Karnataka High Court
Ashok Chadha vs State Of Karnataka on 2 February, 2024
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CRL.P No. 1968 of 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
CRIMINAL PETITION NO. 1968 OF 2020
BETWEEN:
ASHOK CHADHA
SON OF LATE MAJ. GEN. KRISHAN DAYAL CHADHA
AGED ABOUT 58 YEARS
RESIDING AT E-372, GREATER KAILASH PART I
NEW DELHI-110 001
(INCORRECTLY PROVIDED IN THE COMPLAINT AS
NO.77B, SECTOR 18, IFFCO ROAD
(NEAR RANBAXY), GURGAON-122001
...PETITIONER
(BY SRI. RAGHURAM CADAMBI, ADVOCATE)
AND:
1. STATE OF KARNATAKA
Digitally REPRESENTED BY MALLESHWARAM POLICE STATION
signed by
ALBHAGYA 5TH CROSS, NEAR - KC GENERAL HOSPITAL
Location: MALLESHWARAM - 560 055
HIGH COURT
OF 2. MR MAHESH BAJAJ SON OF SHAM BAJAJ
KARNATAKA
AGED ABOUT 40 YEARS
NO.60, SHREYUS APARTMENTS
FLAT NO.32, 18TH CROSS
MALLESHWARAM, BANGALORE-560 055
...RESPONDENTS
(BY SRI.M.R.PATIL, HCGP FOR R1;
SMT.LATHA PRASAD, ADVOCATE FOR R2)
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CRL.P No. 1968 of 2020
THIS CRL.P IS FILED U/S.482 CR.P.C BY THE ADVOCATE
FOR THE PETITIONER PRAYING TO QUASH THE COMPLAINT
AND THE ENTIRE PROCEEDINGS IN C.C.NO.25505/2017
(PREVIOUSLY NUMBERED AS P.C.R.NO.22599/2011) ON THE
FILE OF THE IV ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE, BENGALURU (ANNEXURE-A) IN RESPECT OF THE
PETITIONER.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
The captioned petition is filed by accused No.2
seeking quashing of the proceedings pending in
C.C.No.25505/2017 on the file of the IV Additional Chief
Metropolitan Magistrate, Bengaluru, for the offence
punishable under Sections 408, 409, 415 read with
Section 120(B) of IPC.
2. The facts leading to the case are as under:
The respondent No.2/complainant filed a private
complaint under Section 200 Cr.P.C. against the present
petitioner/accused No.2 alleging that complainant is
entitled for 1/3rd profit out of total profit received which is
to the tune of Rs.1,00,33,647/-. The respondent No.2 has
alleged that despite repeated requests and reminders,
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both accused have neither paid the amount due to him nor
have furnished true and proper accounts. It is also alleged
that the present petitioner and accused No.1 being in-
charge of partnership business have siphoned huge sum of
money depriving complainant of his lawful profit. It is also
alleged that accused who had induced complainant to
make investment of Rs.10,00,000/- have breached trust
reposed on them and have mishandled the capital and
profits made out of the investment and hence, complaint is
lodged.
3. The petitioner herein who is arrayed as accused
No.2 is seeking quashing of the proceedings on the ground
that in absence of specific allegations against the present
petitioner/accused No.2, even if entire allegations made in
the complaint are accepted coupled with allegations made
in the sworn statement of respondent No.2/complainant,
no case is made out and therefore, petitioner has
approached this Court seeking quashing of the
proceedings pending in C.C.No.25505/2017.
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4. Heard learned counsel appearing for the
petitioner and learned counsel appearing for respondent
No.2 and learned HCGP. Perused the records.
