Karnataka High Court
Sri.K.T.Srinivas vs The State Of Karnataka on 27 June, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
-1-
NC: 2025:KHC:22721
CRL.P No. 5600 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CRIMINAL PETITION NO. 5600 OF 2025
BETWEEN:
SRI K.T.SRINIVAS
S/O LATE TIRUMALACHAR
AGED ABOUT 69 YEARS
R/AT NO.56, GOVINDAPPA ROAD,
BASAVANAGUDI,
BENGALURU - 560 004.
...PETITIONER
(BY SRI R.G.BHAT, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
Digitally signed BY THE POLICE INSPECTOR,
by NAGAVENI V.V. PURAM POLICE STATION,
Location: High BENGALURU - 560 004
Court of REPRESENTED BY
Karnataka
THE STATE PUBLIC PROSECUTOR
HIGH COURT BUILDING,
BENGALURU - 560 001.
2. THE ENFORCEMENT OFFICER
EMPLOYEE'S PROVIDENT FUND ORGANISATION
REGIONAL OFFICE, BENGALURU
NO.25146, NO.13,
RAJARAMMOHAN ROY ROAD
-2-
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CRL.P No. 5600 of 2025
HC-KAR
BENGALURU - 560 025.
...RESPONDENTS
(BY SRI B.N.JAGADEESHA, ADDL.SPP FOR R1;
SRI SARAVANA P., ADVOCATE FOR R2)
THIS CRL.P IS FILED U/S 482 OF CR.P.C (FILED U/S 528
BNNS) PRAYING TO ALLOW THIS PETITION BY QUASHING THE
PROCEEDINGS IN CC NO.19362/2017 OFFENCE PUNISHABLE
U/SEC 408, 420 AND SECTION 120B R/W 34 OF IPC PENDING
ON THE FILE OF THE LEARNED IV ADDL. CMM BENGALURU.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA
ORAL ORDER
The petitioner - accused No.2 is before this Court calling
in question proceedings in C.C.No.19362/2017, pending before
the III Additional Chief Metropolitan Magistrate, Bengaluru, for
the offences under Section 408, 420 and 120B r/w. 34 of the
IPC. The proceedings against accused No.1 stood abated as
she is no more.
2. Heard Sri R.G.Bhat, learned counsel for petitioner,
Sri B.N.Jagadeesha, learned Additional State Public Prosecutor
for respondent No.1 and Sri Saravana P., learned counsel for
respondent No.2.
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3. Learned counsel for petitioner submits that the issue in
the lis is identical to what is considered by this Court in
Crl.P.No.195/2020, disposed on 31.01.2023. This Court has
held as follows:
".... .... ......
11. The crime that is registered against the
petitioner in Crime No.499 of 2015 is for offences
punishable under Sections 406 and 409 of the IPC. The
concerned Court took cognizance of the offence
punishable under Sections 409 and 420 of the IPC against
the petitioner and drops the offence punishable under
Section 406 of the IPC. Section 420 of the IPC has its
ingredients in Section 415 of the IPC. The ingredients are
that an accused should lure the complainant/firm to part
with certain property with dishonest intention. The case at
hand is concerning contribution towards provident fund
and its non-remittance to the Organization. It cannot be
imagined as to how contribution of provident fund can be
lured by the petitioner over the employees when it is a
statutory deduction. Therefore, the cognizance for offence
punishable under Section 420 of the IPC is recklessly
taken, as none of the ingredients that are necessary to be
proved for offence punishable under Section 420 as
obtaining under Section 415 of the IPC are remotely
present in the case at hand. Therefore, the cognizance
being taken for the said offence is fundamentally flawed.
