Allowed

R Muniraju v. the State of Karnataka by

Karnataka HC7 Sept 2021CRL.P/1401/2017

Case brief

AI extract

What is this about?

This Criminal Petition challenged proceedings arising from a private complaint alleging offenses under IPC against a former employee. The Court held that the complaint was vague and failed to disclose offense ingredients prima facie. Additionally, directing investigation without an affidavit violated judicial precedents. The court quashed the proceedings to prevent abuse of process.

What did the court decide?

The Criminal Petition is allowed; the proceedings in C.C. No.9538/2017 arising out of Crime No.124/2016 stand quashed.

R Muniraju Vs the State of Karnataka by — Criminal Trial and Appeal | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 7TH DAY OF SEPTEMBER, 2021

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BEFORE

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THE HON’BLE MR. JUSTICE M. NAGAPRASANNA

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CRIMINAL PETITION NO.1401 OF 2017

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BETWEEN :

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R. MUNIRAJU AGED ABOUT 44 YEARS S/O. RAMACHANDRAPPA R/AT NO.57, 2ND MAIN, 9TH CROSS, SOMESHWARA NAGAR JAYANAGAR 1ST BLOCK, BENGALURU - 560 011. (BY SRI M.R.C. MANOHAR, ADVOCATE - PA)

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… PETITIONER

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AND :

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THE STATE OF KARNATAKA BY INDIRANAGAR POLICE STATION, BENGALURU REP. BY STATE PUBLIC PROSECUTOR HIGH COURT COMPLEX BENGALURU - 560 001.

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B.M. DEVAIAH MANAGING DIRECTOR M/S. GREEN AGRO PACK (PRIVATE)LTD., OFFICE AT NO.232, 13TH CROSS, INDIRANAGAR II STAGE, BENGALURU - 560 038.

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… RESPONDENTS

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(SMT. NAMITHA MAHESH B.G., H.C.G.P. FOR R1 - PA; SRI JOSHUA SAMUEL, ADVOCATE FOR R2 - VC)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING TO QUASH THE FIR AND COMPLAINT IN CR. NO.124/2016 (PCR NO.1206/2016) REGISTERED BY INDIRANAGAR POLICE STATION, BENGALURU FOR THE OFFENCES PUNISHABLE UNDER SECTIONS 418, 403, 405 AND 420 OF IPC AND NOW PENDING ON THE FILE OF IV ADDITIONAL CMM, BANGALORE.

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THIS CRIMINAL PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING :

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ORDER

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The petitioner calls in question the proceedings in C.C. No.9538/2017 which arises out of Crime No.124/2016 pending before IV Addl. Chief Metropolitan Magistrate, Bangalore City for the offences punishable under Sections 403, 405, 418 and 420 of the Indian Penal Code, 1860 (for short 'IPC')

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The brief facts that leads to filing of present petition are as follows :

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The second respondent is the Managing Director of M/s.Green Agro Pack Private Limited. The petitioner was working as a Manager (Accounts) in the second respondent - Company and was incharge of several jobs entrusted to him with regard to procurement of certain subsidies of

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several documents from the Ministry of Commerce, Government of India. The petitioner continued in employment upto 2014 and resigned from the services of the second respondent on 13.10.2014. The resignation was accepted and the petitioner was relieved from service.

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After the petitioner was relieved on the ground that the respondent had not paid certain statutory amounts, caused two legal notices upon second respondent on 14.12.2014 and on 09.12.2014. The notice was replied by the second respondent on 04.12.2014 making several allegations with regard to the functioning of the petitioner and the loss caused on account of certain acts of the petitioner to which the petitioner also gave a clarificatory reply on 12.12.2014. The petitioner again sought payment of statutory benefits like gratuity inter alia for having functioned with the second respondent - company and his entitlement for gratuity under the Payment of Gratuity Act, 1972. After the receipt of the aforesaid representations from the hands of the petitioner, the second respondent registers a private complaint

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against the petitioner on 02.02.2016 alleging that the act of the petitioner has resulted in huge loss to the second respondent – Company by non-receipt of subsidies – Travel Assistance Subsidy for the period between 20102011, 2011-2012 and 2012-2013, the projected loss in the complaint was `1,70,00,000/- and odd.

