Bangalore District Court
Serious Fraud Investigation Office vs A1-C.P.Yogeshwara on 21 November, 2025
KABC030815962021
Presented on : 10-11-2021
Registered on : 10-11-2021
Decided on : 21-11-2025
Duration : 4 years, 0 months, 11 days
IN THE COURT OF THE XLII ADDITIONAL CHIEF JUDICIAL
MAGISTRATE, BENGALURU CITY
Present: Shri.K.N.SHIVAKUMAR, B.Sc.,(Agri),L.L.M.,
XLII Addl.CJM, Bengaluru City
Dated this the 21st day of November, 2025
C.C.No. 30788/2021
COMPLAINANT: SERIOUS FRAUD INVESTIGATION OFFICE,
Ministry of Corporate Affairs
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110003.
Represented by Assistant Director
Mr. Saumendra Kumar Nanda.
(Represented By Sri. NCS, Advocate)
-Vs-
ACCUSED: 1. Sri. C.P. Yogeshwara,
S/o. Sh. Puttamadegowda,
Aged about 48 Years,
Managing Director of Megacity
2 C.C.No. 30788/2021
(Bengaluru) Developers
& Builders Limited
464, 1st 'G' Cross,
2nd Phase, BSK 3rd Stage,
BENGALURU 560085.
2. Ms. Manju Kumari
W/o. C.P. Yogeshwara
Aged about 42 Years,
Developers & Builders Limited,
143, 5th Main, BSK 3rd Stage,
BENGALURU 560085.
3. Shri Arun Charantimath
S/o. Sh. Rajashekar Charantimath
Aged about 56 Years,
Ex-Chairman of MDBL
508, 10th Cross, RMV Extension,
BENGALURU - 56080.
(Discharged)
4. Smt. Sujata Charantimath
W/o. Shri. Arun Charantimath
508, 10th Cross, RMV Extension,
BENGALURU - 56080.
(Discharged)
5. M/s. Mega City (Bengaluru) Developers &
Builders Pvt Ltd.,
(Presently Megacity
(Bangalore) Developers and
Builders Ltd.)
(Represented by its
Nominee Director)
Sri. C.V. Sanjeevan
Mega Tower, 120,
Kengal Hanumanthaiah Road,
BENGALURU 560027.
3 C.C.No. 30788/2021
(Accused No.1, 2 & 5
Represented by Sri. VKJ Advocate)
JUDGMENT
The Complainant has filed complaint U/Sec.200 of Code of Criminal Procedure for the offences punishable U/sec.420, 120B & 177 of IPC against the Accused.
2. The case of the prosecution in brief is as follows; The accused No.1 was the Managing Director, accused No.2 to 4 were the Directors of accused No.5- M/s. Megacity (Bengaluru) Developers & Builders Ltd., (herein after referred to as 'MDBL'). Which was incorporated as a private limited company on 11/08/1994 and converted into a public limited company on 12/08/1998, with the object of carrying on the business to develop, construct, furnish, let-out, sell, deal in and to carry on all or any of the functions of Proprietors of lands, flats, dwelling houses, shops, offices, commercial complexes, factory sheds, buildings and 4 C.C.No. 30788/2021 accommodation of all kinds. The accused under the said company have floated a real estate project named Vajragiri Township project and collected about Rs.60 Crores from the public towards booking amounts in respect of the same. However, the said project was not materialized and large number of investors money was not refunded. Accordingly, there were several complaints from the investors pointing towards the financial affairs of said company being conducted prejudicial to the interest of said investors. In view of such complaints regarding financial fraud against the company received by the Ministry of corporate Affairs ( for short 'MCA' ) , an inspection of the company U/Sec. 209A of the companies Act,1956 was ordered and accordingly, the inspection report was submitted to the Ministry of Corporate Affairs on 31/09/2007, which brought out violations of various provisions of the companies Act by the said company. Further, the Registrar of companies, Karnataka has also conducted a scrutiny of the balance sheet of said 5 C.C.No. 30788/2021 company as on 31/03/2006 U/Sec. 234(1) of the Companies Act, 1956 and submitted a report to the Ministry of Corporate Affairs, Government of India U/Sec. 234(6) of the Act, indicating the possible diversion and miss-utilization of funds by the promoters of said company. In the light of said reports, the Ministry of Corporate Affairs, Government of India has directed an investigation into the affairs of said MDBL company U/Sec.235 of the Companies Act, by its order dated:
17/04/2009. Accordingly, a team of investigators was appointed to investigate into the financial and other irregularities, contraventions / violations of the provisions of the companies Act, 1956 or fraudulent Acts committed by said company and its Directors or its Officers or any other persons in the conduct of affairs of the company. After the investigation, the team of investigators submitted the investigation report to the Government of India. On the basis of the findings given in the investigation report as to several irregularities, 6 C.C.No. 30788/2021 fraudulent acts and contraventions / violations of the provisions of the companies Act, the Ministry of Corporate Affairs had directed the complainant office i.e., The Serious Fraud Investigation Office (herein after referred as SFIO), Ministry of Corporate Affairs, Government of India, New Delhi to file complaints against said company, its Directors and Officers by its letter dated: 14/09/2011. Accordingly, on the basis of one of the findings of said investigation report as to giving misleading information in the pamphlets and brochures relating to said Vajragiri Township Project for inducing the members or site aspirants to invest their money in the said project, this complaint is filed. It is the specific allegation that, the said Vajragiri Township Project was launched during August -September 1994 and at the same time, the pamphlets and brochures relating to said project were released to the public. In the said pamphlets and brochures the accused have given false and misleading information about said project stating 7 C.C.No. 30788/2021 that, said project is a residentially converted project and also a Government Sponsored Project, though the conversion of lands in respect of said project was done on 23.12.1995 about year after launching of said project and also said project was not at all a Government Sponsored Project. By giving such false and misleading information in the said pamphlets and brochures, the accused have fraudulently induced the public to invest money in the said project. The accused have coined criminal conspiracy to do so and collected huge fund from the public and to cheat them. Further, in the course of investigation also, the accused No.1 being the Managing director of MDBL company provided wrong information to the investigating agency i.e., the SFIO on 03.12.2019 stating that, at the time of launching said Vajragiri Township Project there was an order of conversion of lands from agriculture to non - agriculture purpose from competent authority. Accordingly, the accused No.1 to 5 8 C.C.No. 30788/2021 have committed the offences punishable U/Sec.420, 177 & 120-B of IPC.
