Karnataka High Court
Sri Rajendra S/O Banduji Patil vs The State Of Karnataka on 8 February, 2022
Bench: M.Nagaprasannapresided Bymnpj
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 8th DAY OF FEBRUARY 2022
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
CRIMINAL PETITION No.100114/2022
BETWEEN
1. SRI RAJENDRA S/O BANDUJI PATIL,
AGED ABOUT 60 YEARS,
OCCU: BUSINESS AND AGRICULTURE,
R/O OM SAI DATTA NAGAR,
VISHRAMBAGH, SANGLI,
SANGLI TALUK AND DISTRICT,
MAHARASTRA.
2. SRI. ARUN S/O. BANDU HAWALDAR,
AGED ABOUT 65 YEARS,
OCCU: BUSINESS AND AGRICULTURE,
WARD NO.2, MUDHOL, MUDHOL TALUK,
BAGALKOT DISTRICT.
3. SRI. RAHUL S/O. RAJENDRA PATIL,
AGED ABOUT 30 YEARS,
OCCU. BUSINESS AND AGRICULTURE,
R/O OM SAI DATTA NAGAR,
VISHRAMBAGH, SANGLI,
SANGLI TALUK AND DISTRICT,
MAHARASTRA.
4. SRI. SANDEEP S/O. ARUN HAWALDAR,
AGED ABOUT 37 YEARS, OCCU: BUSINESS,
WARD NO.2, MUDHOL, MUDHOL TALUK,
BAGALKOT DISTRICT.
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5. SRI. SUDHIR S/O. ARUN HAWALDAR,
AGED ABOUT 35 YEARS, OCCU: BUSINESS AND
AGRICULTURE, WARD NO.2, MUDHOL, MUDHOL TALUK,
BAGALKOT DISTRICT.
6. SRI. SHANKAR S/O. HANAMANT HAWALDAR,
AGED ABOUT 60 YEARS,OCCU: AGRICULTURE,
R/AT SAINAGAR, MUDHOL, MUDHOL TALUK,
BAGALKOT DISTRICT.
7. SRI. ABHIJEET S/O. DINAKAR SADAWARTE,
AGED ABOUT 35 YEARS, OCCU. BUSINESS AND
AGRICULTURE, R/AT. SOLANKURE GALLI,
AKKOL, NIPPANI TALUK, BELGAVI DISTRICT.
...PETITIONERS
(BY SRI B. B. BAJENTRI, SRI VIJAYKUMAR &
SRI J.A PATTAR ADVOCATES)
AND
1. THE STATE OF KARNATAKA,
KATKOL POLICE STATION, BELAGAVI,
REPRESENTED BY ITS
STATE PUBLIC PROSECUTOR,
HIGH COURT OF KARNATAKA,
DHARWAD BENCH, DHARWAD-01.
2. SRI. ANAND KULKARNI S/O ACHUTARAO,
AGED ABOUT 52 YEARS, OCCU: BUSINESS,
R/AT. INDRI BUILDING, PLOT NO. 14, ENGINEERING
COLLEGE HOSTEL ROAD, VIDYAGIRI, BAGALKOT,
BAGALKOT DISTRICT-587102.
...RESPONDENTS
(BY SRI RAMESH CHIGARI, HCGP FOR R1 &
SRI SRIKANT T PATIL & ROHIT S PATIL ADVOCATE FOR R2)
THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C., SEEKING TO
CALL FOR RELEVANT RECORDS TO FIR IN CRIME NO.133/2021 ON
THE FILE OF PRINCIPAL CIVIL JUDGE (JUNIOR DIVISION) AND JMFC
3
COURT, RAMDURG, BELAGAVI DISTRICT, AND QUASH THE FIR IN
CRIME NO.133/2021 ON THE FILE OF PRINCIPAL CIVIL JUDGE
(JUNIOR DIVISION) AND JMFC COURT, RAMDURG, BELAGAVI
DISTRICT, OFFENCE PUNISHABLE U/S 403, 406, 409, 420, 465, 467,
468, 469, 120B OF IPC,1860, AND ALL FURTHER PROCEEDINGS
THEREON, IN SO FAR AS THE PETITIONERS ARE CONCERNED VIDE
ANNEXURE-A, AND QUASH THE COMPLAINT OF 2ND RESPONDENT
DATED 06.08.2021 VIDE ANNEXURE-B IN CRIME NO.133/2021 ON
THE FILE OF PRINCIPAL CIVIL JUDGE (JUNIOR DIVISION) AND JMFC
COURT, RAMDURG, BELAGAVI DISTRICT.
