Karnataka High Court
Mahaveer Prasad Aggarwal vs State Of Karnataka on 13 February, 2026
-1-
NC: 2026:KHC:9061
CRL.P No. 359 of 2020
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE MRS. JUSTICE M G UMA
CRIMINAL PETITION NO. 359 OF 2020
BETWEEN:
1. MAHAVEER PRASAD AGGARWAL,
S/O. SHRI. GANGAJAL AGGARWAL,
AGED ABOUT 52 YEARS,
MANAGING DIRECTOR,
M/S. LAKSHMI ROLLING AND
STRIPS PVT LIMITED, NO. 54,
BOMMASANDRA INDUSTRIAL AREA,
ANEKAL TALUK, HOSUR ROAD,
BENGALURU - 562 158
2. SMT. SHASHIBALLA AGGARWAL
W/O. MAHAVEER PRASAD AGGARWAL,
DIRECTOR, AGED ABOUT 46 YEARS,
M/S. LAKSHMI ROLLING AND STRIPS PVT
LIMITED, NO. 54, BOMMASANDRA
INDUSTRIAL AREA, ANEKAL TALUK,
HOSUR ROAD, BENGALURU - 562 158
Digitally signed
by PRASHANTH 3. SHRI. VIPIN KUMAR AGGARWAL,
NV
S/O. MAHAVEER PRASAD AGGARWAL,
Location: High
Court of DIRECTOR, AGED ABOUT 34 YEARS,
Karnataka M/S. LAKSHMI ROLLING AND STRIPS
PVT LIMITED, NO. 54, BOMMASANDRA
INDUSTRIAL AREA, ANEKAL TALUK,
HOSUR ROAD, BENGALURU - 562 158
...PETITIONERS
(BY SRI. NITHIN GOWDA K.C., ADVOCATE FOR
SRI. P. PRASANNA KUMAR, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY ASHOK NAGAR POLICE STATION,
-2-
NC: 2026:KHC:9061
CRL.P No. 359 of 2020
HC-KAR
CUBBON PARK SUB DIVISION,
REPRESENTED BY ITS
STATE PUBLIC PROSECUTOR,
HIGH COURT BUILDING,
BENGALURU - 560 001
2. MAHENDRA KUMAR GUPTA
AGED ABOUT 58 YEARS,
S/O. LATE. N.R. GUPTA,
MANAGING DIRECTOR,
M/S. CHAMUNDI STEEL
CASTINGS INDIA LIMITED,
HAVING ITS R.O. AT NO. 17/21,
4TH FLOOR, "CASA CAPITOL",
WOOD STREET, ASHOKNAGAR,
BENGALURU - 560 025
...RESPONDENTS
(BY SMT. SUSHMA INDI, ADVOCATE FOR
SRI. SIDDHARTH SUMAN, ADVOCATE FOR R2
SRI. RANGASWMY R., HCGP FOR R1)
THIS CRL.P IS FILED U/S 482 CR.PC PRAYING TO QUASH THE
ORDER DATED 09.04.2019 IN C.C.NO.53517/2019 PASSED BY THE
LEARNED XLIII A.C.M.M., MAYO HALL UNIT, BENGALURU THEREBY
TAKING COGNIZANCE AS AGAINST THE PETITIONERS
HEREIN/ACCUSED NO.1-3 FOR THE OFFENCE P/U/S 420, 34 AND
120B OF IPC AND CONSEQUENTLY DIRECTED TO REGISTER
CRIMINAL CASE (PRODUCED VIDE ANNEXURE-E TO THE PETITION).
THIS CRL.P, COMING ON FOR ADMISSION, THIS DAY, ORDER
WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MRS. JUSTICE M G UMA
ORAL ORDER
The petitioners being accused Nos.1 to 3 in Crime No.283/2016 of Ashoknagar Police Station in CC.No.53517/2019 pending on the file of the learned XLIII Additional Chief Metropolitan Magistrate, Mayohall, Bengaluru -3- NC: 2026:KHC:9061 CRL.P No. 359 of 2020 HC-KAR registered for the offences punishable under Sections 420, 120B read with Section 34 of Indian Penal Code (for short 'IPC') are seeking to quash the criminal proceedings initiated against them.
