Karnataka High Court

U Ganesh Pai S/O U. Vasudeva Pai vs Edigara Nagendrappa S/O. ... on 23 July, 2021

Author: M.G.Umapresided Bymguj

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            IN THE HIGH COURT OF KARNATAKA
                    DHARWAD BENCH

          DATED THIS THE 23RD DAY OF JULY 2021

                             BEFORE

           THE HON'BLE MRS.JUSTICE M.G.UMA

                  CRL.P. NO.100023/2019

BETWEEN

U GANESH PAI S/O U. VASUDEVA PAI,
AGE:61 YEARS,
OCC:RETIRED EMPLOYEE OF CORPORATION BANK,
R/O. #504,INLAND MAJESTIC,
WAREHOUSE ROAD, MANNGUDDA,
MANGALORE-575003.
                                             .....PETITIONER
(BY SRI G S HULMANI, ADV.)


AND

1.    EDIGARA NAGENDRAPPA S/O. YALLAPPA
      AGE:66 YEARS, OCC:FARMER,
      R/O. 114, DANAPURA, TQ:HOSPET,
      DIST:BELLARY.

2.    THE STATE OF KARNATAKA
      BY KOTTUR POLICE,
      REP BY STATE PUBLIC PROSECUTOR,
      HIGH COURT, DHARWAD BENCH,
      DHARWAD.
                                            .....RESPONDENTS
(BY SRI S.S. YADRAMI, ADV. FOR R-1
SRI VINAYAK S. KULKARNI, AGA FOR R-2)

     THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C.
SEEKING TO A) SET ASIDE THE ORDER PASSED BY THE III-ADDL.
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DIST. & SESSIONS JUDGE, BALLARI (SITTING AT HOSAPETE) IN
CRL.RP.NO.5107/2016 DATED 15.12.2018 AND ETC.

     THIS PETITION HAVING BEEN HEARD AND RESERVED FOR
ORDERS, ON THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

                                  ORDER

The petitioner/accused No.1 is before this Court seeking to

quash the order dated 30.10.2016, taking cognizance of the

offence punishable under Sections 504, 506, 420 read with

Section 34 of Indian Penal Code, 1860 (for short, 'IPC'), against

the petitioner and another, in Crime No.142/2013 of Kottur

Police Station which is registered in C.C.No.189/2015 before

learned Senior Civil Judge and JMFC, Kudligi, and to accept the

'B' report submitted by the Investigating Officer.

2. Brief facts of the case are that the respondent No.1

as the complainant filed the complaint against accused Nos.1

and 2 on 15.11.2013 with Kottur Police stating that he was

owning 2.90 acres of land in Sy.No.102(B) and 2.79 acres of

land in Sy.No.103, situated at Hosakodihalli village, Kudligi

Taluk. He obtained the loan of Rs.1,32,000/- from the

Corporation Bank, Kottur, for the purpose of agricultural

activities, by mortgaging the agricultural lands. He sold 2.90

acres of land in Sy.No.102(B) in favour of one Sri Halapa on

27.02.2002 for a consideration of Rs.93,000/-. Out of the sale

consideration, a sum of Rs.54,250/- was repaid to the bank

towards the full and final settlement of the loan. He obtained the

receipt from accused No.1, who gave 'No Due Certificate'

towards repayment of mortgage amount. Accordingly, the

revenue records transferred in the name of the purchaser

Halappa.

3. It is stated that even though accused No.1 issued

'No Due Certificate', he filed the suit in O.S.No.143/2002 before

the learned Senior Civil Judge, Kudligi on 24.06.2002 in respect

of the above said agricultural lands. He also obtained a decree

in the said suit. As a result of which, the respondent No.1 failed

to get the benefits of the loan waiver scheme. Accused No.2 is

the brother of Halappa i.e., the purchaser of the land in

question. He illegally retained the 'No Due Certificate' issued by

accused No.1, for about six years. As a result of which,

respondent No.1 could not produce the same in

O.S.No.143/2002. If the said document was produced before the

Court, the suit would not have been decreed. Therefore, it is

stated that accused Nos.1 and 2 colluding with each other,

cheated the complainant. Further on 15.11.2013 at about 8.30

a.m., accused No.2 called the complainant and abused him in

filthy language and criminally intimidated to take away his life

and also to defame him. Therefore, he requested the police to

4. The Investigating Officer after registering FIR in

Crime No.142/2013 for the above said offences undertook

investigation and filed 'B' report stating that there are no basis

for the allegations made by respondent No.1, in his complaint.