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Further allegation was that the petitioner had joined hands with a competitor Company along with two other erstwhile employees of the second respondent – Company and had caused loss to the business of the Company. After the registration of the complaint, as aforesaid, investigation was ordered under Section 156(3) of the Code of Criminal Procedure, 1973 and the investigation has resulted in police filing its final report – chargesheet against the petitioner.

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It is at that juncture the petitioner approached this Court in the Special Criminal Petition. The same having been entertained, at the outset, an interim order of stay was granted on further proceedings pending before the Criminal Court. The interim order was vacated

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following the judgment of the Apex Court in the case of ASIAN RESURFACING OF ROAD AGENCY PVT. LTD., AND ANOTHER vs. CENTRAL BUREAU OF INVESTIGATION reported in (2018)16 SCC 299 by an order of this Court dated 09.11.2020. The impugned proceedings, on the ground that the interim order is vacated is set for framing of charges in terms of the final report that is filed by the police.

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Heard Sri M.R.C. Manohar, learned counsel appearing for the petitioner, Smt. Namitha Mahesh B.G., Learned H.C.G.P. and Sri Joshua Samuel, learned counsel appearing for the respondent No.2.

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The learned counsel appearing for the petitioner would urge the following contentions :

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The private complaint and the investigation is ordered by the Magistrate even without looking into the fact whether the complaint is supported by an affidavit or otherwise and would submit that at the very outset the direction for investigation under Section 156(3) of Cr.P.C.

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is contrary to the judgment of the Apex Court in the PRIYANKA SRIVASTAVA & ANOTHER vs. STATE OF U.P., reported in (2015)6 SCC 287 and would further submit that there is no offence of cheating made out even on a perusal of the complaint; it is because the petitioner resigned and sought certain amounts from the hands of the respondents, the respondents have complained to set the criminal law in motion by registering a private complaint; if the trial is permitted to continue it would result in the abuse of process of law.

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On the other hand, learned counsel Sri Joshua

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Samuel, learned counsel appearing for the second respondent – complainant would vehemently refute such contentions and contend that the matter is set for framing of charges and at this stage the Court should not interfere, as admittedly the petitioner has indulged in joining hands with the competitor Company and his acts have resulted in loss of huge amounts and would place reliance upon the latest judgment of the Apex Court in the case of

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SARANYA vs. BHARATHI AND ANOTHER, reported in 2021 SCC OnLine SC 634.

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I have given my anxious consideration to the

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submissions made by the petitioner and respondents and have perused the material on record.

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Facts that are not in dispute as narrated hereinabove need not be reiterated. The entire issue that is now before the Court springs from the complaint registered against the petitioner by the second respondent. Certain paragraphs of the complaint which are germane for the consideration of the lis are extracted for the purpose of quick reference :

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" 7. As stated supra, the Accused was holding a responsible position in the Complainant Company. After the resignation of the Accused, at the time of Audit and compliance of various statutory requirements from November 2014 to July 2015, the Complainant found that there were various irregularities committed by the Accused during the course of his employment. The Development Commissioner Cochin Special Economic Zone, had pursuant to various Show

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cause Notices issued to the Complainant Company, which Show Cause Notices were suppressed by the Accused, the Development Commissioner had passed an Order after the Complainant's reply dated 08.07.2015, imposing Penalty on the Complainant Company which is a blemish on the Complainant Company which would affect the Complainant Company in future, even resulting in revocation of Letter of Permission to Export. A copy of the said reply dated 08.07.2015 and Order dated 09.07.2015 are produced as ANNEXURES "F" & G respectively.

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It was further noticed that the Accused had failed to file Returns for claiming "Travel Assistance Subsidy", for the period 20102011, 2011-2012 and 2012-2013 resulting in the Complainant Company being put to financial losses of `1,70,00,000/-. A Copy of the letter of the Complainant Company to APEDA, is produced herewith and marked as ANNEXURE "H".

