Karnataka High Court
G.S.P Veera Reddy vs The State Of Karnataka And Anr on 7 January, 2025
Author: S.Vishwajith Shetty
Bench: S.Vishwajith Shetty
-1-
NC: 2025:KHC-K:51
CRL.P No. 200089 of 2023
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 7TH DAY OF JANUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY
CRIMINAL PETITION NO. 200089 OF 2023
(482(Cr.PC)/528(BNSS))
BETWEEN:
G.S.P VEERA REDDY,
AGED ABOUT 71 YEARS, OCC: RETD.,
PLOT NO. 739-A, ROAD NO. 37,
JUBILEE HILLS,
HYDERABAD-500033.
...PETITIONER
(BY SRI KADLOOR SATYANARAYANACHARYA, ADVOCATE)
AND:
Digitally signed by
SHILPA R
TENIHALLI 1. THE STATE OF KARNATAKA,
Location: HIGH BY SINDAGI POLICE STATION-586128.
COURT OF (RPTD., BY ASPP,
KARNATAKA
HC KAR, KLB-585107).
2. GANAPPA S/O BHIMAPPA HALAVAR,
AGED ABOUT 61 YEARS,
OCC: E.E. HESCOM INDI,
R/O HESCOM INDI,
NOW AT B. BAGEWADI,
VIJAYAPURA-586203.
...RESPONDENTS
(BY SMT. MAYA T.R., HCGP FOR R1
SRI RAVINDRA REDDY, ADVOCATE FOR R2)
-2-
NC: 2025:KHC-K:51
CRL.P No. 200089 of 2023
THIS CRL.P IS FILED U/S.482 OF CR.P.C. PRAYING TO
QUASH THE PROSECUTION LAUNCHED AGAINST THE
PETITIONERS IN C.C.NO.921/2020 ARISING OUT OF P.C. NO.
06/2015 ON THE FILE OF THE SENIOR CIVIL JUDGE AND JMFC,
SINDAGI, DIST. VIJAYAPUR, FOR THE OFFENCES PUNISHABLE
U/SEC. 408, 409, AND 420 OF IPC AT ANNEXURE-E.
THIS PETITION, COMING ON FOR FURTHER HEARING,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY
ORAL ORDER
(PER: HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY)
1. Accused in C.C.No.921/2020 arising out of
P.C.No.06/2015 pending before the court of Senior Civil
Judge and JMFC, Sindagi, Vijayapura District registered for
offences punishable under sections 408, 409 and 420 of
IPC is before this court under section 482 of Cr.P.C with
the prayer to quash the entire prosecution case as against
him.
2. Heard learned counsels for the parties.
3. Respondent No.2 had filed a private complaint in
P.C.No.06/2015 before the court of Senior Civil Judge and
NC: 2025:KHC-K:51
JMFC Sindagi against the petitioner herein alleging that
the contract for providing electricity connections to BPL
houses under the Scheme known as Rajiv Gandhi
Grameen Vidyutikaran Yojana was awarded to a company
known as M/s. GVPR Engineers Ltd., Hyderabad of which
the petitioner was the Managing Director. After the work
awarded was completed, bills were submitted by the
company claiming that electricity connection was provided
to 450 BPL houses, whereas actually electricity connection
was given only for 177 beneficiaries. Allegation was
therefore made that a claim was made for excess payment
though work was not actually done and accordingly a sum
of Rs.7,63,035/- was allegedly misappropriated by the
accused. The learned Magistrate vide order dated
20.10.2020 had taken cognizance of offences punishable
under sections 408, 409 and 420 of IPC against the
petitioner and had issued summons to him. Being
aggrieved by the same, the petitioner is before this Court.
