Karnataka High Court
Anand Rathi vs State Of Karnataka on 10 January, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 19.12.2024
Pronounced on : 10.01.2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF JANUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.3488 OF 2023
BETWEEN:
1. ANAND RATHI
S/O NANDKISHORE RATHI
AGED ABOUT 76 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
DIRECTOR OF ARSSBL AS PER
IMPUGNED COMPLAINT.
2. PRADEEP KUMAR GUPTA
S/O LATE NAVARATANMAL GUPTA
AGED ABOUT 55 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
MANAGING DIRECTOR OF ARSSBL
AS PER IMPUGNED COMPLAINT.
2
3. PRITI PRADEEP GUPTA
W/O PRADEEP GUPTA
AGED ABOUT 42 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
MANAGING DIRECTOR OF ARSSBL
AS PER IMPUGNED COMPLAINT.
4. JUGAL KISHORE MANTRI
S/O MANKARAN MANTRI
AGED ABOUT 50 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
DIRECTOR OF ARSSBL AS PER
IMPUGNED COMPLAINT.
5. ROOP BHOOTRA
S/O SOHANLAL BHOOTRA
AGED ABOUT 49 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
EXECUTIVE DIRECTOR OF
ARSSBL AS PER IMPUGNED COMPLAINT.
6. SHANKAR RAJA M.P.,
S/O MR .PETCHI MUTHU
AGED ABOUT 41 YEARS
EXPRESS ZONE A WING
10TH FLOOR
3
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
REGIONAL HEAD AS PER
IMPUGNED COMPLAINT.
7. AMARNATH H.S.,
S/O LATE H.P. SUNDAR RAJ SHETTY
AGED ABOUT 61 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
MANAGER OF ARSSBL AS PER
IMPUGNED COMPLAINT.
8. REKHA C.,
D/O CHANDRASHEKHAR M.,
AGED ABOUT 35 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
DEPUTY MANAGER (ARSSBL) AS PER
IMPUGNED COMPLAINT.
9. B.L.NAGARAJA
S/O B.S.LAKSHMINARAYAN SETTY
AGED ABOUT 53 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
BRANCH MANAGER OF ARSSBL AS PER
IMPUGNED COMPLAINT.
4
10 . AMIT ANAND RATHI
S/O ANAND RATHI
AGED ABOUT 48 YEARS
EXPRESS ZONE A WING
10TH FLOOR
WESTERN EXPRESS HIGHWAY
GOREGAON EAST
MUMBAI - 400 063
MANAGING DIRECTOR AS PER
IMPUGNED COMPLAINT.
11 . NIMAL CHANDAK
S/O SATYA NARAYAN CHANDAK
AGED ABOUT 40 YEARS
EXPRESS ZONE A WING,
10TH FLOOR, WESTERN EXPRESS
HIGHWAY, GOREGAON EAST
MUMBAI - 400 063.
AUTHORISED SIGNATORY
AS PER IMPUGNED COMPLAINT.
... PETITIONERS
(BY SRI SANDESH J.CHOUTA, SR.ADVOCATE FOR
SRI SHRIKARA P.K., ADVOCATE)
AND:
1 . STATE OF KARNATAKA
BY CID(EOD), SQUAD
BANASHANKARI POLICE STATION
REPRESENTED BY SPP
HIGH COURT OF KARNATAKA
BENGALURU - 560 001.
5
2 . VISHWANATH PUJARI
S/O MALLAYYA PUJARI
AGED ABOUT 67 YEARS
NO.116, SRI SADASHIV KRUPA
28TH CROSS, 12TH MAIN
BSK 2ND STAGE
BENGALURU - 560 070.
