Allowed

Sri Amit Avasthi v. the State of Karnataka

Karnataka HC6 Sept 2021CRL.P/474/2020

Case brief

AI extract

What is this about?

This High Court quashed an FIR and criminal petition filed under Section 482 Cr.P.C. The court held that a dispute over a loan, promissory note, and failure to repay interest was civil in nature. Allowing the complainant to use police investigation was an abuse of process of law.

What did the court decide?

The FIR registered against petitioners-accused Nos. 3 to 7 in Crime No.295 of 2019 by Hennur Police Station is quashed.

Sri Amit Avasthi Vs the State of Karnataka — Money Laundering | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 6^TH DAY OF SEPTEMBER, 2021

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BEFORE

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THE HON'BLE MR. JUSTICE K. NATARAJAN

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CRIMINAL PETITION NO.282 OF 2020 CONNECTED WITH CRIMINAL PETITION NO.474 OF 2020

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IN CRL.P. NO.282/2020:

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BETWEEN:

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ASHWAL S. S/O. SHANKARAIAH, AGED ABOUT 37 YEARS, RESIDING AT 1721, 6^TH MAIN, 2^ND STAGE, VIJAYANAGARA, MYSORE - 560 017.

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... PETITIONER

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(BY SRI ARUNKUMAR Y.H., ADV.)

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IN CRL.P. NO.474/2020:

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BETWEEN:

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SRI AMIT AVASTHI S/O. JAI KRISHNA AVASTI, AGED ABOUT 38 YEARS, RESIDING AT NO.101, BLOCK –A, MANJUNATHA HOMES, 4^TH ‘A’ CROSS, ABBAIAH REDDY LAYOUT, KAGGADASAPURA, BENGALURU - 560 093.

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SRI C.T. DEVAIAH S/O. C.P. THAMMAIAH, AGED ABOUT 39 YEARS, RESIDING AT NO.305, NORTH BLOCK, SADARAMANGALA ROAD, NEAR RAILWAY CROSSING HOODI, BENGALURU NORTH, MAHADEVAPURA, BENGALURU - 560 048.

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SMT. SUJATHA PUTTA W/O. RAMAKRISHNA PUTTA, AGED ABOUT 33 YEARS, RESIDING AT FLAT NO.502, PLOT NO.612-617, SREE SAI TOWERS, S.S. COLONY, POOJA HOSPITAL ROAD, HYDER NAGAR, KULOATPALLY, K.V. RANGAREDDY, TELANGALA - 560 085.

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SRI SURENDER PRASAD S/O. LATE RAMESHWAR PRASAD, AGED ABOUT 64 YEARS, RESIDING AT FLAT NO.11, 3^RD CROSS, GOVT. SCHOOL ROAD, CHIKKABANASWADI, BENGALURU - 560 033. ... PETITIONERS (BY SRI TOMY SEBASITAN, SENIOR COUNSEL, ALONGWITH SRI RENY SEBASTIAN, ADV.)

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AND:

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THE STATE OF KARNATAKA THROUGH HENNUR POLICE STATION, REPRESENTED BY THE STATE PUBLIC PROSECUTOR, HIGH COURT, BENGALURU - 560 001.

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DINESH SHEKHAR SHETTY S/O. SHEKAR ANIAYYA SHETTY, AGED ABOUT 41 YEARS, RESIDING AT C/O. PRAKASH KAIPENCHERY, NO.404, PAVAN APARTMENT, 7^TH CROSS, BEHIND BANK AVENUE, BABUSAPALYA, KALYANANAGAR, BENGALURU - 560 043.

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... RESPONDENTS (COMMON) (BY SRI MAHESH SHETTY, H.C.G.P., FOR R-1, & SRI C.V. SIJU, ADV., FOR R-2)

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THESE CRIMINAL PETITIONS ARE FILED UNDER SECTION 482 OF THE CR.P.C. PRAYING TO QUASH THE F.I.R. DATED 10-9-2019 IN CRIME NO.295 OF 2019 REGISTERED BY HENNUR POLICE STATION, BENGALURU, FOR THE OFFENCES PUNISHABLE UNDER SECTIONS 323, 448, 420, 468, 471 AND 506B OF THE INDIAN PENAL CODE.

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THESE CRIMINAL PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 30-8-2021 AND COMING ON FOR PRONOUNCEMENT, THROUGH VIDEO CONFERENCING, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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O R D E R

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Criminal Petition No.282 of 2020 is filed by accused No.4 and Criminal Petition No.474 of 2020 is filed by accused

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Nos.3, 5, 6 and 7 under Section 482 of the Code of Criminal Procedure, 1973 (for short, ‘Cr.P.C.’) for quashing F.I.R. in Crime No.295 of 2019 registered by Hennur Police Station, Bengaluru, for the offences punishable under Sections 323, 448, 420, 468, 471 and 506B of the Indian Penal Code, 1860 (for short, ‘IPC’).

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Heard the arguments of the learned senior counsel for the petitioners-accused Nos.3 to 7, learned counsel for respondent No.2-complainant and the learned High Court Government Pleader for respondent No.1-State.

