Karnataka High Court
Mr. Rahul Pandya vs State Of Karnataka on 22 January, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 10.01.2025
Pronounced on : 22.01.2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF JANUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.6709 OF 2024
BETWEEN:
MR.RAHUL PANDYA
S/O SRI BHASKER BHANUPRASAD PANDYA,
AGED ABOUT 49 YEARS
RESIDING AT FLAT NO. D303,
CITILIGHTS, RUSTIQUE, ECC ROAD,
WHITEFIELD,
BENGALURU - 560 066.
... PETITIONER
(BY SRI SANDESH J.CHOUTA, SR.ADVOCATE FOR
SRI RAVI C.S., ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY WHITEFIELD CEN POLICE STATION
I FLOOR, WHITEFIELD MAIN ROAD,
BESIDE PRESTIGE WHITE MEADOWS,
SATHYA SAI LAYOUT, WHITEFIELD,
BENGALURU,
KARNATAKA - 560 066.
REPRESENTED BY
STATE PUBLIC PROSECUTOR
2
HIGH COURT OF KARNATAKA.
2. SAMSUNG R AND D INSTITUTE INDIA
BANGALORE PRIVATE LTD.,
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
NO. 2870, PHOENIX BUILDING
BAGMANE CONSTELLATION BUSINESS PARK
OUTER RING ROAD, DODDANEKUNDI CIRCLE
MARATHALLI, BENGALURU - 560 037.
REPRESENTED BY ITS
AUTHORISED REPRESENTATIVE
MS. SOPHIA DAS
HEAD HR-SSIR DIVISION.
... RESPONDENTS
(BY SRI B.N.JAGADEESHA, ADDL.SPP FOR R-1;
SRI RAGHAVENDRA K., ADVOCATE FOR R-2)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO 1. SET ASIDE THE ORDER DATED 07-06-2024
PASSED BY THE HONOURABLE 45TH ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE, BANGALORE IN CRIME NO.1145 OF
2020 REJECTING THE 'B' REPORT, TAKING COGNIZANCE OF THE
OFFENCES UNDER SECTIONS 66, 66(C), 72(A) OF THE
INFORMATION TECHNOLOGY ACT 2000 AND SECTION 420 OF
INDIAN PENAL CODE AND DIRECTING THE COMPLAINANT TO LEAD
EVIDENCE ON 20-07-2024 AT DOCUMENT NO.1 AND ETC.,
3
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 10.01.2025, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
The petitioner/accused is knocking at the doors of this Court
in the subject petition calling in question registration of a crime in
Crime No.1145 of 2020 for offences punishable under Sections 419
and 420 of the IPC and Sections 66C, 66D and 72A of the
Information Technology Act, 2000 ('the Act' for short).
2. Heard Sri C.S.Ravi, learned counsel appearing for the
petitioner, Sri B.N. Jagadeesha, learned Additional State Public
Prosecutor appearing for respondent No.1 and Sri K. Raghavendra,
learned counsel appearing for respondent No.2.
3. Facts, in brief, germane are as follows:-
The 2nd respondent/Samsung R & D Institute India-Bangalore
Private Limited ('the Company' for short) is the complainant. The
4
petitioner on completion of his Master's in Engineering from Indian
Institute of Technology, Kharagpur and securing first rank accepts
offer of employment offered by the 2nd respondent/Company after
an interview. He joins the Company as an Associate Director in the
Commercial Modem Software Development Team. The petitioner
works for about a year and on 27-04-2020 tendered his resignation.
After his resignation he sent documents from his official email id for
reviewing his assigned responsibilities as an employee. When no
response was received even on the last date of the notice period on
29-05-2020, he leaves the Company. After exit of the petitioner
from the Company comes the impugned crime registered on
24-09-2020 which becomes a crime in Crime No.1145 of 2020 for
the afore-quoted offences. The police conduct investigation and file
a 'B' report before the concerned Court. The complainant files a
protest petition. The 'B' report is rejected and cognizance is taken
for the afore-quoted offences. Taking of cognizance on rejection of
'B' report is what has driven the petitioner to this Court in the
subject petition.