... RESPONDENTS
(BY SRI B.N.JAGADEESHA, ADDL. SPP FOR R-1;
SRI VISHWANATH PUJARI, PARTY-IN-PERSON - R-2)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO i) QUASH THE ORDER DATED 19.12.2022
(ANNEXURE-A) PASSED IN CR.NO.32/2017 PASSED BY THE I
ADDL.C.M.M., BENGALURU REJECTING THE B-REPORTS FILED BY
THE RESPONDENT NO.1 IN CR.NO.32/2017; ii) QUASH THE FIR
BEARING CR.NO.32/2017 FILED BY BANASHANKARI POLICE
STATION PENDING ADJUDICATION BEFORE THE I ADDL.C.M.M., AT
BENGALURU (ANNEXURE-B) FOR THE OFFENCES P/U/S 120-B, 418,
403, 409, 406, 420, 468, 471 AND 410 OF IPC; iii) QUASH THE
COMPLAINT DATED 27.01.2017 FILED BY THE RESPONDENT NO.2
AGAINST THE ACCUSED BEFORE THE BANASHANKARI POLICE
STATION ALLEGING FOR THE OFFENCES P/U/S 403, 406, 409, 410,
418, 420, 468, 471 AND 120-B OF IPC PENDING ADJUDICATION
BEFORE THE I ADDL.C.M.M., BENGALURU (ANNEXURE-C).
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 19.12.2024, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
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CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
The petitioners/accused 1 to 11 are before this Court calling
in question an order dated 19-12-2022 passed by the I Additional
Chief Metropolitan Magistrate, Bengaluru in Crime No.32 of 2017
rejecting 'B' report and taking of cognizance of the offences
punishable under Sections 120B, 403, 406, 409, 410, 420, 468,
471 r/w Section 34 of the IPC.
2. Heard Sri Sandesh J.Chouta, learned senior counsel
appearing for the petitioners, Sri B.N. Jagadeesha, learned
Additional State Public Prosecutor appearing for respondent No.1
and Sri Vishwanath Pujari, respondent No.2 - party in-person.
3. Facts, in brief, germane are as follows:-
The 2nd respondent/complainant is an investor in Anand Rathi
Shares and Stock Brokers Limited ('ARSSBL' for short) which is into
the business of stock broking. The said Company is under the
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control of the petitioners who are either in management positions
or as employees. The complainant is said to be a seasoned investor
and actively trading in securities at the stock exchange platform.
The complainant is said to have invested certain amount in stocks
through ARSSBL/petitioners. A loan against shares agreement is
entered into between the 2nd respondent and the
petitioners/ARSSBL or Anand Rathi Global Finance Limited. The 2nd
respondent is said to have defaulted in clearing the loan after about
4 years of his securing the loan. The 2nd respondent is said to have
been informed that his stocks which are held as security would be
liquidated. Accordingly, an amount of ₹1,04,05,222.10 is sought to
be liquidated.
4. The complainant then files a suit seeking injunction against
the petitioners not to liquidate the amount towards the loan. The
complainant also approaches the Investment Grievance Redressal
Cell under SEBI for redressal of the dispute on 27-10-2016 and
later registers the complaint on 28-01-2017 in Crime No.32 of 2017
for the afore-quoted offences. The suit filed by the complainant, as
aforesaid, comes to be dismissed on 09-07-2019 on the score that
8
arbitration clause is available in the agreement between the parties.
In the interregnum investigation in Crime No.32 of 2017 continues
and the Police after investigation file a 'B' report before the
concerned Court on 24-01-2019. The learned Magistrate refers the
matter for further investigation on the 'B' report. On 30-06-2021 a
second 'B' report comes to be filed by the jurisdictional Police. The
complainant files a protest petition on 19-07-2022. Now the
concerned Court rejects the 'B' report and takes cognizance of the
aforesaid offences. This has driven the petitioners to this Court in
the subject petition.
5. The learned senior counsel Sri Sandesh J. Chouta
representing the petitioners would contend that the issue which is
purely a commercial transaction or a civil dispute is given a cloak of
criminality. The agreement also contains an arbitration clause. The
complainant has vented out his grievances before various fora.
