Bangalore District Court
Deepa vs Srinivasala Reddy on 3 March, 2025
KABC030686272013
Presented on : 12-11-2013
Registered on : 12-11-2013
Decided on : 03-03-2025
Duration : 11 years, 3 months, 21 days
IN THE COURT OF THE VIII ADDITIONAL CHIEF
JUDICIAL MAGISTRATE, BENGALURU CITY
Present: Smt. Deepa.V., B.A.L. LL B.
VIII ACJM, Bengaluru City.
Date: this the 03rd Day of March, 2025
C.C. No.18051/2013
(Crime No.196/2013)
State by Hebbala Police Station,
Bengaluru. ... Complainant
(Represented by Sri Vishwanath, Senior APP)
Versus
Sri Srinivasala Reddy,
Aged about 44 years,
S/o Sri Late Nagereddy,
R/at Sab Commodities,
No.10, 3rd Cross, Police
Station Road, Hebbala,
Bengaluru City.
KABC030686272013 CC No.18051/2013
Native Place: No.11-97-3A,
Gollavani Gunta,
Thimmi Naidu Palam,
Tirupati, Chittore District.
Andhra Pradesh. ... Accused
(Represented By Sri. B.Naveen Kumar Advocate)
1. Date of commission of 04-08-2013 to
offence 04-09-2013
2. Date of FIR 04-09-2013
3. Date of Charge sheet 30-10-2013
4.Name of Complainant Smt. Deepa.V.B. Editor of
Bangalore Pragati
5. Offences complained of Under Section 420 of IPC
and Sec.66(A) of I.T. Act
6. Date of framing of 18/04/2022
charges
7.Charge Pleaded not guilty
8. Date of commencement 17/05/2022
of evidence
9. Date of Judgment is 03/03/2025
reserved
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10. Date of Judgment 03/03/2025
11. Final Order Accused is acquitted
12. Date of sentence -
JUDGMENT
The Police Sub-Inspector of Hebbala Police
Station submitted charge sheet against accused for
the offence punishable under Section 420 of IPC and
Sec.66(A) of I.T. Act.
2. Prosecution Case: Accused opened a
company by name Sab Commodities in Police Station
Road, 3rd Cross of Hebbal Police Station limits, and
solicited customers in a website of internet by stating
that he was involved with business of brokerage in
share and invested money on different metals thereby
give returns of 1% per day on investment of
Rs.1,00,000/- and assured to pay returns of
Rs.15,000/- on investment of Rs.1,00,000/- for 15
days and to pay return of Rs.3,00,000/- on
investment of Rs.1,00,000/- for 300 days thereby
fraudulently induced and received huge amount from
general public through online banking to his
company’s and his accounts. Thereafter the accused
paid meager returns to such investors and later
stopped by paying returns and cheated such
investors.
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3. First Information Report: Upon the receipt
of first information from CW1 Smt.Deepa.V.B, Sri
K.N.Sri Harsha, PSI of Hebbala Police Station
registered Crime No.196/2013 against accused for
the offence punishable under Section 420 of IPC,
prepared FIR as per Ex.P2 and sent the same to the
Court and to his superior officers and drawn spot
mahazar as per Ex.P3 on 04-09-2013 from 5.00 pm
to 6.30 p.m. in the presence of CW16 Sri Harish S/o
Raju and CW17 Harish s/o Arun, seized property
and subjected the same under Property Form
No.72/2013 and another mahazar as per Ex.P5 on
08-09-2013 from 2 to 3.30 p.m. in the presence of
CW18 Bharathkumar and CW19 Sukhesh U
Suvarna and seized the documents and subjected the
same under Property Form No.75/2013.
4. Investigation: Thereafter, he collected the
documents, recorded statement of requisite witnesses
and filed charge sheet against accused for the
offences punishable under Section 420 of Indian
Penal Code and Section 66(A) of Information
Technology Act.
5. On receipt of charge sheet, this Court took
cognizance of offences alleged against the accused.