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On further verification by the Complainant, it was found that the Accused in connivance and in cohort with one G.Girish and M. Mahadevalah, former employees of the Complainant Company, had committed acts of criminal breach of trust and had dishonestly and fraudulently incorporated and registered a

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Company by name] M/s.Indus Vegpro Pvt. Ltd. while in the employment of the Complainant Company. The said G. Girish and M. Mahadevaiah were the original Promoter Directors of the Company: The Accused was using the Complainant Company's properties and resources for setting up of the new Company Indus Vegpro Pvt. Ltd. and even the Project Report of Indus Vegpro Pvt. Ltd. was drawn up using the Complainant Company's Computers and printers. The Complainant Company's Office equipment were also used for the purpose of business by the Accused through Indus Vegpro Pvt. Ltd. and e-mail account of the Accused was accessed through the Internet of the Complainant Company for the purpose of furthering the business of the Accused and the new Company. Copy of the Invoices, the Project Report which were found on the hard disk of the Complainant Company's Computer which was being used by the Accused while he was in the employment of the Complainant Company, is in possession and custody of the Complainant Company. The Complainant Company herewith produces a copy of one such Invoice and the Project Report at ANNEXURES "I" and "J" respectively. The Complainant Company craves leave to produce the hard disk as and

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when required by this Hon'ble Court for the purpose of investigation.

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The Complainant submits that the said Accused along with the said Girish and Mahadevalah, using the funds which the Complainant Company believes, was misappropriated from the Complainant's Company, has purchased an extent of 7.04 guntas in Survey No.25, Annapura Village, Mayakonda Hobli, Davanagere Taluk and District, Karnataka for setting up the said factory. Copy of the RTC showing the names of the Company Indus VegPro is produced as ANNEXURE "K". The Complainant further believes that the accused, while in the employment of the Complainant Company, had also opened other Bank Accounts wherein moneys were being received from various of the Complainant Company's customers.

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It is submitted, the act and conduct of the Accused along with Girish and Mahadevaiah in unjustly enriching themselves at the cost of the Complainant Company.

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The Accused has caused huge financial losses to the Complainant being fully aware of the consequences of such conduct which clearly amounts to offences under Sections 403, 405, 418 and 420 of the Indian Penal

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Code, for Criminal misappropriation of property, Criminal Breach of Trust and Cheating.

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The Complainant submits that there been misfeasance and mal-feasance committed by the Accused whilst in the employment of the Complainant Company. The Investigation by the Court or the Jurisdictional Police would reveal the various criminal acts committed by the accused."

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The marrow of the complaint lies at paragraph 8 as extracted hereinabove. The issue in regard to nonfiling of Returns for claiming "Travel Assistant Subsidy" for the period of 2010-11, 2011-12 and 2012-13 resulting in the second respondent - Company due to which a probable financial loss of `1,70,00,000/- is said to be incurred. The other allegation is that the petitioner did not submit certain documents for grant of subsidy from the hands of Ministry of Commerce, Government of India. The criminal misappropriation alleged is as observed in terms of paragraph 10 (supra).

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The complaint further narrates that the complainant Company believes that the petitioner has mis-

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appropriated funds of the complainant's Company and has purchased 7 guntas of land in Sy. No.25. At paragraph 7 it is alleged that the complainant found various irregularities committed by the accused in the course of employment, like several show cause notices that had been issued to the Company by the Development Commissioner were suppressed by the complainant.

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On the aforesaid narration the allegation is that the petitioner liable to be punished for the offences under Sections 403, 405, 418 and 420 of IPC for criminal breach of trust and cheating.

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A little walk in history is needed to consider the contents of the complaint. The petitioner though was an employee from 1995 and after completion of 20 years of service, submitted his resignation, not a word is spoken by the respondents when the resignation of the petitioner was accepted. After resignation, the petitioner, caused legal notices to the second respondent - Company seeking or raising a demand with regard to several amounts that were left unpaid when the petitioner resigned from same. After

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causing such legal notices and reply being given by the second respondent - Company, the complaint is registered on 02.02.2016 alleging that the acts of the petitioner for non-furnishing of Returns for the period 2010-11, 2011-12 and 2012-13 and had projected certain amount of loss. If that be the case, the petitioner ought not to have been permitted to resign and go out of employment. After having issued legal notices against the respondent claiming certain amounts the complaint is registered.

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The contents of the complaint with regard to Section 405 or 406 of IPC is as vague as vagueness could be, it is alleged that as the complainant believes that the petitioner has mis-appropriated from the complainant's Company and purchased lands and further narrates that there are several irregularities committed by the complainant in the course of his employment. Such vague narration in the complaint cannot result in offences punishable, as is indicated in the complaint.

