Karnataka High Court
Sathish Kumar. S vs State Of Karnataka on 12 January, 2024
Author: H.P. Sandesh
Bench: H.P. Sandesh
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF JANUARY, 2024 R
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL PETITION NO.10436/2023
BETWEEN:
SATHISH KUMAR S
S/O SHIVANNA
AGED ABOUT 38 YEARS
NO19/1, 7TH CROSS, AZAD NAGAR
NEAR T.R.MILL, CHAMARAJPET
BENGALURU-560018 ... PETITIONER
(BY SRI M.J.ALVA, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY INSPECTOR OF POLICE
KONANAKUNTE POLICE STATION
BENGALURU - 560 062
REP. BY STATE PUBLIC PROSECUTOR
HIGH COURT OF KARNATAKA BUILDING
BENGALURU - 560 001
2. SMT. T DIVYA
W/O M.BHARATH KUMAR REDDY
AGED ABOUT 38 YEARS
NO.411, 2ND FLOOR, UMA NIVAS
ROYAL COUNTY, JAMBUSAVARI DINNE
BENGALURU - 560 083 ... RESPONDENTS
(BY SRI B LAKSHMAN, HCGP FOR R1
R2 - SERVED & UNREPRESENTED)
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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
OF CR.P.C PRAYING TO QUASH THE CHARGE SHEET FILED BY
THE RESPONDENT NO.1 AGAINST THE PETITIONER IN
C.C.NO.8574/2023 (CR.NO.331/2019) FOR THE ALLEGED
OFFENCES PUNISHABLE UNDER SECTION 384, 420 AND 506 OF
IPC AND SECTION 38 OF KARNATAKA MONEY LENDERS ACT
AND SECTION 3 OF KARNATAKA PROHIBITION OF CHARGING
EXORBITANT INTEREST ACT AND ETC.
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 05.01.2024 THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
ORDER
This criminal petition is filed under Section 482 of Cr.P.C praying to quash the charge sheet filed by respondent No.1 against the petitioner in C.C.No.8574/2023 (Cr.No.331/2019) for the offences punishable under Sections 384, 420 and 506 of IPC; Section 38 of the Karnataka Money Lenders Act, 1961 (for short 'the Act of 1961') and Section 3 of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 (for short 'the Act of 2004').
2. Heard the learned counsel appearing for the petitioner and learned High Court Government Pleader appearing for the respondent No.1-State. Respondent No.2 is served but unrepresented.
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3. The factual matrix of the case of the complainant/respondent No.2 in the complaint dated 27.11.2019 that herself and her husband were running a business of manufacture of labels. One Mr. Santhosh introduced financier Mr.Sathish Kumar as they required liquid cash and they borrowed an amount of Rs.98,500/- on 01.10.2015 with interest at the rate of 5% per week. For this, the said Sathish took the cheques of them belongs to Andhra Bank and Bank of India and they were paying interest at the rate of 5% i.e., Rs.4,925/- per week. As the business was growing, the said Sathish was offering them money whenever needed from 01.10.2015 to 14.01.2019. In this duration, he gave an amount of Rs.65,36,000/- for which, he used to charge 5% interest per week and when the payment was not made, he was adding interest to the principle amount and was charging interest and penalty. The transaction was ended up paying with an amount of Rs.1,74,23,706/- to his personal account and to his C-tract account located in Basavanagudi branch. There was a money laundering case which was registered on 02.08.2018 in 4 Baiyappanahalli police station against the petitioner-Sathish Kumar.
