Somashekar Salimath vs The State Of Karnataka
2021 Latest Caselaw 6946 Kant

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      IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 21ST DAY OF DECEMBER, 2021

                         BEFORE

         THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

             CRIMINAL PETITION No.3285 OF 2018

BETWEEN

SOMASHEKAR SALIMATH
S/O M.V.SALIMATH,
57 YEARS,
NO.3, AC-978, KALYANNAGAR I BLOCK,
BENGALURU - 560 043.
                                                 ... PETITIONER

(BY SRI S.G.BHAGAVAN, ADVOCATE (PHYSICAL HEARING))

AND

1.    THE STATE OF KARNATAKA
      BY THE STATION HOUSE OFFICER,
      HIGH GROUNDS POLICE STATION,
      SESHADRIPURAM SUB-DIVISION,
      BENGALURU - 560 052.

2.    KARNATAKA STATE FINANCIAL CORPORATION
      HP & FS DEPARTMENT,
      HEAD OFFICE, NO.1/1, THIMMAIAH ROAD,
      BENGALURU - 560 052.
                                           ... RESPONDENTS

(BY SRI R.D.RENUKARADHYA, HCGP FOR R1 (PHYSICAL HEARING);
    SRI BIPIN HEGDE, ADVOCATE FOR R2 (PHYSICAL HEARING))
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     THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.CPRAYING TO QUASH THE ENTIRE PROCEEDINGS IN
CC.NO.24417/2017, PENDING IN THE COURT OF THE IV A.C.M.M.,
BANGALORE, FOR THE OFFENCE P/U/S 409, 420, 406, 468, 471,
120B R/W 34 OF IPC, IN SO FAR AS HE AS ACCUSED NO.4 IS
CONCERNED.

     THIS CRIMINAL PETITION COMING ON FOR ADMISSION THIS
DAY, THE COURT MADE THE FOLLOWING:

                             ORDER

The petitioner - accused No.5 is before this Court calling in

question the proceedings in C.C.No.24417/2017, for offences

punishable under Sections 409, 420, 406, 468, 471 and 120- B

r/w Section 34 of the IPC.

2. Heard Sri S.G.Bhagavan, learned counsel appearing for

the petitioner, Sri R.D.Renukaradhya, learned High Court

Government Pleader appearing for respondent No.1, Sri Bipin

Hegde, learned counsel appearing for respondent No.2 and

perused the material on record.

3. Brief facts of the case leading to the filing of the petition

as borne out from the pleadings are as follows:

Petitioner at the relevant point in time was working as an

approved valuer to the Karnataka State Financial Corporation

(for short 'the Corporation'). On 26.03.2013, a complaint is

registered against the petitioner and others in PCR

NO.6699/2013, alleging that about 120 lakhs was sanctioned by

the Board of the Corporation on 22.11.1995 and a sum of

Rs.26,76,27,350/- had become sticky. The Corporation alleging

that the petitioner - accused No.5, on whose valuation inter alia

formed the basis of disbursement of credit facility to

M/s.P.R.T.Exports (P) Ltd. - accused No.1, filed the said

complaint for offences punishable as aforesaid.

4. The learned Magistrate on receipt of the complaint

referred the matter for investigation, after which, a charge sheet

is filed alleging offences punishable under Sections 409, 420,

406, 468, 471 and 120- B r/w Section 34 of the IPC against six

persons including the petitioner.

5. The allegation against the petitioner is that, he has

readied a valuation report contrary to law. The allegations made

against accused No.1, the Company and the representatives of

the Company who are accused Nos.2 and 3 were entirely

different from what is alleged against the petitioner. The

allegations against the petitioner as contended in the complaint

are as follows:

"11. After physical inspection of the property a valuation report came to redied by accused No.5 which is produced and marked as DOCUMENT NO.13. Therefore he being the Manager (Tech.) and FS department of Complainant Corporation has been made as party to this Complaint." In the charge sheet, it is stated that though the documents were not in the name of accused No.3 and not identified the property, in order to help accused Nos.1 and 2 to secure the loan, he has given the report."

Preparation of the valuation report is what becomes the bone of

allegation in the complaint against the petitioner. Other than

what is extracted hereinabove, there is no other allegation found

in the complaint against the petitioner. The loan that was

disbursed was not only on the basis of the report of valuation

that the petitioner submitted, but the file which contained the

valuation report prior to disbursement of such loan had travelled

through several desks and was finally approved and granted by

the Board, which is the Competent Authority for grant of such

advance. Therefore, the petitioner cannot be held responsible

for the default in payment of the borrowers.