12. What remains is cognizance being taken under
Section 409 of the IPC. Section 409 directs breach of
trust by a servant or a banker or whoever being entrusted
with some property. Even if it is construed of entrustment
of property qua the deposit of provident fund against the
petitioner, the finding rendered by the Special Court qua
the Establishment and the discharge of the petitioner in
those cases would clearly have a bearing on the offence
so alleged under Section 409 of the IPC. If ingredients
of Section 409 of the IPC are alleged element of
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mens rea would become mandatory. The finding of
the Special Court in favour of the Establishment was
that there was no willful default on the part of the
Establishment and it was a circumstance which was
beyond the control of the Establishment, as the
Income Tax Department authorities had attached
the properties of the Establishment. If that be the
finding and the said finding having become final,
the petitioner cannot be hauled into the web of
crime for an offence under Section 409 of the IPC,
as if there is willful default against the
Establishment. There cannot be anything willful laid
against the petitioner. There is no iota of element of
mens rea that is alleged against the petitioner.
13. Reference being made to the judgment of the
Apex Court in the case of N.RAGHAVENDER v. STATE
OF ANDHRA PRADESH, CBI1 would be apposite. The
Apex Court has held as follows:
"41. Section 409 IPC pertains to criminal breach
of trust by a public servant or a banker, in respect of
the property entrusted to him. The onus is on the
prosecution to prove that the accused, a public servant
or a banker was entrusted with the property which he is
duly bound to account for and that he has committed
criminal breach of trust. (See: Sadupati Nageswara
Rao v. State of Andhra Pradesh).
42. The entrustment of public property and
dishonest misappropriation or use thereof in the
manner illustrated under Section 405 are a sine qua
non for making an offence punishable under Section
409 IPC. The expression 'criminal breach of trust' is
defined under Section 405 IPC which provides, inter
alia, that whoever being in any manner entrusted with
property or with any dominion over a property,
dishonestly misappropriates or converts to his own use
that property, or dishonestly uses or disposes of that
property contrary to law, or in violation of any law
prescribing the mode in which such trust is to be
discharged, or contravenes any legal contract, express
or implied, etc. shall be held to have committed criminal
breach of trust. Hence, to attract Section 405 IPC, the
following ingredients must be satisfied:
2021 SCC OnLine SC 1232
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(i) Entrusting any person with property or with
any dominion over property;
(ii) That person has dishonestly mis-appropriated
or converted that property to his own use;
(iii) Or that person dishonestly using or disposing
of that property or wilfully suffering any
other person so to do in violation of any
direction of law or a legal contract.
43. It ought to be noted that the crucial word
used in Section 405 IPC is 'dishonestly' and therefore,
it pre-supposes the existence of mens rea. In other
words, mere retention of property entrusted to a
person without any misappropriation cannot fall
within the ambit of criminal breach of trust. Unless
there is some actual use by the accused in violation of
law or contract, coupled with dishonest intention,
there is no criminal breach of trust. The second
significant expression is 'mis-appropriates' which means
improperly setting apart for ones use and to the exclusion of
the owner.
44. No sooner are the two fundamental ingredients of
'criminal breach of trust' within the meaning of Section 405
IPC proved, and if such criminal breach is caused by a public
servant or a banker, merchant or agent, the said offence of
criminal breach of trust is punishable under Section 409 IPC,
for which it is essential to prove that:
(i) The accused must be a public servant or a banker,
merchant or agent;
(ii) He/She must have been entrusted, in such capacity,
with property; and
(iii) He/She must have committed breach of trust in
respect of such property.
45. Accordingly, unless it is proved that the accused,
a public servant or a banker etc. was 'entrusted' with the
property which he is duty bound to account for and that such
a person has committed criminal breach of trust, Section 409
IPC may not be attracted. 'Entrustment of property' is a wide
and generic expression. While the initial onus lies on the
prosecution to show that the property in question was
'entrusted' to the accused, it is not necessary to prove
further, the actual mode of entrustment of the property or
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misappropriation thereof. Where the 'entrustment' is
admitted by the accused or has been established by the
prosecution, the burden then shifts on the accused to prove
that the obligation vis-à-vis the entrusted property was
carried out in a legally and contractually acceptable manner.