5
4. The learned counsel appearing for the petitioner would
vehemently contend that the petitioner in the capacity of him being
the Associate Director and in terms of employment agreement had
access to confidentiality or confidential information. He is now
alleged that he has sent confidential organizational information via
24 emails to his personal id in violation of the security policy of the
complainant and the petitioner admits that he has sent all those
mails. He voluntarily surrenders his laptop, and mobile phone prior
to his last date of working in terms of the notice period. The learned
counsel submits that the petitioner has never indulged in data
thieving as is alleged and the issue which is purely a commercial
dispute between the parties is sought to be dressed with a colour of
crime. Therefore, the Police had rightly filed a 'B' report, as the
issue being a dispute with regard to employment and the Court has
erroneously taken cognizance of the offence. He would seek
quashment of entire proceedings pending before the concerned
Court.
5. Per-contra, the learned counsel appearing for the 2nd
respondent/Company would contend that the Police did not conduct
6
a proper investigation. On a shoddy investigation, they filed a 'B'
report. The Court has rightly rejected the 'B' report on filing of
protest petition and taken cognizance of the offence. The civil suit is
instituted by the complainant to restrain the petitioner/accused
from divulging any confidential information. Injunction is granted
against the petitioner/accused. The petitioner also filed a counter
claim which is rejected by the concerned Court. He would submit
that in a given case both civil and criminal law can go hand in hand.
He seeks dismissal of the petition.
6. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
7. The afore-narrated facts are not in dispute. The
employment of the petitioner with the 2nd respondent/Company is a
matter of record. An employment agreement is entered into
between the two and conditions of employment that are necessary
to be noticed read as follows:
"...... ..... .....
7
2. STANDARD CONDITIONS OF EMPLOYMENT
(a) In addition to the terms of this Agreement, You shall
be subject to the standard terms of employment of the
Company as stated in the Employee Handbook and
any other policies or procedures communicated to You
by the Company either orally or in writing ("Standard
Employment Terms"). The Standard Employment
Terms will be communicated to you from time to time
or be accessible by you on the Company's Intranet.
(b) The Standard Employment Terms will relate to various
matters relating to your working with the Company,
including hours of work, holidays, leave, code of
conduct, confidentiality policy, dress code, etc.
(c) The Standard Employment Terms are deemed to
include other policies of the Company that may be
created including the policy for prevention of
harassment at the workplace, internet and network
use policy, intellectual property policy, etc. The
Standard Employment Terms may be changed by the
Company from time to time at the sole discretion of
the Company and such changed Standard Conditions
of Employment shall become applicable to You
forthwith, upon receipt of notice of the same. It is
clarified that uploading of updated Standard
Employment Terms in the Company's intranet is
deemed as notice of such changed Standard
Conditions of Employment."
The petitioner, after a year, tenders his resignation and after the
resignation at the end of notice period on communicates the
following mail:
"Rahul Bhasker<[email protected]>
8
To: Sophia Das <[email protected]>
Cc: Balajee Sowrirajan<[email protected]>,
[email protected], Haesong Jung
<[email protected]>, Kiran
Nadagoudar<[email protected]>, Madhu Mohan
Mulbagal Rathnaiah <[email protected]>,
[email protected]
Hi Sophia and all,
First of all, my sincere apologies for this behavior.
I have committed a mistake and I am very sorry for the
same. I admit that I have behaved irresponsibly.
Prior to receiving this mail, I have voluntarily handed over
my phone, my personal laptop and my gmail password to
SSIR security for any further investigation. I am fully
cooperating in any kind of investigation from your side.
I do not wish to access this gmail account till the
investigation is over. However, if you want I can delete all
24 mails myself immediately upon confirmation form your
side.
I also declare that this information is not forwarded or sent
to anyone else. And I will never do the same.
Once again my sincere apologies to all of you.
Best Regards
Rahul Pandya
[Quoted text hidden]"
On 02-06-2020 he communicates the following further mail:
"Hi Sophia,
I am waiting for further update from your side.
9
Since my phone, personal laptop and gmail password
are in SSIR possession since 29th May, I would also
like to know when will I get back my personal
belongings.
As my kids school online classes started, it is of great
inconvenience to not have my laptop with me.
I am sure that my personal information will not be
misused in any manner since all my personal sensitive
information is stored in my phone and laptop.
Best Regards
Rahul Pandya
[Quoted text hidden]"
Long thereafter, a complaint comes to be registered by the
respondent/Company on 24-09-2020. Certain paragraphs of the
complaint are germane to be noticed. They read as follows:
".... .... ....