4. It is further stated in the complaint that on 08.01.2019, the petitioner had kidnapped her husband and threatened her and forcefully made her to sign on the agreement of Rs.42,00,000/- with 21 cheques of Andhra Bank. At that time, she did not have any option other than signing the cheques and the agreement to save her husband and kid. After the incident, the petitioner repeatedly came to her house and office and threatened by getting local rowdies. It is also stated that as the complainant's family afraid to give complaint and paid an amount of Rs.7,40,000/- through NEFT and cash by discounting her company cheques and asked to return the cheques for the value of Rs.7,40,000/- out of earlier 21 cheques. But the petitioner refused to return those cheques by saying that the amount of Rs.7,40,000/- is adjusted towards interest and they have to clear all those 21 cheques. Thereafter, the petitioner started to collect 1% interest per day that means 30% interest per month and when the amount was not paid in time, the petitioner was continuously added the same to the principle 5 amount and threatened them to pay the amount how much he demands. Hence, without any other alternative, the complainant approached the police and filed the complaint. Based on the complaint, FIR was registered in Cr.No.331/2019 for the offences punishable under Sections 384, 365, 506 of IPC; Section 38 of the Act of 1961 and Section 3 of the Act of 2004. The police have investigated the matter and filed the charge sheet. While filing the charge sheet, deleted Section 365 of IPC and added 420 of IPC. Hence, the present petition is filed before this Court.
5. The main contention of the counsel for the petitioner that the very initiation of criminal proceedings is nothing but an abuse of process of law since there is no prima facie material evidence collected by respondent No.1 to implicate the petitioner in the alleged offences. The alleged execution of an agreement is said to have been taken place between the husband of respondent No.2 and the petitioner on 09.01.2019 wherein respondent No.2 also signed the said document as a witness but the complaint was lodged belatedly i.e., after the lapse of nearly one year for which there is absolutely no explanation offered by 6 respondent No.2 till the petitioner had initiated the proceedings against respondent No.2 under Section 138 of N.I.Act. The lodging of the complaint and filing of the charge sheet is nothing but a misuse of the process of law. The allegation set out in the complaint is nothing but the defence to escape from the liability and the penal consequences in respect of an offence punishable under Section 138 of N.I. Act. The police also mechanically filed the charge sheet without making proper investigation. The counsel also would vehemently contend that to attract the penal provision under Section 420 of IPC, the complaint does not disclose any prima facie or legal foundation. On the other hand, the complaint itself goes on narrating series of monitory transactions for growth of their business. The counsel also would vehemently contend that the statement of witnesses i.e., CW1 to CW14 does not attract the offences which have been invoked against the petitioner. The complaint does not disclose any molestation of respondent No.2 to invoke Section 38 of the Act of 1961. The term of molestation has not been defined under the Money Lenders Act. No ingredients of Section 38 of the Act of 1961 are invoked. In the complaint, an allegation of 7 kidnap and abduction was made. Therefore, the case was registered against the petitioner for an offence of Section 365 of IPC but nothing was found in the investigation thus, Section 365 of IPC was deleted. The allegation that 21 cheques and other signed papers were collected. But during the course of the investigation, those cheques have not been recovered and no other documents have been produced along with the charge sheet. Respondent No.2 had not followed the mandates of Section 5 of the Act of 2004 and without complying the statutory requirements of law, respondent No.1 had no jurisdiction to register the complaint against the petitioner. Section 506 of IPC and Section 3 of the Act of 2004 are non-cognizable offences in respect of which respondent No.1 had no jurisdiction to file the charge sheet without following the procedure prescribed under Section 155 of Cr.P.C. The entire charge sheet does not make out a prima facie case against the petitioner. Hence, it requires interference of this Court to quash the same.
6. The learned counsel appearing for the State would vehemently contend that the grounds which have been urged 8 before the Court is a matter of trial. There is a specific averment in the complaint that the petitioner caused the life threat and obtained the signature of the complainant on the agreement. It is also borne out from the records that there was a loan transaction and exorbitant interest has been collected and the statement of the witnesses including Bank Manager also recorded. Hence, the matter requires trial and no grounds are made out to quash the proceedings.
7. Having heard the learned counsel appearing for the petitioner and the learned HCGP appearing for respondent No.1, and also the grounds urged in the petition, the point that would arise for the consideration of this Court is:
1. Whether the petitioner has made out a ground to invoke Section 482 of Cr.P.C to quash the charge sheet filed against him?