The complaint is filed by misconception and there are no

materials to proceed against the accused.

5. It is stated that respondent No.1 filed the protest

petition and recorded his sworn statement. He also examined

two witnesses in support of his contention. The trial Court after

taking into consideration these materials on record, proceeded to

pass the impugned order taking cognizance of the offence

punishable under Section 420 read with Section 34 of IPC and

summoning accused Nos.1 and 2 to appear before the Court.

6. Being aggrieved by the said order passed by the trial

Court, the petitioner had preferred a revision petition in

Crl.R.P.No.5107/2016 before the learned III Addl. District and

Sessions Judge, Ballari, sitting at Hospete. The said criminal

revision petition came to be dismissed vide order dated

15.12.2018. Therefore, the petitioner is before this Court

seeking to quash the impugned order directing the trial Court to

accept 'B' report filed by the Investigating Officer.

7. Heard Sri G.S. Hulamani, learned counsel for

petitioner, Sri S.S. Yadrami, learned counsel for respondent No.1

and Sri Vinayak S. Kulkarni, learned Addl. Government Advocate

for respondent No.2.

8. Learned counsel for petitioner submitted that the

petitioner was working as Manager in Kottur branch of the

Corporation Bank. Respondent No.1 had availed three loans

from the bank i.e., on 07.09.1983 for Rs.4,500/-, on 06.08.1998

for Rs.35,000/- and on 13.08.1999 for Rs.1,00,000/-. He had

repaid the first loan amount on 07.09.1983 and therefore, the

petitioner had issued 'No Due Certificate' for the purpose of

getting reconveyance deed, in respect of the loan of the year

1983. Subsequently, the petitioner was transferred to another

branch and he relieved from Kottur branch on 29.05.2002.

Since respondent No.1 failed to repay the subsequent loans that

were taken during 1998 and 1999, the bank instituted the suit in

O.S.No.143/2002 for recovery of the loan amount. The suit was

came to be decreed after contest by respondent No.1. However,

the loan account of respondent No.1 was closed in view of One

Time Settlement Scheme (for short OTS Scheme) introduced by

the Government. However, suppressing all these facts,

respondent No.1 filed false complaint against this petitioner

without any basis. After investigation, the Police filed 'B' report

highlighting all these facts and circumstances. But the trial Court

ignored all these material facts and proceeded to take

cognizance of the offence mechanically. Even the Revisional

Court had not appreciated these facts and circumstances.

Therefore, the petition is liable to be allowed and the criminal

proceedings is to be quashed.

9. Per contra, learned counsel for respondent No.1

submitted that it is the petitioner who gave 'No Due Certificate'

after repayment of the loan amount. But suppressing the said

fact, he filed the suit in O.S.No.143/2002 and managed to obtain

the decree against the accused. He has also managed to see

that respondent No.1 will not be benefited from the Loan waiver

Scheme. Under such circumstances, the trial Court has rightly

accepted the protest petition after recording the sworn

statement of the complainant and two witnesses, and took

cognizance of the offence. There is no illegality or perversity in

the impugned order passed by the trial Court. Hence, he prays

for dismissal of the petition.

10. Learned H.C.G.P. submitted that the Investigating

Officer had filed 'B' report after investigation. The trial Court

accepted the protest petition and took cognizance of the offence.

Under such circumstances, he seeks for suitable orders.

11. Perused the materials on record.

12. In the light of the rival submissions, the point that

would arise for my consideration is,

"Whether the criminal proceedings initiated against the petitioner in Crime No.142/2013 of Kottur Police Station registered in C.C.No.189/2015 pending before the trial Court are liable to be quashed?"

