Karnataka High Court

Sri N H Raju vs State Of Karnataka on 30 July, 2024

Author: Mohammad Nawaz

Bench: Mohammad Nawaz

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                                                    NC: 2024:KHC:30116
                                                CRL.A No. 1274 of 2024




                    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                        DATED THIS THE 30TH DAY OF JULY, 2024

                                       BEFORE
                      THE HON'BLE MR JUSTICE MOHAMMAD NAWAZ
                      CRIMINAL APPEAL NO. 1274 OF 2024 (KPIDFE)
               BETWEEN:

               1.    SRI N H RAJU
                     S/O M NAGRAJU
                     AGED ABOUT 61 YEARS
                     R/O MIG 100, 1ST FLOOR,
                     2ND STAGE, K H B COLONY
                     BASAVEHWARA NAGARA,
                     NEAR PUNYA HOSPITAL
                     BENGALURU NORTH - 560079
                                                           ...APPELLANT
               (BY SRI. ADIT CHANDANAGOUDAR., ADVOCATE)

               AND:

               1.    STATE OF KARNATAKA
                     BY MOODABIDRE POLICE STATION,
                     MANGALORE CITY
Digitally            REPTD BY STATE PUBLIC PROSECUTOR
signed by            HIGH COURT OF KARNATAKA
LAKSHMI T
                     BENGALURU - 560001.
Location:
High Court
of Karnataka   2.    CRIMINAL INVESTIGATION DEPARTMENT
                     SPECIAL ENQUIRY DIVISION
                     HAVING ITS OFFICE AT
                     1, DR A KRISHNA RAO ROAD
                     N AMBEDKAR VEEDHI
                     SAMPANGI RAMA NAGAR
                     BENGALURU
                     KARNATAKA - 560001
                                                         ...RESPONDENTS
               (BY SRI.R RANGASWAMY, HCGP)
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                                        NC: 2024:KHC:30116
                                    CRL.A No. 1274 of 2024




     THIS CRL.A. IS FILED U/S.16 OF KPIDFE ACT 2004
PRAYING TO A. SET ASIDE THE ORDER DATED 12.06.2024 AT
ANNEXURE PASSED IN CRIMINAL MISC NO.353/2024 BY THE
LEARNED PRINCIPAL DISTRICT AND SESSIONS JUDGE, D.K.,
MANGALURU.B. CONSEQUENTLY THIS HONBLE COURT MAY BE
PLEASED TO ALLOW THIS APPEAL AND THEREBY RELEASE THE
APPELLANT ON REGULAR BAIL IN CR.NO.41/2023 REGISTERED
BY THE RESPONDENT POLICE FOR THE OFFENCE P/US/
406,420 R/W SEC.34 OF IPC AND SEC.9 OF KARNATAKA
PROTECTION OF INTEREST DEPOSITORS IN FINANCIAL
ESTABLISHMENT ACT 2004.

    THIS APPEAL IS COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:


CORAM:    HON'BLE MR JUSTICE MOHAMMAD NAWAZ

                    ORAL JUDGMENT

This appeal is preferred under Section 16 of the

Karnataka Protection of Interest of Depositors in Financial

Establishments Act, 2004 ('KPIDFE Act' for short)

2. Heard both sides and perused the material on

record.

3. Crime No.41/2023 of Moodabidre Police Station

is registered against the appellant and four others on a

complaint lodged by one Prakash Govius son of John

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Govius, for offences punishable under Section 406, 420

r/w 34 of IPC.

4. As per complaint allegations, the appellant

herein and 8 others started one Panchavati Multi State

Cooperative Credit Society Limited in the year 2014 and

issued bond, pass book, share certificates to the

complainant and others, who opened their accounts in the

Society and received deposits from them, but not returned

the amount deposited. On the other hand, after collecting

more than Rs.26,41,771/-, closed the Society and thereby

cheated the complainant and others.

5. The learned High Court Government Pleader

has contended that the appellant being the chairman of

the Panchavati Multi State Cooperative Credit Society

Limited along with other accused persons namely the

Directors, lured the complainant and other depositors to

invest money in the said Society and thereafter cheated

them by not returning the deposits made by them, even

after the maturity period. He submitted that subsequent to

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the registration of FIR, investigation has been taken over

by the CID. He contended that if the appellant is granted

bail there are chances of absconding and interfering with

the investigation and also tampering with the witnesses.

He further submitted that two other cases are registered

against the appellant in Crime No.8/2023 and Crime

No.107/2023 of Tumkur Police Station for similar offences.

6. The learned counsel for appellant has

contended that the Society has not been closed as alleged.

The complaint allegations are false. The appellant is

innocent. He was arrested on 18.04.2024 and he has

cooperated with the investigation and he will undertake to

cooperate with the investigation of the case. He

contended that the allegations in the complaint do not

attract the ingredients of the offences alleged. The

offences alleged are not punishable with death or

imprisonment for life. The appellant is a permanent

resident of Bengaluru and having deep roots in the

Society. He hails from a respectable family and has no

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bad antecedents. He submits that the appellant is ready

and willing to abide by any conditions which may be

imposed by this Court.

7. One of the grounds which weighed in the mind

of the learned Sessions Judge to reject the prayer seeking

regular bail was that there is a specific bar for entertaining

a bail petition filed under Section 438 or 439 of Cr.P.C. It

is clear from a plain reading of Section 18 of the KPIDFE

Act that it does not restrict an accused to prefer a regular

bail petition before the Special Court. The observations

made in criminal petition No.9971/2022 decided on

10.11.2022 by this Court, which was relied by the learned

Sessions Judge, is in respect of petition filed before the

High Court under Section 438 and 439 of Cr.P.C., since an

appeal is provided under Section 16 of the KPIDFE Act

against an order passed by the Special Court. In that

context it was held that a petition under Section 438 and

439 of Cr.P.C., is not maintainable.

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8. The allegations are that the appellant being the

Chairman and other accused being the Directors of one

Panchavati Multi State Cooperative Credit Society Limited,

opened its branch at Pinto complex, Moodabidre during

2014 and they accepted deposits from various persons

including the complainant and collected to the tune of

Rs.26,41,771/- and later closed the said branch and

cheated them etc.

9. The appellant claims to be innocent. It is his

contention that the entire allegations are false and the

ingredients of the offence now alleged are not attracted.

10. Appellant is already arrested and interrogated.

Preliminary charge sheet has been filed. The offences

alleged are not punishable with death or imprisonment for

life. The prosecution has to establish that at the inception,

appellant had an intention to cheat the complainant and

other depositors. He has been arraigned as accused No.1

on the ground that he is the Chairman of the Society. He

has undertaken to cooperate with the further investigation

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of the case and also to abide by other conditions. Hence,

the following:

ORDER

Appeal is allowed.

The order dated 12.06.2024 passed by the Court of

Principal District and Sessions Judge, D.K., Mangaluru in

Crl.Misc No.353/2024 is set aside.

Appellant/accused No.1 in Crime No.41/2023 of

Moodabidre Police Station, is ordered to be released,

subject to following conditions:

i. He shall execute a bond in a sum of Rs.1,00,000/- (Rupees One Lakh only) with two sureties for the likesum.

     ii.    He     shall         appear      before        the
            Investigation        Officer    as    and     when
            required       for      the      purpose        of

investigation and shall cooperate with the investigation of the case.

iii. He shall furnish proof of his residential address and shall inform the

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I.O/concerned Court if there is change in the address.