Karnataka High Court
M/S Akiya Business Solutions Pvt Ltd vs The State Of Karnataka on 4 April, 2024
Author: K.Natarajan
Bench: K.Natarajan
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR JUSTICE K.NATARAJAN
CRIMINAL PETITION NO.7151 OF 2023
CONNECTED WITH
WRIT PETITION NO.18683 OF 2023
CONNECTED WITH
WRIT PETITION NO.19892 OF 2023
CONNECTED WITH
CRIMINAL PETITION NO.10996 OF 2022
IN CRIMINAL PETITION NO. 7151 OF 2023
BETWEEN:
M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.41/7, 'THE GRANDIOS',
3RD FLOOR, 15TH CROSS,
MALLESHWARAM,
BENGALURU - 560 003.
REPRESENTED BY ITS DIRECTOR,
SRI. RAVIKUMAR H M.,
S/O H. N. MAYANNA,
AGED ABOUT 43 YEARS.
...PETITIONER
(BY SRI. RAVI B. NAIK, SENIOR ADVOCATE FOR
SRI. R. P. SOMASHEKHARAIAH, ADVOCATE)
2
AND:
DR. RAVI RAJA M E
S/O E. M. PANDIYAN,
AGED ABOUT 55 YEARS,
R/AT NO.3683-1A-42,
10TH CROSS ROAD,
ANJANEYA LAYOUT,
DAVANAGERE - 577 005.
...RESPONDENT
(BY SRI.B.S. SATYANAND, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF CR.P.C. PRAYING TO SET ASIDE THE ORDER DATED
29.02.2020 MADE IN PCR NO.190/2019 ON THE FILE OF
THE JMFC - III, DAVANAGERE UNDER ANNEXURE-L.
IN WRIT PETITION NO. 18683 OF 2023
BETWEEN:
M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.98, RESIDENCY ROAD,
ASHOKNAGAR,
BENGALURU - 560 050.
REPRESENTED BY ITS DIRECTOR,
SRI. RAVIKUMAR H M.,
S/O H. N. MAYANNA,
AGED ABOUT 43 YEARS.
...PETITIONER
(BY SRI. RAVI B. NAIK, SENIOR ADVOCATE FOR
SRI. R. P. SOMASHEKHARAIAH, ADVOCATE)
AND:
DR. RAVI RAJA M E
S/O E. M. PANDIYAN,
AGED ABOUT 55 YEARS,
R/AT NO.3683-1A-42,
3
10TH CROSS ROAD,
ANJANEYA LAYOUT,
DAVANAGERE - 577 005.
...RESPONDENT
(BY SRI. B.S. SATYANAND, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
& 227 OF THE CONSTITUTION OF INDIA READ WITH
SECTION 482 OF CR.P.C. PRAYING TO QUASH THE ORDER
DATED 29/02/2020 ADE IN PCR NO.191/2019 ON THE FILE
OF THE JMFC-III, DAVANAGERE UNDER ANNEXURE-N.
IN WRIT PETITION NO. 19892 OF 2023
BETWEEN:
1. M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.98, RESIDENCY ROAD,
ASHOKNAGAR,
BENGALURU - 560 050.
REPRESENTED BY ITS DIRECTOR,
SRI. RAVIKUMAR H M.,
S/O H. N. MAYANNA,
AGED ABOUT 43 YEARS.
2. M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.98, RESIDENCY ROAD,
ASHOKNAGAR,
BENGALURU - 560 050.
REPRESENTED BY ITS DIRECTOR,
SRI. AJAY VENKATESHAN.,
S/O H. VENKATESHAM,
AGED ABOUT 40 YEARS.
...PETITIONERS
(BY SRI. RAVI B. NAIK, SENIOR ADVOCATE FOR
SRI. R. P. SOMASHEKHARAIAH, ADVOCATE)
4
AND:
DR. RAVI RAJA M E
S/O E. M. PANDIYAN,
AGED ABOUT 55 YEARS,
R/AT NO.3683-1A-42,
10TH CROSS ROAD,
ANJANEYA LAYOUT,
DAVANAGERE - 577 005.
...RESPONDENT
(BY SRI. B.S. SATYANAND, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
& 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE EXECUTION AND PROCEEDINGS IN EXECUTION
97/2022 ON THE FILE OF IV ADDITIONAL CIVIL JUDGE AND
JMFC, DAVANAGERE ANNEXURE-U AND V.
