Karnataka High Court
Sathish Kumar. S vs State Of Karnataka on 12 January, 2024
Author: H.P. Sandesh
Bench: H.P. Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF JANUARY, 2024 R
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL PETITION NO.10436/2023
BETWEEN:
SATHISH KUMAR S
S/O SHIVANNA
AGED ABOUT 38 YEARS
NO19/1, 7TH CROSS, AZAD NAGAR
NEAR T.R.MILL, CHAMARAJPET
BENGALURU-560018 ... PETITIONER
(BY SRI M.J.ALVA, ADVOCATE)
AND:
1. STATE OF KARNATAKA
BY INSPECTOR OF POLICE
KONANAKUNTE POLICE STATION
BENGALURU - 560 062
REP. BY STATE PUBLIC PROSECUTOR
HIGH COURT OF KARNATAKA BUILDING
BENGALURU - 560 001
2. SMT. T DIVYA
W/O M.BHARATH KUMAR REDDY
AGED ABOUT 38 YEARS
NO.411, 2ND FLOOR, UMA NIVAS
ROYAL COUNTY, JAMBUSAVARI DINNE
BENGALURU - 560 083 ... RESPONDENTS
(BY SRI B LAKSHMAN, HCGP FOR R1
R2 - SERVED & UNREPRESENTED)
2
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
OF CR.P.C PRAYING TO QUASH THE CHARGE SHEET FILED BY
THE RESPONDENT NO.1 AGAINST THE PETITIONER IN
C.C.NO.8574/2023 (CR.NO.331/2019) FOR THE ALLEGED
OFFENCES PUNISHABLE UNDER SECTION 384, 420 AND 506 OF
IPC AND SECTION 38 OF KARNATAKA MONEY LENDERS ACT
AND SECTION 3 OF KARNATAKA PROHIBITION OF CHARGING
EXORBITANT INTEREST ACT AND ETC.
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 05.01.2024 THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
ORDER
This criminal petition is filed under Section 482 of Cr.P.C
praying to quash the charge sheet filed by respondent No.1
against the petitioner in C.C.No.8574/2023 (Cr.No.331/2019) for
the offences punishable under Sections 384, 420 and 506 of IPC;
Section 38 of the Karnataka Money Lenders Act, 1961 (for short
'the Act of 1961') and Section 3 of the Karnataka Prohibition of
Charging Exorbitant Interest Act, 2004 (for short 'the Act of
2004').
2. Heard the learned counsel appearing for the
petitioner and learned High Court Government Pleader appearing
for the respondent No.1-State. Respondent No.2 is served but
unrepresented.
3. The factual matrix of the case of the
complainant/respondent No.2 in the complaint dated 27.11.2019
that herself and her husband were running a business of
manufacture of labels. One Mr. Santhosh introduced financier
Mr.Sathish Kumar as they required liquid cash and they
borrowed an amount of Rs.98,500/- on 01.10.2015 with interest
at the rate of 5% per week. For this, the said Sathish took the
cheques of them belongs to Andhra Bank and Bank of India and
they were paying interest at the rate of 5% i.e., Rs.4,925/- per
week. As the business was growing, the said Sathish was
offering them money whenever needed from 01.10.2015 to
14.01.2019. In this duration, he gave an amount of
Rs.65,36,000/- for which, he used to charge 5% interest per
week and when the payment was not made, he was adding
interest to the principle amount and was charging interest and
penalty. The transaction was ended up paying with an amount
of Rs.1,74,23,706/- to his personal account and to his C-tract
account located in Basavanagudi branch. There was a money
laundering case which was registered on 02.08.2018 in
Baiyappanahalli police station against the petitioner-Sathish
Kumar.
