Karnataka High Court
Sri Satish vs The State Of Karnataka on 11 October, 2018
Author: H.B.Prabhakara Sastry
Bench: H.B.Prabhakara Sastry
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF OCTOBER, 2018
BEFORE
THE HON'BLE Dr.JUSTICE H.B.PRABHAKARA SASTRY
WRIT PETITION No.39389 OF 2013 (GM-RES)
BETWEEN:
Sri. Satish S/o Sri Puttaiah,
Aged 50 years,
President, Mandya District,
United Bank, Mandya-571 401. ...Petitioner
(By Sri. M.R. Rajagopal, Advocate)
AND:
1. The State of Karnataka,
By its Secretary Dept. of Co-operation,
Vikasa Soudha, Bengaluru-560 001.
2. The Joint Registrar of Co-operative
Societies, Mysuru Division,
Public Offices Buildings,
New Sayyaji Road,
Mysuru-570 001.
3. The Deputy Registrar of
Co-operative Societies,
Mandya District,
Mandya-571 401.
4. The Assistant Registrar of
Co-operative Societies,
Mandya Taluk, Mandya-571 401.
WP No.39389/2013
2
5. The Deputy Commissioner,
Mandya District, Mandya-571 401.
6. The Superintendent of Police,
Mandya District, Mandya-571 401.
7. The Chief Executive Officer,
M.D.C.C. Bank, Mandya-571 401.
8. The Sub-Inspector Police,
Mandya West Police Station,
Mandya Town, Mandya-571 401. ...Respondents
(By Sri. Chetan Desai, HCGP for R-1 to 6 and 8;
R-7 served)
This Writ Petition is filed under Articles 226 and 227 of
the Constitution of India read with Section 482 of Cr.P.C
praying to quash the communication dated 23.07.2013
issued by the R-2 to R-3 vide Annexure-R and also complaint
dated 23.07.2013 filed by R-3 vide Annexure-S and also the
FIR pending on the file of R-8 in FIR No.284/2013 as per
Annexure-T.
This Writ Petition having been heard and reserved for
orders on 26.09.2018, this day the Court made the following:
ORDER
The petitioner in this petition has sought for a writ of Certiorari seeking quashing of the communication dated 23.07.2013 issued by respondent Nos.2 and 3 which is at Annexure-R, the complaint dated 23.07.2013 WP No.39389/2013 3 filed by respondent No.3 which is at Annexure-S and the FIR pending on the file of respondent No.8 in Crime No.284/2013, which is at Annexure-T.
2. The summary of the case as could be gathered on perusal of the material placed before this Court is that respondent No.3 vide his complaint dated 23.07.2013 which is at Annexure-S, addressed to respondent No.8 - Police, has alleged that in April 2013, while the Deputy Superintendent of Police, Mandya was conducting investigation about the credit of `5 crores to the account of one Sri. Chandrashekar maintained at Indian Bank, Mandya Branch by fraud also noticed that there was one more credit of `2 crores to the said account. The accused therein in his voluntary statement revealed that the said sum of `2 crores was the amount belonging to the Mandya District Co-operative Central Bank Ltd. (hereinafter referred to as the 'MDCC Bank' WP No.39389/2013 4 for the sake of brevity). The Joint Registrar of Co-operative Societies, Mysuru Division, Mysuru (respondent No.2) vide his letter dated 23.07.2013 (Annexure-R) has accorded sanction to prosecute the then President (present petitioner) and one Sri. Shashidhar, Chief Executive of the MDCC Bank. Therefore, the said President and Chief Executive who involved in series of acts of fraud and misappropriation of public money are required to be prosecuted. The said complaint was registered in the Police Station of respondent No.8 in their station Crime No.284/2013 for the offence punishable under Sections 409 and 420 read with Section 34 of Indian Penal Code (IPC) against the present petitioner and one Sri. Shashidhara Ele, the then Chief Executive of MDCC Bank as per Annexure-T.
3. It is the contention of the petitioner as well the arguments of learned counsel for the petitioner that WP No.39389/2013 5 there is a bar under Section 111(2) of Karnataka Co- operative Societies Act (hereinafter referred to as the 'KCS Act' for the sake of brevity), according to which no prosecution can be instituted under the KCS Act without the previous sanction of competent authority. Further, as per Section 111(3) of the same act, no such sanction can be given without giving to the person concerned, an opportunity to represent his case. However, in the instant case, since no such opportunity was given by respondent No.2, the criminal prosecution launched against the present petitioner deserves to be quashed.
4. Learned High Court Government Pleader appearing for respondent Nos.1 to 6 and 8 in his arguments relying upon the judgment of this Court in Taluk Industrial Co-op. Society Ltd, Vs. Patel C.M. Thimmegowda reported in 1965 (1) Mysore Law Journal 98; the judgment of this Court in Gurupad WP No.39389/2013 6 Ramachandra Nandani Vs. The State of Mysore reported in CRL. L. J. 1669 submitted that the bar on institution of prosecution under Section 111(2) of the KCS Act applies only with respect to the offences enumerated under Section 109 of the very same Act, but it does not include the offences punishable under other law including the IPC.