3. The complaint was filed by a Public Servant one Sri. Samendra Kumar Nanda, Assistant Director of SFIO, Ministry of Corporate Affairs, Government of India and as such examination of the complainant U/Sec.200 of Cr.P.C was dispensed. On perusal of the complaint allegations and the documents produced along with the complaint, this court has taken cognizance of alleged offences punishable U/sec.120B, 420 & 177 of IPC and issued summons to the accused. The accused upon service of summons entered their appearance through their counsel and they are enlarged on bail. Subsequently, the accused No.3 & 4 were discharged from the offences alleged against them and the charges were framed, read over & explained to the accused No.1 & 2 in the language known to them, wherein they have not 9 C.C.No. 30788/2021 pleaded guilty, but claimed for trial. Hence, the case was taken up for trial.
4. In order to prove its case, the Representative of the complainant - Samendra Kumar Nanda, himself got examined as PW1 and also examined five more witnesses as PW.2 to 6 and got marked 25 documents as Ex.P1 to 25 and in the course of Cross examination of PW5 & 6 the accused got marked 18 documents as Ex.D1 to 18 on confrontation. Thereafter, the accused were examined U/sec.313 of Cr.P.C., wherein they have denied the incriminating evidences appeared against them in the evidence of complainant side and submitted to have no defence evidence.
5. Heard the arguments of the learned Counsel for the complainant and learned advocate for the accused and perused the materials available on record. 10 C.C.No. 30788/2021
6. The points that arise for consideration are:
1. Whether the complainant proves beyond reasonable doubts that accused No.1 & 2 being the Directors of accused No.5 - Megacity (Bangalore) Developers & Builders Pvt Ltd., company during August
- September 1994 have entered into a criminal conspiracy to cheat the public i.e., the Aspirants of sites / members in the Housing scheme named Vajragiri project of said MDBL company by giving misleading information in the pamphlets & brochures relating to said Vajragiri projects and thereby committed the offence punishable U/sec.120B of Indian Penal Code ?
2. Whether the complainant proves beyond reasonable doubts that accused during the period 1995 to 2002 collected about Rs. 60 crores from the public who were Members / site Aspirants of said housing scheme - Vajragiri projects of said MDBL company by inducing them to invest their money in the said project by giving such misleading representation in the brochures & pamphlets relating to said Vajragiri project and thereby committed the offence punishable U/sec.420 of Indian Penal Code ?11 C.C.No. 30788/2021
3. Whether the complainant proves beyond reasonable doubts that accused No.1-Mr. C.P. Yogeshwara who was the Managing Director of said MDBL company on 03/12/2019 provided wrong information to the SFIO stating that at the time of launching of said Vajragiri project there was already an order of conversion of the lands from agriculture to non-agriculture purpose from competent authority, though said conversion order was made on 23/12/1995 about an year after launching of said project and thereby committed the offence punishable U/sec.177 of Indian Penal Code ?
4. What Order ?
7. My answer to the above points are as follows :
Point No.1 to 3 : In the Negative Point No.4: As per final order for the following;
REASONS
8. Point No.1 to 3 :- As these three points are interlinked, they are taken together for common 12 C.C.No. 30788/2021 discussion in order to avoid repetition of facts & evidences.
9. It is the specific case of the complainant that, accused No.1 being the managing director of accused No.5 - M/s. Megacity (Bangalore) Developers & Builders Limited, Bangalore, Accused No.2 being wife of accused No.1, accused No.3 being the Chairman of accused No.5 - M/s. Megacity (Bangalore) Developers & Builders Limited, Bangalore & accused No.4 being the wife of accused No.3 were the promoters of said MDBL company and launched a housing project named Vajragiri township project during August- September -1994. At the same time they have published brochures & pamphlets relating to said Vajragiri Township project, wherein they have published false and misleading information that said project is a Government Sponsored project and the said project is residentially converted & approved by concerned authorities. But, as on the date of launching 13 C.C.No. 30788/2021 said project and publication of said pamphlets & brochures there were no such conversion of lands from agriculture to non-agricultural purpose and said project was not approved by the concerned authorities. More so, said project was not at all a Government sponsored project. In spite of it, the accused have coined a conspiracy to induce the site aspirants / the public to make investment in the said project by giving such false & misleading information about the said project and in furtherance of said conspiracy they have made such publication of brochures & pamphlets with misleading information and induced the public to make investment in the said project and thereby they have cheated the public who have invested their money in the said project. Further in the course of investigation the accused No.1 & 3 provided wrong information to the investigation Team of SFIO by stating that at the time of launch of the project they had conversion order for the lands from agriculture to non-agricultural purpose from competent authority. 14 C.C.No. 30788/2021 Accordingly, they have committed the alleged offences P/U/Sec. 420, 177 & 120B of IPC.