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The case of the petitioners is that, respondent No.2Dinesh Shekar Shetty filed a private complaint under Section 200 of the Cr.P.C. before the IV Additional Chief Metropolitan Magistrate, Bengaluru, in P.C.R No.8978 of 2019 and the same was referred to Hennur Police Station, Bengaluru, under Section 156(3) of the Cr.P.C. and in turn, they registered a case for the above said offences and issued F.I.R. It is alleged by the complainant in his complaint that the petitioners are running the Company in the name of M/s. Aadras Hospitality at Koramangala. Accused No.2 is working partner and accused Nos.3 to 5 are authorised signatories of the official documents. The petitioners approached the complainant for financial help during November-2017 for a hand loan of Rs.22.00 lakh with an

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assurance to return within twelve months. The complainant believing the false promise made by the petitioners paid Rs.19.00 lakh on different occasions. The petitioners executed promissory note in favour of the complainant on 1-12-2017 and 19-4-2019 undertaking to repay the amount of Rs.10.00 lakh and Rs.3.50 lakh along with the interest at the rate of 2% within a period of twelve months. The petitioners have paid the interest regularly till June-2018 and thereafter, they have failed to pay the interest amount. In spite of repeated contacts, the petitioners have neglected to pay the principal amount as well as the interest amount. Therefore, the complainant issued demand notice. In spite of the same, the petitioners have not chosen to repay the money and cheated the complainant. Hence, he sent the complaint by RPAD to the Police and the same has not been registered by the Police. Therefore, he approached the Magistrate and the Magistrate referred the complaint to Hennur Police Station, Bengaluru, and they registered the case, which is under challenge.

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Learned senior counsel appearing for the petitioners has contended that on perusal of the averments made in the complaint, the dispute is of civil nature. The petitioners have executed the promissory note in favour of the complainant. If they failed to repay the amount, the complainant has to file a civil suit for recovery of loan amount with interest. There is no criminality in order to register the F.I.R and investigate the matter. There is no ingredient to attract the offence under Section 420 of the IPC. He further contended that the Magistrate, while referring the complaint to the Police for registering the case, has not applied his mind and has not verified the nature of the case. He further contended that previously, the case was filed before the IV Additional Chief Metropolitan Magistrate, Bengaluru, for the offence punishable under Section 406 of the IPC. The Magistrate stated that there is no misappropriation to attract Sections 403 to 409 of the IPC. Hence, the Magistrate transferred the case to the XI Additional Chief Metropolitan Magistrate, which is the jurisdictional Court to try other offences and in turn,

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the XI Additional Chief Metropolitan Magistrate referred the case to the Police without application of mind. Therefore, he prayed for quashing the F.I.R.

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On the other hand, the learned High Court

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Government Pleader has objected the petitions.

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Learned counsel for respondent No.2 has contended

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that other than Section 420 of the IPC, there are other offences made out in the complaint, i.e. Sections 506B and 448 of the IPC, apart from Section 323 of the IPC and therefore, there is no ground for quashing the F.I.R. Hence, he prayed for dismissing the petitions.

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Upon hearing the arguments and perusal of the record, the averments of the complaint goes to show that the petitioners are partners of the firm and authorised signatories, borrowed loan of Rs.19.00 lakh from the complainant. They executed promissory note in favour of the complainant with an assurance to repay the amount within a period of twelve months with interest at the rate of 2% on or

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15^th of every calendar month. The complaint also reveals that the petitioners were regular in payment of interest till June2018 and thereafter, they stopped the payment of interest and therefore, the complainant got issued demand notice. In spite of receiving the notice, the petitioners have not paid the amount and denied to repay the money. Thereafter, they started threatening the complainant. Hence, he sent a complaint to the Police by RPAD, but they did not register the case. Hence, he approached the Court. On bare reading of the complaint, it is clear that it is money transactions between the petitioners and the complainant. The petitioners borrowed loan from the complainant and executed the promissory note which clearly goes to show that the dispute is civil in nature. The complainant also issued demand notice to the petitioners for taking action which reveals it is purely civil transactions and if at all the petitioners failed to repay the amount in spite of issuing notice, the complainant can file a civil suit for recovery of money. Absolutely, there is no ingredient to attract any criminal case much less than

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Section 420 of the IPC. The other contention taken by the learned senior counsel for the petitioners is that previously, the case was filed before the IV Additional Chief Metropolitan Magistrate, Bengaluru, for the offence punishable under Section 406 of the IPC. The Magistrate stated that there is no misappropriation to attract Sections 403 to 409 of the IPC. Hence, the Magistrate transferred the case to the XI Additional Chief Metropolitan Magistrate, which is the jurisdictional Court to try other offences and in turn, the XI Additional Chief Metropolitan Magistrate referred the case to the Police. Hence, the Police registered the case. In my considered opinion, the Magistrate has not applied his mind while referring the case. Absolutely, there is no material to attract the offence under Section 420 of the IPC or other offences. Previously, the Police have refused to register the case as the dispute is of civil in nature. Therefore, the complainant approached the Magistrate by filing P.C.R. and got referred the same to the Police and thereby, F.I.R. has been registered against the petitioners. Therefore, in view of

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above observations, if the Police are allowed to investigate the matter, it is nothing but abuse of process of law. The complainant is trying to recover the money by filing a criminal case, instead of filing the suit for recovery of money by paying necessary Court-fee. It appears that the complainant in order to avoid the payment of Court-fee, filed the complaint and got referred the case. The Magistrate is not a Civil Court for recovering the loan amount and the petitioners cannot use the Police as recovery agents by filing the complaint before the Magistrate and it is nothing but abuse of process of law. Therefore, the same requires to be quashed.

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Accordingly, the petitions are allowed . The F.I.R. registered against the petitioners-accused Nos.3 to 7 by Hennur Police Station, Bengaluru, in Crime No.295 of 2019 on the complaint of respondent No.2 is hereby quashed.

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Sd/JUDGE

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kvk

Sri Amit Avasthi v. the State of Karnataka

Case brief

What is this about?

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Sri Amit Avasthi v. the State of Karnataka

Case brief

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