5. However, learned counsel for the petitioner in his reply argument was fair enough to make a submission that in view of the judgment of the Hon'ble Supreme Court in the case of K. Ashoka Vs. N.L. Chandrashekar and Others reported in 2009(5) KLJ 545 (SC), he concedes that since the alleged offence in the instant case against the petitioner is the one punishable under Sections 409 and 420 read with Section 34 of IPC, the bar provided under Section 111(2) and 111(3) of the KCS Act is not attracted. In WP No.39389/2013 7 the said case of K. Ashoka (supra), the Hon'ble Apex Court in paragraph 18 of the judgment was pleased to hold that Section 109 of the KCS Act provides for commission of offences under said Act, wherein, no statutory embargo has been placed on a Court to take cognizance of offence under the provisions of IPC. If the allegations made in the complaint, the petition or in the FIR make out a case under the IPC, Section 111 of the KCS Act would constitute no bar for maintenance thereof, since the Bar is applicable only in respect of the offences committed under the said KCS Act. In view of the same, the first point of argument of learned counsel for the petitioner regarding maintainability of the criminal prosecution initiated against him no more survives for consideration.
6. The main leg of argument of learned counsel for the petitioner is that the alleged deposit of `2 crores WP No.39389/2013 8 in the account of a person by name Chandrashekar was a fraud practiced by the said Chandrashekar on the bank. Since while issuing two cheques of `1 crore each to the said Chandrashekar by the MDCC Bank, it was made clear that the deposit must be made in the name of MDCC Bank, as such, cheques were issued in the name of Indian Bank, Mandya. However the said Chandrashekar fraudulently by adding his account number in the blank portion of the cheque has got that amount credited to his account. However, within three months after noticing the alleged fraud, the amount with interest thereupon has been recovered and credited to MDCC Bank. Learned counsel further submitted that the said decision of depositing `2 crores with Indian Bank in term deposit was taken in the interest of MDCC Bank, as the same was surplus amount and by the Board, which is permissible under Section 28-C (2)(c) of the KCS Act. Drawing the attention of the Court to Section 29-G of WP No.39389/2013 9 the KCS Act which speaks about the appointment of Chief Executive and Bye-law No.14 of the Byelaw of MDCC Act, which speaks about the role of President and his powers, learned counsel also submitted that the administration and affairs of MDCC Bank would be carried on by the Chief Executive, as such, the President who is the petitioner herein has got no role in the said matter. He also submitted that a departmental enquiry conducted against the said Chief Executive under Section 64 of the KCS Act has also proved that the Chief Executive was guilty of the alleged Act for which the present petitioner as a President cannot be held liable.
7. In Gold Quest International Private Limited Vs. State of Tamil Nadu reported in (2014) 15 SCC 235, which judgment the learned counsel for the petitioner has relied upon, the Hon'ble Apex Court in paragraph No.7 while referring to its previous judgment WP No.39389/2013 10 in Giansingh Vs. State of Punjab reported in (2012) 10 SCC 303 was pleased to extract paragraph No.61 of the said judgment, which is reproduced herein below:
"61. The position that emerges from the above discussion can be summarized thus: the power of the High Court in quashing a criminal proceeding or FIR or complaint in exercise of its inherent jurisdiction is distinct and different from the power given to a criminal court for compounding the offences under Section 320 of the Code. Inherent power is of wide plenitude with no statutory limitation but it has to be exercised in accord with the guideline engrafted in such power viz.: (i) to secure the ends of justice, or (ii) to prevent abuse of the process of any court. In what cases power to quash the criminal proceeding or complaint or FIR may be exercised where the offender and the victim have settled their dispute would depend on the facts and circumstances of each case and no category can be prescribed. However, before exercise of such power, the High Court must have due regard to the nature and gravity of the crime. Heinous and serious offences of mental depravity WP No.39389/2013 11 or offences like murder, rape, dacoity, etc. Cannot be fittingly quashed even through the victim or victim's family and the offender have settled the dispute. Such offences are not private in nature and have a serious impact on society. Similarly, any compromise between the victim and the offender in relation to the offences under special statutes like the Prevention of Corruption Act or the offences committed by public servants while working in that capacity, etc. cannot provide for any basis for quashing criminal proceedings involving such offences. But the criminal cases having overwhelmingly and predominatingly civil flavour stand on a different footing for the purposes of quashing, particularly the offences arising from commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or the family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute. In this category of cases, the High Court may quash the criminal proceedings if in its view, because of the compromise between the offender and the victim, the possibility of conviction is WP No.39389/2013 12 remote and bleak and continuation of the criminal case would put the accused to great oppression and prejudice and extreme injustice would be caused to him by not quashing the criminal case despite full and complete settlement and compromise with the victim. In other words, the High Court must consider whether it would be unfair or contrary to the interest of justice to continue with the criminal proceeding or continuation of the criminal proceeding would tantamount to abuse of process of law despite settlement and compromise between the victim and the wrongdoer and whether to secure the ends of justice, it is appropriate that the criminal case is put to an end and if the answer to the above question(s) is in the affirmative, the High Court shall be well within its jurisdiction to quash the criminal proceeding."