Criminal proceedings in such cases should not be permitted to be
continued. Apart from the aforesaid contention, the learned senior
counsel would submit that the order of rejection of 'B' report and
taking of cognizance is contrary to the law laid down by the
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coordinate Bench of this Court in DR. RAVIKUMAR v. MRS.
K.M.C. VASANTHA1.
6. Per-contra, the 2nd respondent/complainant who appears in
person takes this Court through the application seeking vacation of
the interim order and the documents. He would admit that loan
was secured from the hands of the petitioners. But, he would seek
to project as to what the petitioners had done. It is his submission
that several crores of rupees of transaction has happed in his
account. Not a rupee has come into the coffers of the complainant.
Tomorrow if the statutory authorities would question him with
regard to huge transaction in his account, he would be caught in
the loop as he is not aware as to why the petitioners have
transacted such huge amount in the account of the complainant. He
would seek dismissal of the petition.
7. I have given my anxious consideration to the submissions
made by the learned senior counsel and the 2nd respondent in
person and have perused the material on record.
1
2017 SCC OnLine Kar. 4731
10
8. The afore-narrated facts are not in dispute. The primary
issue projected by the learned senior counsel is that the order of
taking cognizance on rejection of 'B' report is contrary to the law
laid down by the coordinate Bench of this Court in the case of
RAVIKUMAR supra. The coordinate Bench in the case of
RAVIKUMAR has held as follows:
"5. The procedure followed by the Learned Magistrate is
not in accordance with law. It is well recognized principle of law
that, once the Police submit 'B' Summary Report and protest
petition is filed to the same, irrespective of contents of the
protest petition, the Court has to examine the contents of 'B'
Summary Report so as to ascertain whether the Police have
done investigation in a proper manner or not and if the Court is
of the opinion that the investigation has not been conducted
properly, the Court has got some options to be followed, which
are,-
i) The court after going through the contents of the
investigating papers, filed u/s 173 of Cr. P.C., is of the
opinion that the investigation has not been done
properly, the court has no jurisdiction to direct the
Police to file the charge sheet however, the Court may
direct the Police for re or further investigation and
submit a report, which power is inherent under section
156(3) of Cr. P.C., but before taking cognizance such
exercise has to be done. This my view is supported by
the decisions of the Hon' ble Apex Court in a decision
reported in between Abhinandan Jha v. Dinesh
Mishra [AIR 1968 S.C. 117.] (para 15) and also Full
Bench decision of Apex Court in between Kamalapati
Trivedi v. State of West Bengal [(1980) 2 SCC 91.]
(second head note.)
ii) If the court is of the opinion that the material available
in the 'B' Summary Report makes out a cognizable
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case against the accused and the same is sufficient to
take cognizance, and to issue process, then the court
has to record its opinion under Sec. 204 of Cr. P.C.,
and the Court has got power to take cognizance on the
contents of 'B' Summary Report and to proceed
against the accused, by issuance of process.
iii) If the court is of the opinion that the 'B' Summary
Report submitted by the Police has to be rejected,
then by expressing its judicious opinion, after applying
its mind to the contents of 'B' report, the court has to
reject the 'B' Summary Report.
iv) After rejection of the 'B' Summary Report, the court
has to look into the private complaint or Protest
Petition as the case may be, and contents therein to
ascertain whether the allegations made in the Private
complaint or in the Protest Petition constitute any
cognizable offence, and then it can take cognizance of
those offences and thereafter, provide opportunity to
the complainant to give Sworn Statement and also
record the statements of the witnesses if any on the
side of the complainant as per the mandate of Sec.