6. The accused was enlarged on bail by the order
dated 03/12/2013.
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7. Copies of prosecution papers as required
U/Sec.207 of Cr.P.C have been furnished to the
accused.
8. Charge: After hearing learned Sr.APP and
counsel for accused, charge for the offence
punishable U/Sec.420 of Indian Penal Code and
Section 66(A) of Information Technology Act has been
framed, read over and explained to the accused in
the language known to him, who, in turn, pleaded not
guilty and claimed to be tried.
9. Prosecution Evidence: The prosecution in
order to establish its case cited 25 witnesses,
examined 2 witnesses and exhibited 20 documents
and MO1 and closed their side. The evidence of
CW2/PW1 discarded and the examination of CW1
and CW3, CW4 to CW8 were dropped by the order
dated 10-02-2023 and 14-08-2023 as the
proclamation neither executed nor secured the
presence of these witnesses. The examination of
CW24 given up on account of examination of IO. The
presence of CW9, 13, 14, 16 to 19 were given up as
not secured despite issuance of proclamation by
order dated 02-09-2024. On account of examination
of IO, the examination of the CW20 to 24 was given
up by the order dated 02/09/2024. CW15 reported to
be dead, the presence of CW6 to CW8 and CW12 were
given up by order dated 14-10-2024 as their presence
was not secured by concerned police.
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10. Accused statement as per section 313 of
CrPC: After completion of evidence of prosecution, the
accused was examined as per section 313 statement
of Cr.P.C, wherein he denied all incriminating
evidence appearing in the statement of prosecution
witnesses and did not lead any rebuttal evidence.
11. Heard the arguments. Perused materials on
the record.
12. The following point are arises for
consideration is as follows;
1. Whether the complainant
proved beyond all reasonable
doubt that accused opened a
company by name Sab
Commodities in Police Station
Road, 3rd Cross of Hebbal police
station limits, and solicited
customers in a web-site of
internet by stating that solicited
customers in a website of
internet by stating that he was
involved with business of
brokerage in share and
invested money on different
metals thereby give returns of
1% per day on investment of
Rs.1,00,000/- and assured to
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pay returns of Rs.15,000/- on
investment of Rs.1,00,000/- for
15 days and to pay return of
Rs.3,00,000/- on investment of
Rs.1,00,000/- for 300 days
thereby fraudulently induced
and received huge amount from
general public through online
banking to his company’s and
his accounts. Thereafter the
accused paid meager returns to
such investors and later
stopped by paying returns and
cheated such investors.
thereby resulted in commission
of the offences punishable
under Section 420 of IPC and
Sec.66A of I.T. Act?
2. What order?
13. The Court’s findings on the above points are
as under:
Point No.1 : In the Negative
Point No.2 : As per final order
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REASONS
14. Point No.1: In support of prosecution case
as narrated in paragraph 2 and the point for
consideration in paragraph 12 of this judgment, the
prosecution has examined the following witnesses,
which are as follows
i. CW2 Sri Raveendranath Gupta, examined
as PW1 deposed that his son-in-law had informed
that if he invest Rs.1,00,000/, he will return of
Rs.13,500/ per month for 20 months. Accordingly in
the year 2011 he had given cash of Rs.1,00,000/ to
his son-in-law i.e., CW9 Sri Prashanth for investing
money in said firm, the firm transferred profit of said
month to his bank account and in second month
Hebbal PS had arrested accused by name Srinivas
Reddy alleging that he had committed fraud.