IN CRIMINAL PETITION NO. 10996 OF 2022
BETWEEN:
M/S. AIKYA BUSINESS SOLUTIONS PVT LTD.,
NO.41/7, 'THE GRANDIOS',
3RD FLOOR, 15TH CROSS,
MALLESHWARAM,
BENGALURU - 560 003.
REPRESENTED BY ITS DIRECTOR,
SRI. RAVIKUMAR H M.,
S/O H. N. MAYANNA,
AGED ABOUT 43 YEARS.
...PETITIONERS
(BY SRI. RAVI B. NAIK, SENIOR ADVOCATE FOR
SRI. R. P. SOMASHEKHARAIAH, ADVOCATE)
5
AND:
1. THE STATE OF KARNATAKA
BY CYBER, ECONOMICS AND
NARCOTIC CRIME POLICE STATION
VIDYANAGAR,
DAVANAGERE - 577 005.
REPRESENTED BY HCGP,
HIGH COURT OF KARNATAKA,
BENGALURU - 560 001.
2. DR. RAVI RAJA M E
S/O E. M. PANDIYAN,
AGED ABOUT 55 YEARS,
R/AT NO.3683-1A-42,
10TH CROSS ROAD,
ANJANEYA LAYOUT,
DAVANAGERE - 577 005.
...RESPONDENTS
(BY SMT. ANITHA GIRISH N., ADVOCATE FOR R1;
SRI. B.S. SATYANAND, ADVOCATE FOR R2)
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF CR.P.C. PRAYING TO QUASH THE FIR IN
CR.NO.6/2020 UNDER SECTIONS 406, 409, 418, 420,
120(B) R/W 34 OF IPC REGISTERED BY THE RESPONDENT
NO.1 POLICE, UNDER ANNEXURE-D.
THESE PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 18.03.2024 THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:
6
RESERVED FOR ORDERS ON: 18.03.2024
PRONOUNCED ON : 04.04.2024
ORDER
Criminal Petition No.7151/2023 is filed by the
petitioner-accused under Section 482 of Cr.P.C. for quashing
the order dated 29.02.2020 passed in PCR No.190/2019 by
the JMFC-III, Davanagere.
2. Writ Petition No.18683/2023 is filed by the same
petitioner-accused for quashing the further proceedings in
pursuance to the order dated 29.02.2020 made in PCR
No.191/2019 by the JMFC-III, Davanagere, on the basis of
the order in Execution Petition No.97/2022 pending on the
file of the IV Additional Civil Judge and JMFC, Davanagere.
3. Writ Petition No.19892/2023 is filed by the same
petitioner-accused for quashing the further proceedings in
Ex. P. No.97/2022 on the file of IV Additional Civil judge and
JMFC, Davanagere.
4. Criminal Petition No.10996/2022 is filed by the
same petitioner-accused under Section 482 of Cr.P.C. for
quashing the FIR in Crime No.6/2020 registered by the
Vidyanagar Police, Davanagere, for the offences punishable
under Sections 406, 409, 418, 420, 120B read with Section
34 of IPC.
5. All the petitions are arising out of the common
dispute between the petitioner and the respondent No.2 and
therefore, they are taken together for common disposal.
6. Heard the arguments of learned Senior Counsel for
the petitioner, learned counsel for the respondent - de-facto
complainant. and learned High Court Government Pleader
for the State.
7. The case of the petitioner-accused in Writ Petition
No.18683/2023 and Criminal Petition No.7151/2023 is that
the respondent filed two PCRs 190/2019 and 191/2019
before the JMFC-III, Davanagere, for the offences
punishable under Section 138 of N.I. Act for the dishonour
of two cheques issued by the petitioner-M/s. Aikya Business
Solutions Pvt. Ltd, Rep. by its Director Ravi Kumar
(hereinafter referred to as 'the Company'). After filing of
both the private complaints, there said to be some
settlement between the petitioner-Company and the
complainant. They said to be entered into a memorandum
of settlement and a joint memo was prepared by both
parties for settling the issues, where the petitioner-
Company undertook to pay the amount payable to the
respondent-complainant in instalments vide joint memo
dated 29.02.2020. Based upon the joint memo, the
complainant filed a memo before the Magistrate seeking
permission of the Court to withdraw the complaints as the
matter was settled out of the Court. Accordingly, both the
private complaints in PCR Nos.190/2019 and 191/2019 were
dismissed as not pressed and the complainant was
permitted to withdraw the case vide order dated
29.02.2020.
8. Subsequently, the petitioner-accused Company did
not pay the amount as per the settlement between them.
