceedings in Crime No.133 of 2021 pending before the Civil Judge (Junior Division) & JMFC, Ramdurg, Belgaum District registered for offences punishable under Sections 403, 406, 409, 420, 465, 467, 468, 469 and 120B of the Indian Penal Code.
2. Heard Sri.B.B.Bajantri, learned counsel for the petitioners and Sri.Ramesh Chigari, learned HCGP for respondent-State.
3. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows:-
4The 1st petitioner is the Managing Director and petitioners 2, 4 to 7 are the Directors of Shivasagar Sugars & Agro Products Limited ('the Company' for short) which is stated to have been established in the year 2011 in Udupadi Village, Ramdurg Taluk, Belgavi District. Petitioner No.3 who was earlier the Director of the Company claims to have resigned from the Directorship in the month of May 2015. The Company claims to be engaged in the business of manufacturing sugar and power generation and in 2011 also initiated Ethanol project. The Company claims to have achieved success in sugar production and their relations with farmers were cordial. The complainant who was one of whole time Directors of the Company was one of the authorized signatories for operation of bank accounts for the purpose of opening of bank accounts for the Company. He is also said to be the signatory of all Board resolutions of opening various bank accounts in different banks. Alleging certain illegal activities the EOGM held on 14-03-2014 resolved to remove the complainant from the post of Director. The petitioners also contend that due to illegal activities of the complainant the Company was made to suffer financially and was forced to close down. In this regard 5 the petitioners have initiated several proceedings against the complainant as narrated in the complaint.
4. The complainant also has registered several cases against the petitioners in which the petitioners claim that the Police after investigation have filed 'B' report.
5. The learned counsel appearing for the petitioners would seek to argue with vehemence that the present FIR in Crime No.133 of 2021 is one of those complaints registered against the petitioners to wreck vengeance and to harass them for having removed him from the post of Director. On other hand, the learned counsel Sri Shrikant T.Patil appearing for the respondent/complainant while taking this Court through the narration of the complaint would submit that there is large scale mis-appropriation by the petitioners in huge transactions amounting to 112 crores. The modus operandi of the petitioners is routing the amount through Punjab National Bank and siphoning of funds. He would submit that these are financial crimes that are committed by the petitioners and since the matter is still at the stage of investigation this Court should not 6 interfere at this stage of the proceedings. The learned High Court Government Pleader representing the State would also toe the lines of learned counsel representing the respondent.
6. I have given my anxious consideration to the submissions made by the respective learned counsel appearing for the parties and perused the material on record.
7. It is not in dispute that the petitioners have knocked the doors of this Court at the stage when the matter is still being investigated by the Police. The offences punishable are as afore-quoted. Since the entire issue springs from the complaint, certain allegations made in the complaint are required to be noticed and they read as under:
"6.The fact about the accused No.8 & 9 banks allowing the accused Nos.1 to 7 to open bank accounts in different banks has been disclosed by accused No.1 to independent auditors of accused Nos.8 & 9 bank i.e. M/s G.B. Rathi & Co, Chartered Accountants, vide his letter and the independent auditor has made a remark about the same in his Independent Auditor's Report dated 31.08.2019 on page.25 of the report. The fact about the routing of funds from the account of 7 Punjab National Bank and no recoveries being made by the accused nos. 8 & 9 has been seriously looked upon by the independent auditor Mr.Gokul Rathi and has passed serious remarks against the accused banks.
7.It has been transpired that, after taking permission to open and operate bank account in Punjab National Bank, Belgaum Branch, the Accused Nos. 1 to 7 have routed and exorbitant amount of Rs.112 Crore and odd amount from the said account of Punjab National Bank, Belgaum Branch, however, the accused No.8 and 9 made a recovery of only an amount of Rs.10 Crores and odd amount out of the entire transaction of Rs.112 Crores, which was not only surprising but against the baking policies laid down by the Reserve Bank of India.
8.When the accused No.8 & 9 bank had given loan to the said company on the basis of properties mortgaged by myself and other removed directors worth crores of rupees, the accused No.8 & 9 bank had put a specific condition that all the transactions shall be routed through the accounts maintained with accused Nos.8 & 9 and not otherwise. This was one of the most important condition and a condition 8 precedent, as the accused No.8 & 9 banks were duty bound to closely monitor the accounts of the said company for the purpose of effective and transparent operation and recovery of loan amount which were to the tune of crores of rupees.
