Karnataka High Court
Amarnath Somalapuram And Anr vs State Of Karnataka And Anr on 18 April, 2023
CRL.P.NO.200365/2022
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 18TH DAY OF APRIL, 2023
BEFORE
THE HON'BLE MR JUSTICE S RACHAIAH
CRL.P.NO.200365/2022
BETWEEN
1. AMARNATH SOMALAPURAM
AGE: 42 YEARS,
SON OF SRI U. GALEPPA REDDY,
RESIDING AT NO.470, 1ST STAGE,
6TH MAIN ROAD, 5TH BLOCK,
H.B.R. LAYOUT, KALYANNAGAR,
BANGALORE-560 043
2. SRI U. GALEPPA REDDY
AGE: 69 YEARS,
SON OF SRI CHINNA GALEPPA
RESIDING AT NO.470, 1ST STAGE,
6TH MAIN 5TH BLOCK,
H.B.R. LAYOUT, KALYANNAGAR,
BENGALURU-560 043. ...PETITIONERS
(BY SRI DHANAJAY VIDYAPATI JOSHI, SENIOR COUNSEL
(BY V.C.) FOR SRI KASHYAP N. NAYAK, ADVOCATE)
AND
1. STATE OF KARNATAKA
REPRESENTED BY RAICHUR P.S.
S.P.P HIGH COURT BUILDING,
KALABURAGI.
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CRL.P.NO.200365/2022
2. SRI. VIKRAM SREERAMA
AGE: 41 YEARS,
SON OF SRI S.N ARJUNA
RESIDING AT NO. 7-7-48/95
SAVITRI COLONY,
OLD JOHNSON ROAD, RAICHUR,
KARNATAKA-584 101.
....RESPONDENTS
(BY SRI SHARANABASAPPA M. PATIL, HCGP FOR R1;
SRI SRINIVAS V. SUMAN K.S. (BY VC) AND
SRI GANESH NAIK, ADVOCATES FOR R2)
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF CR.P.C. PRAYING TO CALL FOR RECORDS IN
C.C.NO.663/2020 PENDING ON THE FILE OF THE II
ADDITIONAL CIVIL JUDGE AND JMFC-IV, RAICHUR AND
QUASH THE IMPUGNED ORDER DATED 15.06.2020
PASSED BY THE 2ND ADDITIONAL CIVIL JUDGE AND JMFC-
IV, RAICHUR IN C.C.NO.663/2020 (CRIME NO.5/2018 OF
RAICHUR CEN POLICE STATION, RAICHUR) FOR THE
OFFENCES PUNISHABLE UNDER SECTIONS 406 AND 420
READ WITH SECTION 34 OF IPC.
THIS CRIMINAL PETITION HAVING BEEN HEARD
AND RESERVED ON 03.03.2023 COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT
MADE THE FOLLOWING:
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CRL.P.NO.200365/2022
ORDER
The petitioners filed this petition seeking to quash the impugned order dated 15.06.2020 in C.C.No.663/2020 passed by the II Additional Civil Judge and JMFC-IV, Raichur.
02. The Brief facts of the case The petitioner No.2 and respondent No.2 had entered into partnership and started their business in the name and style as M/s. Amvicube. The object of the Firm is to develop and build a machine for paddy analysis which including selling and marketing the said machine. The petitioners were undertaking for development of the machine to automate the process of paddy analysis. The petitioner No.1 had conceived the idea of mechanizing and automating the process using a technology to significantly enhance the efficiency and accuracy of such paddy analysis. The respondent No.2 came to know that the petitioner No.1 undertake the research and development on the same subject and the petitioner No.1 was offered -4- CRL.P.NO.200365/2022 to provide financial assistance for further development of the product. Accordingly, the offer was accepted by the petitioner No.1 and the machine was invented.
03. After invention of the paddy analyzer machine, petitioner No.1 and respondent No.2 have applied for patent, in the name and style as "Amvicube P.A. 2.0"
jointly.