Therefore, the complainant filed execution petition before
the IV Additional City Civil Judge, Davanagere in Execution
Petition No.97/2022 under Order XXI Rule 11 of CPC for
executing the settlement arrived at between the parties in
the Criminal Court and the Civil Court at Davanagere, issued
the notice to the judgment debtor and also the arrest
warrant. Accordingly, the petitioner was arrested and
produced before the Court and in turn, he was sent to
custody and remanded to the civil prison till 17.08.2023
vide order dated 04.08.2023.
9. Subsequently, he was said to be released on bail
after the order passed by this Court in the above said writ
petition/Criminal petition. In the meanwhile, the
complainant filed a complaint to the Vidyanagar police on
17.01.2020. An FIR was registered by the Vidyanagara
police in Crime No.6/2020 for the offences punishable under
Sections 406, 409, 418, 420, 120B read with Section 34 of
IPC, which is challenged by the petitioner-accused company
in Criminal Petition No.10996/2022. The petitioner has filed
two petitions for quashing the order of the Magistrate for
accepting the joint memo and dismissing the complaint.
Based upon the joint memo/settlement, the respondent
filed execution petition No.97/2022, which has been
challenged in the writ petition. Consequently, the petitioner-
accused prays for allowing all the petitions in the above said
four cases.
10. The learned Senior Counsel Sri.R.B.Naik,
appearing for the petitioner, has contended that both the
PCRs have been filed at the belated stage. There was delay
in filing the complaint under Section 138 of N.I. Act. The
office noted the delay in the office note. In the meanwhile,
a joint memo was filed by the complainant and both the
complaints have been dismissed as the matter was settled
out of the Court. Therefore, there is no executable
judgment or decree available for the complainant for filing
the Execution Petition No.97/2022, in fact, the complaint
came to be dismissed as not pressed. Therefore, there is no
executable decree for the purpose of filing any execution
before the Civil Court whereas the order was passed by the
Criminal Court.
11. The learned Senior Counsel for the petitioner-
accused Company further contended that when there is no
executable order or decree, filing of the execution petition
does not arise. In the execution petition, the trial Court has
committed an error in sending the petitioner to the civil
prison and even the Magistrate did not take the cognizance
of the offence against the petitioner for the offence
punishable under Section 138 of the N.I. Act. Such being
the case, the question of treating the order of the Magistrate
dated 29.02.2020 or decree, does not arise and it is not a
decree or a judgment for the purpose of execution.
Therefore, the Execution Petition No.97/2022 is not
sustainable and liable to be quashed. The learned Senior
Counsel further contended that when the petitioner issued a
cheque for Rs.20.00 lakhs in one case and Rs.10.00 lakhs in
another case, the question of settling the matter for Rs.6.50
crores is not sustainable and even otherwise, the matter is
already seized in the Court for the offence punishable under
Section 138 of the N.I. Act, therefore, the question of filing
the complaint for cheating, for the same cause of action,
does not arise. Borrowing money and not returning the
same, will not attract Sections 406, 409 and 420 of IPC and
there was no entrustment of property. As per the
memorandum of settlement, it was stated that the amount
was an investment, but in the complaint, it has been stated
that it was the loan amount. It is further contended that
the complainant has stated in the PCR for the purpose of
Section 138 of the N.I. Act it was investment, whereas in
the police complaint, he has stated as loan. There is
contradictory stand by the complainant. Therefore, the
question of continuing the proceedings does not arise.
Hence, prayed for allowing the petitions.
12. Per contra, learned counsel for respondent - de-
facto complainant objected the petition and contended that
the respondent-complainant filed two private complaints
before the Magistrate, which was registered as PCR
Nos.190/2019 and 191/2010. A notice was issued to the
petitioner-accused Company, who was appeared before the
Court. Then the petitioner entered into a memorandum of
settlement and by signing the same, it was produced before
the Court. Accordingly, the joint memo was accepted and
the complaint was dismissed. If the petition filed by the
petitioner for setting aside the order dated 29.02.2020 is
allowed, then the complaint of the complainant will be
reopened and it has to be continued. Therefore, the
question of allowing these two petitions does not arise. It is
further contended that the complainant has paid Rs.5 crores
to the petitioner-accused company wherein the Directors are
Ravi kumar and one Ajay Venkateshan. After the receipt of
the money, they issued two cheques and both the cheques
were dishonoured and therefore, the complaint came to be
filed under Section 200 Cr.P.C. read with Section 138 of N.I.
