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Karnataka High Court
Naveen S/O Mohan Reddy vs The State Of Karnataka on 17 December, 2025
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CRL.P No. 201645 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 17TH DAY OF DECEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
CRIMINAL PETITION NO.201645 OF 2025
(482(Cr.PC)/528(BNSS))
BETWEEN:
1. NAVEEN S/O MOHAN REDDY,
AGE ABOVE 29 YEARS,
OCC: PRIVATE WORK,
R/O POOJA COLONY,
TQ. AND DIST. KALABURAGI-585106.
2. RAGHAVENDRA S/O MOHAN REDDY,
AGE ABOVE 25 YEARS,
OCC: TRADE BUSINESS,
R/O POOJA COLONY,
TQ. AND DIST. KALABURAGI-585106.
Digitally signed by
NIJAMUDDIN
...PETITIONERS
JAMKHANDI (BY SMT. LAKSHMI G. E, AND
Location: HIGH SRI. M. G. BHRUNGIMATH, ADVOCATE)
COURT OF
KARNATAKA
AND:
1. THE STATE OF KARNATAKA
THROUGH CHOWK POLICE STATION, KALABURAGI
REP BY ADDL. S.P.P.
HIGH COURT OF KARNATAKA
AT KALABURAGI BENCH-585103.
2. KIRAN S. ILLAL
S/O SHREEMANTH ILLAL,
AGED ABOUT 28 YEARS,
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CRL.P No. 201645 of 2025
HC-KAR
OCC: OWNER OF TULAJA BHAVANI PETROL PUMP,
R/O: HOUSE NO.11-421/5B,
KANAKA NAGAR, KHANI AREA,
NR COLONY ROAD BHRAHAMAPURA,
TQ. AND DIST. KALABURAGI-585101.
...RESPONDENTS
(BY SRI. GOPALKRISHNA B. YADAV, HCGP FOR R1
SRI. VIKRAM HUILGOL, SR. ADVOCATE FOR
SRI. AJAY JAWALI, AND
SRI. BASAVARAJ M. PATIL, ADVOCATES FOR R2)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 528
OF BNSS (NEW), UNDER SECTION 482 OF CR.P.C.(OLD),
PRAYING TO ALLOW THIS PETITION AND QUASH THE FIR AND
ITS FURTHER PROCEEDINGS OF THE FIR NO.2384 OF 2025,
VIDE CRIME NO.181 OF 2025, REGISTERED AT KALABURAGI
CHOWK POLICE STATION, FOR THE OFFENCES PUNISHABLE
UNDER SECTIONS 316(2), 318(4) READ WITH SECTION 3(5)
OF THE BHARATIYA NYAYA SANHITA-2023, WHICH ARE
PENDING ON THE FILE OF THE COURT OF THE 3RD ADDITIONAL
CJ (C.J.) AND JMFC, KALABURAGI.
THIS PETITION, COMING ON FOR FURTHER
CONSIDERATION THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
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CRL.P No. 201645 of 2025
HC-KAR
CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
ORAL ORDER
Captioned petition is by the petitioners/accused
persons seeking quashing of the proceedings pending in
Crime No.181/2025 of Chowk Police Station, Kalaburagi
for the offence punishable under Sections 316(2), 318(4)
read with Section 3(5) of Bharatiya Nyaya Sanhita, 2023
pending on the file of III Addl. Civil Judge (JD) and JMFC
Court, Kalaburagi.
2. The gravamen of the complaint is that the
complainant's father, late Shreemant Illal, while serving as
a Circle Police Inspector at Gramin Police Station,
Kalaburagi, had conducted a raid against cannabis
cultivators, which allegedly provoked an assault by a mob
of about 40-50 persons. Owing to the grievous injuries
sustained, he required advanced medical treatment and
was shifted to Bengaluru. During this period, the
complainant claims that he was constrained to entrust the
day-to-day management of Tulaja Bhavani Petroleum
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Pump to the present petitioners. It is alleged that taking
undue advantage of the complainant's absence, the
petitioners, who are full brothers, misused the trust
reposed in them and misappropriated the sale proceeds of
fuel and allied products. The complainant asserts that
upon verification of the turnover, accounts, and the tax
audit report for the financial year 2023-2024, it came to
light that funds to the extent of Rs.1,17,00,000/- were
siphoned off. This revelation prompted the lodging of the
complaint, culminating in the registration of the present
crime.
3. The petitioners have sought quashing of the
proceedings contending that the first petitioner had
neither authority nor responsibility to handle the financial
or banking operations of the petrol pump and that his
alleged role as a manager is seriously disputed. The
second petitioner, who is the brother of the first petitioner,
likewise denies having any role in maintaining or
managing the accounts of the firm. It is further contended
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that the allegations in the complaint, even if taken at face
value, indicate a benami arrangement, which is expressly
prohibited under the Prohibition of Benami Property
Transactions Act, 1988. The first petitioner has also
asserted that only a duly qualified and competent person
can be appointed as a manager of a commercial
establishment. On these premises, it is urged that the
dispute is purely civil in nature and that the second
respondent/complainant has misused the criminal law
machinery to settle a civil dispute, warranting quashing of
the proceedings.
4. Per contra, the learned High Court Government
Pleader, on a perusal of the materials available at this
stage, would submit that the allegations disclose a prima
facie case of criminal breach of trust involving diversion of
substantial funds, which necessarily calls for a thorough
investigation. It is therefore contended that the
proceedings cannot be interdicted at the threshold.
