Karnataka High Court
Smt. Lakshmi. R vs The State Of Karnataka By Cubbon Park ... on 13 March, 2026
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
Reserved on : 03.03.2026
Pronounced on : 13.03.2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF MARCH, 2026
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.3208 OF 2026
BETWEEN:
SMT. LAKSHMI R.,
W/O B.L.JAGADISH
AGED ABOUT 38 YEARS
RESIDING AT:
NO.611, ROYAL PARK RESIDENCY
J.P. NAGAR 9TH PHASE,
BENGALURU - 560 062.
... PETITIONER
(BY SRI JAYAKUMAR S.PATIL, SR.ADVOCATE A/W
SRI SHRAVAN MADHAV K.P., ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
BY CUBBON PARK POLICE STATION,
REPRESENTED BY S.P.P.,
HIGH COURT OF KARNATAKA
BENGALURU - 560 001.
2
2. C.J. MURALIDHAR
S/O LATE. JAYRAM
AGED ABOUT 54 YEARS
RESIDING AT:
NO.25, KERAF SRI GIRIRAJ,
R.K. MATH ROAD,
HALSUR, BENGALURU - 560 008.
WORKING AT:
EPFO STAFF CREDIT CO-OP SOCIETY LTD.,
NO.13, BAVISHYANIDHI BHAVAN
RAJARAM MOHAN ROY ROAD
BENGALURU - 560 025.
... RESPONDENTS
(BY SRI B.N.JAGADEESHA, ADDL.SPP FOR R-1 ) THIS CRIMINAL PETITION IS FILED UNDER SECTION 528 OF B.N.S.S., 2023, PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN SPL.C. NO. 207/2026 PENDING ON THE FILE OF THE HON'BLE PRL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU WITH RESPECT TO THE PETITIONER; AND QUASH THE CHARGE SHEET DATED 27.01.2026 WITH RESPECT TO THE PETITIONER VIDE ANNEXURE - C IN SPL.C. NO. 207 OF 2026 PENDING ADJUDICATION BEFORE THE HON'BLE PRL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU.
THIS CRIMINAL PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 03.03.2026, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-
3CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA CAV ORDER The petitioner/accused No.4 is at the doors of this Court calling in question proceedings in Special Case No.207 of 2026 arising out of crime in Crime No.199 of 2025 registered for offences punishable under Sections 120B, 403, 408, 409, 411, 477A read with 34 and 37 of the IPC and Section 9 of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (for short 'KPID Act') and Section 66D of the Information Technology Act, 2000.
2. Heard Sri Jayakumar S. Patil, learned senior counsel appearing for the petitioner and Sri B.N. Jagadeesha, learned Additional State Public Prosecutor appearing for respondent No.1.
3. Facts in brief, germane, are as follows: -
The 2nd respondent is the complainant. The complainant registers a complaint on 31-10-2025 as the President of the Employees' Provident Fund Organization, Staff Credit Co-operative Society Limited. The allegation is that accused Nos. 1 to 4 have 4 siphoned of the amount of provident fund that was deposited by nearly 300 employees and retired employees and thereby committed misappropriation of funds. It is the further allegation that from 2 to 3 months, the accused have also not credited the interest amount on the fixed deposits made, thereby close to ₹70/- crores of amount in the Society has went missing. On this score the complaint comes to be registered. The Police conduct investigation and file a charge sheet against four accused making all 359 persons who have lost their provident fund amount as witnesses. The petitioner/accused No.4 challenges filing of charge sheet against her, on the score that she has no role to play in the entire episode of alleged crime and, therefore, the proceedings must not be permitted to continue against her.
4. The learned senior counsel Sri Jayakumar S. Patil appearing for the petitioner while taking this Court to the documents appended to the petition, as also to the charge sheet material, would contend that the petitioner is only the wife of accused No.2 and she has not received any money nor can she be alleged of any misappropriation. Therefore, further proceedings if 5 permitted to continue against the present petitioner would become an abuse of the process of law. He would further contend that invocation of KPID Act against the petitioner is also abuse of the process of law.
5. Per contra, the learned Additional State Public Prosecutor submits that the role of the petitioner is clearly brought out in the summary of the charge sheet. The petitioner is the wife of accused No.3. Though she is not the member of the Society, so far she is the beneficiary of several amounts, as the amounts are credited to the account of accused No.4 in HDFC Bank, BDCC Bank and Axis Bank to the tune of ₹6,50,89,766/-. If the petitioner is not prima facie guilty of the offence, the learned Additional State Public Prosecutor would submit who else can be. Projecting it to be that she is nowhere concerned with the Society is of no avail, as accused No.2 and 3 have received the amount in their accounts from the account of accused No.4. It is a clear case of conspiracy and misappropriation punishable under the provisions of KPID Act as well.6
6. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.
7. The afore-narrated facts and link in the chain of events are all a matter of record. It is the case of the prosecution that the complainant was working as a Section Supervisor in the organization for the last 33 years and at the relevant point in time was the President of 15 Member Board. It is the allegation that around 300 employees and retired employees have totally deposited ₹70/- crores as fixed deposit in the Cooperative Society.
