Sri Kamal Nayan Goyal vs The State Of Karnataka on 29 August, 2024

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Karnataka High Court

Sri Kamal Nayan Goyal vs The State Of Karnataka on 29 August, 2024

SRI CHINTAN CHINNAPPA, ADV., FOR SRI ROSHAN JOCOB, ADV., FOR R-2) THIS CRL.P FILED U/S.482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS HONOURABLE COURT MAY BE PLEASED TO QUASH THE FIR REGISTERED AS CRIME NO.1193/2023 U/S.64 AND 66 OF INFORMATION TECHNOLOGY ACT 2000 AND SEC.406 AND 420 OF IPC 1860 REGISTERED BY THE NORTH CEN CRIME P..S, IN THE FILE OF THE Ist ADDITIONAL CHIEF METROPOLITAN MAGISTRATE COURT NRUPATHUNGA ROAD, BENGALURU CITY.

THIS PETITION HAVING BEEN HEARD AND RESEVED ON 08.08.2024, COMING ON FOR PRONOUNCEMENT ON THIS DAY,THE COURT MADE THE FOLLOWING:

CORAM: HON'BLE MR JUSTICE S VISHWAJITH SHETTY CAV ORDER

1. Petitioner, who is accused in Crime No.1193/2023 registered by North CEN Police Station, Bengaluru City, for the offences punishable under Sections 406, 420 IPC and Sections -3- NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 65 & 66 of the Information Technology Act, 2000, is before this Court under Section 482 Cr.PC with a prayer to quash the FIR in Crime No.1193/2023 on the file of the Court of I Addl. Chief Metropolitan Magistrate, Nrupatunga Road, Bengaluru City.

2. Heard the learned Counsel for the parties.

3. Petitioner claims to the Founder President and Director of Unipe Technology Inc. (hereinafter referred to as 'Unipe'), a company incorporated in Delaware, USA. Unipe had purchased 99.9% shares of respondent no.2-Company (hereinafter referred to as 'Payrocket') on 02.08.2022. Anupam Acharya who was one of the Director of Payrocket was appointed as the Director of Unipe on 08.08.2022. Petitioner was thereafter appointed as Chief Technology Officer and Anupam Acharya was appointed as the Chief Executive Officer, Chief Financial Officer and Secretary of Unipe. Petitioner's appointment as Chief Technology Officer of Unipe was done by a third party human resources service provider known as 'Canada Remote Technology Inc.' under an employment agreement dated 04.08.2022 and the services of Canada Remote Technology Inc. for the said purpose was engaged by Unipe.

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4. Anupam Acharya, who continued also to be a Director of Payrocket, on 02.05.2023, had submitted a typed first information to the incharge Station House Officer of Cyber Crime Police Station, Yeshwanthpur, Bengaluru, alleging that the petitioner who was the past Director of the parent entity - Unipe, who had access to email, database and different accounts of Payrocket had committed the alleged offences by removing Anupam Acharya from admin access of Payrocket's Mercury Bank account, which contained 1,59,000 USD, and thereby had made unlawful gain for himself. It was also alleged that the petitioner denied access to the database used by Payrocket and he also denied access to management of Payrocket to Github and Amazon Web Services. It is further alleged that petitioner had hacked into the G-suite mail ID of Anupam Acharya. It is in this background, petitioner's employment in Unipe was terminated, and thereafter, Payrocket represented by its Director - Anupam Acharya had approached the police and submitted the first information, which resulted in registration of the impugned FIR in Crime No.1193/2023 against the petitioner. Being aggrieved by the same, the petitioner is before this Court. -5-

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5. Learned Counsel for the petitioner submitted that petitioner is a citizen of Canada who is accused of committing the offences against a company registered in USA, which does not have any presence in India. He submits that there is no allegation that the computer resource code allegedly targeted by the petitioner is located in India. Therefore, in view of Section 4 of IPC, FIR could not be registered against him in India. He submits that Unipe is the parent company and Payrocket is its subsidiary. Money which was in the account of Payrocket belongs to the parent company and unless there is an authorization by Unipe, respondent no.2 has no competency to lodge the FIR. He submits that prior to the registration of FIR, the petitioner's services were terminated by Anupam Acharya with similar allegations which are now made in the FIR and the said termination was subsequently changed from "with cause" to "without cause". He submits that Payrocket had filed a suit for damages and the said suit was withdrawn unconditionally, and thereafter, the impugned criminal proceedings is initiated. Payrocket is not the owner of the money which was in its account, and therefore, there cannot be any financial loss to the said company. He submits that only to -6- NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 harass and coerce him, the impugned criminal case has been registered against the petitioner, in India. Accordingly, he prays to allow the petition.