Act. The complainant also filed a complaint to the police. A
case was registered by the police for cheating the
complainant and therefore, the matter requires
investigation. It is further contended that after the disposal
of the two criminal cases in respect of the offence under
Section 138 of N.I. Act, which was settled out of the Court
based upon the compromise, the complainant filed
execution petition. The order of the Magistrate amounts to
the decree in view of the settlement and therefore, it is
executable. It is also contended that the one criminal
petition is filed by the petitioner himself and another
criminal case is filed by his father through sworn affidavit,
which is not permissible. The petitioner undertook to pay
Rs.1 crore 30 lakhs as on 31.3.2020 and Rs.5 crores 45
lakhs to be paid within 31.12.2020, but he has cheated. The
entire amount of Rs.5 crores has been cheated by the
petitioner-accused. Therefore, prayed for dismissal of the
petition. The learned counsel for the respondent also
contended that as per the judgments of the Hon'ble
Supreme Court in various cases, the complainant can invoke
the civil Court for execution of the judgment under Section
138 of N.I. Act. Hence, prayed for dismissal of the petition.
13. The learned High Court Government Pleader also
objected the petition in respect of quashing the FIR
registered against the petitioner.
14. Having heard the arguments of learned counsel
for the parties, perused the records.
15. On perusal of the records, it reveals that the
respondent has filed two private complaints in PCR
Nos.190/2019 and 191/2019 for the offences punishable
under Section 138 of the N.I. Act against the petitioner for
dishonour of cheques for Rs.20 lakhs and Rs.10 lakhs
respectively. Along with the complaint, the respondent also
filed an application for condonation of delay in filing the
complaint. Therefore, the learned Magistrate, without
taking cognizance and without recording any sworn
statements, issued notice to the accused petitioner. The
said complaints were filed on 12.12.2019.
16. Subsequently, the very same complainant filed a
complaint against the petitioner before Vidyanagar police
Davanagere on 20.01.2020 which was registered in crime
No.6/2020. Subsequently, it appears that the petitioner and
respondent settled their issues and prepared joint
compromise memo and reported settlement before the
Court on 29.02.2020. The learned counsel for the
respondent-complainant also filed a memo for withdrawing
the complaint as the matter was settled out of the Court.
Accordingly, the learned Magistrate dismissed the complaint
as not pressed and permitted the complainant to withdraw
the case. For the better understanding, the order of the
learned Magistrate, in both the cases, is referred as under:
ORDER
The advocate for the complainant has
filed a memo praying this Hon'ble Court to
permit the complainant to withdraw the
application as the complainant and accused
settled the matter out of court.
Perused the application. For the reasons
stated therein, the application is allowed.
Hence, this case is dismissed as not pressed
and the complainant is permitted to withdraw
the case.
17. On careful reading of the order dated 29.02.2020
passed by the learned Magistrate in both the PCRs, it
reveals that the complainant-respondent herein withdrawn
his complaint before the learned Magistrate as the matter
was settled between the parties, out of court settlement and
the complaint has been dismissed as withdrawn. That
means, there is no complaint before the learned Magistrate
and there is no settlement or any compromise allowed by
the learned Magistrate in the Court as per Section 320 of
Cr.P.C. or Section 147 of the Negotiable instruments Act.
Therefore, when there is no settlement or compromise
before the Court, there is no question of considering the
order of the learned Magistrate that it is an executable order
for the purpose of recovery of the amount as fine under
Section 421 read with Section 431 of Cr.P.C. by filing any
execution. Even otherwise, it is not an executable decree or
an award within the meaning of decree as per the provisions
of CPC in order to execute the same by filing a civil case
under Order XXI Rule 11 of CPC before the Civil Court for
execution of the judgment. There is no judgment or decree
or an award in the eye of law when the complaint was
withdrawn by the complainant before taking the cognizance
by the learned Magistrate and the complaint came to be
dismissed as not pressed.
18. Therefore, the question of quashing/setting aside
the order 29.02.2020 passed in both cases i.e. PCR Nos.190
and 191/2019, as prayed by the learned Senior Counsel for
the petitioner, does not arise. On the other hand, if the
petition is allowed and the order is set aside then the
complaint is required to be restored on the file of the
learned Magistrate. When there is no prayer by the
respondent by filing any petition for modification of the
order or quashing that order, this Court cannot quash that
order as it is not an order against the petitioner.
19. Therefore, both the Criminal Petition
No.7151/2023 and Writ Petition No.18683/2023 for
quashing the proceedings or order dated 29.02.2020 passed
in PCR No.190/2019 and 191/2019 by the JMFC-III,
Davanagere, is liable to be dismissed.