NC: 2025:KHC-K:51
4. Learned Counsel for the Petitioner submits that on
the very same allegations, the respondent No.2 had filed a
police complaint earlier and after investigation, B report
was filed in the said case which was accepted by the
Jurisdictional Court of Magistrate. Without challenging the
same, a private complaint was subsequently filed. He
submits that since the Company of which the petitioner
was the Managing Director, is not made as a party to the
impugned criminal proceedings, the petitioner who is being
vicariously held liable for the act of the Company, cannot
be prosecuted in the absence of the company. In support
of his arguments, he has placed reliance on the order of
the co-ordinate bench of this Court in Criminal Revision
Petition No.843/2013.
5. Per Contra, learned counsel appearing for the
respondent No.2 submits that the petitioner was the
Managing Director of the company and therefore he is
responsible for all the acts of the company. He submits
that merely for the reason that B report is filed in the
NC: 2025:KHC-K:51
police complaint that was filed earlier, there is no bar to
file a private complaint by producing necessary material
before the learned Magistrate. In support of this
argument, he has placed reliance on the judgment of the
Division bench of this court in the case of J.Alexander Vs
State of Karnataka By the Superintendent of Police,
City Division, Karnataka Lokayukta, Bangalore
reported in 1995(4) Kar.L.J 227 (DB) and in the case of
Naveen Kumar and Others Vs State By Circle
Inspector of Police, Udupi Circle, Udupi and Another
reported in 1998(5) Kar.L.J.596.
6. The undisputed facts of the present case are the
respondent No.2 had earlier filed a police complaint based
on which FIR in Crime No.48/2010 was registered against
the petitioner herein for offences punishable under
sections 408, 409 & 420 of IPC by Sindagi Police Station.
In the said case, the police after investigation had filed "B
final report" and the said B final report was accepted by
the Jurisdictional court of Magistrate and the criminal case
NC: 2025:KHC-K:51
was closed. Thereafter respondent No.2 has filed a private
complaint in P.C.No.06/2015 and the learned Magistrate
has taken cognizance of the alleged offences and has
issued summons to the petitioner by passing a detailed
order. The co-ordinate bench of this court in the case of
Naveen Kumar (supra) has held that filing of B report by
the police and acceptance of the same by the learned
Magistrate cannot be a bar for the Magistrate to entertain
a second complaint.
7. The division bench of this Court in the case of
J. Alexander (supra) in para No.16 of the judgment has
observed as follows:
"We shall now consider the contention of the
learned Counsel for the petitioners that there was
no hearing in the matter much less any notice was
served on the party concerned. In this context,
reliance was placed upon the decision of the
Supreme Court in the case of Kamalapati Trivedi,
supra, to contend that an order made by the
Magistrate accepting a 'B' report is a judicial order
determining the rights of the parties-the State on
the one hand and the accused on the other, after
application of mind. If that is so, the order passed
must be characterised as a judicial act and
therefore is one performed in its capacity as a
Court. The order made by the Magistrate though
NC: 2025:KHC-K:51
judicial, is only of tentative character because even
if there be adjudication of the matter, the order
made by the Magistrate accepting a 'B' report could
not become final because if certain events or
circumstances take place such as a complaint being
filed under Section 200 and cognizance taken,
further investigation can be directed, at any rate. If
that be so, we fail to understand as to why any
notice is required in such circumstances. In such
circumstances that notice need not be given does
not admit of any doubt. Therefore, at the stage
when the police want to investigate the matter
further in terms of Section 173(8) of the Code,
without reference to the Court, question of issue of
notice to the petitioner would not arise. Thus if
merely an intimation is made to the Court and
further investigation is done, how notice and
hearing in the matter is required baffles us. At the
stage of investigation the principles of audi alteram
partem do not apply. We are not impressed with
any of the contentions advanced on behalf of the
petitioner. Petition is therefore dismissed."
8. In the present case Respondent No.2 in its private
complaint has revealed the fact of filing of a B report in
the earlier police complaint and the Trial Court after
appreciating the averments made in the private complaint
and also the documents that were produced along with the
private complaint by respondent No.2, which were marked
as Exs.C.1 to C.13, has issued summons to the accused.