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16. The charge-sheet is filed by the police after

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investigation. The allegations in the charge-sheet reads as follows :

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"zÉÆÃµÁgÉÆÃ¥ÀuÁ ¥ÀnÖAiÀÄ PÁ®A. £ÀA. 4 gÀ°è £ÀªÀÄÆ¢¹gÀÄªÀ J-1 DgÉÆÃ¦AiÀÄÄ ¸ÁQë -1 gÀªÀjUÉ ¸ÉÃjzÀ EA¢gÁ£ÀUÀgÀ 2£ÉÃ ºÀAvÀzÀ , 13£ÉÃ PÁæ¸ï ©°ØAUï £ÀA. 232 gÀ°ègÀÄªÀ VæÃ£ï CUÉÆæÃ ¥ÁåPï JA§ÄªÀ PÀA¥À¤AiÀÄ°è d£ÀgÀ6ï ªÀiÁå£ÉÃdgï (Crmï ªÀÄvÀÄÛ Crä¤¸ÉÖçÃµÀ£ï) DV PÉ®¸À ªÀiÁrPÉÆArzÀÄÝ DgÉÆÃ¦AiÀÄÄ vÁ£ÀÄ PÉ®¸À ªÀiÁrPÉÆArzÀÝ 201011 ªÀÄvÀÄÛ 2011-12 gÀ CªÀ¢üAiÀÄ°è PÀA¥À¤UÉ £ÀµÀÖªÀ£ÀÄßAlÄªÀiÁr. vÀ£Àß ¸ÉßÃ»vÀgÀ ªÀÄÆ®PÀ ¥ÁægÀA©ü¹zÀ ªÉeï ¥ÉÆæÃ ¥ÉæöÊ °«ÄmÉqï JA§ÄªÀ PÀA¥À¤ ¨É¼ÀAiÀÄ®Ä C£ÀÄPÀÆ® ªÀiÁqÀÄªÀ zÀÄgÀÄzÉÝÃ±À¢AzÀ PÀA¥À¤UÉ APEDA (Agricultural Product export Development Authority) ¬ÄAzÀ ¹UÀ¨ÉÃPÁzÀ ¸À©ìrUÉ ¸ÀÆPÀÛ zÁR6ÁwUÀ¼À£ÀÄß GzÉÝÃ±À ¥ÀÆªÀðPÀªÁV MzÀV¸ÀzÉÃ 2010-2011£ÉÃ ¸Á°£À°è 66,41,639/ªÀÄvÀÄÛ 2011-12 £ÉÃ ¸Á°£À°è 47,84,639/- gÀÆ UÀ¼À£ÀÄß £ÀµÀÖªÀ£ÀÄßAlÄªÀiÁrzÀÄÝ C®èzÉÃ PÉÆaÑ£ï ¸ÉàµÀ6ï JPÀ£Á«ÄPï gÉhÆÃ£ï ¤AzÀ®Æ §gÀ¨ÉÃPÁVzÀÝ ¸À©ìrUÀ¼ÀÄ ¹UÀzÀAvÉ ªÀiÁr PÀA¥À¤UÉ £ÀA©PÉ zÉÆæÃºÀªÀ£Éß¸ÀV £ÀµÀÖªÀ£ÀÄßAlÄªÀiÁrgÀÄªÀÅzÀÄ vÀ¤SÉ¬ÄAzÀ zÀÈqsÀ¥ÀnÖgÀÄvÀÛzÉ."

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The charge-sheet is what the complaint narrates for an offence punishable under Sections 405, 406, 415 and 420 of IPC. What is needed for an offence of cheating is inducement and intention to cheat from the very outset of a particular transaction. The petitioner

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being an employee of the Company since 1995 and had resigned in the year 2014 cannot now be alleged to say that he had intention to cheat the Company from the date on which certain transaction has taken place. There is no narration in the complaint that can link the act of the petitioner to offences punishable under Section 415 or 420 of IPC. Insofar as it concerns of offences under Sections 405 and 406 of IPC, the complaint also would not link the aforesaid ingredients of the aforesaid penal provisions as there is no entrustment of the property or any funds to the hands of the petitioner for him to mis-appropriate the same with a dishonest intention. With the complaint being such and charge-sheet being verbatim similar to what the complaint narrates, the trial, if permitted to continue would in my considered view result in mis-carriage of justice. The view of mine in this regard is fortified by the judgment of the Apex Court which de-alienates the penal provisions as aforesaid i.e., Sections 405, 406, 415 and 420 of IPC in the case of MD. IBRAHIM & OTHERS vs.

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STATE OF BIHAR & ANOTHER reported in (2009)8 SCC

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751 which is subsequently followed by the Apex Court in

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the case of PROF. R.K. VIJAYASARATHY vs. SUDHA SEETHARAM reported in (2019)16 SCC 739.