13. My answer to the above point is in the 'affirmative'

for the following:

REASONS

14. The specific contention raised by respondent No.1 as

complainant while filing the fist information is that accused No.1

had issued no due certificate after he repaying the entire amount

of loan that was due to the Bank and even thereafter he filed

O.S.No.143/2002 before the learned Senior Civil Judge, Kudligi

and obtained a decree. He further managed to see that the

informant is not benefited from the loan waiver scheme.

15. The reconveyance deed relied on by the informant is

dated 27.02.2002 which is as per Annexure-M. As per this

document, loan of Rs.4,500/- was fully repaid by the

complainant and nothing is due to be paid. It is pertinent to note

that the loan in question referred to in the deed is of the year

1983-84 and the loan amount is Rs.4,500/- that was availed on

07.09.1983.

16. The suit in O.S.No.143/2002 filed by the Manager,

Corporation Bank, Branch Kottur is against defendants No.1 to 3

and defendant No.1 is respondent No.1 herein. The suit was

came to be filed on 24.06.2002. This suit pertains to loan of

Rs.35,000/- that was obtained by respondent No.1 herein on

06.08.1998 for the purpose of purchasing a pump set for the

borewell. It is contended that an amount of Rs.1,16,712/- is still

due to be paid by the borrower. This judgment further goes to

show that respondent No.1 herein who is defendant No.1 in the

suit was represented through his advocate and filed his written

statement admitting availing of the loan and execution of the

loan documents. It is disputed by respondent No.1 that he

agreed to pay the interest and that he executed the

acknowledgment of debt. A contention was taken that his

signature was taken to the blank forms and the documents were

concocted. A defence was taken that respondent No.1 had sold

2.90 acres of land in Sy.No.102/D in favour of one Halappa and

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Rs.54,000/- was paid to the Bank on 27.02.2002 but the said

amount was not given deduction to, by the Bank. After

considering the rival contentions the Civil Court came to the

conclusion that respondent No.1 herein is liable to pay the suit

claim and accordingly decreed the suit. It is specifically observed

by the Civil Court that the defence taken by respondent No.1

that amount of Rs.54,000/- not given deduction to by the Bank

cannot be accepted in view of the loan statement produced by

the Bank. The Court specifically observed that even though

respondent No.1 herein had stepped into the witness box to

depose about his defence, he never denied execution of the

documents nor denied his signatures, relied on by the Bank.

Under such circumstances, the Court decreed the suit against

respondent No.1 herein, for Rs.1,08,528/-.

17. It is contended by the petitioner that respondent

No.1 herein had never challenged this judgment passed by the

Civil Court and thus it has reached finality. This fact is never

disputed by respondent No.1. It is pertinent to note that the suit

in O.S.No.143/2002 was came to be decreed on 11.11.2003 and

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the present complaint was came to be filed on 15.11.2013,

raising similar contentions which were raised in the suit of the

year 2002. There is absolutely no explanation as to why the

decree of the Civil Court in O.S.No.143/2002 was not challenged

by respondent No.1. When reconveyance deed which is an

admitted document refers to the loan that was obtained during

1983-84 for loan amount of Rs.4,500/-, the suit in

O.S.No.143/2002 relates to loan of Rs.35,000/- obtained on

06.08.1998.

18. According to respondent No.1 he had availed loan of

Rs.1,32,000/- during 1999 by mortgaging his agricultural

properties and subsequently sold one item of the property in

favour of one Halappa for Rs.93,000/- on 27.02.2002. Out of the

sale consideration amount, a sum of Rs.54,250/- was repaid to

the Bank towards full satisfaction of the said loan amount. But

the judgment in O.S.No.143/2002 disclose that it pertains to an

entirely different loan transaction i.e. loan of Rs.35,000/- availed

on 06.08.1998.