The said ₹70/- crores is said to have become the subject of misappropriation by the accused. On the said allegation, the complainant registers a complaint on 31-10-2025. The complaint reads as follows:
"ರವ ೆ, ಾಂಕ-31.10.2025
ೕ ಸ ಇ ೆಕ
ಕಬ ಾ ೕ ಾ ೆ
ೆಂಗಳ"ರು ನಗರ
ಇಂದ,
&.'ೆ ಮುರ)ಧ + ,ೇ- ಜಯ0ಾ1 54ವಷ
7
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@ಾ A Bೆ9ೕC- Bೋ.ಅ @ೋ@ೈE FGೆ=
ನಂ.13, ಭ:ಷ4IJ ಭವನ, 0ಾಜ0ಾ1 Kೕಹ 0ಾ8 ರ@ೆM
ೆಂಗಳ"ರು ನಗರ-560025
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[ಂ\ೆ @ೊ@ೈEಯ 7 ಅBೌಂGೆಂ- Bೆಲಸ
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0ಾb ಜಯಶಂಕ , TಾW
&.ಇ
ಇ.ಓ
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ಜರುVಸ ೇBೆಂದು BೋರುoೆMೕ ೆ."
ೆ
(Emphasis added)
At the stage of registration of complaint, the petitioner is said to have been drawn as accused No.7. At a later point in time while registering the crime, only 6 accused were shown, but the petitioner was shown as 7th accused in the remand application. The police conduct investigation and file a charge sheet depicting the role of each of the accused and as to what benefit they have been drawn in the alleged misappropriation. Insofar as the petitioner is concerned, the finding in the charge sheet is as follows:
".... .... ....
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ಆ0ೋX ಲ'' ಆ .
ಈ ಪ9ಕರಣದ ಎ4 ೇ ಆ0ೋX ಲ'' ಆ ಈBೆಯು ಪ9ಕರಣದ ಎ3 ೇ ಆ0ೋX ಜಗJೕ`.
ಜಗJೕ`
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ನಂ.50100196310110 ೆ ಾಂಕ : 11.01.2017 ಂದ 04.02.2025 ರ ಅವJಯ 7 ಹಂತ ಹಂತOಾV ರೂ 6,50,89,766/- ಹಣವನುz @ೊ@ೈEಯ 10 BDCC ಾ4ಂ Acc. No: 619040002031 Iಂದ ಅಕ9ಮOಾV ವ ಾ ವ ೆ TಾCರುವˆದು ದೃಡಪE ರುತM\ೆ.ೆ ಎ4 ೇ ಆ0ೋXಯು ತನz ಅBೌಂ- ೆ ಬಂ ದ^ ಹಣದ ೈ„ ಎ2 ಮತುM ಎ3 ೇ ಆ0ೋXಗಳ I-ೇ ಶನ jೕ0ೆ ೆ ಎ2 ೇ ಆ0ೋXಯ ಮಗaಾದ ಹv u ಈBೆಯ Axis Bank :
919010033655457 ಾ4ಂ ಅBೌಂ- ೆ 18,00,000/- ರೂಗಳನುz Nಾಗೂ ಎ2 ೇ ಆ0ೋXಯ ಅ)ಯ ಾದ ಪˆರು--ೋತM1 ಇವರ ಇವರ ಅBೌಂ- ೆ 25,00,000/= ರೂಗಳನುz ವ ಾ ವ ೆ TಾCರುವˆದು ಮತುM ಅವˆಗಳನುz ಅಕ9ಮOಾV ಆ&M ಖ ೕ ೆ ಮತುM ಸ~ಂತBಾkV ಉಪ˜ೕV&ರುವˆದು ತI€ೆ|ಂದ ದೃಡಪE ರುತM\ೆ.ೆ ಇದಲ7\ೇ ಎ3 ಮತುM ಎ4 ೇ ಆ0ೋXಗಳs @ೊ@ೈE|ಂದ ಅಕ9ಮOಾV TಾCBೊಂCದ^ ಹಣ ಂದ ಈ Bೆಳಕಂಡ ಚ0ಾ&M ‹0ಾ&Mಗಳನುz ಖ ೕ TಾCರುವˆದು ತI€ೆ|ಂದ ದೃಡಪE ರುತM\ೆ.
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ೆ (Emphasis added) The allegation is that the petitioner/4th accused is the wife of accused No.3. She is not connected with the affairs of the Society.
She has conspired with her husband and has received an amount of ₹6,50,89,766/- during the period from 11-01-2017 to 4-02-2025.
It is stated that the petitioner has transferred the amount that she has received into her account as aforesaid, into the accounts of accused Nos. 2 and 3 and accused No.2 has further transferred it to the account of his daughter. This is the conspiracy note that is drawn to keep accused Nos. 1 to 4 in the loop of the transaction.
128. About 340 witnesses are drawn as complainant witnesses, as those persons have deposited their hard earned provident fund amount into the Society in the great desire of securing interest or securing amount in lumpsum when they would need it. But, the amount is missing due to the acts of misappropriation of all the accused. If the petitioner had not received any amount into her account, it would have been an altogether different circumstance.
The petitioner has received the bounty on account of misappropriation. Therefore, there can be no question of interference at this stage of the proceedings.
9. The petition is shrouded with seriously disputed questions of fact. In this regard, the Apex Court in KAPTAN SINGH v.
STATE OF UTTAR PRADESH1, has 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 1 (2021) 9 SCC 35 13 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 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 14 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 Khanna [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 15 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.
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 16 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 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) 17 In the light of the facts, the complaint and the allegation of misappropriation, the petitioner cannot seek protective hands of this Court, on the score that she is the wife of accused No.3 and is not involved in the affairs of the Society. It is for the petitioner to come out clean in the full-blown trial.
10. Finding no merit in the petition, the petition stands rejected.
Consequently, I.A.Nos.1 and 2 of 2026 also stand disposed.
Sd/-
(M.NAGAPRASANNA) JUDGE Bkp CT:MJ