6. Per contra, learned Counsel appearing for respondent no.2 - Payrocket submits that petitioner is an Indian citizen who holds an Indian Passport. He submits that the passport of the petitioner available at Annexure-M to the application filed by him for vacating the interim order is valid up to 05.07.2027. He has referred to Annexure-AD produced by the petitioner, and submits that in the complaint which was lodged by the petitioner alleging cyber crime against Anupam Acharya and others, petitioner has stated that he is the resident of Rohini in Delhi and Director of US based company Unipe. Petitioner, therefore, cannot approbate and reprobate. He submits that since serious consequences would follow if an employee is wrongly terminated "with cause" in Canada, the termination of the petitioner was modified by his employer - Canada Remote Technology Inc. into termination "without cause". Petitioner, who was only an employee of Unipe, indulged in unilateral blockage of access to Mercury Bank account of Payrocket. He has referred to various documents produced by him and -7- NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 submits that the bills of the database companies was being paid by Payrocket which goes to show that Payrocket was the owner of the database, and therefore, petitioner could not have blocked access to the database of Payrocket. He submits that prima facie case is made out against the petitioner which needs to be investigated by the jurisdictional police. Therefore, at this stage, there cannot be any interference by this Court. Accordingly, he prays to dismiss the petition.

7. Petitioner, who claims to be a citizen of Canada, has not produced any material before this Court in support of this contention of his. On the other hand, copy of the Passport of the petitioner which is available on record would go to show that he is an Indian citizen and his Passport is valid upto 05.07.2027. In the complaint given by him alleging Cyber Crime at Delhi, he has clearly stated that he is a resident of Rohini in Delhi.

8. Section 4 of IPC reads as under:

"4. Extension of Code to extra-territorial offences.- The provisions of this Code apply also to any offence committed by-

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NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 (1) any citizen of India in any place without and beyond India;

(2) any person on any ship or aircraft registered in India wherever it may be;

(3) any person in any place without and beyond India committing offence targeting a computer resource located in Inida.

Explanation.- In this Section-

(a) the word "offence" includes every act committed outside India which, if committed in India, would be punishable under this Code;

(b) the expression "computer resource" shall have the meaning assigned to it in clause (k) of sub-section (1) of section 2 of the Information Technology Act, 2000."

9. Since petitioner has not produced any material before this Court to show that he is a citizen of Canada, and on the other hand, material on record would go to show that he is an Indian citizen, the provisions of the Indian Penal Code would apply to the offences allegedly committed by the petitioner.

10. Section 1(2) of the Information Technology Act, 2000, states that the said Act would extend to the whole of India and, -9- NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 save as otherwise provided in the Act, it applies also to any offence or contravention thereunder committed outside India by any person. Therefore, I do not find any merit in the contention of the petitioner that since he is a citizen of Canada, FIR for the alleged offences could not be registered against him in India.

11. Petitioner has contended that the money that was in the account of Payrocket belonged to Unipe, and therefore, there cannot be any financial loss to Payrocket. He also contended that his services were wrongly terminated and his termination "with cause" was modified to "without cause", and therefore, the allegations now made against him is baseless.

12. In the FIR, allegations are made against the petitioner that by misusing the access that he had to the mail ID, Database and different accounts of Payrocket, he had removed Anupam Acharya from admin access of Payrocket's Mercury Bank account which contained 1,59,000 USD, and thereby he had made unlawful gain. It is also alleged that petitioner had denied access to the database of Payrocket which had caused financial loss to Payrocket.

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13. The correctness, or otherwise, of the allegations made in the first information cannot be gone into by this Court at this stage. This Court is only required to consider whether the allegations made in the first information would attract the alleged offences against the accused. If a prima facie case is made out for the alleged offence, and if necessary ingredients are found in the first information which would attract the alleged offences against the accused, unless it is found that the impugned proceedings is initiated with mala fide intentions and process of law is being abused, there cannot be any interference by this Court with the investigation into the allegations found in the FIR.

14. In the case of BHAVIN MANUBHAI PATEL VS STATE OF GUJARAT & ANOTHER - 2024:GUJHC:10561, wherein the accused had raised a plea that he was residing in USA much prior to the alleged incident and the material on record were not sufficient to make out whether the fake account created was in India or USA, and therefore, the police in India had no territorial jurisdiction, the High Court of Gujarat in the background of the law laid down by the Apex Court in the case

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NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 of AJAY AGARWAL VS UNION OF INDIA & ORS. - AIR 1993 SC 1637, has held that the accused who was an NRI was governed by Sections 179 & 182 of Cr.PC, and in addition to that Section 4 of IPC would also apply. Keeping in mind the provisions of Section 1(2) and Section 75 of the Information Technology Act, 2000, it is held that police in India had territorial jurisdiction to register FIR and investigate the case.