Ingredients necessary to prove a charge under Section
420 IPC:
46. Section 420 IPC, provides that whoever
cheats and thereby dishonestly induces a person
deceived to deliver any property to any person, or to
make, alter or destroy, the whole or any part of
valuable security, or anything, which is signed or
sealed, and which is capable of being converted into a
valuable security, shall be liable to be punished for a
term which may extend to seven years and shall also
be liable to fine.
47. It is paramount that in order to attract the
provisions of Section 420 IPC, the prosecution has to not
only prove that the accused has cheated someone but also
that by doing so, he has dishonestly induced the person who
is cheated to deliver property. There are, thus, three
components of this offence, i.e., (i) deception of any
person, (ii) fraudulently or dishonestly inducing that
person to deliver any property to any person, and
(iii) mens rea of the accused at the time of making the
inducement. It goes without saying that for the
offence of cheating, fraudulent and dishonest
intention must exist from the inception when the
promise or representation was made.
48. It is equally well-settled that the phrase
'dishonestly' emphasizes a deliberate intention to cause
wrongful gain or wrongful loss, and when this is coupled with
cheating and delivery of property, the offence becomes
punishable under Section 420 IPC. Contrarily, the mere
breach of contract cannot give rise to criminal prosecution
under Section 420 unless fraudulent or dishonest intention is
shown right at the beginning of the transaction. It is equally
important that for the purpose of holding a person guilty
under Section 420, the evidence adduced must establish
beyond reasonable doubt, mens rea on his part. Unless the
complaint showed that the accused had dishonest or
fraudulent intention 'at the time the complainant parted
with the monies', it would not amount to an offence under
Section 420 IPC and it may only amount to breach of
contract."
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(Emphasis supplied)
The Apex Court, in the aforesaid judgment, has clearly
held that for an offence punishable under Section 409 of
the IPC, the ingredients under Section 405 are sine qua
non. The ingredients are that the accused should have
dishonestly misappropriated or converted that property to
his own use. Dishonestly, therefore, is what is required to
be present in any transaction where the offence alleged is
that of Section 409 of the IPC which pre-supposes
existence of mens rea, which I do not find anywhere in the
case at hand.
14. It is also germane to notice that the proceedings are
instituted only against the petitioner. The petitioner was an
employee of the Establishment. For proceedings to be
instituted for offences under Sections 406 or 420 of the IPC,
the Establishment ought to have been made a party. Without
the Establishment being an accused, the proceedings against
the petitioner cannot be permitted to be continued. For these
reasons, permitting further proceedings to be continued
against the petitioner would degenerate into harassment,
becomes an abuse of the process of law and ultimately result
in miscarriage of justice."
The afore-quoted judgment is identical only for the
reason that the allegation for the offence punishable under
Section 409 of the IPC, which arises out of a complaint
registered by the Enforcement Officer of the Employees'
Provident Fund Organisation, is that, at the time of reporting of
the offence by the respondent - Enforcement Officer, the
petitioner was the signatory of the firm. Identical submission
was considered and it was held that it would not amount to an
offence punishable under Section 409 of the IPC and what
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could be proceeded is only under the provisions of the
Employees' Provident Funds and Miscellaneous Provisions Act,
1952. In the light of the fact that the issue standing answered
by the judgment rendered by this Court supra, I deem it
appropriate to quash the proceedings against the petitioner.
4. For the aforesaid reasons, the following:
ORDER
a. The criminal petition is allowed.
b. The proceedings in C.C.No.19362/2017, pending
before the III Additional Chief Metropolitan Magistrate,
Bengaluru, qua the petitioner, stand quashed.
c. It is made clear that the observations made in the
course of the order would not come in the way of the
proceedings pending against the petitioner in any
other fora.
Ordered accordingly.
Sd/-
(M.NAGAPRASANNA)
JUDGE
NVJ