2. Heard Sri. Nithin Gowda. K.C, for Sri. P. Prasanna Kumar, learned counsel for the petitioners, Smt. Sushma Indi, learned counsel for Sri. Siddharth Suman, learned counsel for respondent No.2 and Sri. Rangaswamy. R, learned HCGP for respondent No.1. perused the materials on record.
3. Respondent No.2 - the informant filed the first information with Ashoknagar Police Station against accused Nos.1 to 3 alleging commission of the offence punishable under Section 420 of IPC. The FIR was registered in Crime No.283/2016 of Ashoknagar Police Station and investigation was undertaken. After investigation the 'B' report came to be filed by the Investigating Officer, holding that there was a business take over agreement between the informant and the accused, whereunder, the petitioners have agreed to take over M/s.Chamundi Steel Casting (India) Ltd., (for short 'CSCIL') together with the land, factory, building, plant and machinery -4- NC: 2026:KHC:9061 CRL.P No. 359 of 2020 HC-KAR for a total consideration of Rs.15.85 crores. It is stated that, as per the terms of the agreement, an advance amount of Rs.9.25 crores was paid and Rs.6.60 crores was due to be paid. The accused took possession of the land, building, machinery etc., and thus has taken over the possession of the business, but failed to pay the balance amount of Rs.6.60 crores, even though, he had undertaken to pay the same within four weeks from 01.03.2014.
4. The first information discloses that the informant has specifically contended that even after repeated request the accused have not paid the balance sale consideration. They were giving false assurance, due to which the informant faced financial problem. After some time the accused started behaving rudely and started denying their liability. Therefore, the first information came to be filed alleging commission of the offence under Section 420 of IPC.
5. After investigation, the 'B' repot came to be filed. While filing the 'B' report, the investigation referred to the agreement to take over the business with its terms and conditions and formed an opinion that there are several civil -5- NC: 2026:KHC:9061 CRL.P No. 359 of 2020 HC-KAR litigations between the parties. Few writ petitions were also filed before the High Court of Madras. Therefore, opined that the dispute is of civil in nature.
6. The Trial Court accepted the protest petition filed by the informant and passed the order dated 09.04.2019, taking cognizance of the offence punishable under Sections 420, 120B read with 34 of IPC. Being aggrieved by the same, the petitioners are before this Court.
7. In view of the rival contentions urged by learned counsel for both the parties, the point that would arise for my consideration is:
"Whether the petitioners have made out any grounds to allow the petition and to quash the criminal proceedings initiated against them?"
My answer to the above point is in the 'Affirmative' for the following:
REASONS
8. On going through the first information and 'B' report filed by the Investigating Officer it is observed that the informant is placing reliance heavily on the business take over -6- NC: 2026:KHC:9061 CRL.P No. 359 of 2020 HC-KAR the agreement dated 01.03.2014. This business takeover agreement is an admitted document. As per the terms of this agreement, respondent No.2 agreed to sell and the petitioners agreed to take over the business and the assets of CSCIL for a total consideration of Rs.27 crores. The parties have agreed to deduct a sum of Rs.1.65 crores from the sale consideration towards the amount that is to be paid by the petitioners to Tamilnadu Electricity Board (for short 'TNEB') and Rs.9.50 crores to IDBI, the balance amount of Rs.15.85 crores was agreed to be paid by the petitioners to respondent No.2. Out of this amount, as per the agreement, a sum of Rs.9.25 crores was paid on the date of agreement and the properties of CSCIL such as land, building, machineries etc., were taken over getting the sale deed registered with the Sub-Registered Kelamangalam of Krishnagiri District in the name of M/s Laxmi Rolling and Strips Pvt., (for short 'LRSPL'). The balance amount of Rs.6.60 crores was agreed to be paid, it was also agreed between the parties that the liability of any nature upto 01.03.2014 is to be borne by CSCIL and in case of any refunds it is only CSCIL which is entitled for the same. The liabilities from 01.03.2014 onwards is held to be the responsibility of -7- NC: 2026:KHC:9061 CRL.P No. 359 of 2020 HC-KAR LRSPL. There is reference to One Time Settlement with IDBI and the benefit of such settlement should accrue to LRSPL. The deposit made with the TNEB was agreed to be left to the account of LRSPL. It is also agreed that the brand Chamundi will be used by LRSPL. It is stated that petitioner No.1 - accused No.1 - Mahaveer Prasad Aggarwal, has taken over the possession of the factory along with all land, buildings, machineries etc., on 01.03.2014 and he is enjoying the same. This agreement is signed by both the parties, the accused has endorsed that the remaining amount of Rs.6.60 crores will be paid within 4 months from 01.03.2014.