ii. CW25 Sri Harsha K.N., the then PSI of
Hebbal PS, examined as PW2 deposed that on
04/09/2013, he received complaint as per Ex.P1
from CW1 Smt. Deepa and registered the FIR as per
Ex.P2, conduced spot mahazar on 04/-09/2013 as
per Ex.P3 in presence of CW16 Sri Harish s/o Raju
and CW17 Harish s/o Arun and seized ACER
company laptop as MO1 and 43 documents, recorded
the voluntary statement of accused and statement of
requisite witnesses, opened the website created by
the Accused through his laptop by using his
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password and taken the printout of the entire details
of website as per Ex.P4 in presence of CW18
Bharathkumar and CW19 Sukhesh U Suvarna,
seized the website detail report by drawing the
mahazar as per Ex.P5 and addressed letters to
Managers of Axis and ICICI Bank to close the
accounts of Accused. After freezing the account, he
received the documents from the concerned banks
and collected the various FIRs registered against
accused and filed those documents in the file and he
identified ACER laptop as MO1 and documents as per
Ex.P7 to 20. After completion of investigation he
submitted charge sheet against accused.
15. The allegation is that the accused has
induced and received huge amount from general
public to his account by way of online banking
stating that to invest in share and the same would be
invested on different type of Metal with profitable
returns, but after investment, he not returned their
money thereby cheated them. In this context it is
relevant to reiterate Section 415 of Indian Penal Code
defines cheating
“Whoever, by deceiving any
person, fraudulently or
dishonestly induces the person so
deceived to deliver any property to
any person, or to consent that any
person shall retain any property,
or intentionally induces the
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person so deceived to do or omit
to do anything which he would
not do or omit if he were not so
deceived, and which act or
omission causes or is likely to
cause damage or harm to that
person in body, mind, reputation
or property, is said to “cheat”.
It has been held in the case of Hridaya Ranjan
Verma and others Vs State of Bihar and another
reported in 2000(4) SCC 168 and and in the case of
Indian Oil Corporation Vs NEPC India Limited and
others reported in 2006(6) SCC 736, this Court held :
14. On a reading of the section, it
is manifest that in the definition
there are set forth two separate
classes of acts which the person
deceived may be induced to do. In
the first place he may be induced
fraudulently or dishonestly to
deliver any property to any
person. The second class of acts
set forth in the section is the
doing or omitting to do anything
which the person deceived would
not do or omit to do if he were not
so deceived. In the first class of
cases the inducing must be
fraudulent or dishonest. In the10
KABC030686272013 CC No.18051/2013second class of acts, the inducing
must be intentional but not
fraudulent or dishonest.
15. In determining the question it
has to be kept in mind that the
distinction between mere breach
of contract and the offence of
cheating is a fine one. It depends
upon the intention of the accused
at the time to inducement which
may be judged by his subsequent
conduct but for this subsequent
conduct is not the sole test. Mere
breach of contract cannot give rise
to criminal prosecution for
cheating unless fraudulent or
dishonest intention is shown right
at the beginning of the
transaction, that is the time when
the offence is said to have been
committed. Therefore, it is the
intention which is the gist of the
offence. To hold a person guilty of
cheating, it is necessary to show
that he had fraudulent or
dishonest intention at the time of
making the promise. From his
mere failure to keep up promise
subsequently such a culpable
intention right at the beginning,11
KABC030686272013 CC No.18051/2013that is, when he made the
promise cannot be presumed.”
Thus, the ingredients of Section 420 of the
Indian Penal Code are as follows:
(i) Deception of any persons;
(ii) Fraudulently or dishonestly
inducing any person to deliver
any property; or
(iii) to consent that any person
shall retain any property and
finally intentionally inducing that
person to do or omit to do
anything which he would not do
or omit.
16. The evidence of CW2/PW1 was alleged to be
victim from the hands of accused however he did not
subject himself for cross examination ordered to be
discarded by the order dated 10/02/2023. The
defence of accused in criminal law could be put forth
only during the time of cross-examination. When the
PW1 never subjected himself for cross examination,
then an adverse inference ought to be drawn against
the prosecution case that he is not victim as per
Section 114(f) of Indian Evidence Act and the said
principle is appreciated in the case of VIDHYADHAR
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KABC030686272013 CC No.18051/2013
VS. MANKIKRAO AND ANOTHER REPORTED IN AIR
1999 SC 1441 AND IN THE CASE OF ISWAR BHAI C.
PATEL VS HARIHAR BEHERA AND ANOTHER
REPORTED IN AIR 1999 SC 1341.