4. It is further stated in the complaint that on
08.01.2019, the petitioner had kidnapped her husband and
threatened her and forcefully made her to sign on the agreement
of Rs.42,00,000/- with 21 cheques of Andhra Bank. At that
time, she did not have any option other than signing the cheques
and the agreement to save her husband and kid. After the
incident, the petitioner repeatedly came to her house and office
and threatened by getting local rowdies. It is also stated that as
the complainant's family afraid to give complaint and paid an
amount of Rs.7,40,000/- through NEFT and cash by discounting
her company cheques and asked to return the cheques for the
value of Rs.7,40,000/- out of earlier 21 cheques. But the
petitioner refused to return those cheques by saying that the
amount of Rs.7,40,000/- is adjusted towards interest and they
have to clear all those 21 cheques. Thereafter, the petitioner
started to collect 1% interest per day that means 30% interest
per month and when the amount was not paid in time, the
petitioner was continuously added the same to the principle
amount and threatened them to pay the amount how much he
demands. Hence, without any other alternative, the complainant
approached the police and filed the complaint. Based on the
complaint, FIR was registered in Cr.No.331/2019 for the offences
punishable under Sections 384, 365, 506 of IPC; Section 38 of
the Act of 1961 and Section 3 of the Act of 2004. The police
have investigated the matter and filed the charge sheet. While
filing the charge sheet, deleted Section 365 of IPC and added
420 of IPC. Hence, the present petition is filed before this Court.
5. The main contention of the counsel for the petitioner
that the very initiation of criminal proceedings is nothing but an
abuse of process of law since there is no prima facie material
evidence collected by respondent No.1 to implicate the petitioner
in the alleged offences. The alleged execution of an agreement
is said to have been taken place between the husband of
respondent No.2 and the petitioner on 09.01.2019 wherein
respondent No.2 also signed the said document as a witness but
the complaint was lodged belatedly i.e., after the lapse of nearly
one year for which there is absolutely no explanation offered by
respondent No.2 till the petitioner had initiated the proceedings
against respondent No.2 under Section 138 of N.I.Act. The
lodging of the complaint and filing of the charge sheet is nothing
but a misuse of the process of law. The allegation set out in the
complaint is nothing but the defence to escape from the liability
and the penal consequences in respect of an offence punishable
under Section 138 of N.I. Act. The police also mechanically filed
the charge sheet without making proper investigation. The
counsel also would vehemently contend that to attract the penal
provision under Section 420 of IPC, the complaint does not
disclose any prima facie or legal foundation. On the other hand,
the complaint itself goes on narrating series of monitory
transactions for growth of their business. The counsel also
would vehemently contend that the statement of witnesses i.e.,
CW1 to CW14 does not attract the offences which have been
invoked against the petitioner. The complaint does not disclose
any molestation of respondent No.2 to invoke Section 38 of the
Act of 1961. The term of molestation has not been defined
under the Money Lenders Act. No ingredients of Section 38 of
the Act of 1961 are invoked. In the complaint, an allegation of
kidnap and abduction was made. Therefore, the case was
registered against the petitioner for an offence of Section 365 of
IPC but nothing was found in the investigation thus, Section 365
of IPC was deleted. The allegation that 21 cheques and other
signed papers were collected. But during the course of the
investigation, those cheques have not been recovered and no
other documents have been produced along with the charge
sheet. Respondent No.2 had not followed the mandates of
Section 5 of the Act of 2004 and without complying the statutory
requirements of law, respondent No.1 had no jurisdiction to
register the complaint against the petitioner. Section 506 of IPC
and Section 3 of the Act of 2004 are non-cognizable offences in
respect of which respondent No.1 had no jurisdiction to file the
charge sheet without following the procedure prescribed under
Section 155 of Cr.P.C. The entire charge sheet does not make
out a prima facie case against the petitioner. Hence, it requires
interference of this Court to quash the same.
6. The learned counsel appearing for the State would
vehemently contend that the grounds which have been urged
before the Court is a matter of trial. There is a specific averment
in the complaint that the petitioner caused the life threat and
obtained the signature of the complainant on the agreement. It
is also borne out from the records that there was a loan
transaction and exorbitant interest has been collected and the
statement of the witnesses including Bank Manager also
recorded. Hence, the matter requires trial and no grounds are
made out to quash the proceedings.
7. Having heard the learned counsel appearing for the
petitioner and the learned HCGP appearing for respondent No.1,
and also the grounds urged in the petition, the point that would
arise for the consideration of this Court is:
1. Whether the petitioner has made out a
ground to invoke Section 482 of Cr.P.C to
quash the charge sheet filed against him?