20. For the above said reasons, when there is no
executable order or judgment or decree, in order to execute
the same either under Section 421/431 of Cr.P.C., or under
Order XXI Rule 11 of CPC, the question of filing the
Execution Petition No.97/2022 by the respondent-
complainant pending on the file of the IV Additional Civil
Judge and JMFC, Davanagere, does not arise. Even the
learned executing Judge has not considered the order of the
learned Magistrate, and blindly, issued notice and also the
petitioner was said to be arrested and sent to the civil
prison, which is not in accordance with law when there is no
award or decree in favour of the complainant. Therefore,
the question of executing the same before the Executing
Court does not arise. Therefore, Execution Petition
No.97/2022 pending on the file of IV Additional Civil Judge
and JMFC, Davanagere, is liable to be quashed.
21. As regards to Criminal Petition No.10996/2022 for
quashing the FIR in Crime No.6/2020 registered by
Vidyanagar Police Station, Davanagere, where the
complainant has stated in the complaint that he has come
into contact with the accused, who is the founder director of
M/s. Aikya Business Solutions Pvt. Ltd., and the accused
approached the complainant for taking loan for a project.
Accordingly, Rs.5.00 crores has been paid by the
complainant to the accused. The accused promised to
return the money within 6-8 months, but not repaid. The
said loan was given to the accused by the bank transfer and
they refused to repay the money. The accused said to be
issued 2-3 cheques, which were dishonoured. The accused
approached for settlement and when the complainant went
to the office of the accused, he was not present. The
accused threatened the complainant for filing a complaint
against him. When the complainant sent the office boy, the
accused said to be assaulted and abused him. The accused
hatched conspiracy against the complainant to avoid
repayment of loan. Hence, prayed for filing the complaint
for cheating. The said FIR is under challenge.
22. The learned Senior Counsel for the petitioner has
contended that there is no criminality as alleged by the
complainant. The petitioner was said to be assured to give
the interest at 20% p.a. The complainant became the share
holder on the unsecured loan. The said amount is a loan,
but not investment. Therefore, it cannot be said that it is
cheating/misappropriation within the meaning of Section
420 of IPC.
23. The learned Senior Counsel for the petitioner has
relied upon the following judgments of the Hon'ble Supreme
Court:
(i) SAMIR SAHAY ALIAS SAMEER
SAHAY VS. STATE OF UTTAR PRADESH
AND ANOTHER reported in (2018) 14 SCC
233;
(ii) PROF. R.K. VIJAYASARATHY
AND ANOTHER VS. SUDHA SEETHARAM
AND ANOTHER reported in (2019) 16 SCC
739;
(iii) DEEPAK GABA AND OTHERS Vs.
STATE OF U.P. AND ANOTHER reported in
(2023) 3 SCC 423.
24. The Hon'ble Supreme Court has held and given
interpretation in respect of Sections 405, 406 and 420 of
IPC. In the present facts and circumstances of the case, the
respondent gave the amount of more than Rs.5.00 crores to
the petitioner as loan, which was received by the petitioner
by online transfer. Subsequently, it was not returned.
Thereafter, two cheques issued by the petitioner to the
respondent, were dishonoured. Subsequently, the
complaint has been filed under Section 138 of N.I. Act and
the petitioner has entered into a settlement with the
respondent and undertook to repay the amount and made
the respondent-complainant to withdraw the complaint.
Later, the amount was not paid. Even, the respondent was
unable to execute the settlement agreement. Therefore, it
is clear that from the beginning, the petitioner-accused had
intention of cheating the respondent-complainant.
25. Considering the facts and circumstances of the
case, I am of the view that the police are required to
investigate the matter and file the final report and the FIR
cannot be quashed, at this stage, since the crores of rupees
have been cheated by the petitioner. Therefore, Criminal
petition No.10996/2022 is liable to be dismissed.
26. Accordingly, I pass the following order:
(i) Criminal Petition No.7151/2023 for quashing the
order dated 29.02.2020 passed in PCR No.190/2019 by the
JMFC-III, Davanagere, is hereby dismissed.
(ii) Writ Petition No.18683/2023 for quashing the
further proceedings in pursuance to the order dated
29.02.2020 made in PCR No.191/2019 by the JMFC-III,
Davanagere, is hereby dismissed.
(iii) Writ Petition No.19892/2023 is allowed. The
execution proceedings in Ex. P. No.97/2022 on the file of IV
Additional Civil judge and JMFC, Davanagere, is hereby
quashed.
(iv) Criminal Petition No.10996/2022 filed under
Section 482 of Cr.P.C., is hereby dismissed.
Sd/-
JUDGE
CS
CT:SK