17. It appears from the cross examination of
PW2 that
Other than CW1, no other
investors had made any
complaint. It is true to suggest
that, there are no any investors
from Bengaluru and no body got
cheated from the Accused. The
CW1 not filed any documents in
support of complaint. I had not
enquired CW1 whether she is
having any other document. I do
not know who has created the
website mentioned in Ex.P.4. It is
true to suggest that, I do not
know the name and details of the
said website. I have not furnished
65B certificate in support of
website documents. I have not
issued notice to CW16 to 19 in
writing. It is true to suggest that,
near Accused office, there are
shops and house. I have not
enquired the residence and shop
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owners of the said premise. I do
not remember the password of the
said website. I do not know the
name of the printer company and
model in which documents were
taken printout. I have not
mentioned the Sl. No. and model
no. of Acer laptop and the same is
not mentioned in mahazar and
PF. I have not produced the
documents with respect to
ownership of the said laptop.
Witness volunteers that the said
laptop was with Accused.
Thus, it emerges from the cross-examination of
PW2 that none from Bangalore had lodged the
complaint.
18. This apart, CW1 who is none other than
editor in Bangalore Pragati was not aggrieved person
and more so did not furnish any documents to lodge
the complaint.
19. No prima-facie document were produced
before this court that the accused had induced them
to part money to deceive or cheat the public i.e., right
from the beginning.
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20. The particulars of Investors were not
furnished by the IO/PW2.
21. PW2/IO has not seized any receipts for
having deposited by the investors to corroborate his
statement for tallying with the website particulars
and more so the PW2 has not secured the password
of the said website from accused for this court to
access to the said website through the said MO1.
22. PW2/IO has not investigated the particulars
of website sabcommodities.com whether the said
website belongs to the accused. The Ex.P4 website
sabcommodities.com was created on 19/06/2013
and expiry date was on 18/06/2014. No doubt, the
prosecution has produced the Ex.P6 that the accused
is the proprietor of Sab Commodities wherein he is
involved with share broking commodities and forex
trading, but does not disclose that the Sab
Commodities were created by the accused. This apart,
none of the investors mentioned in the Ex.P4 were
not lodged the complaint with the complainant police.
No doubt, the IO has secured various FIR from the
different police station registered against the accused
persons in various station, but does not mean that
the prosecution has proved the alleged offence when
the IO did not produce any prima material before this
court to corroborate the cheating proved in this case.
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23. PW2/IO has secured the statement of
account of accused i.e., Ex.P14, 15, 17 and 20 in the
name of company namely Sab Commodities and in
the personal name of accused with the State Bank of
India, Hyderabad but does not help the PW1 or CW1
in this case in any way.
24. It appears from the record that the statement
made by the complainant police are mostly from
investors who are from Andhra Pradesh and who
have invested the money in Andhra Pradesh. There
are only two people from Bangalore who invested the
money in Sab Commodities, Bangalore wherein they
clearly had given the statement as follows;
a. Sri. Ravidranath clearly states
that he made investment in the
month fo August 2013 based on
the information received from his
son-in-law Sri Prashanth and the
accused and he did receive the
returns for the first 15 days and
thereafter he did not receive any
money from the accused
b. Sri Prashanth, sons in law of
Sri Ravindranath clearly states
that he invested the money in the
company during June 2013 and
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received two or three return
payments from the accused
The above statements further supports the fact
that the accused never had any dishonest intention to
cheat the investors right from the inception of
transaction as he paid the money. Thus, it is clear
that there was a failure to give the returns
subsequently for non-fulfillment of promise which
does not come within purview of cheating and the
said principle is appreciated in the case of Ramesh
Ch. Jain Vs Raghuvans Moni Prasad reported in 1997
Crl. L. J. 463.