Keeping the above guidelines in mind, the case on hand is to be now analysed.
8. According to Section 28-A of the KCS Act, the Management of co-operative societies vests in the board WP No.39389/2013 13 constituted in accordance with the KCS Act, the rules and the bye-laws of such society. The Board exercise such powers, discharge such duties and perform such functions as may be conferred or imposed upon it by this Act, the rules ad the bye-laws.
According to Section 29(F) of the KCS Act, every co-operative society shall have President, Vice-President or Vice-Chairperson and such other office bearers elected in accordance with the provisions of the KCS Act, rules or bye-laws.
9. Admittedly, in the instant case the present petitioner is the President of MDCC Bank. Bye-law No.14, a copy of which is placed before the Court by the petitioner, deals with the President and his power in MDCC Bank. According to the said bye-law, the President would be the head of the bank and he shall preside over the General Body Meeting governing body WP No.39389/2013 14 meeting, sub-committee meeting and all other meetings of the various committees. He shall have general control over the business affairs of the bank and he has to supervise the affairs of the bank. Thus, the President, who is the petitioner herein being the head of MDCC Bank has got its general control and duties of supervision on the affairs of the bank.
10. On the other hand, Bye-law No.16 of the said Bye-law of MDCC Bank, which deals about the Chief Executive says that the Chief Executive Officer shall be appointed by the Government who shall be not below the rank of a Joint Director of Co-operative Societies. The said officer shall work under the President and the governing body as a Chief Executive Officer and he would also be an ex-officio member of governing council. Thus, the bye-law makes it very clear that the functioning of the Chief Executive would be subordinate WP No.39389/2013 15 to the President and the governing council. Even though the enquiry report said to have been initiated against the other Chief Executive, Sri. Shashidhar Ele, a photo copy of which is placed before this Court would go to show that the said Chief Executive was found guilty of mis-conduct, negligence and carelessness in discharging his work, however, it cannot be lost sight of the fact that in the very same report of page No.21, the enquiry officer has observed that the issuance of cheque in the hand of an unknown person has taken place in the presence of the President and the Chief Executive. Further, the very same report in its finding at page No.22 while holding the Chief Executive, Sri. Shashidhar Ele as guilty, has made specific observation that the said Shashidhar Ele, the Chief Executive was not thoroughly got introduced and identified the persons who were introduced by the President. This report of the enquiry officer go to show that the alleged person WP No.39389/2013 16 Sri. Chandrashekar to whom the cheques were handed over by MDCC Bank was got introduced to the Chief Executive by none else than the present petitioner i.e., the President of MDCC Bank.
11. Secondly, two cheques of `1 Crore each were also handed over to said Chandrashekar in the presence of the present petitioner i.e., the President. This gives raise to a suspicion as to what business the President had to introduce said Chandrashekar to his Bank and to get two cheques of `1 crore each handed over to him. It also gives raise to a doubt as to what made the MDCC Bank as well the President herein to introduce any middlemen for depositing a huge sum of amount with the Indian Bank.
12. Thirdly, it also give raise to a suspicion as to why did the petitioner as a president allowed its people to deliver those two cheques of `1 crore each into the WP No.39389/2013 17 hands of said Chandrashekar who was not a known person to MDCC Bank. Atleast on that point of time, being the President of the Bank, having power of general control and duty of supervision of the affairs of the Bank as per Bye-law No.14 he could have ensured that those two cheques of huge amount are delivered to the Bank by one of its official in person. On the other hand, he has allowed the said cheque to be handed over to a third person whom he had introduced to the Bank.
13. In addition to these, a perusal of the letter dated 22.07.2013 at Annexure-N showing to be written by MDCC Bank to the Registrar of Co-operative Societies, Bengaluru at point No.7 go to show that the said Sri. Chandrashekar in whose hand two cheques were delivered was introduced to the President by one Sri. Kebballi Anand and that when enquired by the President, it was revealed that the deposit receipts WP No.39389/2013 18 submitted to MDCC Bank were fabricated. Thus, the said Sri. Chandrashekar was introduced to MDCC Bank through the present petitioner i.e., the President to whom he was introduced by one Kebballi Anand. Therefore, the introduction of said Sri. Chandrashekar to the MDCC Bank was also by the President himself, so also, the delivery of two cheques to the hands of said Chandrashekar was also in the presence of the present petitioner/President of MDCC Bank.
14. Therefore, at this stage, by a reading of the complaint and the papers produced along with this petition, gives raise to a suspicion that there is all the reasons to suspect that the present petitioner had deceptive intention when the transaction occurred. Therefore, the argument of learned counsel for the petitioner that the materials placed along with the writ petition would not attract the ingredients of the alleged WP No.39389/2013 19 offences which are punishable under Sections 409 and 420 read with Section 34 of IPC cannot be accepted. Further, the Joint Registrar of Co-operative Societies vide his letter dated 23.07.2013, a copy of which is at Annexure-R has also accorded sanction to institute a criminal proceedings against the present petitioner.
Thus, I do not find that there are any grounds to allow the writ petition. Accordingly, the writ petition stands dismissed.
Sd/-
JUDGE BMC