04. It is further submitted that during 2016 and 2018, the respondent No.2 has sold about 25 machines for the price of rupees five lakhs each. The amount which the respondent No.2 has sold has not been shared among the petitioners No.1 and 2. The petitioner No.2 on coming to know that the respondent No.2 trying to dominate the business, without following the agreement entered into between them, written a letter to the banker where the company account was opened and being maintained, seeking for cancellation of the authorization given to the respondent No.2 to operate the bank account. As a counter blast, the respondent No.2 filed a criminal case -5- CRL.P.NO.200365/2022 against the petitioners before the jurisdictional police. The police have registered the FIR in Crime No.5/2018 stating that the petitioner No.1 had received a sum of Rs.1,42,500/- from the respondent No.2 on 07.03.2018 promising that he would develop a software for P.A. Analyzer and also share the source code. As such, the petitioners No.1 and 2 have colluded and cheated the respondent No.2. The police submitted a charge-sheet against the petitioners. The learned Magistrate took cognizance of the offences under Sections 406 and 420 read with Section 34 of IPC and summons was issued to the petitioners. Hence, this petition.
05. Heard Sri. Dhananjay Vidyapati Joshi, the learned Senior Counsel for Sri. Kashyap N. Nayak, the learned counsel for the petitioners, Sri. Sharanabasappa M. Patil, the learned High Court Government Pleader for the respondent No.1 - State and Sri. Srinivas V. Suman K.S. for Sri. Ganesh Naik, the learned counsel for the respondent No.2.
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06. The learned counsel for the petitioners submits that the respondent No.2 started business with petitioner No.2 and petitioner No.1 developed a software of the P.A. analyzer and there was a difference of opinion between the petitioners and the respondent No.2. As such, the petitioners No.2 has made a requisition to the bank to cancel the authorization of the respondent No.2 to operate the bank account pertaining to the Firm. As a counter blast, the false case has been registered against the petitioners.
07. It is further submitted that, the respondent No.2 though working along with petitioners as a partner, he has not shared the profit of the Firm with the petitioners, in spite of clear information regarding 25 Paddy Analyzer machines being sold to the farmers for a sum of rupees five lakhs each. It is further stated that there is a arbitration clause in the agreement, if any conditions are violated as per the terms of the agreement, the aggrieved party must approach the arbitrator for the remedy. Such being the fact, filing of criminal case is only -7- CRL.P.NO.200365/2022 to pressurize the petitioners to yield the illegal demand of respondent No.2. As such, the learned counsel for the petitioners prays to quash the order dated 15.06.2020 issued by the learned Magistrate.
08. It is further submitted that the petitioner No.2 filed a arbitration proceedings against the respondent No.2 and the learned Arbitrator allowed the arbitration proceedings and directed the respondent No.2 to share the profit and also to produce books of accounts. In the said arbitration proceedings, the respondent No.2 made a counter claim to provide software source code of the P.A. analyzer. The same has been denied.
09. It is further submitted that the respondent No.2 being aggrieved by the award of the arbitration, preferred an appeal before the Civil Court for adjudication. In the meantime, filed one more additional suit, against the petitioner No.1 seeking to provide software source code of the machine which the petitioner No.1 has invented. Once, the matter is seized before the Civil Court and the relief sought for by the respondent No.2 has been denied by the -8- CRL.P.NO.200365/2022 Arbitrator, the registration of the criminal case with an ulterior motive to pressurize the petitioners which is not permissible and the criminal case, has to be quashed.
10. The learned counsel for the respondent No.2 vehemently opposed the petition and submitted that, the petitioner No.1 even though invented and developed the software of P.A. Analyzer machine, it was financed by the respondent No.2. It is evident from the record that the petitioner No.1 and respondent No.2 applied for patent jointly. It is further submitted the petitioners have colluded to cheat the respondent No.2, intentionally walked out from the Firm and joined the hands with others without giving the software code of the P.A. Analyzer. The matter requires to be tried in a full pledged trial. Hence, invoking the inherent jurisdiction may not be appropriate in such cases.
