Sri T R Ramachandran vs State Of Karnataka
2021 Latest Caselaw 2166 Kant

                             1


IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 09TH DAY OF JUNE 2021

                          BEFORE

 THE HON'BLE MR. JUSTICE SREENIVAS HARISH KUMAR

        CRIMINAL PETITION NO.3278 OF 2021


BETWEEN

Sri. T.R.Ramachandran,
S/o. Sri. T.S.Rajagopalan,
Aged about 53 years,
Former Chief Executive Officer,
Aviva Life Insurance India Ltd.,
Aviva Towers, Sector Road,
Opp. Golf Course, DLF,
Phase V, Sector 43, Gurgaon,
Haryana-122003.

Presently at No.1701
'The Capital', Bandra Kurla Complex,
Bandra West, Mumbai-400072,
Maharashtra.
                                              ...Petitioner
(By Sri.K.N.Phaneendra, Senior Counsel, for
 Smt. Vaishali Hegde, Advocate)

AND

1.    State of Karnataka
      By Hebbal Police Station,
      Bengaluru City,
      Represented by its SPP.,
      High Court of Karnataka,
      Bengaluru-560001.
                               2



2.    M/s Dream World India
      Represented by its Proprietor,
      Sri. Niketan J Devadiga
      S/o. Late Sri. Jinnappa Devadiga,
      No.85, SMR Arcade,
      Vinayaka Nagar, Hebbal,
      Beside Viva Toyota Showroom,
      Bengaluru-560024.
                                               ...Respondents
(By Sri. Mahesh Shetty, HCGP, for R1;
R2 served, unrepresented)


      This Crl.P. is filed under Section 482 of Cr.P.C.
praying to quash the FIR and complaint dated 03.07.2017,
charge sheet and entire proceedings a/w order dated
28.07.2018 passed in Cr.No.195/2017 now renumbered as
C.C.No.20686/2018 against petitioner/accused No.2 for
the offence punishable under Sections 406, 420, 120B
read with 34 of IPC pending on the file of the IV A.C.M.M.,
Bengaluru City, produced at Annexures A,A1, B and C.

      This Crl.P. coming on for admission through video
conferencing this day, the court made the following:


                             ORDER

This is a petition filed under section 482 Cr.P.C. The

petitioner is accused No.2 in the criminal case,

C.C.20686/2018 on the file of IV ACMM, Bengaluru City.

Charge sheet is filed against him and other accused for the

offences punishable under sections 406, 420, 120B read

with section 34 of IPC. The factual background, stated in

the charge sheet is as follows :

2. The second respondent in collaboration with

M.J.Maths used to hold examination in Mathematics and

give awards to the winning students. In the year 2013

accused No.3, an employee of Aviva Life Insurance

Company India Limited, ('Aviva' for short) contacted CW1

of the second respondent company and made a proposal

that insurance policies could be issued to the winning

students instead of giving them prize in the form of cash.

Thinking that this proposal would benefit the students, the

second respondent agreed for the same and contracted

with the second respondent for obtaining 35 policies of

Aviva in the names of parents of the children. The second

respondent paid Rs.30,00,000/- by way of cheques.

Thereafter, accused No.3 failed to issue policies to CW1.

Then accused No.4 brought this matter to the notice of

accused Nos. 7 and 8 who agreed for issuing the policies.

On 19.4.2014 they communicated to CW1 by sending e-

mail and expressed regrets for the inconvenience caused

and then assured of issuing new policies under the

Employer- Employee scheme. CW1 paid Rs.36,89,567/- to

Aviva. Policies were issued in the names of parents of the

children. It is stated that accused No.4 used the letter-

heads of second respondent and created documents to

give an impression that the parents of the children were

the employees of the second respondent. Thereafter,

Aviva cancelled the policies. CW1 wanted to meet the

petitioner who was the CEO of Aviva at that time, but the

meeting was not possible. Then A4 communicated CW1

once again through e-mail stating that there was a mistake

on their part and that Aviva would return the entire

premium amount with interest. CW1 did not agree for

this.

3. The FIR was registered with the first respondent

police station on 3.7.2017. In the FIR name of the

petitioner did not figure. Only in the charge sheet, he was

arrayed as accused No.2. This petition has been filed for

quashing the charge sheet as against the petitioner.

4. Heard the learned senior counsel for the

petitioner and the High Court Government Pleader for

respondent No.1. Respondent No.2 has been served with

notice but has not entered appearance.

5. The learned counsel for the petitioner argued that

in the FIR, the name of the petitioner is not forthcoming;

there are no allegations against him. Only in the charge

sheet he is shown as accused No.2. In respect of the

transaction of the year 2014, FIR was registered in the

month of July 2017. The petitioner is no way connected

with the alleged offences. He submitted that all the

allegations are against other accused. The charge sheet

clearly shows that it was accused No.3 who met the

second respondent and induced him to provide insurance

policies to the winning children in the examination instead

of awarding prize to them in the form of cash. But, the

policies were issued under the scheme Employer and

Employee. Since the parents of the children were not

employees of the second respondent, the internal audit

team of Aviva took objection and for this reason, Aviva

terminated the polices by issuing a letter dated 18.11.2014

and offered to return the entire premium amount of

Rs.35,90,873/- with interest. Subsequently on 10.11.2016

Aviva transferred an amount of Rs.43.86 Lakhs to the bank

account of the second respondent by NEFT transfer.