200 Cr. P.C.
v) If the court is of the opinion that the materials
collected by the police in the report submitted under
section 173 of Cr. P.C. are not so sufficient, however,
there are sufficient materials which disclose that a
cognizable offence has been committed by the
accused, the court can still take cognizance of the
offence/s under Section 190 read with 200 Cr. P.C. on
the basis of the original complaint or the protest
petition as the case may be. After taking cognizance
and recording sworn statement of the complainant and
statements of witnesses if any and also looking into
the complaint/Protest Petition and contents therein, if
the Magistrate is of the opinion that, to ascertain the
truth or falsity of the allegations further inquiry is
required and he thinks fit to post pone the issue of
process he can still direct the investigation under
section 202 of Cr. P.C., to be made by a Police officer
or by such other officer as he thinks fit, to investigate
12
and submit a report, for the purpose of deciding
whether or not there is sufficient ground for
proceeding against the accused. In the above
eventuality, care should be taken that, the case shall
not be referred to the Police under section 156(3) of
Cr. P.C., once the magistrate takes cognizance and
starts inquiring into the matter himself.
vi) After taking such report under section 202 of Cr. P.C.,
and looking to the entire materials on record, if the
magistrate is of the opinion that there are no grounds
to proceed against the accused, then the Magistrate is
bound to dismiss the complaint or the Protest Petition
u/s. 203 of Cr. P.C. as the case may be.
vii) If in the opinion of the Magistrate there are sufficient
grounds to proceed against the accused, on
examination of the allegations made in the Protest
Petition or in the complaint, as the case may be and
also after perusal of the sworn statement, then he has
to record his opinion judiciously, and issue summons
to the accused by exercising power u/s. 204 of Cr.
P.C."
The options open to the learned Magistrate to pass orders on the 'B'
reports are five-fold as the Court observes. There were two 'B'
reports in the case at hand. The first 'B' report was filed on
23-01-2019. The learned Magistrate does not accept the said 'B'
report but directs further investigation under Section 156(3) of the
Cr.P.C. Then comes the second 'B' report on 30-06-2021. Both the
'B' reports are dealt with by the learned Magistrate in his detailed
order. The narration while rejecting the 'B' report and taking
13
cognizance captures minutes details of handling of the account of
the complainant. What drove the learned Magistrate inter alia to
reject 'B' report is documents produced by the complainant in his
protest petition. The reasons recorded are as follows:
".... .... ....
15. However, as rightly pointed out by complainant and
as rightly argued by his counsel, the I.O. has failed to consider
the nature of agreement or contract of operation of aforesaid
account of HDFC Bank by accused persons in violation of public
policy. Further it shows that the I.O. has accepted the ledger
and other related documents pertaining to aforesaid
transactions in the account of informant as truthful documents
without going into the deep root of such transactions in the light
of contract much less by considering the volume of share
trading entered into by informant. Further despite specific
allegation that the accused persons have treated the profits
earned by informant in his share trading as loan amount and
they have charged heavy interest on such amount of profits and
reinvestment, the I.O has not considered the said fact nor he
has given any explanation with regard to right of aforesaid
companies to treat such profit as a loan to informant. Further,
the I.O. has also not specifically considered each and every
transactions in aforesaid HDFC Bank, despite serious allegations
by informant that the accused persons have operated said
account and withdrawn money as per their whims and fancies
by illegal use of GPA deed. It further shows that the I.O. has
not at all secured any of accused persons calling upon them to
explain about documents availed by them during opening of
aforesaid D-MAT and share trading account of complainant and
he has also not recorded their statements with regard to
opening of HDFC Bank account of informant and nature of its
operation. It further shows that the I.O. has not properly
investigated the flow of money and huge share trading
transaction in foresaid HDFC Bank account nor he has given any
finding that the transactions carried on by ARSSBL and ARGFL in
respect of shares and securities of informant are valid and as
per guidelines of RBI, NSE and BSE. Further though the I.O. has
14
strongly relied upon the statements of staff of ARSSBL, he has
not made any efforts to consider the documents put forth by
concerned Bank in the light of such ledger accounts furnished by
aforesaid companies to ascertain that no irregularity or
misappropriation has taken place during said process. On
perusal of entire materials on record it clearly shows that the
aforesaid opening of share trading account of informant in HDFC
Bank and huge transactions entered into said account is not
denied and disputed by investigating agency, but the I.O. has
come to opinion that same is done in pursuant to rules and
regulations of share trading, without considering the validity of
such transactions in the light of prescribed rules of share
trading. The I.O. has ignored the allegations of money
laundering by accused persons in operating the aforesaid
account of HDFC Bank against the interest of informant and also
against the rules prescribed under law.