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19. It is the contention of respondent No.1 that the

petitioner filed the suit O.S.No.143/2002 on 24.06.2002,

suppressing issuance of no due certificate and obtained the

decree. In this regard, the learned counsel for the petitioner

contended that the petitioner was transferred to Hosangadi

branch. He got himself relieved from the branch at Kudligi on

29.05.2002 and took charge in Hosangadi branch on

11.06.2002. In this regard copy of the vakalath filed by the

counsel representing the Corporation Bank, Kottur branch is

produced by the petitioner as Annexure-N1. As per this

document the Bank was represented not by the petitioner but by

one Sri.Mohan Mendan while filing the suit for recovery of the

loan amount. Therefore, the contention of respondent No.1 that

the petitioner had filed the suit on behalf of the Bank and

obtained the decree, cannot be accepted.

20. One more contention taken by respondent No.1 is

that the petitioner played fraud on him to see that he will not

avail the benefit under the loan waiver scheme. In this regard,

the petitioner produced the accounts statement extract as per

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Annexure-Q, pertaining to respondent No.1, for the period from

01.04.2008 to 31.03.2009. As per this accounts statement,

there was one time settlement and the loan account was closed

on 03.03.2012. An amount of Rs.25,367/- was credited to the

loan account under Agriculture Debt Waiver and Debt Relief

Scheme 2008. There is absolutely no explanation by respondent

No.1 about these clinching documents.

21. It is pertinent to note that after investigation the

investigating officer filed 'B' report specifically stating that there

are no materials to substantiate the contention of the

complainant. The trial Court while passing the impugned order,

taking cognizance of the offence reiterated the facts narrated by

the complainant in the complaint and highlighted that Ex.C.23 is

the opinion given by the legal aid counsel stating that the Bank

has misled the applicant and caused injustice to the

complainant. Therefore, the opinion was given to challenge the

judgment and decree passed by the Civil Court. Without

considering the clinching materials and without discussing much

about the documents and the sworn statement, the trial Court

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arrived at a conclusion that the Bank has recovered the amount

for the second time and there are sufficient grounds for

proceeding against the accused.

22. After perusal of all these materials on record by no

stretch of imagination it can be said that the Bank had recovered

the amount for the second time, in respect of the very same

loan. There are no prima facie materials to substantiate such

contention. Even the Revisional Court in Criminal Revision

Petition No.5107/2016 mechanically proceeded to dismiss the

petition restricting itself to examine the records of the Court

below for the purpose of satisfying its correctness, legality or

propriety about its finding and proceeded to hold no case is

made out for interference. The very fact that the reconveyance

deed produced as Annexure-M pertains to the loan amount of

Rs.4,500/- that was taken during 1983 which is entirely different

from the loan transaction referred to in the suit in

O.S.No.143/2002 i.e. loan amount of Rs.35,000/- obtained on

06.08.1998 was never taken into consideration. Therefore, I am

of the opinion that there is clear non-application of mind by both

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trial Court as well as by the Revisional Court regarding

sufficiency of the materials to proceed against the petitioner.

23. One more ground raised by the learned counsel for

respondent No.1 is that the present petition amounts to second

revision and therefore the same is not maintainable. In this

regard, it is to be noted that immediately after passing the

impugned order by the trial court vide order dated 30.10.2015,

the petitioner had preferred Criminal Petition No.100582/2016.

The same was came to be rejected vide order dated 14.07.2016,

on the ground that the statutory remedy under Section 397 of

Cr.P.C. is available to the petitioner to seek review of the

impugned order passed by the trial Court. Thereafter the

petitioner preferred revision before the Revisional Court in

Criminal Revision Petition No.5107/2016 which was also came to

be rejected.

24. Learned counsel for respondent No.1 relied on the

decision in Dharampal Vs. Ramshri1. However, the Hon'ble

Apex Court in Krishnan and Another Vs. Krishnaveni and

(1993) 1 SCC 435

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Another2 while overruling its earlier decision in Dharampal

(Supra), held that even after dismissal of the second revision

before the High Court, after dismissal of the first one by the

Court of Sessions, the inherent powers of the Court under

Section 482 of Cr.P.C. is still available. However, the same is to

be exercised sparingly, so as to avoid needless multiplicity of

procedure, unnecessary delay in trial and protraction of

proceedings.