2. What order?
Point No.1:
8. Having perused the complaint dated 27.11.2019, it is stated that one Santhosh had introduced Mr. Sathish Kumar to 9 the complainant for financial assistance and the transactions were taken place from 01.10.2015 to 14.01.2019. Initially, the complainant availed an amount of Rs.98,500/- from the petitioner and continued the borrowings and ultimately, an amount of Rs.65,36,000/- was paid and an allegation against the petitioner is that he was charging interest at the rate of 5% per week. It is also stated that an amount of Rs.1,74,23,706/- was paid to the petitioner from the account of the complainant. It is also the case of the complainant that a money laundering case was also registered against the petitioner by Baiyappanahalli police on 02.08.2018. It is the specific allegation in the complaint that on 08.01.2019, her husband was kidnapped and threatened and got the signature on the agreement and also collected 21 cheques from her. It is also an allegation that subsequently, she made payment of Rs.7,40,000/- and the same was adjusted towards interest at the rate of 30% per month. The Investigating Officer after registering the case, investigated the matter and filed the charge sheet and during the course of investigation, recorded the statement of witnesses i.e., CW1 to CW14.
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9. It is not in dispute that while filing the charge sheet, Section 365 of IPC is deleted with regard to the kidnap is concerned. But there is a force in the contention of the counsel for the petitioner that during the course of investigation, no materials are collected with regard to the kidnap is concerned. It is also the contention of the counsel for the petitioner that an allegation was made that at the time of kidnap and abduction, 21 cheques were collected but in order to prove the said fact, no cheques were recovered from the petitioner. It is important to note that when the investigating officer did not found any material with regard to kidnap and seizure of cheques, there is a force in the contention of the counsel for the petitioner that a false allegation is made against him stating that 21 cheques were collected. The counsel for the petitioner also brought to notice of this Court that when the kidnap and forcibly collection of cheques was alleged referring the incident of 08.01.2019, no complaint was given from January to November 2019 and the complaint was given on 27.11.2019.
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10. It is also important to note that in the charge sheet, the complainant and her husband were made as CW1 and CW2; CW3 is the brother of CW1 who speaks with regard to obtaining of 21 cheques and filing of the case; CW4 is the person who introduces the petitioner to CW1 and CW2 and he speaks about obtaining of cheques and filing of case under Section 138 of N.I. Act; CW5 and CW6 are the Panchnama witnesses; CW7 is the witness who speaks with regard to payment of more money to the petitioner by making audit; CW8 to CW10 are the Bank Managers who gave the details of bank account which have been referred in the complaint; CW11 is the bank employee who gave the particulars of the account and CW12 to CW14 are the police witnesses. It is important to note that the petitioner has produced the copy of the private complaint filed against the complainant on 03.10.2019 and both the complaints were filed on the very same date and the Trial Court has took the cognizance and registered the case as a criminal case against respondent No.2 herein. The petitioner also produced the copy of the appeal filed by the petitioner against the acquittal order 12 passed in C.C.No.28673/2019 and so also the copy of the appeal filed against the order passed in C.C.No.28673/2019.
11. Perused the copy of the complaint and also the registration of the criminal case under Section 138 of N.I. Act as well as appeal filed by the petitioner against the order of acquittal. It is also important to note that the complainant herself has admitted in the complaint that there was a financial transaction between them and payments were also made through bank. Thus, it is clear that the complainant borrowed the money from the petitioner from 2015 to 2019. It is also important to note that an allegation of kidnapping was made in the complaint that is in the month of January 2019, but the complaint was given in the month of November 2019 and no proper explanation on the part of respondent No.2 regarding delay in lodging the complaint though explained for the said date. But not stated what prevented her to give complaint afterwards. It is also the case of the complainant/respondent No.2 that by threatening, the petitioner obtained the signature on the agreement and took 21 cheques from them but those 13 cheques were not seized during the course of investigation. No doubt, there is a reference in the complaint that earlier to the present complaint, a money laundering case was registered against the petitioner herein. It is also important to note that the complainant is offshoot of PCRs filed against respondent No.2 in the month of October that is on 03.10.2019 and proceedings under Section 138 of N.I. Act was initiated but the complaint was given on 27.11.2019, even though an allegation of kidnapping and abduction was made in the month of January 2019. From January 2019 till November 2019, the complainant was kept quiet and not lodged any complaint. Thus, the records reveal that after filing of the complaint under Section 138 of N.I. Act, the present complaint is filed. It is very clear that there were financial transactions between the petitioner and respondent No.2 that too for a period of four years i.e., from 2015 to 2019. The investigating officer comes to the conclusion that it is not a case of kidnapping thus, deleted Section 365 of IPC and invoked Section 420 of IPC and also Section 384 of IPC. This Court would like to refer the very Section 420 of IPC which reads as follows: 14
"420. Cheating and dishonestly inducing delivery of property.-- Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
12. Having read the Section 420 of IPC, it is clear that there has to be a dishonest intention from the very beginning, which is sine qua non to hold the accused guilty for commission of the said offence. In this regard, this Court would like to refer the judgment of the Apex Court reported in (2009) 14 SCC 696 in the case of DALIP KAUR AND OTHERS vs JAGNAR SINGH AND ANOTHER wherein the Apex Court held that in order to invoke Section 420 of IPC there must be ingredients of cheating that is fraudulent and dishonest intention must exist from the very inception when the promise or representation was made.