Therefore, no fault can be found in the said order, on the
ground that the private complaint has been entertained by
NC: 2025:KHC-K:51
the learned Magistrate in spite of the fact that the police
had filed a B report in the earlier police complaint that was
filed by the respondent No.2 herein based on which FIR in
crime No.48/2010 was registered against the petitioner by
Sindagi Police Station, Vijayapur.
9. Perusal of the averments made in the private
complaint would reveal that allegation by the complainant
is that the contract was awarded to a company known as
M/s. GVPR Engineers Limited, Hyderabad and undisputedly
the payment is also made to the very same company.
Allegation in the complaint is that though the Company
claimed that electricity connection was provided to 450
houses, actually the electricity connection was provided
only to 177 beneficiaries and a false claim was made and a
sum of Rs.7,63,035/- was wrongly claimed by the
Company. Petitioner was the Managing Director of the said
Company during the relevant period. Petitioner is therefore
being vicariously held liable for the act committed by the
company. The Hon'ble Supreme Court in the case of
NC: 2025:KHC-K:51
R.Kalyani vs. Janak C. Mehta and others reported in
(2009) 1 SCC 516 in para No.41 of judgment has
observed as follows.
"If a person, thus, has to be proceeded with as
being vicariously liable for the acts of the
company, the company must be made an
accused. In any event, it would be a fair thing
to do so, as legal fiction is raised both against
the company as well as the person responsible
for the acts of the company."
10. In the case of S.K. Alagh vs. State of Uttar
Pradesh and others, reported in (2008) 5 SCC 662 in
para No.19, the Hon'ble Supreme Court observed as
follows.
"As admittedly, drafts were drawn in the name
of the Company, even if the appellant was its
Managing Director, he cannot be said to have
committed an offence under Section 406 of
the Penal Code. If and when a statute
contemplates creation of such a legal fiction.
It provides specifically therefore. In the
absence of any provision laid down under the
statute, a Director of a Company or an
employee cannot be held to be vicariously
liable for any offence committed by the
Company itself."
- 10 -
NC: 2025:KHC-K:51
11. In the case of Sharad Kumar Sanghi vs. Sangita
Rane reported in (2015) 12 SCC 781, the Hon'ble
Supreme Court for the reason that though the allegations
were made against the Company, the Company was not
made as a party to the proceedings had quashed the
criminal proceedings as against the Managing Director.
12. The co-ordinate bench of this Court placing reliance
on the aforesaid judgments of the Hon'ble Supreme Court,
in Crl.R.P.No.843/2013 disposed of on 16.09.2022 in para
No.12 has observed as follows:
"The above judgments clearly go to show that when
the allegations are against the company of alleged
cheating or criminal breach of trust, in such a
circumstance, the registered Company under the
Companies Act, 1956 being a juristic person is
required to be arraigned as an accused. Independent
of the Company arraigning only the Managing
Director or Directors of that Company against whom
no individual allegations or specific allegations are
made, then the said criminal proceedings initiated
only against the Managing Director or Directors is not
maintainable."
13. Perusal of the allegations made in the private
complaint in the present case would go to show that all
- 11 -
NC: 2025:KHC-K:51
the allegations made in the complaint is against the
Company of which the petitioner was the Managing
Director and undisputedly the contract was awarded to the
Company and the payments were also made to the
Company.
14. Under the circumstances, the Company is a
necessary party to the criminal proceedings and in the
absence of the Company, the petitioner, who was the
Managing Director of the Company alone cannot be
prosecuted for the alleged offences.
15. Under the circumstances on this short ground, the
impugned criminal proceeding is liable to be quashed.
Accordingly, I pass the following:
ORDER
i) Criminal Petition is allowed.
ii) The entire proceedings in
C.C.No.921/2020 pending before the
Court of Sr.Civil Judge and JMFC,
- 12 -
NC: 2025:KHC-K:51
Sindagi, District VIjayapur, registered
for the offences punishable under
sections 408, 409 and 420 of IPC, is
hereby quashed as against the
petitioner.
Sd/-
(S.VISHWAJITH SHETTY)
JUDGE
DHA,AMM
CT:PK
