Dismissed

Suresh Elangovan v. State of Karnataka

Karnataka HC28 Jun 2021CRL.P/3860/2017

Case brief

AI extract

What is this about?

Criminal petition to quash proceedings for cheating, criminal breach of trust, and criminal conspiracy arising from a commercial hire agreement dispute. The court allowed the petition, quashing proceedings as the dispute was civil in nature and a settlement had been reached in related proceedings.

What did the court decide?

Criminal proceedings in C.C.No.8752/2016 against petitioners are quashed.

Suresh Elangovan Vs State of Karnataka — Contract and Commercial Disputes | Karnataka HC (2021)

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Crl.P.No.3860/2017

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 28^TH DAY OF JUNE 2021

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BEFORE

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THE HON’BLE MRS. JUSTICE K.S.MUDAGAL

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CRIMINAL PETITION No.3860/2017

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BETWEEN :

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SURESH ELANGOVAN S/O S.VENKATESHAN AGED ABOUT 54 YEARS

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CHITRA ELANGOVAN W/O SURESH ELANGOVAN AGED ABOUT 49 YEARS

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SRIJITH P.S S/O LATE P.G. SIDDHARTHAN AGED ABOUT 40 YEARS

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ALL PARTIES SL.NOS.1 TO 3 ARE THE DIRECTORS OF MINDLOGICX INFRATEC LIMITED HAVING OFFICE AT TECHLLANO NO.10/1-B, GRAPHITE INDIA ROAD, HOODI NEAR WHITEFIELD BENGALURU-560 048

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… PETITIONERS

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(BY SRI. SANJAY H. SETHIYA, ADVOCATE)

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AND :

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STATE OF KARNATAKA ASHOKNAGAR POLICE STATION

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Crl.P.No.3860/2017

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SOGO COMPUTERS PVT. LTD. HAVING OFFICE AT NO.D-1/1 HAYES ROAD, 11/9, HAYES COURT RICHMOND TOWN, BENGALURU-560 025 REPRESENTED BY ITS MANAGING DIRECTOR G.JAYAMUNI RAO … RESPONDENTS

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(BY SRI. K.S. ABHIJITH, HCGP FOR R1; R2 - SERVED)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING TO QUASH THE PROCEEDINGS PENDING ADJUDICATION AGAINST THE PETITIONERS IN C.C.NO.8752/2016 BEFORE THE IV ADDL.C.M.M., BENGALURU IN PURSUANCE TO THE FIRST INFORMATION REPORT AND CHARGE SHEET FILED BY THE 1^ST RESPONDENT ASHOKNAGAR POLICE STATION, BENGALURU BASED ON THE COMPLAINT DATED 03.02.2015 FILED BY RESPONDENT NO.2.

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

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O R D E R

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“Whether the proceedings against the petitioners in C.C.No.8752/2016 on the file of the IV Additional Chief Metropolitan Magistrate, Bengaluru amounts to abuse of the process of the Court?” is the question involved in this case.

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Petitioners are accused Nos.1, 2 and 4 in C.C.No.8752/2016. Petitioners and two others are

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Crl.P.No.3860/2017

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being prosecuted in the said case for the offences punishable under Sections 406, 420 read with Section 34 of IPC on the basis of the charge sheet filed by Ashoknagar Police in Crime No.96/2015 of their police Station.

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Crime No.96/2015 was registered against the petitioners and the other accused for the offences punishable under Sections 420, 504, 506, 406 120B read with Section 34 of IPC on the basis of the complaint filed by respondent No.2.

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The case of the prosecution in brief is as follows:

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That the accused are the Directors of

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Mindlogicx Infratec Limited Company and carrying on Information Technology Business. Under hiring agreement, the accused hired 294 computers, 10 servers, 1 laptop from respondent No.2 – Company. They paid the hire charges only for few months and thereafter committed default. Therefore, on

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Crl.P.No.3860/2017

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19.05.2014 the accused entered into an agreement to settle the payments. As per the said agreement, the accused had to return the computer equipments hired by them and arrears of rent of Rs.99,82,994/-. Towards payment of the said amount, the accused issued post dated cheques. On issuing cheques, they issued ‘stop payment’ instruction to the Bank. Thereby the accused committed criminal breach of trust and cheating.

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On the basis of the charge sheet, the Trial Court took cognizance of the offences and summoned the petitioners. The petitioners seek quashing of the impugned proceedings on the ground that the issue was purely a civil dispute arising out of commercial contract. It is further contended that respondent No.2 on the same cause of action prosecuted the petitioners in C.C.No.50245/2015 before the XIV Additional Chief Metropolitan Magistrate, Bengaluru for the offence under Section 138 of the Negotiable

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Crl.P.No.3860/2017

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Instruments Act. It is contended that the civil dispute is given a color of criminal case only to harass the petitioners.

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Respondent No.2 though served

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unrepresented. Pending these proceedings, respondent No.2 and the petitioners have entered into a settlement in C.C.No.50245/2015. Learned counsel for the petitioners has submitted the certified

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copy of the joint memo dated 23.07.2019 filed by the petitioners and respondent No.2 and the judgment dated 01.08.2019 passed by the learned Magistrate in C.C.No.50245/2015 recording the compromise entered into between the petitioners and respondent No.2.

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The perusal of the aforesaid records

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shows that the petitioners and respondent No.2 compounded the offence under Section 138 of the Negotiable Instruments Act. Under the said agreement, the petitioners and other accused therein

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Crl.P.No.3860/2017

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agreed to pay Rs.1,17,00,000/- to respondent No.2 in several installments and recording the same, the Trial Court acquitted the said accused with a condition that if they fail to pay the agreed installments, respondent No.2 is entitled to recover the said amount under Section 421 of Cr.P.C.

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In said 138 of the Negotiable Instruments Act proceedings, respondent No.2 impleaded the Company as accused No.1. In the case on hand though the allegations of cheating are against the company, only the Directors are made accused. Without impleading the company as the accused vicarious liability cannot be imputed to the petitioners.

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The aforesaid records further show that

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the dispute between the parties was predominantly a commercial dispute arising out of breach of terms of contract. Therefore, there is force in the contention that the dispute was civil in nature.

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Crl.P.No.3860/2017

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Having regard to the aforesaid facts and circumstances, the settlement of dispute between the second respondent and the petitioners and the ratio of the judgment of the Hon’ble Supreme Court in Gian Singh vs. State of Punjab and another¹ it is a fit case to quash the proceedings. Therefore, the petition is allowed.

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The impugned proceedings in C.C.No.8752/2016 against the petitioners on the file of the IV Additional Chief Metropolitan Magistrate, Bengaluru are hereby quashed.

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Sd/JUDGE

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KG

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1 (2012)10 SCC 303

Suresh Elangovan v. State of Karnataka

Case brief

What is this about?

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Suresh Elangovan v. State of Karnataka

Case brief

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