2. What order?
Point No.1:
8. Having perused the complaint dated 27.11.2019, it is
stated that one Santhosh had introduced Mr. Sathish Kumar to
the complainant for financial assistance and the transactions
were taken place from 01.10.2015 to 14.01.2019. Initially, the
complainant availed an amount of Rs.98,500/- from the
petitioner and continued the borrowings and ultimately, an
amount of Rs.65,36,000/- was paid and an allegation against the
petitioner is that he was charging interest at the rate of 5% per
week. It is also stated that an amount of Rs.1,74,23,706/- was
paid to the petitioner from the account of the complainant. It is
also the case of the complainant that a money laundering case
was also registered against the petitioner by Baiyappanahalli
police on 02.08.2018. It is the specific allegation in the
complaint that on 08.01.2019, her husband was kidnapped and
threatened and got the signature on the agreement and also
collected 21 cheques from her. It is also an allegation that
subsequently, she made payment of Rs.7,40,000/- and the same
was adjusted towards interest at the rate of 30% per month.
The Investigating Officer after registering the case, investigated
the matter and filed the charge sheet and during the course of
investigation, recorded the statement of witnesses i.e., CW1 to
CW14.
9. It is not in dispute that while filing the charge sheet,
Section 365 of IPC is deleted with regard to the kidnap is
concerned. But there is a force in the contention of the counsel
for the petitioner that during the course of investigation, no
materials are collected with regard to the kidnap is concerned.
It is also the contention of the counsel for the petitioner that an
allegation was made that at the time of kidnap and abduction,
21 cheques were collected but in order to prove the said fact, no
cheques were recovered from the petitioner. It is important to
note that when the investigating officer did not found any
material with regard to kidnap and seizure of cheques, there is a
force in the contention of the counsel for the petitioner that a
false allegation is made against him stating that 21 cheques
were collected. The counsel for the petitioner also brought to
notice of this Court that when the kidnap and forcibly collection
of cheques was alleged referring the incident of 08.01.2019, no
complaint was given from January to November 2019 and the
complaint was given on 27.11.2019.
10. It is also important to note that in the charge sheet,
the complainant and her husband were made as CW1 and CW2;
CW3 is the brother of CW1 who speaks with regard to obtaining
of 21 cheques and filing of the case; CW4 is the person who
introduces the petitioner to CW1 and CW2 and he speaks about
obtaining of cheques and filing of case under Section 138 of N.I.
Act; CW5 and CW6 are the Panchnama witnesses; CW7 is the
witness who speaks with regard to payment of more money to
the petitioner by making audit; CW8 to CW10 are the Bank
Managers who gave the details of bank account which have been
referred in the complaint; CW11 is the bank employee who gave
the particulars of the account and CW12 to CW14 are the police
witnesses. It is important to note that the petitioner has
produced the copy of the private complaint filed against the
complainant on 03.10.2019 and both the complaints were filed
on the very same date and the Trial Court has took the
cognizance and registered the case as a criminal case against
respondent No.2 herein. The petitioner also produced the copy
of the appeal filed by the petitioner against the acquittal order
passed in C.C.No.28673/2019 and so also the copy of the appeal
filed against the order passed in C.C.No.28673/2019.
11. Perused the copy of the complaint and also the
registration of the criminal case under Section 138 of N.I. Act as
well as appeal filed by the petitioner against the order of
acquittal. It is also important to note that the complainant
herself has admitted in the complaint that there was a financial
transaction between them and payments were also made
through bank. Thus, it is clear that the complainant borrowed
the money from the petitioner from 2015 to 2019. It is also
important to note that an allegation of kidnapping was made in
the complaint that is in the month of January 2019, but the
complaint was given in the month of November 2019 and no
proper explanation on the part of respondent No.2 regarding
delay in lodging the complaint though explained for the said
date. But not stated what prevented her to give complaint
afterwards. It is also the case of the complainant/respondent
No.2 that by threatening, the petitioner obtained the signature
on the agreement and took 21 cheques from them but those
cheques were not seized during the course of investigation. No
doubt, there is a reference in the complaint that earlier to the
present complaint, a money laundering case was registered
against the petitioner herein. It is also important to note that the
complainant is offshoot of PCRs filed against respondent No.2 in
the month of October that is on 03.10.2019 and proceedings
under Section 138 of N.I. Act was initiated but the complaint was
given on 27.11.2019, even though an allegation of kidnapping
and abduction was made in the month of January 2019. From
January 2019 till November 2019, the complainant was kept
quiet and not lodged any complaint. Thus, the records reveal
that after filing of the complaint under Section 138 of N.I. Act,
the present complaint is filed. It is very clear that there were
financial transactions between the petitioner and respondent
No.2 that too for a period of four years i.e., from 2015 to 2019.