5. During the internal investigations, as is highlighted in
the KPMG Report, it was found out that even earlier,
i.e. on 19 May 2020 Rahul Pandya sent 1 (one) email
from his official Samsung e-mail ID
[email protected] to a Gmail ID bearing
[email protected], which contained details
of modem project/group, which is confidential and
commercially sensitive information belonging to SRI-B
as it contained information about ongoing commercial
projects and future roadmap.
6. It was also confirmed by KPMG that on 28 May 2020,
one day prior to his resignation, Rahul Pandya had
indeed sent 24 (Twenty four) Emails from his official
Samsung E-mail ID [email protected] to a
Gmail ID [email protected], as was also
10
found by Company's internal IT team earlier. In the
said batch of emails sent out on 28 May 2020, 10 e-
mails were confidential in nature and 12 emails
contained proprietary information of SRI-B."
.... .... ....
10. Sir, the aforesaid actions were very obviously
committed with an evil intent and criminal mind to
make an unlawful enrichment and deliberately causing
unlawful loss to the Company, both monetarily and
otherwise. Moreover, from the facts and
circumstances deciphered by both SRI-B internal team
and third party independent investigator KPMG, and
the duration and repetitive nature of his malafide
actions, it is crystal clear that the Ruhul Pandya was
not just cheating the Company on almost a daily basis
but possibly also had fraudulent intentions to steal
valuable confidential Data/proprietary information of
the Company from day one and possibly, even before
joining the Company, and prima facie appears that he
joined the Company only with the sole motive to
commit the aforesaid offences of Criminal Breach of
trust and cheating, in addition to offences committed
under the Information Technology Act, 2000."
The Police conduct investigation and file a 'B' report. The reason
for filing 'B' report can be gathered in the following paragraphs:
".... .... ....
¢£ÁAPÀ:25/02/2023 gÀAzÀÄ vÀ¤SÁ ¸ÀªÀÄAiÀÄzÀ°è DgÉÆæUÉ £ÉÆÃn¸ï eÁj
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ºÉýPÉAiÀÄ£ÀÄß zÁR®Ä ªÀiÁrPÉÆArzÀÄÝ, ¢£ÁAPÀ: 29/05/2020 gÀAzÀÄ DgÉÆæAiÀÄ
PÉ®¸ÀzÀ PÉÆ£ÉAiÀÄ ¢£ÀªÁVzÀÄÝ, ¢£ÁAPÀ: 28/05/2020 gÀAzÀÄ PÉ®¸ÀPÉÌ
C£ÀÄPÀÆ®ªÁUÀ§ºÀÄzÉAzÀÄ DgÉÆæ vÀ£Àß PÀA¥À¤AiÀÄ ªÉÄïï Lr
[email protected] ¤AzÀ ªÉÊAiÀÄQÛPÀ ªÉÄïï Lr
[email protected] UÉ vÀgÀ¨ÉÃwUÉ ¸ÀA§A¢ü¹zÀ zÀvÁÛA±ÀUÀ¼À£ÀÄß
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11
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On the 'B' report comes the protest petition by the complainant.
The crux of the protest petition was misuse of data. On the protest
petition comes the impugned order which rejects 'B' report and
taking of cognizance. The order insofar as it is germane reads as
follows:
".... .... ....
17. As rightly argued by the learned counsel for
accused, the breach of contract would amount to offence of
cheating only if the intention to cheat was existing at the
very inception. The investigation officer has stated in his
report that, there is no evidence to show that, the accused
was having such an intention since from joining the
complainant company. Whereas, the complainant has clearly
stated in paragraph No.10 of the first information statement
that, the act of transferring the data pertaining to the
12
company from official e-mail ID of the company to his
personal e-mail ID were obviously committed with an evil
intent and criminal mind to make an unlawful enrichment
and deliberately causing unlawful loss to the company, both
monetarily and otherwise. Further it is alleged that,
moreover from the facts and circumstances deciphered by
both SRI-B internal team and their party independent
investigator KPMG and the duration and repetitive nature of
his malafide actions, it is crystal clear that the accused was
not just cheating the company on almost a daily basis, but
possibly also had fraudulent intentions to steal valuable
confidential data/proprietary information of the company
from day one and possibly even before joining the company
and prima-facie appears that he joined the company with a
sole motive to commit the offences of criminal breach of
trust and cheating and offences under Information
Technology Act, 2000. Further, the complainant in the
protest petition has asserted that, the complainant company
is ready to provide evidence and produce necessary digital
and documentary evidence to prove that the accused has
committed the alleged offences.