6. It is not in dispute that the loan was advanced to the

borrowers in the year 1995 and the private complaint is

registered against the petitioner and others in the year 2013,

after about 18 years of grant of such loan.

7. This Court in the case of S.K.BADAMI VS. STATE OF

KARNATAKA AND ANOTHER in Crl.P.No.6448/2018 disposed

on 07.09.2021, while considering a similar issue of an

Assistant General Manager - Legal, who had given his stamp

of opinion to the loan advanced had also been subjected to

criminal proceedings. This Court quashed those proceedings

impugned in the aforesaid criminal petition by holding as

follows:

"9. It is not in dispute that the loan was advanced to the borrowers who are accused Nos.1 and 4 in the year 1994 on a scrutiny of the documents that were submitted for advancement of said loan and the documents were indeed scrutinized prior to the grant of said loan.

10. Learned counsel for the respondent No.2- Corporation has submitted that the documents that were placed for advancement of loan were all originals. It is the collateral security that was given by one Smt.Parvathamma who is accused No.4, the loan was granted, this was later found to be forged and bogus. The petitioner had no doubt given an opinion on the documents that were placed before him, but he was not the one who had advanced such loan. The file did pass through several rungs of officers and reached the Board and the Board ultimately approved grant of loan to the borrowers. Therefore, fault cannot lie with the petitioner alone for him to be singled out and a criminal proceeding to be registered against him for offences under Sections 409, 420, 406, 468, 471 and 120B r/w Section 34 of IPC. Primarily, the allegation against the petitioner is one of cheating and criminal breach of trust.

11. For an allegation of offence punishable under Section 406 of IPC there must be entrustment and such entrustment should be misappropriated with a criminal intention by the accused. The case at hand is not the case where even an allegation of such a kind is made in the complaint. The complaint or the submission that is now made is that the petitioner was not diligent enough in looking into the documents while giving his opinion. Non conduct of due diligence by the petitioner cannot result in an offence under Section 406 of IPC for criminal breach of trust as the complaint nowhere would link to the

ingredients that are necessary for an offence under Section 406 of IPC.

12. Insofar as the offence under Section 420 of IPC is concerned, the petitioner gives an opinion with regard to the documents that were placed before him for advancement of such loan and the loan is not sanctioned by the petitioner, but by the Board. Section 420 of IPC clearly indicates what amounts to cheating as obtaining under Section 415 of IPC. For an offence under Section 420 of IPC, the intention to cheat must be at the outset of a transaction. As stated in the complaint or submitted by the learned counsel appearing for the complainant, the intention to cheat cannot be made out against the petitioner as even according to them, the allegation is that the petitioner has not conducted due diligence while giving an opinion for advancement of such loan. The petitioner cannot be said to have committed the offence under Section 420 of IPC which deals with cheating and dishonestly inducing a person deceived to deliver any property to any person. Such inducement can gathered in the complaint nor in the charge sheet that is filed by the police.

13. The charge sheet is filed only on the basis of the correspondences between the Corporation and the police which does not inspire confidence, as it is verbatim similar to what is alleged in the complaint. Therefore, there is neither criminal breach of trust as is found in Sections 405 and 406 of IPC or cheating as is found in Sections 415 and 420 of IPC. Therefore, permitting the trial against the petitioner to continue, at this juncture, particularly for the offences alleged against the petitioner for a loan that was advanced by the Board in the year 1994 would amount to abuse of the process of law and result in miscarriage of justice.

For the aforesaid reasons, I pass the following:

ORDER

(i) Criminal Petition is allowed.

(ii) The criminal proceedings in C.C.No.24417/2017 pending before the IV Additional Chief Metropolitan Magistrate, Bengaluru, stand quashed qua petitioner- accused No.6 in the petition."

Therefore, in the light of the judgment in an identical matter

(supra), the proceedings against the petitioner is rendered

unsustainable.

8. For the aforesaid reasons, the following:

ORDER

(i) The Criminal Petition is allowed.

(ii) The criminal proceedings in C.C.No.24417/2017 pending before the IV Additional Chief Metropolitan Magistrate, Bengaluru, stand quashed qua petitioner- accused No.5 in the petition.

Sd/-

JUDGE bkp CT:MJ