IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF MARCH, 2019 BEFORE THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.921/2014 BETWEEN SRI S.SURESH S/O LATE SRI.SHANKARANARAYANA RAO, R/O AT NO 174, 7TH CROSS, 1ST BLOCK, 5TH STAGE, MAHAGANAPATHI NAGAR, WEST OF CHORD ROAD, BANGALORE-560 010. ... PETITIONER (BY SRI SAMPAT BAPAT, ADV.) AND 1. SMT.VANDITHA SHARMA MANAGING DIRECTOR, KARNATAKA STATE FINANCE CORP., NO.1/1, THIMMIAHA ROAD, BANGALORE-560 052.
2. SRI. B.H.SRINIVAS MURTHY GENERAL MANAGER, KARNATAKA STATE FINANCIAL CORPORATION, CIRCLE 1, NO.1/1, THIMMAIAHA ROAD, BANGALORE-560 052.
3. SRI N.VENKATESH AUTHORISED OFFICER KARNATAKA STATE FINANCE CORP.
NO.197, 2ND FLOOR 2ND STAGE, WEST OF CHORD ROAD, BANGALORE-560 086.
4. N.R.ANAND GUPTA KARNATAKA STATE FINANCE CORP. NO.197, 2ND FLOOR 2ND STAGE, WEST OF CHORD ROAD, BANGALORE-560 086.
5. SRI D.H.HONNE GOWDA NO.1396/A, 5TH MAIN ROAD, 2ND STAGE, RAJAJINAGAR, BANGALORE-560 010.
PROP: M/S MANJUNATHA INDUSTRIES.
6. SRI D.H.RAJE GOWDA NO.1396/A, 5TH MAIN ROAD, 2ND STAGE, RAJAJINAGAR, BANGALORE-560 010, PROP: M/S HRH INDUSTRIES.
7. SMT. PRABHAVATHI W/O SRI HONNE GOWDA, NO.1396/A, 5TH MAIN ROAD, 2ND STAGE, RAJAJINAGAR, BANGALORE-560 010.
8. SRI SANJAY KULKARNI S/O SURESH A KULKARNI, AGED ABOUT 47 YEARS, R/O AT NO.406, SARANGA APARTMENTS, WEST OF CHORDROAD, BANGALORE. ... RESPONDENTS (BY SRI GURURAJ JOSHI, ADV. FOR R1 TO R7, R8 SERVED AND UNREPRESENTED.) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 CR.P.C PRAYING TO SET ASIDE THE ORDER DATED:28.9.13 IN PCR NO.NIL/13 PASSED BY THE IV ADDL.C.M.M., BANGALORE AND ALSO THE ORDER DATED:18.1.14 PASSED BY THE V ADDL.CITY CIVIL AND S.J., C/C OF FTC-9, BANGALORE IN CRL.RP.NO.310/13 AND DIRECT THE IV ADDL.C.M.M., TAKE COGNIZE OF THE OFFENCES COMMITTED BY THE ACCUSED NO.1 AND 8 U/S 120B, 409, 420, 468 AND 471 R/W SEC. 34 OF IPC AND PUNISH THE ACCUSED IN ACCORDANCE WITH THE LAW.
THIS CRIMINAL PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Petitioner herein filed a private complaint against the Managing Director, General Manager, Authorized Officer of Karnataka State Financial Corporation (in short `the KSFC’) and others seeking action for the alleged offences punishable under Sections 120(B), 409, 420, 468 and 471 read with Section 34 of IPC.
2. Learned Magistrate refused to take action on the said complaint and returned the complaint to the petitioner. Being aggrieved by the said order, the complainant/petitioner filed a revision petition before the V Additional City Civil and Sessions Judge, Bangalore in Crl.R.P.No.310/2013 who, by order dated 18th January 2014 dismissed the revision petition.
3. Learned counsel for the petitioner submits that respondent-KSFC initiated recovery proceedings against the complainant/petitioner on the allegation that his father had offered a surety for the loan alleged to have been availed by respondent nos.5 & 6. It is contended that the father of the complainant did not offer any surety for the loan alleged to have been availed by Respondent nos. 5 & 6. The complainant took up a plea that documents in question were fabricated by the respondents and officials of the KSFC and based on the said false documents, the recovery proceedings were initiated and hence, petitioner/complainant sought action against the respondents. In the private complainant in para.11 of the complaint it was stated that father of the complainant has not offered his property as security for the loan obtained by the 5th accused and the documents do not disclose any sort of creation of mortgage or any kind of security in respect of the loan obtained by the 5th accused. Inspite of it, there being no documents to support the creation of mortgage, the first accused has manipulated the records and initiated proceedings purported to be under SFC Act and Securitization Act.
4. The records disclose that the KSFC has initiated recovery proceedings by taking recourse to Section 29 of the SFC Act, 1951 and taken notional possession of the property offered as guarantee. The petitioner herein has challenged the action taken by the KSFC authorities before this Court by filing a writ petition and the same is pending consideration by this Court.
5. The contention urged by the petitioner prima facie appears to be arising out of a deed of guarantee (Agreement) dated 23.5.1996. The contention of the petitioner that his father has not offered any surety and the guarantee agreement does not permit the KSFC to take possession of the property belonged to his father are required to be determined by the writ Court.
6. Since all the issues involved in the matter are required to be decided by the Civil Court, invocation of criminal jurisdiction on the same set of allegations cannot be sustained. That apart, alleged dispute having arisen out of a written deed of guarantee, solely on the ground that the said agreement is disputed by the petitioner criminal Court cannot assume jurisdiction into the matter. Allegations made in the complaint are essentially civil in nature. Hence, the Courts below were justified in refusing to take cognizance of the alleged offences.
7. I do not find any error or illegality in the impugned orders passed by the Courts below. More so, Section 41 of the State Financial Corporations Act, 1951 offers protection to the Directors of the Financial Corporations against Criminal prosecution. The Section reads as under:
“Section 41-A of State Financial Corporation Act, 1951 - Protection of action taken by persons appointed under Section 27 or Section 32A – No suit, prosecution or other legal proceeding shall lie against any person appointed as Director, Administrator, Managing agent or Manager by the Financial Corporation in pursuance of Section 27 or Section 32A for anything which is in good faith done or intended to be done by him as such direction, administrator, managing agent or Manager.”
8. There is nothing on record to indicate that the complainant has complied with the requirements of the said provision before initiating any criminal action against the petitioner.
9. In that view of the matter, the proceedings initiated against the petitioner are legally untenable. Hence, I do not find any reason to interfere in the matter in exercise of jurisdiction under Section 482 of Cr.PC. However, having regard to the contentions urged by the petitioner, liberty is reserved to the petitioner to take recourse to criminal action depending upon the findings-recorded by the Civil Court or the writ Court on the subject matter in question.
With this observation, the petition is dismissed.
Sd/- JUDGE Sk/- CT-HR