16. Considering all these materials it appears that the 'B'
reports filed by I.O. are not supported with cogent reasons and
I.O. has not deeply considered the actual dispute and serious
allegations of misappropriation of huge funds by accused
persons in the share trading and bank account of informant.
Hence, it shows that looking to facts and peculiar circumstances
of the case, an opportunity has to be given to informant to
prove his case much less the allegations against accused
persons by examining himself and his witnesses and also by
producing relevant documents. Further in view of prior
investigation and further investigation of the matter, absolutely
thee are no grounds to refer the matter once again to I.O. for
further investigation. Hence, in view of reasons stated above,
complainant has definitely made out prima facie case to take
cognizance of offences punishable under Sections 403, 406,
409, 410, 420, 468, 471 and 120(B) R/w Section 34 of IPC and
to permit complainant to examine himself on oath u/s 200 of
Cr.P.C. Consequently the 'B' report filed by I.O. does not inspire
the confidence of the Court so as to believe that absolutely no
offence is made out as averred in such reports. Hence, the 'B'
report filed by I.O. deserves to be rejected. Hence, point Nos. 1
and 2 are answered in the affirmative.
17. Point No.3: For the reasons stated and findings
given on point Nos. 1 and 2, the following is order:
15
ORDER
The ‘B’ reports filed by I.O. dated 23-01-2019
and 30.06.2021 are hereby rejected.
Further cognizance is taken for offences
punishable under Sec. 403, 406, 409, 410, 420, 468,
471 and 120(B) R/w Sec. 34 of IPC.
Call on for sworn statement of complainant by
04-02-2023.”
The learned Magistrate clearly observes that there are unauthorized
transactions in the account of the complainant inter alia and,
therefore, rejects the ‘B’ report and takes cognizance of the
offence. I do not find any error in the order of rejection of ‘B’ report
or taking of cognizance by the learned Magistrate for it to be in
violation of the law laid down by the coordinate Bench in
RAVIKUMAR supra. The order impugned is in strict consonance
with law.
9. The submission of the learned senior counsel for the
petitioners is that the issue is purely civil in nature; the concerned
Court could not have rejected the ‘B’ report and taken cognizance
of the offence; ‘B’ report was filed not once but twice. This
submission is neither here nor there, as the reasons rendered by
16
the concerned Court to reject the ‘B’ report and taking of
cognizance are cogent and the allegations against the petitioners
are a maze of facts. Entertainment of this petition would run foul of
the judgment of the Apex Court in the case of KAPTAN SINGH v.
STATE OF UTTAR PRADESH2, wherein it is held as follows:
“…. …. ….
“9.1. At the outset, it is required to be noted that
in the present case the High Court in exercise of powers
under Section 482 CrPC has quashed the criminal
proceedings for the offences under Sections 147, 148,
149, 406, 329 and 386 IPC. It is required to be noted
that when the High Court in exercise of powers under
Section 482 CrPC quashed the criminal proceedings, by
the time the investigating officer after recording the
statement of the witnesses, statement of the
complainant and collecting the evidence from the
incident place and after taking statement of the
independent witnesses and even statement of the
accused persons, has filed the charge-sheet before the
learned Magistrate for the offences under Sections 147,
148, 149, 406, 329 and 386 IPC and even the learned
Magistrate also took the cognizance. From the impugned
judgment and order [Radhey Shyam Gupta v. State of U.P.,
2020 SCC OnLine All 914] passed by the High Court, it does
not appear that the High Court took into consideration the
material collected during the investigation/inquiry and even
the statements recorded. If the petition under Section 482
CrPC was at the stage of FIR in that case the allegations
in the FIR/complaint only are required to be considered
and whether a cognizable offence is disclosed or not is
required to be considered. However, thereafter when
the statements are recorded, evidence is collected and
the charge-sheet is filed after conclusion of the
2
(2021) 9 SCC 35
17
investigation/inquiry the matter stands on different
footing and the Court is required to consider the
material/evidence collected during the investigation.