10. In order to prove it's case, the complainant got examined himself as PW1 and examined five more witnesses as PW2 to PW6. PW1 being complainant & PW2 to 5 being the inspectors of said investigation team have in their evidence reiterated the allegations of the complaint as well as the findings of investigation report at Ex.P8 with regard to alleged misrepresentation & misleading information published by the accused in the alleged brochures & pamphlets.
11. The PW1 in the course of his evidence got produced copies of said brochure & pamphlet as Ex.P9 & 10 and also got marked alleged portion in the pamphlet showing Government sponsored project as Ex.P10(a). He also deposed that, as per the information gathered by the investigating team from BMRDA no such approval was 15 C.C.No. 30788/2021 obtained by the company for the said Vajragiri project. Further, the accused No.1 also stated before the investigating team that there was no such approval, but, it was converted to residential purpose as on the date of launching. He got produced alleged statement of accused No.1 as per Ex.P11. He also deposed that, the accused No.1 himself produced the conversion order to the investigation team which was dated: 23/12/1995. He also produced an extract of Minutes of Meeting, which is marked as Ex.P12 & stated that as per the minutes of meeting the launching date of said project was August- September - 1994. Therefore, as on the date of launching said project there was no conversion order, rather it was on 23/12/1995 i.e., all most an year after launching said project. He further deposed that, the accused No.3 has given statement before the Investigating team stating that as on the date of launching, there was no approval of said project, but the accused No.1 assured that he will get it approved after 16 C.C.No. 30788/2021 getting the conversion order. Said statement of accused No.3 is produced & marked as Ex.P13. He further deposed that after launching the said project, the accused company started collecting money from the public who are prospective buyers of sites in the said layout. The accused No.1 himself in his statement before the investigating team stated that about 60 Crores was collected from the members and said fact was also confirmed from the balance sheet of the company for the period 2000 to 2006, which was produced & marked as Ex.P14. He further deposed that, subsequently the investigation team issued notices to accused on 13/05/2011 & 02/06/2011, which are produced & marked as Ex.P15 & 16. He also says that the accused No.1 has given reply on 19/05/2011 to said notice, which is produced & marked as Ex.P17.
12. The PW2 in his evidence except saying that, said MDBL company had not obtained any permission or 17 C.C.No. 30788/2021 approval from BMRDA or any other authority for the said Vajragiri project, he has not stated anything about alleged misrepresentation or misleading information published in said brochures & pamphlets. Further though he states that as per the directions of the Head of Investigation Team he used to collect Income Tax returns, Survey records relating to said company done by Income Tax Department and the investigation reports of Income Tax Department for the period 2005-06, he has categorically admitted in his cross examination that, he cannot say as to whether the information or documents collected by him from the Income Tax Department are relevant for the allegations of this case. He also admits that only on the basis of oral information received from their investigation team, he has stated that the accused have dishonestly collected funds from the members of said project & cheated them. Therefore, the testimony of this witness appears to be of not much helpful for the complainant to prove its case.
18 C.C.No. 30788/2021
13. The PW3 in his testimony deposed in support of the case of the prosecution and in corroboration to the testimony of PW1 with regard to alleged misrepresentation in the alleged pamphlets & brochures and collection of funds from the site aspirants by the accused company by inducement through such misrepresentation. However, in the course of his cross examination he has categorically admitted that in the investigation report, only the balance sheet for the period 2005-06 are there and says that he do not know as to whether they have collected any documents relating to transfer of funds, collections of funds, purchase of lands etc., from the said company during their investigation. Further, he says that he do not know about the policy of counter magnets of a city and on confrontation categorically admits that in Ex.P10 it is stated that a Government sponsored Bengaluru's counter magnet is located and such counter magnets are surrounding Bengaluru City. He also admits that such magnet cities 19 C.C.No. 30788/2021 are developed as Satellite Towns in ordered to reduce the density of population of Bengaluru City & such Satellite Town / Counter Magnets have all infrastructure facilities of a City. More so, he has categorically admitted that said Vajragiri project is strategically located between Ramanagara & the Nice Road.
14. The PW4 in his evidence deposed in support of the case of the complainant with regard to alleged false representation made in the brochures & pamphlets and collections of funds from the public who are site aspirants. But, in his cross examination he categorically deposes that, he do not remember as to whether in the course of their investigation, they had come across any person who had approached accused company for purchase of sites during 1994 based on alleged pamphlets & brochures. He also deposes that, he do not know as to when alleged brochures & pamphlets were issued by accused company. Thus, the testimony of this 20 C.C.No. 30788/2021 witness also appears to be of not much useful for the complainant to prove his case.
15. The PW5 who is stated to be the Head of said Investigation Team of SFIO, in his testimony deposed in support of the case of the complainant, his investigation report as well as the testimony of PW1 with regard to alleged publication of false & misleading information in the brochures & pamphlets by the accused and inducement of public or site aspirants to invest their money in the said project on the basis of such brochures & pamphlets and thereby cheating the public at large and also about the accused No.1 providing false information before the investigation team about alleged conversion of land as on the date of launching the project.