9. Now, it is the contention of respondent No.2 that, even though accused Nos.2 and 3 were present at the time of accused No.1 signing the business takeover agreement, they deliberately did not sign the same, and the accused have given false promises. It is also contented that immediately after March 2014, accused No.1 got the required sale deeds with respect to the landed properties and inspite of repeated demands made by respondent No.2, the petitioners are not ready to pay the balance consideration amount of Rs.6.6 -8- NC: 2026:KHC:9061 CRL.P No. 359 of 2020 HC-KAR crores, even though, they were enjoying the plant and machineries. It is alleged that, the accused were giving false assurances and subsequently, started behaving rudely and also started denying their liability to pay Rs.6.60 crores as per the agreement. Therefore, it is contented that the accused have committed the offence under Sections 420 and 120B read with section 34 of IPC.
10. Even though, the learned counsel for respondent No.2 filed a memo with several documents to content that respondent No.2 is not concerned about the writ petitions filed before the High Court at Madras and that the correspondence between the parties and the conduct of the petitioners disclose that there was an intention to commit cheating since from the beginning, the fact remains that both the parties after knowing the contents of the agreement have signed the same on 01.03.2014 and they are bound by its terms. When the terms of a written agreement is violated, it gives rise to a civil right to recover the balance amount along with interest or damages, but the same cannot be a ground for filing the criminal complaint. Even though, the learned counsel for respondent No.2 is trying to make out a new case by producing several -9- NC: 2026:KHC:9061 CRL.P No. 359 of 2020 HC-KAR documents, the first information does not support such contention. Under such circumstances, the Investigating Officer has rightly filed the 'B' report referring to various litigations pending between the parties and the terms of the agreement in question. Even though, the Trial Court rejected the 'B' report and took cognizance of the offence, it is only by recording that, accused Nos.1 to 3 have not fulfilled their assurance and not paid the balance amount as agreed. Therefore, it amounts to cheating. By no stretch of imagination, this finding of the Trial Court could be accepted. Hence, I am of the opinion that, no case is made out to invoke either Section 420 or 120B of IPC. Therefore, initiation of the criminal proceedings against the petitioners is liable to be quashed as the same is instituted in abuse of process of law.
11. In view of the above, I answer the above point in the 'Affirmative' and proceed to pass the following:
ORDER
i) The petition is allowed.
ii) The criminal proceedings initiated against the
petitioner - accused Nos.1 to 3 in
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NC: 2026:KHC:9061
CRL.P No. 359 of 2020
HC-KAR
CC.No.53517/2019 pending on the file of the learned XLIII Additional Chief Metropolitan Magistrate, Mayohall, Bengaluru (Crime No.283/2016 of Ashoknagar Police Station) registered for the offences punishable under Sections 420, 120B read with Section 34 of Indian Penal Code, is hereby quashed.
Sd/-
(M G UMA) JUDGE PNV CT:VS List No.: 1 Sl No.: 4