15. From the allegations found in the first information, it appears that a prima facie case is made out for the alleged offences which are cognizable in nature. The police have a statutory right to investigate into the cognizable offences and only under exceptional circumstances, there can be interference with the same by this Court in exercise of its powers under Section 482 Cr.PC.

16. The Hon'ble Supreme Court in the case of NEEHARIKA INFRASTRUCTURE VS STATE OF MAHARASHTRA & OTHERS - 2021 SCC OnLine 315, at paragraph 57, has observed as under:

"57. From the aforesaid decisions of this Court, right from the decision of the Privy Council in the case of

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NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 Khawaja Nazir Ahmad (supra), the following principles of law emerge:

i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into cognizable offences;

ii) Courts would not thwart any investigation into the cognizable offences;

iii) However, in cases where no cognizable offence or offence of any kind is disclosed in the first information report the Court will not permit an investigation to go on;

iv) The power of quashing should be exercised sparingly with circumspection, in the 'rarest of rare cases'. (The rarest of rare cases standard in its application for quashing under Section 482 Cr.P.C. is not to be confused with the norm which has been formulated in the context of the death penalty, as explained previously by this Court);

v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint;

vi) Criminal proceedings ought not to be scuttled at the initial stage;

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vii) Quashing of a complaint/FIR should be an exception and a rarity than an ordinary rule;

viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities. The inherent power of the court is, however, recognised to secure the ends of justice or prevent the above of the process by Section 482 Cr.P.C.

ix) The functions of the judiciary and the police are complementary, not overlapping;

x) Save in exceptional cases where non-

interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;

xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;

xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. During or after investigation,

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NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;

xiii) The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the court to be cautious. It casts an onerous and more diligent duty on the court;

xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint; and xv) When a prayer for quashing the FIR is made by the alleged accused, the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether or not the allegations in the FIR disclose the commission of a cognizable offence and is not required to consider on merits whether the allegations make out a cognizable offence or not and the court has to permit the investigating agency/police to investigate the allegations in the FIR."

17. In the case of SKODA AUTO VOLKSWAGEN (INDIA) PRIVATE LIMITED VS STATE OF UTTAR PRADESH & OTHERS -

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NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 (2021) 5 SCC 795, the Hon'ble Supreme Court in paragraphs 41 & 42, has observed as under:

"41. As cautioned by this Court in State of Haryana v. Bhajan Lal, the power of quashing should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. While examining a complaint, the quashing of which is sought, the Court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or in the complaint.

42. In S.M. Datta v. State of Gujarat, this Court again cautioned that criminal proceedings ought not to be scuttled at the initial stage. Quashing of a complaint should rather be an exception and a rarity than an ordinary rule. In S.M. Datta, this Court held that if a perusal of the first information report leads to disclosure of an offence even broadly, law courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities and one ought not to tread over the other sphere."

18. In the case of RAMVEER UPADHYAY & ANR. VS STATE OF U.P. & ANR. - 2022 OnLine SC 484, the Hon'ble Supreme Court has observed as under:

"Even though, the inherent power of the High Court under Section 482 of the Cr.PC, to interfere with criminal proceedings is wide, such power has

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NC: 2024:KHC:34831 CRL.P No. 8803 of 2023 to be exercised with circumspection, in exceptional cases. Jurisdiction under Section 482 of the Cr.PC is not be exercised for the asking."

19. The said principle has been reiterated by the Hon'ble Supreme Court in the case of CENTRAL BUREAU OF INVESTIGATION VS ARYAN SINGH - 2023 SCC Online SC 379 and MOHIT SINGH VS REENA BAGGA & ORS. - Criminal Appeal No.843/2024.

20. In the present case, though the material on record would prima facie go to show that the petitioner is an Indian citizen, a strong contention was raised contending that he is a citizen of Canada, and during the course of arguments, learned Counsel for the petitioner who had undertaken to produce the Canadian Passport of the petitioner, has failed to produce the same. The material on record would also go to show that the petitioner was very much in India a few days prior to the registration of the impugned FIR against him and he himself had submitted a complaint at Delhi against Anupam Acharya and others alleging that they had committed cyber crime.

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21. If on consideration of the relevant material the court is satisfied that an offence is disclosed, in normal circumstances, this Court will not interfere with the investigation and generally allow the investigation to continue in order to collect materials for proving the offences. A reading of the averments made in the first information which has resulted in registration of the impugned FIR in Crime No.1193/2023 against the petitioner, would prima facie make out a case for the alleged offences, and therefore, I am of the opinion that the prayer made in this petition cannot be granted. Accordingly, the petition is dismissed.

SD/-

(S VISHWAJITH SHETTY) JUDGE KK

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Karnataka High Court