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5. The learned Senior Counsel appearing for the
second respondent has filed a detailed statement of
objections along with several documents to substantiate
that the first petitioner was entrusted with the petrol pump
in the capacity of a manager and was in complete control
of its day-to-day affairs. Reliance is placed on
documentary material to show that the second petitioner
was managing the accounts of the firm, including bills
raised in his name, thereby contradicting his denial of any
accounting role. Referring to the audit report and bank
account statements, it is contended that diversion of sale
proceeds followed by subsequent re-credit of substantial
amounts, when questioned, prima facie establishes the
involvement of both petitioners in misappropriation of the
firm's funds. Placing reliance on the principles enunciated
in State of State of Haryana and Ors. V. Bhajan Lal and
Ors.1 and the judgment of the Hon'ble Supreme Court in
Dinesh Sharma v. EMGEE Cables And Communication and
1992 AIR 604
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Anr.2, it is argued that economic offences stand on a
distinct footing, have wider societal ramifications, and
therefore cannot be quashed at the nascent stage of
investigation. The learned Senior Counsel accordingly
urges that the Investigating Officer be permitted to
complete the investigation and that this is not a fit case for
exercise of jurisdiction under Section 482 of Cr.P.C.
6. Having heard the learned counsel appearing for
the parties and on perusal of the documents produced by
the second respondent, this Court notes that although, by
order dated 13.11.2025, an interim protection was
granted on the premise that the complainant had an
efficacious civil remedy, the subsequent production of
counter-documents by the second respondent necessitates
a closer examination of the matter. In that view of the
matter, the following points arise for consideration:
2025 INSC 571
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"i) Whether, in the facts and circumstances of
the present case, the petitioners have made out
a case for quashing of the proceedings?
ii) Whether, upon consideration of the rival
contentions and the material placed on record,
the dispute is essentially civil in nature, or
whether it discloses a prima facie case of
criminal breach of trust warranting further
investigation?"
Finding on point Nos. i and ii:
7. Ordinarily, where this Court finds that a dispute is
predominantly commercial or civil in nature, it would, in
exercise of its extraordinary jurisdiction under Section 528
of the Bharatiya Nagarik Suraksha Sanhita, 2023, lean in
favour of granting indulgence to the litigants. However,
the factual matrix of the present case stands on an
entirely different footing. Though both the petitioners have
vehemently denied their respective roles, the material
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placed on record by the complainant, at this prima facie
stage, indicates otherwise. The complainant has been able
to demonstrate that the first petitioner was entrusted with
the responsibility of managing the petrol pump and was in
complete control of its day-to-day affairs. Likewise, the
complainant has prima facie established that the second
petitioner, who is the full brother of the first petitioner,
was handling and overseeing the accounts of the firm.
8. At this stage, the complainant has also been able
to show that the sale proceeds of the firm were routed to
the personal bank account of the second petitioner, who
was entrusted with accounting responsibilities. The
affidavit of undertaking executed by the first petitioner, in
which the second petitioner is shown as a witness, prima
facie assigns and acknowledges the role of the first
petitioner as the pump manager. Further, as pointed out
by the learned counsel appearing for the complainant, the
bank statements of the firm disclose that substantial
amounts, which were initially diverted to the personal
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account of the second petitioner, were subsequently
credited back to the firm's account. These circumstances,
coupled with the tax audit report relied upon by the
complainant, raise serious questions which necessarily
require a detailed investigation by the Investigating
Officer.
9. On a holistic examination of these counter-
documents, this Court is not persuaded to accept the
contention that the dispute is purely civil in nature. The
complainant has specifically pleaded that owing to an
untoward incident in which his father was allegedly
assaulted in a criminal case and was compelled to shift
temporarily to Bengaluru for medical treatment, the entire
management and affairs of the petrol pump were
entrusted to the first petitioner. It is in this backdrop that
allegations have surfaced that the first petitioner, in
collusion with the second petitioner, who was handling the
accounts, diverted the sale proceeds of the firm for their
personal benefit. Whether such acts constitute criminal
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breach of trust and allied offences falling within the ambit
of Sections 316(2), 318(4) read with Section 3(5) of the
Bharatiya Nyaya Sanhita, 2023, is a matter which squarely
falls within the domain of investigation. Therefore, this
Court is of the considered view that the allegations cannot
be brushed aside at the threshold and that this is not a fit
case to interdict the investigation or to quash the
proceedings at this nascent stage.
10.The principles enunciated by the Punjab and
Haryana High Court, as well as the law laid down by the
Hon'ble Supreme Court in Dinesh Sharma (supra), are
squarely attracted to the facts of the present case.
Economic offences, by their very nature, stand on a
distinct footing and have wider ramifications, and
therefore, the investigative process ought not to be stifled
at the inception. Applying the aforesaid principles, this
Court finds no merit in the present petition, which is
accordingly liable to be dismissed.
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11. It is, however, clarified that this Court has not
expressed any opinion on the merits of the case. Any
observations made herein are only for the limited purpose
of deciding the present petition and shall not influence the
Investigating Officer, who shall independently conduct the
investigation, unearth the truth, and file a final report
strictly in accordance with law. Accordingly, the points for
consideration are answered in the negative.
12. In the result, the petition stands dismissed, with
the above observations.
Sd/-
(SACHIN SHANKAR MAGADUM)
JUDGE
NJ
LisT No.: 2 Sl No.: 3
CT:SI