13. This Court also would like to refer the judgment of the Apex Court reported in (2021) 3 SCC 751 in the case of ARCHANA RANA vs STATE OF UTTAR PRADESH AND 15 ANOTHER wherein the Apex Court held that to quash criminal proceedings against accused under Section 420 as it could not be said that averments in FIR and allegations in complaint against appellant are constituted offences. In the case on hand also no such averments with regard to cheating but while filing of charge sheet, offence under Section 420 was invoked.
14. This Court also would like to refer the judgment of the Apex Court reported in (2015) 8 SCC 293 in the case of VESA HOLDINGS PRIVATE LIMITED AND ANOTHER vs STATE OF KERALA AND OTHERS wherein the Apex Court held that while invoking Section 420, in the absence of ingredients of cheating, culpable intention at the time of making initial promise, absent, male fide criminal proceedings which amounts to abuse of process of Court should not be allowed.
15. This Court also would like to refer the judgment of the Apex Court reported in (2021) 18 SCC 70 in the case of N.RAGHAVENDER vs STATE OF ANDHRA PRADESH, CBI wherein the Apex Court held that cheating, deception of any person, fraudulently or dishonestly inducing that person to 16 deliver property to any person, mens rea of accused at the time of inducement, necessity of existence of fraudulent and dishonest intention at inception when promise or representation made, phrase 'dishonestly' emphasizes deliberate intention to cause wrongful gain or wrongful loss and when this is coupled with cheating and delivery of property, offence becomes punishable under Section 420 amounts to breach of contract.
16. In the case on hand, it has to be noted that a specific allegation of kidnapping of her husband and abduction was made but no such cheques which have been forcibly taken were seized during the course of investigation. Admittedly, there was a financial transaction between the petitioner and respondent No.2. It is also not in dispute that two cases were initiated against respondent No.2 under Section 138 of N.I. Act and cognizance was taken and the cases are pending. Having considered the material available on record it is nothing but offshoot of a complaint as against the proceedings initiated against respondent No.2 under Section 138 of N.I.Act. It is also important to note that in the complaint there is no allegation of 17 dishonest intention on the part of this petitioner. It is very clear that in order to invoke Section 420 of IPC, there must be dishonest intention from the very beginning which is sine qua non to hold that accused is guilty for commission of the said offence. The police while filing the charge sheet, deleted Section 365 of IPC and invoked Sections 420 and 384 of IPC. When the investigating officer comes to the conclusion that there was no kidnapping and also not seized any cheques as alleged by the complainant, the question of invoking Section 420 of IPC does not arise. Only if any such valuable document is collected or deceived to deliver any property or any person, the very allegation of kidnapping or collecting cheques have to be made. But in the case on hand, no such ingredients are found to invoke Section 420 of IPC.
17. The police also filed the charge sheet under Section 384 of IPC against the petitioner and considering the same, this Court would like to extract Sections 383 and 384 of IPC which reads as follows:
"383. Extortion.--Whoever intentionally puts any person in fear of any injury to that person, or to any 18 other, and thereby dishonestly induces the person so put in fear to deliver to any person any property or valuable security, or anything signed or sealed which may be converted into a valuable security, commits "extortion".