16. The PW6 who is stated to be one of the Member who invested money in the said Vajragiri Township project, in his evidence deposed about he making 21 C.C.No. 30788/2021 investment in the said project and the subsequent developments as to non-completion of said project by the accused and the legal proceedings initiated by him and the ultimate end of the issue by way of a compromise for refund of money along with interest as per the order of District consumer forum. He also produced certain documents receipts of installments payment, allotment letter & other letter correspondences made by him relating to said transactions as per Ex.P20 to 25. He has also stated that during August 2007 he became President of the said Vajragiri Township members welfare associations and during November 2008 he stated to had written a letter to the MCA on behalf of the association requesting for an investigation in to the financial fraud committed by said MDBL. Except this in his examination in chief, he has not stated anything as to having been mislead or induced by any such publications made in the alleged brochures & pamphlets. In the course of his cross examination, he has categorically deposed that he 22 C.C.No. 30788/2021 had not read the pamphlet - Ex.P10 during May-1995. However, he admits that he has gone through the brochure at Ex.P9 in detail. But, at the same time he admits that in the brochure it is stated that said Vajragiri project was sand-witched between existing highway and the proposed six lane express way. However, he simply says that he did not remember as to whether pamphlets were also issued along with brochures. Further, he has admitted Ex.D18 - the complaint given by him on behalf of the Association to MCA, which was not produced by the complainant, but by the accused in his cross examination. On confronting said Ex.D18, he has categorical admitted that, in the said complaint they have not stated about any such inducement caused on them by alleged brochures & pamphlets of said Vajragiri project to make investment in the said project. More so, he also admitted that in the brochure at Ex.P9 it is stated that 'the Vajragiri Township will be completed with all the basic amenities like, roads, 23 C.C.No. 30788/2021 Underground drainage & Electricity'. Further, he has admitted that at that point of time he was aware that they would provide residential sites after due conversion & approval and categorically admits that in the said brochure it was also stated that after such conversion & approval they could raise loans from financial institutions. Further, he also admitted that in the complaint given to MCA as per Ex.D18 they have not specifically stated that, while issuing brochures, the accused have stated that the project is in already converted lands, but as on that day there were no lands converted. More so, he also admitted that at any point of time they had not given any letter to the MDBL alleging that they have been mislead by said brochures & pamphlets. Thus, from the testimony of this witness nothing worth to substantiate the allegations of this complaint as well as the testimony of PW1 could be derived, rather it could be deduced from his evidence that he was not at all induced by the contents of said 24 C.C.No. 30788/2021 brochures & pamplets as the same was conveying that the said project will be having all such facilities/amenities/features, but not as if all those facilities/amenities/features were available as on the date.
17. From the above discussed evidences of PW1 to 6, it can be held that the only evidence that is available for scrutiny for the purpose of proving the case of the complainant is the evidence of PW1 & PW5. As already discussed herein above, there are three important issues that would arise for evaluation from the allegations of complaint & the evidence led by the complainant in proof of the same. Firstly, what is the exact launching date of said Vajragiri Township project. In this regard, in the investigation report (page 97) as well as the evidence of PW1 & PW3 to 5, it is alleged that said project was launched during August-September - 1994. Further, as stated by the complainant-PW1 and the Head of 25 C.C.No. 30788/2021 investigation Team - PW5 said fact as to launching of said project during August-September -1994 was stated based on the Minutes of Meeting dated: 01/09/1994 of said MDBL company and its balance sheet for the year ending 31/03/1995. The complainant also got produced an extract of Minutes of meetings of said MDBL as per Ex.P12. But, on perusal of said Ex.P12, it is very clear that the same is not the Minutes of Meeting dated:
01/09/1994, rather it is the Minutes of Meeting dated:
19/04/2005. This is also admitted by PW5 in his cross examination.
18. Further, in support of its case the complainant got produced an extract of the balance sheet as per Ex.P14. On perusal of said Ex.P14 it is revealed that the same is the extract of balance sheet for the year ending 31/03/2000, but not the balance sheet for the year ending 31/03/1995 as stated by PW1 & PW5. However, later in the course of further evidence of PW5, the 26 C.C.No. 30788/2021 complainant got produced an extract of balance sheet for the year ending 31/03/1995 as per Ex.P19. But, at this juncture, it is pertinent to note that, admittedly no such balance sheet was produced either along with the investigation report submitted to SFIO or the complaint filed before this court. In this regard, it is pertinent to refer to an admission given by PW3 that, in the investigation report only the balance sheet for the period 2005-06 were there. More so, it is pertinent to refer to an admission given by PW5 in his cross examination that, balance sheets for the year 1995-1996 to 1999 are not produced in this case. These admissions by PW3 who was one of the Member of said investigation team and the PW5 who was the Head of said investigation team would substantiate the fact that no such balance sheet for the year ending 31/03/1995 was either perused during investigation or produced along with the investigation report or this complaint. If it is so, this court cannot understand as to how the PW1 & PW5 say & concluded 27 C.C.No. 30788/2021 in the investigation report that based on the balance sheet for the year ending 31/03/1995, they had come to a conclusion that, said project was launched during August-September -1995. That apart, it is pertinent to note that, admittedly said MDBL company was incorporated during 1994. Though PW5 simply denies the suggestions to the effect that before incorporation of a company no such projects by any such company could be launched, in the normal course of business, it can be inferred that no such project could be undertaken or launched by a company before its incorporation. As such, a serious doubt would arise about the allegations that said Vajragiri Township project was launched during August- Separate -1994.