The investigating officer comes to the conclusion that it is not a
case of kidnapping thus, deleted Section 365 of IPC and invoked
Section 420 of IPC and also Section 384 of IPC. This Court would
like to refer the very Section 420 of IPC which reads as follows:
"420. Cheating and dishonestly inducing
delivery of property.-- Whoever cheats and
thereby dishonestly induces the person deceived to
deliver any property to any person, or to make, alter
or destroy the whole or any part of a valuable
security, or anything which is signed or sealed, and
which is capable of being converted into a valuable
security, shall be punished with imprisonment of
either description for a term which may extend to
seven years, and shall also be liable to fine."
12. Having read the Section 420 of IPC, it is clear that
there has to be a dishonest intention from the very beginning,
which is sine qua non to hold the accused guilty for commission
of the said offence. In this regard, this Court would like to refer
the judgment of the Apex Court reported in (2009) 14 SCC 696
in the case of DALIP KAUR AND OTHERS vs JAGNAR SINGH
AND ANOTHER wherein the Apex Court held that in order to
invoke Section 420 of IPC there must be ingredients of cheating
that is fraudulent and dishonest intention must exist from the
very inception when the promise or representation was made.
13. This Court also would like to refer the judgment of
the Apex Court reported in (2021) 3 SCC 751 in the case of
ARCHANA RANA vs STATE OF UTTAR PRADESH AND
ANOTHER wherein the Apex Court held that to quash criminal
proceedings against accused under Section 420 as it could not
be said that averments in FIR and allegations in complaint
against appellant are constituted offences. In the case on hand
also no such averments with regard to cheating but while filing
of charge sheet, offence under Section 420 was invoked.
14. This Court also would like to refer the judgment of
the Apex Court reported in (2015) 8 SCC 293 in the case of
VESA HOLDINGS PRIVATE LIMITED AND ANOTHER vs
STATE OF KERALA AND OTHERS wherein the Apex Court held
that while invoking Section 420, in the absence of ingredients of
cheating, culpable intention at the time of making initial
promise, absent, male fide criminal proceedings which amounts
to abuse of process of Court should not be allowed.
15. This Court also would like to refer the judgment of
the Apex Court reported in (2021) 18 SCC 70 in the case of
N.RAGHAVENDER vs STATE OF ANDHRA PRADESH, CBI
wherein the Apex Court held that cheating, deception of any
person, fraudulently or dishonestly inducing that person to
deliver property to any person, mens rea of accused at the time
of inducement, necessity of existence of fraudulent and
dishonest intention at inception when promise or representation
made, phrase 'dishonestly' emphasizes deliberate intention to
cause wrongful gain or wrongful loss and when this is coupled
with cheating and delivery of property, offence becomes
punishable under Section 420 amounts to breach of contract.
16. In the case on hand, it has to be noted that a
specific allegation of kidnapping of her husband and abduction
was made but no such cheques which have been forcibly taken
were seized during the course of investigation. Admittedly, there
was a financial transaction between the petitioner and
respondent No.2. It is also not in dispute that two cases were
initiated against respondent No.2 under Section 138 of N.I. Act
and cognizance was taken and the cases are pending. Having
considered the material available on record it is nothing but
offshoot of a complaint as against the proceedings initiated
against respondent No.2 under Section 138 of N.I.Act. It is also
important to note that in the complaint there is no allegation of
dishonest intention on the part of this petitioner. It is very clear
that in order to invoke Section 420 of IPC, there must be
dishonest intention from the very beginning which is sine qua
non to hold that accused is guilty for commission of the said
offence. The police while filing the charge sheet, deleted Section
365 of IPC and invoked Sections 420 and 384 of IPC. When the
investigating officer comes to the conclusion that there was no
kidnapping and also not seized any cheques as alleged by the
complainant, the question of invoking Section 420 of IPC does
not arise. Only if any such valuable document is collected or
deceived to deliver any property or any person, the very
allegation of kidnapping or collecting cheques have to be made.
But in the case on hand, no such ingredients are found to invoke
Section 420 of IPC.
17. The police also filed the charge sheet under Section
384 of IPC against the petitioner and considering the same, this
Court would like to extract Sections 383 and 384 of IPC which
reads as follows:
"383. Extortion.--Whoever intentionally puts any
person in fear of any injury to that person, or to any
other, and thereby dishonestly induces the person so
put in fear to deliver to any person any property or
valuable security, or anything signed or sealed which
may be converted into a valuable security, commits
"extortion".