11.The conduct of accused nos.8 & 9 banks giving such permission to the accused nos. 1 to 7 to operate the account of the company in different bank, when the accounts were in NPA, in a clandestine manner i.e without the consent of the mortgagers like me and others, makes it apparently clear that the officers of the accused No.8 &9 bank have joined hands with accused nos. 1 to 7 siphon huge funds to the extent of approximate amount of Rs.102 Crores, which were due and payable to the alleged loan accounts of accused no.8 & 9 but which were routed through other bank.
12.The accused nos. 8 & 9 bank, who were required to keep a close monitoring in the accounts of the said company for the following reasons:
i. Sanction loan advise dated
13.12.2012 provided that the
transactions shall be routed
9
through the accounts of
accused nos. 8 & 9 bank
only.
ii. Accused Nos. 8 & 9 bank had
admitted that my removal
from the company is illegal
and I have raised serious
concern about the usage of
the funds of the company.
iii. Huge amount were
recoverable from the
company as alleged by
accused Nos.8 & 9 bank.
iv. Already a complaint of
criminal misappropriation
of funds to the tune of
Rs.6,00,000/- was pending
against Rajendra Patil and
others in respect of the
Branch of Indian Overseas
Bank, Mudhol Branch.
13.Thus in view of the aforesaid facts and circumstances, the accused nos.8 & 9, had to be very very cautious and were required to take utmost care while monitoring the funds movement of the said company, as the amount of 10 alleged recovery was to the tune of Rs.100 Crores and above. However, the conduct of accused No.8 & 9 bank of allowing the accused Nos. 1 to 7 to open the account of the said company in another bank i.e. Punjab National Bank, and not monitoring the same with care and caution and further allowing the accused Nos.1 to 7 to siphon or convert the amounts routed in Punjab National Bank to the tune of Rs.102 Crores, is nothing but an act of dishonest misappropriation, criminal breach of trust and cheating by accused Nos. 1 to 7 in connivance with the officers of accused nos. 8 & 9 bank.
19. The accused nos. 1 to 7 have been illegally operating and managing the affairs of the company from the factory site and the entire stock of sugar, molasses, bagasse worth 112 crores was stored at the factory site and the same has been disposed and dispatched from the factory site to realize the amount of Rs.112 crores and odd amount and hence the offence has been first committed at the factory site. So also, the accused No.1 to 7 have also prepared false and fabricated stock statements at the factory site and furnished it with the accused nos.8 & 9 bank, therefore the offence is 11 committed at the factory site. The factory site is falling within the jurisdiction of this Police Station and hence the present complaint is filed with this Police Station."
The afore-quoted paragraphs are some of the narrations in the complaint. The complaint no doubt alleges financial fraud, criminal conspiracy and forgery forging the documents for the purpose of cheating against the petitioners. For this Court to conclude that the entire complaint is frivolous and a counter-
blast for the petitioners having registered several cases against the complainant or his removal from the post of Director, the stage is yet to come about as it is only on investigation, as and when a charge sheet is filed in the matter, such contentions can probably be looked into. Otherwise there are serious triable issues in the case at hand as the narration in the complaint, without doubt, would touch upon the offences punishable under Sections 403, 406, 409, 420, 465, 467, 468, 469 and 120B of the IPC. It is germane to notice the judgment of the Apex Court in the case of KAPTAN SINGH v. STATE OF UTTAR PRADESH
- (2021) 9 SCC 35 wherein at paragraphs 9.1, 9.2, 10, 12 and 14 it is held as follows:
12"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 13 FIR/complaint only are required to be considered and whether a cognizable offence is disclosed or not is required to be 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 14 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 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 15 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.
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 16 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 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.
12. Therefore, the High Court has grossly erred in quashing the criminal proceedings 17 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.
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 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."18
In the light of disputed questions of fact and serious triable issues existing in the case at hand and the judgment of the Apex Court, I decline to entertain the petition, particularly at this stage of the proceedings.
8. In the result, the criminal petition lacks merit and is dismissed.
SD/-
JUDGE Vb/-