19. Further, even if the extract of balance sheet for the year ending 31/03/1995 subsequently produced by PW5 as per Ex.P19 is considered, said balance sheet shows that a total of Rs.5,99,143/- was received as land 28 C.C.No. 30788/2021 advance during the said period, but not all the said Rs.60 Crores. In the course of cross examination of PW1, the defence counsel has suggested the said Rs.5,99,143/- was collected as membership fee during 1994-1995, which was denied by PW1. As already stated in the said balance sheet at Ex.P19 the said amount of Rs.5,99,143/- is shown under the Heading advance received from Scheme Members towards plot. As such said suggestion of the defence counsel holds no water as there is a separate head for share deposit money received. Even if, it can be considered that as per Ex.P19 an advance towards said project was received by the accused, that itself may not be sufficient to hold that said project was launched during August - September - 1994 and said money was received by the accused during 1994 itself. Because, as admitted by Pw5 in the course of investigation they had not collected the statement of bank account of said company for the period 1994-95 to 2005 and the one collected during their investigation was from 29 C.C.No. 30788/2021 January 2006 to September 2009, which was confronted & marked as Ex.D1. That being the case it cannot be understood as to when exactly & under which provision said amount of Rs, 5,99,143/- was received by the accused company. In view of all the above discussed facts & reasons, it appears that the complainant has failed to establish with cogent & convincing evidences that said project was launched during August - September - 1994.
20. The second issue is with regard to issuance of alleged pamphlets & brochures. In the investigation report it is stated that said pamphlets & brochures were released to the public at the time of launch of said project. But, as already discussed herein above, no materials or evidences are produced or adduced to show that said project was launched during August - September - 1994. that being the case it may not be possible to conclude that said pamplets & brochures were 30 C.C.No. 30788/2021 released/issued during August-September 1994. More over except the say of Pw1 & 5, there are no materials or evidences either in the investigation report or the complaint to show that said pamphlets & brochures were released on the same day of launch of said project. In the alleged pamphlets & brochures which are produced at Ex.P9 & 10 also there is no such mention as to any such date of publication of those pamphlets or brochures. The PW4 who was one of the Member of Investigation Team, in his examination in chief deposes that, said brochures & pamphlets were issued to the public by the MDBL company during August - September -1994 itself, when the said Vajragiri Township project was launched. But, in the course of his cross examination, he categorically deposes that, he do not know as to when alleged brochures & pamphlets were issued by the accused company. Further, in the absence of any such materials or documents, it is the members / site aspirants / the public who did investment in the said 31 C.C.No. 30788/2021 project, who have to say about the same. But, the only witness in this regard examined by the complainant is PW6, who also not stated anything about the specific date of launch of said project and issue of said pamphlets & brochures. Therefore, it can be concluded that the complainant has failed to produce or adduce any sufficient & substantive materials or evidences to show that alleged pamphlets & brochures were issued to public by the accused company on the very same date of launch of said project.
21. The third issue is that, even if the date of issue or publication of alleged brochures & pamphlets was accepted as August-September 1994, whether the contents of said brochures & pamphlets are really misleading in the eye of a prudent man. In this regard, Ld.defence counsel has argued that, the plain reading of the very contents of said pamphlets & brochures would clearly show that there are no such misleading 32 C.C.No. 30788/2021 information or representation about said project. It is specifically argued that, in the said brochures & pamphlets at Ex.P9 & 10, it is specifically mentioned that the said Vajragiri Project "will be" a residential township with all such facilities and approvals as mentioned therein. Thus, the very word 'will be' would indicate that all those facilities / features / approvals would be made available in the said project, but does not mean that as on the date of issue of said brochures & pamphlets itself all those features / facilities / approvals were there in the said project. It is further argued that, the very nature of schemes for payments made under the said pamphlets like 60 months installments & 66 months installments would clearly establish that said project would be developed from the contributions & sponsors by each member of said project. That means, the lands required for the said project would be acquired periodically out of the funds collected from the members and the developmental works like, conversion of lands, 33 C.C.No. 30788/2021 approvals of the project etc., would be undertaken periodically out of the funds collected from the members through installments. He also argued that, in the said brochure & pamphlet at Ex.P9 & 10 it is mentioned that, "Your dream land Vajragiri Turns a reality. In the back drop of Government sponsored, Bengaluru's Counter Magnet your Vajragiri is strategically located". That means said Vajragiri Township would be strategically located in the vicinity of the Government sponsored, Bengaluru's counter magnets & as such said Town ship would get access to such good facilities that would be provided to such counter magnet Towns, but not that said Vajragiri Township itself is a Government sponsored project. Therefore, there is no question of any prudent man misleading from the information or representation made in the said brochures & pamphlets.