THIS PETITION COMING ON FOR Admission THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
The petitioners have called in question the proceedings in
Crime No.133 of 2021 pending before the Civil Judge (Junior
Division) & JMFC, Ramdurg, Belgaum District registered for
offences punishable under Sections 403, 406, 409, 420, 465,
467, 468, 469 and 120B of the Indian Penal Code.
2. Heard Sri.B.B.Bajantri, learned counsel for the
petitioners and Sri.Ramesh Chigari, learned HCGP for
respondent-State.
3. Brief facts leading to the filing of the present petition,
as borne out from the pleadings, are as follows:-
The 1st petitioner is the Managing Director and petitioners
2, 4 to 7 are the Directors of Shivasagar Sugars & Agro Products
Limited ('the Company' for short) which is stated to have been
established in the year 2011 in Udupadi Village, Ramdurg Taluk,
Belgavi District. Petitioner No.3 who was earlier the Director of
the Company claims to have resigned from the Directorship in
the month of May 2015. The Company claims to be engaged in
the business of manufacturing sugar and power generation and
in 2011 also initiated Ethanol project. The Company claims to
have achieved success in sugar production and their relations
with farmers were cordial. The complainant who was one of
whole time Directors of the Company was one of the authorized
signatories for operation of bank accounts for the purpose of
opening of bank accounts for the Company. He is also said to
be the signatory of all Board resolutions of opening various bank
accounts in different banks. Alleging certain illegal activities the
EOGM held on 14-03-2014 resolved to remove the complainant
from the post of Director. The petitioners also contend that due
to illegal activities of the complainant the Company was made to
suffer financially and was forced to close down. In this regard
the petitioners have initiated several proceedings against the
complainant as narrated in the complaint.
4. The complainant also has registered several cases
against the petitioners in which the petitioners claim that the
Police after investigation have filed 'B' report.
5. The learned counsel appearing for the petitioners would
seek to argue with vehemence that the present FIR in Crime
No.133 of 2021 is one of those complaints registered against
the petitioners to wreck vengeance and to harass them for
having removed him from the post of Director. On other hand,
the learned counsel Sri Shrikant T.Patil appearing for the
respondent/complainant while taking this Court through the
narration of the complaint would submit that there is large scale
mis-appropriation by the petitioners in huge transactions
amounting to 112 crores. The modus operandi of the petitioners
is routing the amount through Punjab National Bank and
siphoning of funds. He would submit that these are financial
crimes that are committed by the petitioners and since the
matter is still at the stage of investigation this Court should not
interfere at this stage of the proceedings. The learned High
Court Government Pleader representing the State would also
toe the lines of learned counsel representing the respondent.
6. I have given my anxious consideration to the
submissions made by the respective learned counsel appearing
for the parties and perused the material on record.
7. It is not in dispute that the petitioners have knocked
the doors of this Court at the stage when the matter is still
being investigated by the Police. The offences punishable are as
afore-quoted. Since the entire issue springs from the complaint,
certain allegations made in the complaint are required to be
noticed and they read as under:
"6.The fact about the accused No.8 & 9 banks
allowing the accused Nos.1 to 7 to open bank
accounts in different banks has been disclosed by
accused No.1 to independent auditors of accused
Nos.8 & 9 bank i.e. M/s G.B. Rathi & Co,
Chartered Accountants, vide his letter and the
independent auditor has made a remark about the
same in his Independent Auditor's Report dated
31.08.2019 on page.25 of the report. The fact
about the routing of funds from the account of
Punjab National Bank and no recoveries being
made by the accused nos. 8 & 9 has been
seriously looked upon by the independent auditor
Mr.Gokul Rathi and has passed serious remarks
against the accused banks.
7.It has been transpired that, after taking
permission to open and operate bank account in
Punjab National Bank, Belgaum Branch, the
Accused Nos. 1 to 7 have routed and exorbitant
amount of Rs.112 Crore and odd amount from
the said account of Punjab National Bank,
Belgaum Branch, however, the accused No.8 and
9 made a recovery of only an amount of Rs.10
Crores and odd amount out of the entire
transaction of Rs.112 Crores, which was not only
surprising but against the baking policies laid
down by the Reserve Bank of India.