11. The learned High Court Government Pleader appearing for the State submitting that the investigating officer conducted the investigation in detail and found that there are sufficient reasons to proceed against the -9- CRL.P.NO.200365/2022 petitioners. As such, the investigating officer submitted the charge-sheet. Therefore, quashing the proceedings at this stage certainly would effect the credibility of the investigating agency. As such, the learned High Court Government Pleader prays to dismiss the petition.
12. After having heard the learned counsel for the respective parties and also perused the documents available on record, it appears that the petitioner No.2 and the respondent No.2 were the partners of the Firm namely M/s. Amvicube. There was agreement to develop paddy analyzer machine with the help of petitioner No.1. Financial support was offered to petitioner No.1 to develop the software technology. Accordingly, he invented the machine and applied for "patent" along with the respondent No.2.
13. It is stated that the respondent No.2 has sold 25 machines for rupees five lakhs each and has not shared the profits to petitioners. As such, there was a grievance among the petitioner No.2 and the respondent No.2. The
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CRL.P.NO.200365/2022petitioner No.2 has made a request to the bank to cancel the authorization of respondent No.2 to operate the bank account of the Firm. In the meantime, the petitioner No.2 filed a petition for appointment of arbitrator in C.M.P. No.157/2018 and a sole arbitrator has been appointed. The arbitration proceeding was initiated and arbitration award was passed. The respondent No.2 had to return the misappropriated amount along with interest at the rate of 18% p.a. and also an injunction order was passed restraining the respondent No.2 from manufacturing, developing, marketing or selling the product "Amvicube". In the said order, it is needless to say that the counter claim of the respondent No.2 has been rejected.
14. Aggrieved by the same, the respondent No.2 preferred an appeal under Section 34 of the Arbitration and Conciliation Act, 1996 before the City Civil and Sessions Judge, Commercial Division at Bengaluru in Com.A.S.No.148/2019, the same is pending for adjudication. Similarly, the petitioner No.1 filed civil case against the respondent No.2 in O.S.No.398/2019
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CRL.P.NO.200365/2022restraining him from being sold the Amvicube product. The same is also pending for consideration. In the meantime, the respondent No.2 filed one more suit in O.S.No.9386/2019 against the petitioner No.1 seeking the relief to provide software source code of Amvicube P.A.2.0. and for a direction to pay him 40% of all expenses incurred by him on the Firm Amvicube. The same is also pending for consideration. Having regard to the rival contention of the parties and also pendency of civil proceedings between the petitioners and the respondent No.2, it is relevant to refer the judgment of the Hon'ble Supreme Court in the case of Paramjeet Bhatra vs. Uttarkhand and others reported in (2013) 11 SCC 673, Para No.12 reads thus:- "12. While exercising its jurisdiction under Section 482 of the Code the High Court has to be cautious. This power is to be used sparingly and only for the purpose of preventing abuse of the process of any court or otherwise to secure ends of justice. Whether a complaint discloses a criminal offence or not depends upon the nature of facts alleged therein. Whether essential ingredients of criminal offence are present or
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CRL.P.NO.200365/2022not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash criminal proceedings to prevent abuse of process of court."
15. On careful reading of the dictum of the Hon'ble Supreme Court, no doubt in the present case there are number of civil litigations pending between the petitioners and the respondent No.2. In fact, the petitioner No.2 had initiated arbitration proceedings against the respondent No.2, wherein the respondent No.2 made a counter claim and sought for providing software source code "Amvicube P.A. 2.0", the said counter claim has been denied by the arbitrator. Such being the fact, filing the criminal case on the said fact and on the same ground, considered as abuse of process of law. Hence, interference by this Court by invoking inherent jurisdiction to deter the abuse of process of law is essential.
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CRL.P.NO.200365/2022
16. In the light of the above observations, I proceed to pass the following;
ORDER The petition is allowed.
The order dated 15.06.2020 in C.C.No.663/2020 on the file of the II Additional Civil Judge and JMFC-IV, at Raichur, stands quashed.
In view disposal of the main petition, the pending I.As. do not survive for consideration and hence the same are also disposed of.
Sd/-
JUDGE KJJ