384. Punishment for extortion.--Whoever commits extortion shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both."
18. Having considered the ingredients of Section 383 and also the penal provision of Section 384 of IPC, it is very clear that whoever intentionally puts any person in fear of any injury to that person, or to any other, and thereby dishonestly induces the person so put in fear to deliver to any person any property or valuable security, or anything signed or sealed which may be converted into a valuable security, commits "extortion".
19. Having perused this, it is very clear that if any valuable security is obtained, then it comes within the definition of "extortion". This Court already discussed with regard to the averments made in the complaint wherein no doubt, a specific allegation is made that she was subjected to the threat and collected 21 cheques and also got the signature on the 19 agreement. This Court already taken note of the material collected by respondent No.1 during the course of investigation wherein no such document of agreement and the alleged cheques were recovered. When such being the case, the question of invoking Section 384 of IPC against the petitioner does not arise.
20. The Apex Court in the judgment reported in (2014) 15 SCC 357 in the case of ISAAC ISANGA MUSUMBA AND OTHERS vs STATE OF MAHARASHTRA AND OTHERS while quashing the FIR itself, in connection with the offences punishable under Sections 383 and 384 of IPC, comes to the conclusion that unless property is delivered to the accused pursuant to the threat, no offence of extortion is made out and FIR for offence under Section 384 cannot be registered.
21. This Court would like to refer the judgment of the Apex Court reported in 2024 LIVE LAW (SC) 41 in the case of RAJARAM SHARMA vs THE STATE OF UTTAR PRADESH AND ANOTHER wherein the Apex Court vide order dated 04.01.2024 held that when the High Court was called upon to invoke power 20 under Section 482 of CrPC raising such contentions, it was incumbent upon the High Court to consider the question whether the allegations would constitute the offence(s) alleged against the appellant. It is also observed that a scanning of the FIR and the subsequently filed charge sheet, we are of the considered view that ingredients necessary to constitute the offence under Sections 420, 406, 504 and 506 of the IPC are not made out. The said aspect was not at all looked into by the High Court.
22. Having perused the principles laid down in the judgments referred supra and also the recent judgment of the Apex Court, this Court has to consider the material available on record. In the case on hand, I have already pointed out that though alleged threat is made, the investigating officer comes to the conclusion that there was no material with regard to the allegation of kidnapping. In order to invoke an offence punishable under Section 384 of IPC, there must be a specific ingredient of Section 383 but prima facie, no such valuable security or anything signed or sealed which may be converted into a valuable security is recovered at the instance of the 21 petitioner hence, continuing of proceedings against the petitioner in the absence of such recovery amounts to an abuse of process. Hence, it is a fit case to invoke Section 482 of Cr.P.C to quash the charge sheet filed against the petitioner or otherwise it leads to miscarriage of justice. This Court already pointed out the fact that already there were monitory transaction between the petitioner and respondent No.2 and also the material discloses for having taken the amount and complaint was filed belatedly that is after initiation of proceedings under Section 138 of N.I. Act against the complainant. Hence, it amounts to abuse of process.
23. Having considered the material available on record and taking into note of the fact that the present complaint is filed after initiation of 138 proceedings against respondent No.2. In the complaint, it is alleged that already a case has been registered against the petitioner herein by Baiyappanahhali police for the offence punishable under Section 3 of the Act of 2004. But continuing of this case only to consider Section 3 of the Act of 2004 is nothing but an abuse of process of law. Hence, 22 I am of the opinion that the petitioner has made out the grounds to quash the proceedings initiated against him under Section 482 of Cr.P.C. Accordingly, Point No.1 is answered as affirmative. Point No.2
24. In view of the discussions made above, I pass the following:
ORDER The criminal petition is allowed.
The charge sheet filed by respondent No.1 against the petitioner in C.C.No.8574/2023 (Cr.No.331/2019) for the offences punishable under Sections 384, 420 and 506 of IPC;
Section 38 of the Karnataka Money Lenders Act, 1961 and Section 3 of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 is hereby quashed.
Sd/-
JUDGE SN