Therefore, the entire premium amount has been returned

to the second respondent. He refers to a document in this

regard. Then Aviva lodged a complaint against one

Devangi Sanghi and Others on 8.3.2017 at Mumbai

alleging their role in sourcing the policies from the second

respondent fraudulently. When the police did not take any

action, the private complaint also came to be lodged

against Devangi Sanghi and Others. The second

respondent has approached the IRDAI in regard to this

transaction having received the entire amount with

interest. The complaint before IRDAI was suppressed, FIR

was registered at first respondent police station.

Therefore, it was the submission of the petitioner's counsel

that if the charge sheet is read, the allegations made do

not constitute any offence in so far as the petitioner is

concerned. The allegations are against the other

employees of Aviva. The transaction between Aviva and

the second respondent was based on a contract in relation

to which suit has to be filed. Referring to section 45 (4) of

the Insurance Act he argued that the Life Insurance could

be terminated within three years from issuance of policy if

suppression of material fact is made out. In this case the

parents of the children were not employees of the second

respondent and this was the reason for cancellation of

policies issued under Employer and Employee scheme. In

support of his contention he placed reliance on a judgment

of the Supreme Court in the case of Reliance Life

Insurance Company Limited and Another vs

Rekhaben Nareshbhai Rathod [(2019) 6 SCC 175].

He also referred to another judgment of the Supreme

Court in the case of Anand Kumar Mohatta and

Another vs State (NCT of Delhi), Department of

Home and Another [(2019) 11 SCC 706] in support of

his another argument that the allegations made in the

charge sheet do not constitute offences under sections 406

and 420 IPC so far as the petitioner is concerned and that

even after filing charge sheet, inherent power under

section 482 Cr.P.C can be invoked for quashing the charge

sheet.

6. The Government Pleader submitted that just

because the name of the petitioner has not been

mentioned in FIR, it does not mean that in the charge

sheet he cannot be arrayed as an accused. FIR is just a

report made to the police at the beginning and it is the

investigation that reveals involvement of the persons other

than the persons mentioned in the FIR. He submitted

further that it is a clear case of cheating and mis-

appropriation of money. The petitioner was CEO of Aviva

and he had the knowledge of the transaction. Therefore,

charge sheet cannot be quashed.

7. It is a settled principle that power under section

482 Cr.P.C can be exercised at any stage and charge sheet

can be quashed if the allegations made in the charge sheet

do not constitute an offence. FIR can also be quashed if

on its face value the allegations made therein do not

constitute an offence. This is the principle reiterated by

the Supreme Court in the case of Anand Kumar Mohatta

(supra).

8. It is true that the petitioner's name is not

forthcoming in the FIR. It is only in the charge sheet he is

made as accused No.2. As narrated above, issuance of

insurance policies gave raise to lodging of FIR. The

transaction is of the year 2014. The allegations made in

the charge sheet are against the other accused, not

against the petitioner. Only allegation found is that CW1

could not meet the petitioner. It is not stated that the

petitioner had also conspired with other accused. That

apart, it was accused No.3 who appears to have induced

CW1 of the second respondent company to obtain the

insurance policies instead of giving them cash prizes.

What is forthcoming is that the policies were issued under

the scheme, Employer and Employee. The audit team of

the second respondent having detected that the parents of

the children were not the employees of the company might

have recommended for cancellation of the policies.

Whether accused No.3 had brought it to the notice of the

insurance company Aviva that the insured were not the

real employees of the second respondent is not

forthcoming in the charge sheet. In a circumstance like

this role of the petitioner in issuance of insurance policies

is not forthcoming.

9. As has been argued by the petitioner's counsel,

according to section 45 of the Insurance Act, policies may

be called in question within three years on the ground of

fraud and suppression of a material fact or other

document. In the case of Reliance Life Insurance

Company Limited (supra) it has been held in para 30

that,

"30. It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client.

Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal form the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down

the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement".

10. On coming to know that the insured were not

the employees of the second respondent, if Aviva decided

to terminate the policies, it was in accordance with section

45 of the Insurance Act. The other requirement of section

45 is that the insurance company should return the

premium amount collected by it and to this effect there is

a document which cannot be disputed. Moreover the

second respondent has approached IRDAI. This aspect has

been suppressed in the FIR. Therefore, if all these aspects

are taken into consideration, it may be said that the role of

the petitioner in the alleged offences is not clearly

forthcoming. His prosecution appears to be abuse of

process of court. Therefore, it can be said that the charge

sheet against him can be quashed and hence the

following:-

ORDER

(a) Petition is allowed.

(b) The proceedings against the petitioner, ie.,

accused No.2 in CC 20686/2018 on the file of IV

Additional Chief Metropolitan Magistrate,

Bengaluru City, are quashed.

Sd/-

JUDGE

ckl