5. Before I advert to the relief sought in the
captioned petition, I deem it fit to cull out the relevant
portion of the complaint. It would be useful for this Court
to cull out para 1 to 3 and para 8 which reads as under:
"1. The complainant and the 1st accused known
to each other for the last 10 years and have also
been colleagues in past. The 1st accused had
approached the complainant in the year 2005 to start
a partnership business for operating a service
apartment. The 1st accused had informed the
complainant that his experience in hotel industry
would be useful in running the business of service
apartment. The 1st accused promised that he will
keep all the accounts truthfully and had requested
the complainant to invest a sum of Rs.10 lakhs and
on the assurance that the 1st accused and the
complainant would be 50-50 partners. Based on the
said assurance given by the 1st accused, the
complainant had reposed faith in him and invested a
sum of Rs.10 lakhs as capital of the partnership
business. Accordingly the complainant was entitled
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to 50% ownership and profit of the said partnership
business.
2. Thereafter the complainant along with a
local broker had identified a functional and
established service apartment called "Lake View
Residence", owned and operated by M/s. Ambience a
partnership firm situated at No.2/1, Kensington
Road, Ulsoor Lake, Ulsoor, Bangalore - 560 042. As
the 1st accused was working in New Delhi, the
complainant along with the broker had conducted an
inspection of the said service apartment and due
diligence and back ground check about the property
and the current operators/tenants.
3. After the due discussions and negotiations
with M/s. Ambience it was agreed that a sum of
Rs.40 lakhs was required to be paid as an interest
free refundable deposit amount to take over M/s.
Ambience and its service apartment business. Since
the complainant and 1st accused did not have any
additional money to pay entire refundable deposit
they started searching for the additional partner who
can invest in the said business. The complainant had
suggested one Mr. Nikhil Kapur as the 3rd partner but
the 1st accused refused to take him as the 3rd partner
for the reasons best known to him. Instead, the 1st
accused had approached the 2nd accused to join the
partnership firm as a 3rd partner. Even though
complainant was not interested to take the 2nd
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accused as the 3rd partner he agreed for the same as
it was suggested by 1st accused. The 2nd accused
also invested a sum of Rs.10,00,000/- to the said
partnership business. After the induction of 2nd
accused as the 3rd partner it was agreed that the
complainant and both accused would be entitled for
1/3rd ownership and profit of the said partnership
firm. In the meanwhile the 1st accused undertaken
the responsibility of complying with the legal
requirements of getting a partnership deed drafted
and registered.
8. Accordingly to the complainant the
partnership business carried on between the
complainant and accused has gained profits of in
excess of Rs.3 crores. As such, the complainant
being entitled for 1/3 profit ought to have received
Rs.1,00,33,647/-. Despite repeated requests and
reminders made by the complainant, the accused
have neither paid the amount due to him nor have
furnished true and proper accounts. Moreover the
accused being in charge of partnership business have
siphoned off large sums of money to deprive the
complainant of his lawful profit. The accused, who
had induced the complainant to reposing trust on
them and making him to invest Rs.10 lakhs as the
capital business has breached the trust reposed on
them and have used the capital and profits made out
of such capital for re-investment in to various other
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businesses to their undue advantage. Having
received the investment and capital from the
complainant, the accused have not given the due
profits to the complainant but have fraudulently used
the same by cheating the accused."
6. The sworn statement of respondent
No.2/complainant would be also relevant to examine as to
whether offence is made out against the present
petitioner/accused No.2. The relevant portion reads as
under:
"At the end of the year 2005-06 the charted
accountant appointed by us sent a mail stating that
in the said year we had made a profit of more than
Rs.20 lakhs. The chartered accountant had advice
that out of the said profit Rs.15 lakhs should be
divided equally between three partners and the
remaining Rs.5 lakhs be kept with the company for
future expansion. I was given my share of Rs.5
lakhs at profits. Later on I came to know that the
accused had diverted the remaining Rs.5 lakhs to his
own company, which he had started without bringing
it to my knowledge. He expanded his own business
using my funds. He had started a new company by
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name Justa. In the year 2009-2010 the agreement
for lake view apartment came to an end."