25. PW2/IO has not produced the ownership
particulars of Acer Laptop (MO1) that it was belong
to the accused.
26. The prosecution has prosecuted the accused
under Section 66A of Information of Technology Act
(IT Act) of 2000 cannot be used to prosecute anyone
after it was struck down in 2015. The Hon’ble
Supreme Court of India has directed the courts in all
pending cases under Section 66A should remove
references to the section 66A of IT Act and the said
principle is appreciated in the case of Shreya Singhal
v. Union of India reported in AIR 2015 SC 1523.
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27. In view of the above discussion, it is clear
that the accused did not cheat the PW1 and CW3 as
they have made the payments and hence the question
of cheating does not arise and the ingredients of
offence under section 420 of IPC was not proved and
hence the point No.1 is answered in negative.
28. Point No.2:- For the foregoing discussion
and the findings to the above point No.1, this court
proceeds to pass the following:
ORDER
Acting U/Sec.248(1) of the Cr.P.C.
(i) The accused is found not guilty
and acquitted from the offences
punishable under Section 420 of
Indian Penal Code and Section
66A of Information Technology
Act
(ii) Accused is set at liberty.
(iii) In view of Section 437-A of
Cr.P.C his bail bond shall be in
force for 6 (six) months.
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(iv) After the expiry of appeal
period, MO1 shall be returned to
its owner on proper identification.
(v) Ordered accordingly.
(Dictated to the stenographer, typed by steno, verified and corrected by me in
my laptop, then the judgment pronounced by me in the open court, on this
the 03rd day of March, 2025)
(Deepa.V.),
VIII Addl. Chief Judicial
Magistrate, Bengaluru City.
ANNEXURE
Witnesses examined for Prosecution :
PW1 : Sri Raveendranath Gupta Victim
PW2: Sri Harsha.K.N. IODocuments marked on behalf of Prosecution:
Ex.P1: Complaint
PW2
Ex.P2: FIR
Ex.P3: Mahazar dtd: 4-9-2013
Ex.P4: Entire Website print out
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Ex.P5: Mahazar dtd: 8-9-2013 PW2
Ex.P6: ಉದ್ದಿಮೆದಾರರ ಜ್ಞಾಪನ ಪತ್ರ
Ex.P7: ಸ್ವೀಕೃತಿ ಪತ್ರ
Ex.P8: Form ST-2
Ex.P9: Certificate of Registration
Ex.P10: Rental Agreement dated
26/06/2013
Ex.P11 & Rental Agreement dated
12 01/07/2013
Ex.P13: Notice to Manager Axis
Bank
Ex.P14: Statement of account issued
by Axis bank
Ex.P15: Notice under section 91 of
CR.P.C. to Manager State
Bank of India
Ex.P16: Notice under section 91 of
CR.P.C. to Manager State
Bank of India
Ex.P17: Statement of account issued
by SBI in respect of account
holder Sab commodities
Ex.P18: Statement of account issued
by SBI in respect of account
holder accused
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Ex.P19: Statement of account issued PW2
by Federal Bank in respect
of account holder
Ex.P20: Statement of account issued
by ICICI Bank in respect of
account holder
Material Objects marked on behalf of
the Complainant:
MO1 : Laptop
Witnesses examined for the defence: Nil
Documents marked on behalf of the defence: Nil
VIII Addl. Chief Judicial
Magistrate, Bengaluru City.
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03-03-2025
Judgment pronounced in the open court vide separately
ORDER
Acting U/Sec.248(1) of the Cr.P.C.
(i) The accused is found not guilty
and acquitted from the offences
punishable under Section 420 of
Indian Penal Code and Section
66A of Information Technology
Act
(ii) Accused is set at liberty.
(iii) In view of Section 437-A of
Cr.P.C his bail bond shall be in
force for 6 (six) months.
(iv) After the expiry of appeal
period, MO1 shall be returned to
its owner on proper identification.
(v) Ordered accordingly.
VIII ACJM, Bengaluru.
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