22. In the light of the above contentions of the defence counsel, on careful reading of the contents of 34 C.C.No. 30788/2021 said brochures & pamphlets at Ex.P9 & 10, it is evident that the Heading quote in the said pamplet-Ex.P10 is "Your dream land Vajragiri Turns a reality. In the back drop of Government sponsored, Bengalore's Counter Magnet your Vajragiri is strategically located". As rightly argued by the defence counsel, the plain meaning of the same could be that in the back drop of said Vajragiri Township being strategically located around the counter magnets of Bengalore city, the dream land Vajragiri turns to be a reality. That means as the said township project is proposed to be strategically located around the cities like Ramanagara & Channapatna which are proposed to be developed as counter magnets of Bengalore city by the government, the site/plot holders in the said project would be benefited with such facilities & infrastructures that may be provided to such counter magnet cities. But doesn't mean that the very Vajragiri project itself is a Government sponsored project. Any prudent man could gather only such meaning from the said Heading quote. 35 C.C.No. 30788/2021
23. Further, it is argued by Ld. counsel for the complainant that on conjoint reading of the content under the heading ' The Megacity' and the content under the heading ' Vajragiri' in the brochure at Ex.P9, it goes to convey the meaning that the said MDBL have launched said Vajragiri township for providing the convenience & modernity of megacity to the public. As such the contents of said brochures are clearly misleading the public/ aspirants of sites in the said locality. In this regard on careful reading of the contents mentioned under the heading The Megacity & Vajragiri in the said brochure Ex.P9, it appears very clear that in the contents under the heading The Megacity it is stated that 'the studies & surveys conducted by the Central & state Governments as well as Asian Development Bank indicated that the congestion of Bengalore city can be best eased by creation of a megacity programme, which involves creation of counter magnets comprising Ramanagara, Channapatna & surrounding areas and the Asian Development bank 36 C.C.No. 30788/2021 has commenced investment of about Rs.1000 crores towards development of infrastructure like express ways, railway tracks, train networks, fly-overs, bridges, ring- roads etc,'. Similarly, in the contents under the heading Vajragiri it is stated that 'the MDBL have launched said Vajragiri Township project on Mysore Road with the view to provide the fruits of the convenience & modernity of the Megacity Programme as stated above to the public'. Thus even upon conjoint reading of the contents under the said two headings also any prudent man could gather only the meaning that as there has been a government sponsored Megacity programme involving creation of counter magnets comprising of Ramanagara, Channapatna & surrounding areas, the accused company had planned to launch said Vajragiri project therein, so as to get the fruits of conveniences & modernities of such megacity programme to the public who invest in said Vajragiri project. As already discussed herein above, the Pw3 & Pw5 have categorically admitted 37 C.C.No. 30788/2021 in their cross-examination that in the pamphlets & brochures it is mentioned that 'In the Back drop of Government sponsored Bengaluru's counter magnets'. They have also admitted that around any metropolitan city satellite towns are developed and similarly around the Bangalore metropolitan city there are satellite towns & those satellite towns are counter magnets to metropolitan city to attract people to move out of such metropolitan city area, so as to ease out heavy congestion in such metropolitan city. Therefore this contention of Ld. Counsel for the complainant that the conjoint reading of the contents under the headings 'Meghacity' and 'Vajragiri' would convey a misleading meaning or representation, cannot be accepted.
24. Further, with regard to the allegation that the accused had shown said project as a residentially converted & approved project in the said brochures & pamphlets, as rightly argued by the defence counsel, the 38 C.C.No. 30788/2021 very words & sentences used therein would not convey any such meaning. Rather the plain reading of the same would clearly convey that the said Vajragiri Project would be having all those facilities or benefits as mentioned therein under 7 bullet points, but doesn't convey any such meaning that the said project was already having all those facilities or benefits. If at all, as argued by the Ld.counsel for the complainant, any such meaning could be derived from the same, it is not only an inference as conversion & approval, but of the other facilities or benefits as mentioned therein are to be inferred as not available as on the date of issue of said pamphlets. For example if it is inferred that as stated at bullet point.4 said project was having residential converted sites, it should also have to be inferred that other facilities as mentioned in other bullet points like commercial, recreational, educational & health care facilities as mentioned in bullet point.1 were also there, which is highly impossible. More so, amenities like wide 39 C.C.No. 30788/2021 roads, electricity, underground drainage & abundant water supply as mentioned in bullet point.2 also should have been there as on the date of issue of said pamphlets. For convenience the same is extracted herein below;
The Vajragiri Project will be a residential township with:
1. Commercial, recreational, educational and health care facilities.
2. Amenities like wide roads, electricity, underground drainage and abundant water supply.
3. The microwave station nearby provides efficient telecommunication service.
4. Well connected roads and electric train network. Bangalore is only 20 minutes away.
5. Residential converted sites. All the paperwork for Vajra Giri carry the proper legal sanctions that will enable the benefit of loans from all financial institutions.
6. A very Special benefit : Nominees will get free sites on the accidental death of the applicant.
7. All Vajra Giri plots are available on outright purchase or easy installment schemes 40 C.C.No. 30788/2021 installment schemes allow the owner to purchase the property within a period of 60 months.
25. Further, in the light of the nature of alleged pamphlets & brochures, it appears pertinent to note that normally there would be two kinds of real estate projects that may be launched by any real estate company. First category is those projects wherein the company would not make entire capital investment of such project. Rather it would launch the project, invite investments from the public/member/ site aspirants and take up developmental works like purchase of lands, conversion of such lands, getting approval of the project from concerned authorities & formation of layout in said project periodically upon collection of funds from the investors/members. Second category is that the company itself would make entire capital investment of the project and take up developmental works including purchase of lands, conversion of lands, approval of the project & 41 C.C.No. 30788/2021 formation of layout out of its own capital investment. In the first category, members or site aspirants would be offered sites with reasonable price taking into account the investment made by them for the development of such projects, which would be normally lesser than the actual market price and also they would be provided with the facility of making investment in installments. But in the second category, it is not so. Rather the ready sites would be offered to public at the market price and there may or may not be any such facility of installment payments of such consideration.
26. In the light of the above on considering the nature of alleged pamphlets & brochures at Ex.P9 & 10, it appears very clear that admittedly, there was facility of 60 months & 66 months installments for making investment in the said project, which also clearly substantiate that said project falls under the first category and as such the developmental works of said 42 C.C.No. 30788/2021 project including purchase of lands, conversion of lands & approval of the project would be under taken periodically upon collection of funds from the members through installments. Therefore it appears the investigation team of SFIO without proper understanding such concepts in real estate business and without proper understanding of the contents of alleged pamphlets & brochure, under misconception might had arrived at such a conclusion and alleged that the accused made misleading publication or information in the pamphlets & brochures of said project to induce the public/site aspirants.