7. On reading the complaint, it is evident that
accused No.1 and respondent No.2/complainant resolved
to start a partnership business for operating a service
apartment. Having realized that they needed further
funds, it is the version of respondent No.2/complainant
that accused No.1 requested the present
petitioner/accused No.2 and at his request, it is alleged
that accused No.2 has invested Rs.10,00,000/- in the joint
venture. The sworn statement of respondent
No.2/complainant also gives an indication that
complainant and accused were short of funds to the tune
of Rs.20,00,000/- and they were looking out for a suitable
partner. The culled out relevant paragraph of sworn
statement supra clearly clinches the issue as to whether
the present petitioner is liable to be prosecuted for the
offence indicated in the complaint. The culled out para
clearly gives an indication that it is the respondent No.2's
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specific claim that first accused has diverted the money
which was resolved to be kept for future expansion. It is
alleged that an amount of Rs.5,00,000/- is diverted to his
own company i.e., accused No.1. Complainant has also
alleged that accused No.1 has expanded his own business
by utilizing the corpus of the alleged joint partnership firm.
8. If these significant details are taken into
consideration, then this Court is more than satisfied that
even if the allegations made in the complaint are accepted
in entirety coupled with what is stated in sworn statement
is also taken cognizance of, no case is made out against
the present petitioner/accused No.2. As per his own
version, in the complaint, no specific role is assigned to
the present petitioner/accused No.2 which would attract
the ingredients of Section 415 of IPC. The allegation made
in the complaint do not constitute any offence against the
petitioner. Therefore, to do substantial justice and to
prevent abuse of process, proceedings against the present
petitioner are liable to be quashed.
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9. The foundational tenet of criminal jurisprudence
mandates that criminal liability must not be imputed
arbitrarily or on a whim; rather, it must be rooted in
concrete allegations substantiated by evidence that
meticulously satisfies the requisite elements of the alleged
offence. In the context of cheating under Section 415 of
the Indian Penal Code (IPC), the framework necessitates
the presence of deception, fraudulent or dishonest
inducement, delivery of property or consent, intentional
inducement to act or omit, and resulting damage or harm
to the victim. Deception, constituting the core element of
cheating, serves as the linchpin upon which the entire
edifice of the offence rests. The essence of cheating lies in
the deliberate and calculated act of inducing another
person through deceitful means, thereby influencing their
actions or decisions to their detriment. This deceptive
intent, coupled with fraudulent or dishonest inducement,
must be meticulously articulated in the complaint to
substantiate the charge of cheating against the petitioner.
Failure to proffer specific allegations delineating the
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petitioner's purported deceitful conduct undermines the
very essence of the offence, rendering the criminal
proceedings inherently deficient and susceptible to being
quashed.
10. Upon meticulous examination of the complaint
levelled against the petitioner, it is discerned that no
specific allegations are articulated therein that correlate
with the aforementioned essential ingredients of cheating,
the foundation upon which the criminal proceedings rest is
fundamentally flawed. The absence of precise and
particularized assertions pertaining to the petitioner's
purported deceitful conduct, fraudulent inducement, and
consequential harm suffered by the complainant
engenders a stark departure from the threshold of legal
sufficiency requisite for the initiation of criminal
prosecution.
11. In such circumstances, the petitioner is
confronted with the specter of being subjected to the
rigors of criminal adjudication bereft of a substantive basis
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rooted in law and fact. This predicament not only
undermines the petitioner's fundamental rights but also
precipitates the specter of abuse of the legal process.
Consequently, the invocation of judicial intervention to
quash the criminal proceedings emerges as an imperative
safeguard against the perversion of justice and the
deleterious repercussions attendant to the perpetuation of
baseless accusations.
12. The judgments cited by the learned counsel
appearing for respondent No.2/complainant are not
applicable to the present set of facts. If no offence is
disclosed against the present petitioner, then this Court by
exercising inherent jurisdiction under Section 482 of
Cr.P.C. is bound to prevent abuse of process.
13. For the reasons stated supra, I pass the
following:
ORDER
(i) The criminal petition is allowed;
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(ii) The proceedings pending in
C.C.No.25505/2017 on the file of the IV
Additional Chief Metropolitan Magistrate,
Bengaluru, insofar as petitioner is concerned are
hereby quashed.
Sd/-
JUDGE
CA