18. Admittedly, the investigation officer has not
submitted the seized laptop and mobile phone for forensic
examination and obtained expert report with regard to
whether the alleged data of the company was transferred
and deleted from the said devices. Further, the investigation
officer has not collected necessary documents with regard to
appointment and agreement entered by the accused with the
complainant company in order to ascertain whether there is
any violation of terms of the employment agreement and
confidentiality agreement committed by the accused. On
meticulously going through the contents of 'B' report filed by
the investigation officer, it reveals that, the main ground or
reason for filing 'B' report is that, there is lack of evidence to
show that the accused has misused the stolen data or the
accused has stolen the said data with an intention to cheat
the complainant company or he has caused any financial loss
to company. The said grounds are not sustainable, as it is
not necessary for the complainant to prove that, the accused
has stolen the said data with an intention to cheat the
complainant company or he has caused any financial loss to
company. Mere transferring the confidential data of another
13
person or company without their permission, itself amounts
to an offence under Information Technology Act, 2000.
Hence, this Count is of the opinion that, at this stage there is
a prima - facie material on record to take cognizance of
offences punishable Sec.66, 66(C), 72(A) of Information
Technology Act, 2000 and Sec.420 of I.P.C. The ratio laid
down and the observations, made in the above cited
decisions is not applicable to the facts and circumstances of
the present case. Further, the protest petition filed by the
complainant contains all the necessary ingredients of a
complaint and it is signed by the authorised person of the
complainant company. In such circumstances, taking into
consideration the facts and circumstances of the case and
the material placed on record by complainant, this Court is of
the opinion that, an opportunity is to be given to complainant
company to prove its case by examining its witnesses with all
relevant documents with regard to violation of terms of the
employment agreement and confidentiality agreement by the
accused and commission of alleged offence under Sec.66,
66(C), 72(A) of Information Technology Act, 2000 and
Sec.420 of I.P.C. Accordingly, holding that the complainant
has made our reasonable grounds to reject the 'B' report
filed by the investigation officer and to take cognizance of
alleged offences, I answer Point No. 1 in affirmative.
19. Point No.2: In view of above conclusion arrived
on Point No.1, I proceed to pass the following:
ORDER
The 'B' report filed by investigation officer is hereby rejected.
Cognizance of offences punishable under Sec.66, 66(C), 72(A) of Information Technology act, 2000 and Sec.420 of I.P.C., is taken against the accused.
For sworn statement of complainant, call on 20-07- 2024."
14The concerned Court observes that as rightly contended by the learned counsel for the accused, a breach of contract would not amount to an offence of cheating. But, then goes on to hold that it was not a breach of contract, but it was a transfer of data unauthorizedly.
8. The issue now would be, "whether further proceedings before the concerned Court should be permitted to be continued or otherwise?"
9. In the considered view of this Court, the proceedings cannot be permitted to be continued, for the simple reason that the 2nd respondent/complainant has already filed a civil suit in O.S.No.5190 of 2020 to restrain the petitioner/accused from circulating any proprietary information. There is an order of injunction operating against the petitioner. A perusal at the contents of the complaint quoted hereinabove would indicate that for the same cause of action of preventing the petitioner from circulating confidential proprietary information suit is filed.
Therefore, the ground on which the civil suit is preferred is the 15 alleged breach of confidentiality clause in the agreement. The reason for registering the crime is again breach of confidentiality clause in the agreement. Therefore, it is a breach of agreement.
Whether on such breach of agreement the proceedings before the concerned Court should be permitted to be continued or otherwise need not detain this Court for long and delve deep into the matter.
10. The Apex Court in the case of DELHI RACE CLUB (1940) LIMITED v. STATE OF UTTAR PRADESH1, has held as follows:
".... .... ....
41. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been committed. Therefore, it is this intention, which is the gist of the offence.
42. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which 1 2024 SCC OnLine SC 2248 16 the offence of breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership of it must be of some other person. The accused must hold that property on trust of such other person. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention, yet they are mutually exclusive and different in basic concept.
43. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously."
(Emphasis supplied) The Apex Court holds that in the case of cheating the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution, unless fraudulent or dishonest intention is shown right from the beginning of the transaction. The beginning of the transaction between the two in the case at hand is an agreement. Therefore, no cheating arises in 17 the case at hand, as ingredients of Section 415 of the IPC are hardly met as elucidated by the Apex Court in DELHI RACE CLUB's case.