8.When the accused No.8 & 9 bank had given loan
to the said company on the basis of properties
mortgaged by myself and other removed directors
bank had put a specific condition that all the
transactions shall be routed through the accounts
maintained with accused Nos.8 & 9 and not
otherwise. This was one of the most
important condition and a condition
precedent, as the accused No.8 & 9 banks
were duty bound to closely monitor the
accounts of the said company for the
purpose of effective and transparent
operation and recovery of loan amount
which were to the tune of crores of rupees.
11.The conduct of accused nos.8 & 9 banks giving
such permission to the accused nos. 1 to 7 to
operate the account of the company in different
bank, when the accounts were in NPA, in a
clandestine manner i.e without the consent of the
mortgagers like me and others, makes it
apparently clear that the officers of the
accused No.8 &9 bank have joined hands
with accused nos. 1 to 7 siphon huge funds
to the extent of approximate amount of
Rs.102 Crores, which were due and payable to
the alleged loan accounts of accused no.8 & 9 but
which were routed through other bank.
12.The accused nos. 8 & 9 bank, who were
required to keep a close monitoring in the
accounts of the said company for the following
reasons:
i. Sanction loan advise dated
13.12.2012 provided that the
transactions shall be routed
through the accounts of
accused nos. 8 & 9 bank
only.
ii. Accused Nos. 8 & 9 bank had
admitted that my removal
from the company is illegal
and I have raised serious
concern about the usage of
the funds of the company.
iii. Huge amount were
recoverable from the
company as alleged by
accused Nos.8 & 9 bank.
iv. Already a complaint of
criminal misappropriation
of funds to the tune of
Rs.6,00,000/- was pending
against Rajendra Patil and
others in respect of the
Branch of Indian Overseas
Bank, Mudhol Branch.
13.Thus in view of the aforesaid facts and
circumstances, the accused nos.8 & 9, had to be
very very cautious and were required to take
utmost care while monitoring the funds
movement of the said company, as the amount of
alleged recovery was to the tune of Rs.100 Crores
and above. However, the conduct of accused
to open the account of the said company in
another bank i.e. Punjab National Bank, and not
monitoring the same with care and caution and
further allowing the accused Nos.1 to 7 to siphon
or convert the amounts routed in Punjab National
Bank to the tune of Rs.102 Crores, is nothing
but an act of dishonest misappropriation, criminal
breach of trust and cheating by accused Nos. 1 to
7 in connivance with the officers of accused nos. 8
& 9 bank.
19. The accused nos. 1 to 7 have been illegally
operating and managing the affairs of the
company from the factory site and the entire
stock of sugar, molasses, bagasse worth 112
crores was stored at the factory site and the
same has been disposed and dispatched
from the factory site to realize the amount of
Rs.112 crores and odd amount and hence the
offence has been first committed at the factory
site. So also, the accused No.1 to 7 have also
prepared false and fabricated stock statements at
the factory site and furnished it with the accused
nos.8 & 9 bank, therefore the offence is
committed at the factory site. The factory site is
falling within the jurisdiction of this Police Station
and hence the present complaint is filed with this
Police Station."
The afore-quoted paragraphs are some of the narrations in the
complaint. The complaint no doubt alleges financial fraud,
criminal conspiracy and forgery forging the documents for the
purpose of cheating against the petitioners. For this Court to
conclude that the entire complaint is frivolous and a counter-
blast for the petitioners having registered several cases against
the complainant or his removal from the post of Director, the
stage is yet to come about as it is only on investigation, as and
when a charge sheet is filed in the matter, such contentions can
probably be looked into. Otherwise there are serious triable
issues in the case at hand as the narration in the complaint,
without doubt, would touch upon the offences punishable under
Sections 403, 406, 409, 420, 465, 467, 468, 469 and 120B of
the IPC. It is germane to notice the judgment of the Apex Court
in the case of KAPTAN SINGH v. STATE OF UTTAR PRADESH
- (2021) 9 SCC 35 wherein at paragraphs 9.1, 9.2, 10, 12 and
14 it is 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
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
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.
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 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.
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.
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."
In the light of disputed questions of fact and serious triable
issues existing in the case at hand and the judgment of the
Apex Court, I decline to entertain the petition, particularly at
this stage of the proceedings.
8. In the result, the criminal petition lacks merit and is
dismissed.
SD/-
JUDGE
Vb/-