384. Punishment for extortion.--Whoever
commits extortion shall be punished with
imprisonment of either description for a term which
may extend to three years, or with fine, or with
both."
18. Having considered the ingredients of Section 383
and also the penal provision of Section 384 of IPC, it is very
clear that whoever intentionally puts any person in fear of any
injury to that person, or to any other, and thereby dishonestly
induces the person so put in fear to deliver to any person any
property or valuable security, or anything signed or sealed which
may be converted into a valuable security, commits "extortion".
19. Having perused this, it is very clear that if any
valuable security is obtained, then it comes within the definition
of "extortion". This Court already discussed with regard to the
averments made in the complaint wherein no doubt, a specific
allegation is made that she was subjected to the threat and
collected 21 cheques and also got the signature on the
agreement. This Court already taken note of the material
collected by respondent No.1 during the course of investigation
wherein no such document of agreement and the alleged
cheques were recovered. When such being the case, the
question of invoking Section 384 of IPC against the petitioner
does not arise.
20. The Apex Court in the judgment reported in (2014)
15 SCC 357 in the case of ISAAC ISANGA MUSUMBA AND
OTHERS vs STATE OF MAHARASHTRA AND OTHERS while
quashing the FIR itself, in connection with the offences
punishable under Sections 383 and 384 of IPC, comes to the
conclusion that unless property is delivered to the accused
pursuant to the threat, no offence of extortion is made out and
FIR for offence under Section 384 cannot be registered.
21. This Court would like to refer the judgment of the
Apex Court reported in 2024 LIVE LAW (SC) 41 in the case of
RAJARAM SHARMA vs THE STATE OF UTTAR PRADESH AND
ANOTHER wherein the Apex Court vide order dated 04.01.2024
held that when the High Court was called upon to invoke power
under Section 482 of CrPC raising such contentions, it was
incumbent upon the High Court to consider the question whether
the allegations would constitute the offence(s) alleged against
the appellant. It is also observed that a scanning of the FIR and
the subsequently filed charge sheet, we are of the considered
view that ingredients necessary to constitute the offence under
Sections 420, 406, 504 and 506 of the IPC are not made out.
The said aspect was not at all looked into by the High Court.
22. Having perused the principles laid down in the
judgments referred supra and also the recent judgment of the
Apex Court, this Court has to consider the material available on
record. In the case on hand, I have already pointed out that
though alleged threat is made, the investigating officer comes to
the conclusion that there was no material with regard to the
allegation of kidnapping. In order to invoke an offence
punishable under Section 384 of IPC, there must be a specific
ingredient of Section 383 but prima facie, no such valuable
security or anything signed or sealed which may be converted
into a valuable security is recovered at the instance of the
petitioner hence, continuing of proceedings against the petitioner
in the absence of such recovery amounts to an abuse of process.
Hence, it is a fit case to invoke Section 482 of Cr.P.C to quash
the charge sheet filed against the petitioner or otherwise it leads
to miscarriage of justice. This Court already pointed out the fact
that already there were monitory transaction between the
petitioner and respondent No.2 and also the material discloses
for having taken the amount and complaint was filed belatedly
that is after initiation of proceedings under Section 138 of N.I.
Act against the complainant. Hence, it amounts to abuse of
process.
23. Having considered the material available on record
and taking into note of the fact that the present complaint is
filed after initiation of 138 proceedings against respondent No.2.
In the complaint, it is alleged that already a case has been
registered against the petitioner herein by Baiyappanahhali
police for the offence punishable under Section 3 of the Act of
2004. But continuing of this case only to consider Section 3 of
the Act of 2004 is nothing but an abuse of process of law. Hence,
I am of the opinion that the petitioner has made out the grounds
to quash the proceedings initiated against him under Section 482
of Cr.P.C. Accordingly, Point No.1 is answered as affirmative.
Point No.2
24. In view of the discussions made above, I pass the
following:
ORDER
The criminal petition is allowed.
The charge sheet filed by respondent No.1 against the
petitioner in C.C.No.8574/2023 (Cr.No.331/2019) for the
offences punishable under Sections 384, 420 and 506 of IPC;
Section 38 of the Karnataka Money Lenders Act, 1961 and
Section 3 of the Karnataka Prohibition of Charging Exorbitant
Interest Act, 2004 is hereby quashed.
Sd/-
JUDGE
SN