11. The Apex Court, a little earlier, in the case of SARABJIT KAUR v. STATE OF PUNJAB2, has held as follows:
".... .... ....
13. A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that Respondent 2 had improved his case ever since the first complaint was filed in which there were no allegations against the appellant rather it was only against the property dealers which was in subsequent complaints that the name of the appellant was mentioned. On the first complaint, the only request was for return of the amount paid by Respondent 2. When the offence was made out on the basis of the first complaint, the second complaint was filed with improved version making allegations against the appellant as well which was not there in the earlier complaint. The entire idea seems to be to convert a civil dispute into criminal and put pressure on the appellant for return of the amount allegedly paid. The criminal courts are not meant to be used for settling scores or pressurise parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in question on the basis of which FIR was registered was filed nearly three years after the last date fixed for registration of the sale deed. Allowing the 2 (2023) 5 SCC 360 18 proceedings to continue would be an abuse of process of the court."
(Emphasis supplied) The Apex Court holds that a breach of contract does not give rise to criminal prosecution. A civil dispute cannot be permitted to be continued as a crime. The criminal justice system must not be permitted to be misused to settle civil disputes. The dispute in the case at hand is civil in nature, which cannot be in dispute, as the complainant itself has filed the civil suit and it is pending consideration. In such circumstances, the Court exercising jurisdiction under Section 482 of the Cr.P.C. is also elucidated by the Apex Court in NARESH KUMAR v. STATE OF KARNATAKA3, wherein it is held as follows:
".... .... ....
5. Under these circumstances, we are of the considered view that this is a case where the inherent powers should have been exercised by the High Court under Section 482 of the Criminal Procedure Code as the powers are there to stop the abuse of the process and to secure the ends of justice.
6. In the case of Paramjeet Batra v. State of Uttarakhand, (2013) 11 SCC 673, this Court recognized that although the inherent powers of a High Court under Section 482 of the Code of Criminal 3 2024 SCC OnLine SC 268 19 Procedure should be exercised sparingly, yet the High Court must not hesitate in quashing such criminal proceedings which are essentially of a civil nature. This is what was held:
"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 not 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 the criminal proceedings to prevent abuse of process of the court."
(emphasis supplied)
7. Relying upon the decision in Paramjeet Batra (supra), this Court in Randheer Singh v. State of U.P., (2021) 14 SCC 626, observed that criminal proceedings cannot be taken recourse to as a weapon of harassment. In Usha Chakraborty v. State of West Bengal, 2023 SCC OnLine SC 90, relying upon Paramjeet Batra (supra) it was again held that where a dispute which is essentially of a civil nature, is given a cloak of a criminal offence, then such disputes can be quashed, by exercising the inherent powers under Section 482 of the Code of Criminal Procedure."
(Emphasis supplied) If the facts obtaining in the case at hand are pitted to the law elucidated by the Apex Court, the unmistakable inference would be 20 quashment of the entire proceedings. The Police had rightly filed a 'B' report. The concerned Court has erred in rejecting the 'B' report and taking cognizance of the offence.
12. The other offences are under Section 66 of the Act. The common ingredient between the offence of cheating under Section 420 of the IPC and Section 66 of the Act is dishonest or fraudulent intention. Therefore, the reasons rendered to hold Section 420 of the IPC as loosely laid, against the petitioner, would become applicable to Section 66 of the Act. The offence alleged under Section 66C which deals with dishonestly making use of electronic signature is not even the allegation in the case at hand. The allegation is sending emails from his official mail id to his personal mail id. The other offence is under Section 72A of the Act. The ingredients of the complaint would not become an offence under Section 72A even, as the petitioner has not accessed to anybody else's personal information or disclosed the information for wrongful gain. Therefore, none of the ingredients find place in the offences laid. Hence, permitting further proceedings before the concerned 21 Court would become an abuse of the process of law and result in miscarriage of justice.
13. For the aforesaid reasons, the following:
ORDER
(i) Criminal Petition is allowed.
(ii) FIR in Crime No.1145 of 2020 registered by Whitefield CEN Crime Police Station, Bangalore and pending before 45th Additional Chief Metropolitan Magistrate, Bengaluru stands quashed.
(iii) It is made clear that the observations made in the course of the order are only for the purpose of consideration of the case of petitioner under Section 482 of Cr.P.C. and the same shall not bind or influence the proceedings pending before any other fora.
Sd/-
______________________ JUSTICE M.NAGAPRASANNA Bkp CT:MJ