IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF FEBRUARY 2019 BEFORE THE HON'BLE MR. JUSTICE ARAVIND KUMAR CRIMINAL PETITION NO.8039/2017 Between:
1. Shilpa Gautam, W/o Gautam Raghavendra, Aged about 36 years, R/at No.672/B, 11th Cross, 7th Block, Jayanagar, Bengaluru – 560 070.
2. Suman P.
S/o Babu Rao, Aged about 37 years, R/at Flat No.004, Old View Apartment, Crescent Road, Bengaluru – 560 001.
3. Gangaraju H.D.
S/o Late H.Devanna, Aged about 72 years, R/at Old No.44, New No.59, Serpentine Road, 5th Block, Kumarapark, Bengaluru – 560 020. ... Petitioners (By Sri.Madhav, Advocate for Sri.Partha M, Advocate) And:
1. Vallabha S. Rao S/o not known, Aged about 46 years, R/at No.14, Langford, Avenue Building, Beside Arvind Motors, Richmond Circle, Bengaluru – 560 025.
2. State of Karnataka by Ashoknagar Police Station, Bengaluru City.
Pin:560050 (Rep. by SPP, High Court of Karnataka, Bengaluru.
Pin:560001.) ... Respondents (By Sri.S.Rachaiah, HCGP for R.2) This Criminal Petition is filed under Section 482 of Cr.P.C praying that this Hon’ble Court may be pleased to quash the FIR in Crime No.173/2017 of Ashok Nagar Police Station, Bengaluru City, pending on the file of IV Additional CMM, Bengaluru for the offences punishable under Sections 406, 408, 465, 468, 469, 471, 420 r/w 120(B) of IPC and etc., This Criminal Petition coming for Admission this day, the Court made the following:
O R D E R Though the matter is listed for admission, by consent of learned counsel appearing for parties, it is taken up for final disposal.
2. Heard Sri.Madhav, learned counsel appearing on behalf of for petitioner and Sri.S.Rachaiah, learned HCGP appearing for respondent No.2.
3. A complaint came to be lodged by 1st respondent herein on 18.04.2017 before Ashok Nagar Police Station alleging that it is a non-banking financial company extending financial assistance to its customers and also facilitate customers who failed to repay the loan, to sell the property and Vijay Mining and Infra Corporation Private Limited being one of its customer, had availed financial assistance from its company for purchasing equipments and C.Vijayshekar Reddy being Director of said company, had given eight apartments/flats owned by him as collateral security by depositing Title Deeds of said Flats creating equitable mortgage in favour of petitioners. It is further alleged in the complaint that on account of its inability to repay the loan, Mortgagee had informed that property may be sold to recover balance loan amount and gave his consent for sale of the properties so mortgaged and in this regard, Power of Attorney came to be executed in favour of the company, on 03.09.2014, authorizing company to identify the buyer and sell the property so mortgaged and Power of Attorney was also duly registered and as such, company was identifying the purchasers and accused No.4 who was said to be a purchaser, had approached through one of relatives and after negotiations, he had agreed to purchase the property for Rs.20 crores. Accordingly, an Agreement for sale was executed by the owner – C.Vijayshekar Reddy in favour of M/s.Shakthi Enterprises, represented by H.D.Gangaraju and complainant company NBFC (Non-Banking Financial Company) was also a confirming party to said Agreement. Pursuant to same, an advance amount of Rs.5 crores was required to be paid, against which, only a sum of Rs.50 lakhs was paid by Sri.H.D.Gangaraju the buyer and account of inability to pay further money and on his request, Agreement was cancelled and advance amount was refunded to said Sri.H.D.Gangaraju.
4. It is further alleged that in the background of above factual matrix an employee of the complainant company by name K.A.Harish who had been authorized by a Power of Attorney to recover amounts due from the customers of complainant who had defaulted in loan re-payment and who was reporting to a Senior Officer at Kolkata Office was vested with the power to follow up with defaulting customers for collecting dues/payment, acting as care taker of moveable assets that were repossessed through Court orders by the Company and would also look into the sale of repossessed movable assets and identification of prospective buyers. It is further stated that said K.A.Harish had refunded the advance amount of Rs.50 lakhs to Sri.H.D.Gangaraju and as such, he was in the know how of entire transaction relating to the property which had been mortgaged in favour of the complainant company. The complainant further alleges that on account of the said K.A.Harish not depositing the amount to customers loan accounts including the amount of cash paid by its customers, a show cause notice came to be issued and he had submitted his resignation and the company being apprehensive of his intent had accepted his resignation and he had been relieved of his duties with effect from 25.08.2016. It is further alleged that said K.A.Harish had entered into Agreement of Sale to sell the property in favour of Mrs.Shilpa Goutham and one P.Suman who are daughter and friend of Sri.H.D.Gangaraju and had received advance amount to the tune of Rs.1 crore from them. Hence, alleging all the accused persons, including K.A.Harish, had conspired with an intention to deceive the company had entered into a sale transaction, though he (K.A.Harish) was not authorized and he had been relieved of his duties, got entered into a fraudulent transaction to sell the property belonging into the company. Said complaint has been registered by the Ashok Nagar Police Station in Crime No.173/2017 under Sections 406, 408, 465, 468, 469, 471, 420 r/w 120(B) of IPC which is now under investigation. Hence, for quashing of said proceedings, petitioners are before this Court.
5. It is the contention of Sri.Madhav, learned counsel appearing on behalf of the learned counsel appearing for petitioners that petitioners are innocent purchasers and are not conversant with the affairs of the transactions between K.A.Harish and his erstwhile company. Hence, contending that petitioners under a bonafide impression have entered into Agreement of Sale and had in fact issued Demand Drafts in favour of the complainant company itself and as such, there is no mens rea on the part of the petitioners to cheat complainant when they entered into said agreement. On this ground, he prays for allowing the petition by quashing the proceedings against the petitioners.
6. Per contra, learned HCGP would support the case of prosecution.
7. Quashing of criminal proceedings is called for where the complaint disclose that it is frivolous, vexatious and allegations made in the complaint would not constitute offence for which cognizance has been taken by the Magistrate. Then, it would be open for this Court to quash the proceedings. However, if it appears on reading of the complaint and considering the allegations made therein and in the light of statement made on oath that ingredients of the offences are disclosed, there would be no justification for this Court to quash the proceedings.
The defence that is made available or factual aspects which establishes the contrary, may lead to acquittal are not grounds for quashing the complaint or the proceedings at the threshold. At this stage, only question which would be relevant for consideration is whether averments/ allegations made in the complaint disclose the ingredients of criminal offence or not?. A bare reading of the complaint in the instant case would disclose that prima facie offences that are alleged against the respondents and correctness or otherwise of the said allegation has to be decided at trial. At this initial stage i.e., issuance of process it is not desirable to stifle investigation by entering into merits of contention advanced on behalf of petitioner. That apart, the criminal complaint cannot be quashed only on the ground that allegations made therein would appear to be of civil in nature. If the dispute is having both civil as well as any criminal act, even in such circumstances, this Court would not quash the proceedings.
8. In the instant case, as noticed hereinabove, a perusal of the complaint discloses prima-facie the offences that are alleged against the petitioners. Hence, petition stands rejected.
In view of the dismissal of the above petition, I.A. No.1/2017 for stay does not survive for consideration.
SD/- JUDGE NBM