Even at this stage also, as observed and held by this Court in
a catena of decisions, the High Court is not required to go into
the merits of the allegations and/or enter into the merits of
the case as if the High Court is exercising the appellate
jurisdiction and/or conducting the trial. As held by this Court
in Dineshbhai Chandubhai Patel [Dineshbhai Chandubhai
Patel v. State of Gujarat, (2018) 3 SCC 104 : (2018) 1 SCC
(Cri) 683] in order to examine as to whether factual contents
of FIR disclose any cognizable offence or not, the High Court
cannot act like the investigating agency nor can exercise the
powers like an appellate court. It is further observed and held
that that question is required to be examined keeping in view,
the contents of FIR and prima facie material, if any, requiring
no proof. At such stage, the High Court cannot appreciate
evidence nor can it draw its own inferences from
contents of FIR and material relied on. It is further
observed it is more so, when the material relied on is
disputed. It is further observed that in such a situation,
it becomes the job of the investigating authority at such
stage to probe and then of the court to examine
questions once the charge-sheet is filed along with such
material as to how far and to what extent reliance can
be placed on such material.
9.2. In Dhruvaram Murlidhar Sonar [Dhruvaram
Murlidhar Sonar v. State of Maharashtra, (2019) 18 SCC 191 :
(2020) 3 SCC (Cri) 672] after considering the decisions of this
Court in Bhajan Lal [State of Haryana v. Bhajan Lal, 1992
Supp (1) SCC 335 : 1992 SCC (Cri) 426] , it is held by this
Court that exercise of powers under Section 482 CrPC to
quash the proceedings is an exception and not a rule. It is
further observed that inherent jurisdiction under
Section 482 CrPC though wide is to be exercised
sparingly, carefully and with caution, only when such
exercise is justified by tests specifically laid down in the
section itself. It is further observed that appreciation of
evidence is not permissible at the stage of quashing of
proceedings in exercise of powers under Section 482
CrPC. Similar view has been expressed by this Court in Arvind
18Khanna [CBI v. Arvind Khanna, (2019) 10 SCC 686 : (2020) 1
SCC (Cri) 94] , Managipet [State of Telangana v. Managipet,
(2019) 19 SCC 87 : (2020) 3 SCC (Cri) 702] and
in XYZ [XYZ v. State of Gujarat, (2019) 10 SCC 337 : (2020) 1
SCC (Cri) 173] , referred to hereinabove.
9.3. Applying the law laid down by this Court in the
aforesaid decisions to the facts of the case on hand, we are of
the opinion that the High Court has exceeded its jurisdiction in
quashing the criminal proceedings in exercise of powers under
Section 482 CrPC.
10. The High Court has failed to appreciate and consider
the fact that there are very serious triable issues/allegations
which are required to be gone into and considered at the time
of trial. The High Court has lost sight of crucial aspects which
have emerged during the course of the investigation. The High
Court has failed to appreciate and consider the fact that the
document i.e. a joint notarised affidavit of Mamta Gupta
Accused 2 and Munni Devi under which according to Accused 2
Ms Mamta Gupta, Rs 25 lakhs was paid and the possession
was transferred to her itself is seriously disputed. It is required
to be noted that in the registered agreement to sell dated 27-
10-2010, the sale consideration is stated to be Rs 25 lakhs
and with no reference to payment of Rs 25 lakhs to Ms Munni
Devi and no reference to handing over the possession.
However, in the joint notarised affidavit of the same date i.e.