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Insofar as the contention of the learned counsel appearing for the respondent with regard to the hands of this Court being stalled at the stage when the criminal proceedings are set to framing of charges is concerned. There can be no qualm about the said contention advanced, but the same would be not applicable to the facts and circumstances of each case. The Apex Court in the case of SARANYA (supra) has held as follows :

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"27. Before considering the rival submissions of the parties, few decisions of this Court on the principles which the High Court must keep in mind while exercising the jurisdiction under Section 482 Cr.P.C./at the stage of framing of the charge while considering the discharge application are required to be referred to and considered.

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In the case of Deepak (supra), to which one of us (Dr. Justice D.Y. Chandrachud) is the author, after considering the other binding decisions of this Court on the point, namely, Amit Kapoor v. Ramesh Chander (2012) 9 SCC 460; State of Rajasthan v. Fatehkaran Mehdu (2017) 3 SCC 198; and Chitresh Kumar Chopra v. State (Government of NCT of Delhi) (2009) 16 SCC

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605, it is observed and held that at the stage of framing of charges, the Court has to consider the material only with a view to find out if there is a ground for “ presuming ” that the accused had committed the offence. It is observed and held that at that stage, the High Court is required to evaluate the material and documents on record with a view to finding out if the facts emerging therefrom, take at their face value, disclose the existence of all the ingredients constituting the alleged offence or offences. It is further observed and held that at this stage the High Court is not required to appreciate the evidence on record and consider the allegations on merits and to find out on the basis of the evidence recorded the accused chargesheeted or against whom the charge is framed is likely to be convicted or not."

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The Apex Court in several judgments rendered prior to aforesaid judgment relied on by the learned counsel has clearly held it is the duty of this Court to interject trial or any criminal proceeding which would in the opinion of the Court result in abuse of process of law. These inherent powers of this Court is clearly indicated by the judgments of the Apex Court extracted hereinabove. Therefore, I decline to accept the contention of the

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respondent that the matter is set for framing of charge and should not be interfered at this stage.

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Yet another glaring circumstance as indicated

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by the learned counsel appearing for the petitioner which would go to the route of the matter is, the act of the criminal Court in directing investigation under Section 156(3) of Cr.P.C. without even looking into the fact whether the complaint is supported by an affidavit or otherwise. The order sheet produced nowhere indicates an affidavit being filed or a sworn statement of the complainant being taken, the order sheet which is a document of the record of the Criminal Court does not indicate so and it cannot be probabilised that it could have been taken. This is again in violation of the law declared by the Apex Court in the case of PRIYANKA SRIVASTAVA (supra) wherein the Apex Court holds as follows :

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"30. In our considered opinion, a stage has come in this country where Section 156(3) Cr.P.C. applications are to be supported by an affidavit duly sworn by the applicant who seeks

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the invocation of the jurisdiction of the Magistrate. That apart, in an appropriate case, the learned Magistrate would be well advised to verify the truth and also can verify the veracity of the allegations. This affidavit can make the applicant more responsible. We are compelled to say so as such kind of applications are being filed in a routine manner without taking any responsibility whatsoever only to harass certain persons. That apart, it becomes more disturbing and alarming when one tries to pick up people who are passing orders under a statutory provision which can be challenged under the framework of said Act or under Article 226 of the Constitution of India. But it cannot be done to take undue advantage in a criminal court as if somebody is determined to settle the scores.

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The present lis can be perceived from another angle. We are slightly surprised that the financial institution has been compelled to settle the dispute and we are also disposed to think that it has so happened because the complaint cases were filed. Such a situation should not happen."

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Therefore, in the light of the preceding analysis, I deem it appropriate to stall the criminal proceedings, failing which it would result in miscarriage of justice and an abuse of the process of law.

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22. For all the aforesaid reasons, the following : ORDER (i) The Criminal Petition is allowed.

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(ii) The proceedings in C.C. No.9538/2017 which arises out of Crime No.124/2016 pending before IV Addl. Chief Metropolitan Magistrate, Bangalore City stands quashed.

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Sd/JUDGE

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hnm

R Muniraju v. the State of Karnataka by

Case brief

What is this about?

What did the court decide?

R Muniraju v. the State of Karnataka by

Case brief

What is this about?

What did the court decide?

What the court decided

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