25. Learned counsel for the petitioner placed his reliance

on the recent decision of the Hon'ble Apex Court in

K.Virupaksha and Others Vs. The State of Karnataka and

Others3, wherein the Court considered a similar situation in the

light of its earlier decision in Authorised Officer, Indian

Overseas Bank and Another vs. Ashok Saw Mill4 and held

in paragraph No.17 as under :

"17. We reiterate, the action taken by the Banks under the SARFAESI Act is neither unquestionable nor treated as sacrosanct under all circumstances but if there

(1997) 4 SCC 241

2020 (4) SCC 440

MANU/SC/1219/2009

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is discrepancy in the manner the Bank has proceeded it will always be open to assail it in the forum provided. Though in the instant case the application filed by the Complainant before the DRT has been dismissed and the Appeal No.523/2015 filed before the DRAT is also stated to be dismissed the appellants ought to have availed the remedy diligently. In that direction the further remedy by approaching the High Court to assail the order of DRT and DRAT is also available in appropriate cases. Instead the petitioner after dismissal of the application before the DRT filed the impugned complaint which appears to be an intimidatory tactic and an afterthought which is an abuse of the process of law. In the matter of present nature if the grievance as put forth is taken note and if the same is allowed to be agitated through a complaint filed at this point in time and if the investigation is allowed to continue it would amount to permitting the jurisdictional police to redo the process which would be in the nature of reviewing the order passed by the learned Single Judge and the Division Bench in the writ proceedings by the High Court and the orders passed by the competent Court under the SARFAESI Act which is neither desirable nor permissible and the banking system cannot be allowed to be held to ransom by such intimidation. Therefore, the present case is a fit case wherein the extraordinary power is necessary to be invoked and exercised."

(emphasis supplied)

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26. The facts and circumstances in the present case

appears to be an intimidatory tactics played by respondent No.1

after suffering the civil decree. He chose to file criminal

complaint against the petitioner, without challenging the decree

passed by the competent civil Court.

27. The Hon'ble Apex Court in its recent decision in M/s

Neeharika Infrastructure Pvt. Ltd. Vs. State of

Maharashtra and others5 considered the inherent jurisdiction

of the Court under Section 482 of Cr.P.C. and laid down the

principles of law as under:

"10. From the aforesaid decisions of this Court, right from the decision of the Privy Council in the case of Khawaja Nazir Ahmad (supra), the following principles of law emerge:

i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into cognizable offences;

AIR 2021 SC 1918

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ii) Courts would not thwart any investigation into the cognizable offences;

iii) However, in cases where no cognizable offence or offence of any kind is disclosed in the first information report the Court will not permit an investigation to go on;

iv) The power of quashing should be exercised sparingly with circumspection, in the 'rarest of rare cases'. (The rarest of rare cases standard in its application for quashing under Section 482 Cr.P.C. is not to be confused with the norm which has been formulated in the context of the death penalty, as explained previously by this Court);

v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint;

vi) Criminal proceedings ought not to be scuttled at the initial stage;

vii) Quashing of a complaint/FIR should be an exception and a rarity than an ordinary rule;

viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities. The inherent power of the court is, however, recognised to secure the

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ends of justice or prevent the above of the process by Section 482 Cr.P.C.

ix) The functions of the judiciary and the police are complementary, not overlapping;

x) Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;

xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;

xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. During or after investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;

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xiii) The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the court to be cautious. It casts an onerous and more diligent duty on the court;

xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint; and

xv) When a prayer for quashing the FIR is made by the alleged accused, the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether or not the allegations in the FIR disclose the commission of a cognizable offence and is not required to consider on merits whether the allegations make out a cognizable offence or not and the court has to permit the investigating agency/police to investigate the allegations in the FIR."

28. The trial Court should have been alert while

considering the 'B' report filed by the Investigating Officer. Even

though it had accepted the protest petition after recording sworn

statements, it has not applied its mind to see as to whether the

allegations made against the petitioner disclose the commission

of a cognizable offence or not. The revisional Court also

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proceeded mechanically, without taking into consideration the

fact that allegations were made against a Bank official and the

allegations relate to the loan that was granted in favour of the

informant. On going through the materials on record, the

averments made in the first information by respondent No.1,