27-10-2010 sale consideration is stated to be Rs 35 lakhs out
of which Rs 25 lakhs is alleged to have been paid and there is
a reference to transfer of possession to Accused 2. Whether Rs
25 lakhs has been paid or not the accused have to establish
during the trial, because the accused are relying upon the said
document and payment of Rs 25 lakhs as mentioned in the
joint notarised affidavit dated 27-10-2010. It is also required
to be considered that the first agreement to sell in which Rs 25
lakhs is stated to be sale consideration and there is reference
to the payment of Rs 10 lakhs by cheques. It is a registered
document. The aforesaid are all triable issues/allegations
which are required to be considered at the time of trial. The
High Court has failed to notice and/or consider the material
collected during the investigation.
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11. Now so far as the finding recorded by the High Court
that no case is made out for the offence under Section 406 IPC
is concerned, it is to be noted that the High Court itself has
noted that the joint notarised affidavit dated 27-10-2010 is
seriously disputed, however as per the High Court the same is
required to be considered in the civil proceedings. There the
High Court has committed an error. Even the High Court has
failed to notice that another FIR has been lodged against the
accused for the offences under Sections 467, 468, 471 IPC
with respect to the said alleged joint notarised affidavit. Even
according to the accused the possession was handed over to
them. However, when the payment of Rs 25 lakhs as
mentioned in the joint notarised affidavit is seriously disputed
and even one of the cheques out of 5 cheques each of Rs 2
lakhs was dishonoured and according to the accused they were
handed over the possession (which is seriously disputed) it can
be said to be entrustment of property. Therefore, at this stage
to opine that no case is made out for the offence under
Section 406 IPC is premature and the aforesaid aspect is to be
considered during trial. It is also required to be noted that the
first suit was filed by Munni Devi and thereafter subsequent
suit came to be filed by the accused and that too for
permanent injunction only. Nothing is on record that any suit
for specific performance has been filed. Be that as it may, all
the aforesaid aspects are required to be considered at the time
of trial only.
12. Therefore, the High Court has grossly erred in
quashing the criminal proceedings by entering into the
merits of the allegations as if the High Court was
exercising the appellate jurisdiction and/or conducting
the trial. The High Court has exceeded its jurisdiction in
quashing the criminal proceedings in exercise of powers
under Section 482 CrPC.
13. Even the High Court has erred in observing that
original complaint has no locus. The aforesaid observation is
made on the premise that the complainant has not placed on
record the power of attorney along with the counter filed
before the High Court. However, when it is specifically stated
in the FIR that Munni Devi has executed the power of attorney
and thereafter the investigating officer has conducted the
20
investigation and has recorded the statement of the
complainant, accused and the independent witnesses,
thereafter whether the complainant is having the power of
attorney or not is to be considered during trial.
14. In view of the above and for the reasons stated
above, the impugned judgment and order [Radhey Shyam
Gupta v. State of U.P., 2020 SCC OnLine All 914] passed by
the High Court quashing the criminal proceedings in exercise
of powers under Section 482 CrPC is unsustainable and the
same deserves to be quashed and set aside and is accordingly
quashed and set aside. Now, the trial is to be conducted and
proceeded further in accordance with law and on its own
merits. It is made clear that the observations made by this
Court in the present proceedings are to be treated to be
confined to the proceedings under Section 482 CrPC only and
the trial court to decide the case in accordance with law and
on its own merits and on the basis of the evidence to be laid
and without being influenced by any of the observations made
by us hereinabove. The present appeal is accordingly allowed.”
(Emphasis supplied)
10. In the light of the facts narrated hereinabove and the law
laid down by the Apex Court, I find no merit to entertain this
petition. Accordingly, the petition stands rejected.
Interim order of any kind operating shall stand dissolved.
Consequently, I.A.No.2 of 2023 also stands disposed.
Sd/-
(M. NAGAPRASANNA)
JUDGE
Bkp
CT:MJ
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