27. More over, if at all any such inducement is caused by said brochures & pamphlets, it is those who had been induced so, have say so. As such in the present case, if at all any such inducement is caused by said pamphlets or brochures, it is the members/site aspirants who mad investment in the said Vajragiri project, who 43 C.C.No. 30788/2021 have to say so. But as already discussed herein above, the investigating team appears to had not examined or enquired any of such members who did investment in the said project in that regard. Though the complainant in the course of trial, at the end has chosen to examine a witness Pw6 who is stated to be one of the members of said project & also president of the welfare association of members of said project, as already discussed herein above, he has not stated anything as to he making investment in the said project being induced by any such contents of alleged pamphlets & brochures. Rather in his cross-examination he has categorically admitted that even in the complaint-Ex.D18 filed by him on behalf of the association to the MCA against the accused company also they have not made any such allegations as to any such inducement caused by the accused by making any such misleading publication in their pamphlets & brochures. He also admits that they have not given any letter to accused company regarding the same. 44 C.C.No. 30788/2021
28. Apart from the above, it is pertinent to note that, in the investigation report apart from the allegations in this case, there were some other allegations against the accused company recommending for prosecution. One of such allegations is that the accused company had collected about 60 Crores from the members of said Vajragiri project, out of which it had acquired several agricultural lands by way of purchase & agreements for the purpose of said project. But, those lands purchased out of the funds collected under said project should have been used only for the purpose of development of said Vajragiri project. But, the accused have misused those lands by way of selling some of those lands to one M/s. Prestige Bidadi Holdings Pvt Ltd.,. Accordingly, as per the findings in the investigation report in that regard, the complainant - SFIO has also filed complaints against the accused, which are pending before this court for trial under C.C No.30790/2021. This very fact of allegations of the complainant itself as to misuse of the lands 45 C.C.No. 30788/2021 purchased out of the funds collected under the said Vajragiri project by the accused, itself substantiate the above discussed fact that as on the date of launching said project and issuance of alleged pamphlets & brochures no lands were there in the hands of accused company meant for the purpose of said Vajragiri project, rather the lands were acquired subsequently by way of purchase or sale agreements periodically from 1995-96 out of the funds collected under the said project. That being the case there is no meaning in drawing presumption or inference on the contents of alleged pamphlets & brochures that the accused have published that the lands under the said project were already converted and approved by concerned authorities.
29. Further with regard to the allegation of Criminal conspiracy, there appears no specific investigation as to whether there was any such meeting of minds or agreement to do any such illegal act or an act which is 46 C.C.No. 30788/2021 legal, but by illegal means by the accused. This is very much necessary because, the offence of criminal conspiracy itself is an independent offence, irrespective of as to whether the offence alleged have been conspired is committed or not. There are neither any such specific allegations in the complaint nor any materials or circumstances to infer meeting of minds or agreement. Rather their own report /evidence says that accused No.3 in his statement categorically stated that as on the date of launching said project there was neither any conversion order nor any approval of the project by concerned authorities, but the accused No.1 assured that he would get approval from BMRDA after conversion order. That being the case there appear no grounds to infer any such meeting of minds of these accused No.1 &
3. More so, the Pw5 in his cross-examination categorically admitted allotment of sites during 1996 to some of the members and also admitted collection of documents like possession certificates & agreements to 47 C.C.No. 30788/2021 sell as per Ex.D2 to 17. if so, no such inference as to any such criminal conspiracy could be drawn against the accused. More over, as discussed & held herein above, as the contents of very pamphlets & brochures do not give any such meaning, the question of cheating by inducement through them doesn't arise. If so, no such conspiracy could be inferred.
30. Further it is alleged that the accused gave false statement before the investigation team as per Ex.P11. It is specific allegation that the accused No.1 in the course of recording his statement stated that there was order of conversion as on the date of launching said project, but the conversion order was on 23.12.1995. No doubt as per Ex.P18, the conversion order was dated 23.12.1995. But, as discussed & held herein above the complainant has failed to prove the exact date of launch of said project & issue of alleged pamphlets & brochures. That being the case, it cannot be decided as to whether 48 C.C.No. 30788/2021 the conversion was prior to launching said project or after that. When it cannot be ascertained, it may not be possible to arrive at a conclusion that alleged statement of accused No.1 was false. As such it can be held that this allegation of the complainant is not established with cogent & convincing evidences.
31. From all the above discussed facts, circumstances, evidences and the reasons, it can be concluded that the complainant has failed to prove that the accused have coined a conspiracy to induce the public to invest money in the said Vajragiri project and in furtherance of said conspiracy they have published misleading information or representations in the brochures & pamphlets issued to public in respect of said Vajragiri project and thereby cheated the public who have invested money in the said project and in the course of investigation the accused No.1 knowingly /intentionally gave false information about the same to the investigating 49 C.C.No. 30788/2021 team. As such, it can be held that the complainant has failed to prove the guilt of the accused for the offences punishable U/Sec. 120B, 420 & 177 of IPC, beyond reasonable doubts. Accordingly, Point Nos.1 to 3 are answered in the Negative.
32. Point No.4- In view of the above findings on point Nos.1 to 3, the following order is passed;
ORDER Acting under section 248(1) of Cr.P.C., the accused No.1, 2 & 5 are hereby acquitted of the offences punishable U/Sec. 120B, 420 & 177 of IPC.
Bail bonds and surety bonds of the accused shall stand canceled.
(Dictated to the Stenographer directly on computer, after her typing, corrected, signed and then pronounced by me in open Court this the 21st day of November, 2025).
(K.N. SHIVAKUMAR) XLII Addl. CJM,Bengaluru (Spl.Court for trial of cases filed against sitting as well as former MPs/MLAs, triable by the Magistrate in the State of Karnataka) 50 C.C.No. 30788/2021 ANNEXURE Witnesses examined for the Prosecution:
PW.1 - Samendra Kumar Nanda PW.2 - Indrani Sen Chawdhuree PW.3 - Anupam Vasishista PW.4 - R.S. Chaudhary PW.5 - J.K. Teotia PW.6 - Ravindra Beleyur
Documents exhibited for the Prosecution:
Ex.P1 - C/c of Gazatte Notification
Ex.P2 - C/c of Order dated: 17/10/2011 passed
by the Ministry of Corporate Affairs
Ex.P3 - C/c of Certificate Of Incorporation
Ex.P4 - C/c of Memorandum of Association
Ex.P5 - C/c of Order dated 17.04.2009 passed by
the Ministry of Corporate Affairs
Ex.P6 - C/c of Order dated: 30.12.2009 passed
by the Ministry of Corporate Affairs
Ex.P7 - C/c of Sanction order given by the
Ministry of Corporate of Affairs dated 14.09.2011 Ex.P8 - C/c of Investigation report dated 30.07.2011 submitted by Team of Inspectors to the Ministry of Corporate Affairs Ex.P9 - C/c of brochure Ex.P10 - C/c of pamphlet Ex.P11 - C/c of statement of accused No.1 Ex.P12 - C/c of Extracts of Minutes of meeting dated 01.09.1994 Ex.P13 - C/c of statement of accused No.3 Ex.P14 - C/c of Balance sheet of the MDBL Company from 2000-2006 51 C.C.No. 30788/2021 Ex.P15 - C/c of notice issued to the accused on 13.05.2011 Ex.P16 - C/c of notice issued to the accused on 02.06.2011 Ex.P17 - C/c of reply notice of the accused No.1 dated 19.05.2011 Ex.P18 - C/c of convection order dated 23.12.1995 Ex.P19 - C/c of balance sheet as at dt 31.03.1995 of the MDBL company Ex.P20 - Original 55 receipts relating to Megacity (Bangalore) Developers & Builders Ltd., Ex.P21 - Original copy of letter dated 04.07.2000 regarding to allotment of sites to the outright purchasers Ex.P22 - Original copy of letter dated 19.01.2006 regarding to change of address Ex.P23 - Original copy of letter to MDBL dated 07.02.2006 regarding to change of address Ex.P24 - Original copy of letter dated 24.10.2007 from MDBL to Pw6 to prepare draft sale and come for registration on 31.10.2007 Ex.P25 - C/c of letter written by the Pw6 on 30.10.2007 to MDBL seeking details Witnesses examined for the Defence:
- Nil -
Documents exhibited for the defence:
Ex.D1 - C/c of Bank statement of MDBL from 05.06.2006 to 17.07.2009 issued by ABN
- AMRO Bank Ex.D2 - C/c of possession certificate dated 15.05.2002 of Ganesan. S 52 C.C.No. 30788/2021 Ex.D3 - C/c of possession certificate dated 15.08.1998 of Shylaja .S Ex.D4 - C/c of possession certificate dated 06.01.2000 of Ramadevi .S Ex.D5 - C/c of possession certificate dated 16.03.1999 of Jaideep Rao .B Ex.D6 - C/c of possession certificate dated 10.01.2003 of Anthony Peter Ex.D7 - C/c of possession certificate dated 05.04.1999 of Sudha C. P. Ex.D8 - C/c of possession certificate dated 25.02.1999 of Nagesh .K Ex.D9 - C/c of possession certificate dated 09.08.1999 of Hemachandra K. N. Ex.D10 - C/c of possession certificate dated 19.07.2001 of Muttu Lakshmi .V Ex.D11 - C/c of agreements to sell dated 25.06.1997 between MEGACITY (Bangalore) Developers and Buildings Pvt.
Ltd.
Ex.D12 - C/c of agreements to sell dated 10.12.1999 between MEGACITY (Bangalore) Developers and Buildings Pvt. Ltd.
Ex.D13 - C/c of agreements to sell dated 21.03.1991 between MEGACITY (Bangalore) Developers and Buildings Pvt. Ltd.
Ex.D14 - C/c of agreements to sell dated 02.05.1997 between MEGACITY (Bangalore) Developers and Buildings Pvt. Ltd.
Ex.D15 - C/c of agreements to sell dated 15.03.1996 between MEGACITY (Bangalore) Developers and Buildings Pvt. Ltd.
53 C.C.No. 30788/2021Ex.D16 - C/c of agreements to sell dated 15.03.1996 between MEGACITY (Bangalore) Developers and Buildings Pvt. Ltd.
Ex.D17 - C/c of agreements to sell dated 15.03.1996 between MEGACITY (Bangalore) Developers and Buildings Pvt. Ltd.
Ex.D18 - C/c of letter dated 12.11.2008 given by Members Association to Ministry of Corporate Affairs Material objections:
- Nil -
(K.N. SHIVAKUMAR) XLII Addl. CJM,Bengaluru 54 C.C.No. 30788/2021 (Spl.Court for trial of cases filed against sitting as well as former MPs/MLAs, triable by the Magistrate in the State of Karnataka) 55 C.C.No. 30788/2021 (Order pronounced in open court Vide Separate Judgment ) ORDER Acting under section 248(1) of Cr.P.C., the accused No.1, 2 & 5 are hereby acquitted of the offences punishable U/Sec. 120B, 420 & 177 of IPC.
Bail bonds and surety
bonds of the accused shall stand
canceled.
( K.N. SHIVAKUMAR )
XLII Addl. CJM,Bengaluru
(Spl.Court for trial of cases filed against sitting as well as former MPs/MLAs, triable by the Magistrate in the State of Karnataka)