Allowed

Sri a Vishwanath v. State of Karnataka

Karnataka HC1 Jul 2021CRL.P/5957/2016

Case brief

AI extract

What is this about?

High Court allowed a criminal petition under Section 482 Cr.P.C. to quash an order taking cognizance and the confirmatory order of the Sessions Court. The court held that since the civil court found the sale involved bank consent, criminal prosecution was a futile exercise.

What did the court decide?

The order of the Trial Court taking cognizance and the order of the Revisional Court confirming the same are quashed.

Sri a Vishwanath Vs State of Karnataka — Quashing and FIR | Karnataka HC (2021)

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Crl.P.No.5957/2016

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 1^ST DAY OF JULY 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.5957/2016

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BETWEEN :

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SRI A.VISHWANATH S/O SRI V.RAMA RAO AGED 44 YEARS RESIDING AT 19/126 RESERVOIR STREET BASAVANAGUDI BENGALURU-560 004

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SMT LALITHA R. RAO W/O SRI V.RAMA RAO AGED 70 YEARS RESIDING AT MCCW EXTENSION K.M. ROAD CHIKMAGALUR-577 101 … PETITIONERS

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(BY SRI. NARENDRA DEV, ADV. FOR SRI. SRIVASTHAVA H.K., ADV.)

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AND :

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STATE OF KARNATAKA BY THE STATION HOUSE OFFICER TOWN POLICE STATION CHIKMAGALUR REPRESENTED BY THE PUBLIC PROSECUTOR

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SRI RAVINDRA KUMAR JAIN S/O LATE SRI VIJAYLAL JAIN N.R. ROAD BASAVANAHALLI CHIKMAGALUR-577 101 … RESPONDENTS

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(BY SMT. NAMITHA MAHESH B.G., HCGP FOR R1; R2 – SERVED AND UNREPRESENTED)

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Crl.P.No.5957/2016

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ORDER DATED 21.06.2016 PASSED BY THE PRINCIPAL DISTRICT AND SESSIONS JUDGE, CHIKKAMAGALURU IN CRL.RP.NO.175/2015 AGAINST THE PETITIONERS.

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

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O R D E R

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Aggrieved by the order of Trial Court taking cognizance against them for the offences punishable under Sections 406, 420, 504 and 506 read with Section 34 of IPC and confirmation of the same by the Sessions Court in Crl.R.P.No.175/2015 the accused have preferred the above petition.

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The land consisting of site bearing No.18451/12080 belonged to Mysore Coffee Curing Works Ltd., Chikkamagaluru Company (for short ‘MCCW’). The said company mortgaging the said property had borrowed loan from State Bank of Mysuru, Chikkamagaluru. Between 03.02.2008 to 05.10.2010, the petitioners were the Directors of Mysore Coffee International Private Ltd.,(for short ‘MCI’).

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Crl.P.No.5957/2016

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MCCW became a sick industry. Therefore,

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that moved the Board for Industrial Finances and Reconstruction (BIFR), New Delhi to declare it as a sick industry. In the meantime, Canara Bank, Chikkamagaluru initiated recovery proceedings against MCCW before Debt Recovery Tribunal, Bengaluru in O.A. No.114/2001.

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The said site was not mortgaged to Canara Bank as security for the loan. In O.A. No.114/2001, an ex-parte injunction was granted against MCCW against alienation of its properties. MCCW filed W.P.No.27099/2002 before this Court and the proceedings before Debt Recovery Tribunal in O.A. No.114/2001 were stayed.

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During the pendency of the aforesaid proceedings, MCCW moved State Bank of Mysuru for one time settlement of the dues. State Bank of Mysuru, Chikkamagaluru agreed to receive a sum of Rs.25,00,000/- in full and final settlement. As MCCW had no sufficient funds to pay the agreed amount, that

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Crl.P.No.5957/2016

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sold its property to MCI for a consideration of Rs.25,00,000/-.

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Site No.18451/12080 is the part of the property so sold to MCI. In turn MCI sold the said site to respondent No.2 under the registered sale deed dated 22.12.2008.

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7. Canara Bank, Chikkamagaluru filed

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representative suit in O.S. No.90/2010 against MCCW and also MCI before the I Additional Senior Civil Judge, Chikkamagaluru for declaration that the sale of the properties by MCCW in favour of MCI is null and void and does not bind the said plaintiffs and the creditors of MCCW.

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Respondent No.2/complainant got himself impleaded as defendant No.3 in O.S.No.90/2010. Then he filed complaint as per Annexure-O dated 08.11.2010 alleging that the petitioners being the Chairman and Directors of MCI have sold the property to him suppressing the interim injunction passed against them

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Crl.P.No.5957/2016

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in O.A. No.114/2001, thereby committed breach of trust and cheating. He further alleged that when he questioned that the petitioners abused him and criminally intimidated him.

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On the basis of such complaint, respondent No.1 police registered Crime No.259/2010 against the petitioners as per Annexure-P. After investigation, respondent No.1 police charge sheeted the petitioners for the offences punishable under Section 406, 420, 504 and 506 read with Section 34 of IPC.

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On the basis of the said charge sheet, the learned Senior Civil Judge and C.J.M., Chikkamagaluru under order Annexure - ‘Z’ dated 20.07.2012 took cognizance of the offences and summoned the petitioners to take up the trial. The petitioners filed Crl.RP.No.175/2015 before the Principal District and Sessions Judge, Chikkamagaluru challenging the order taking cognizance. The learned Sessions Judge vide order Annexure-A dated 21.06.2016 dismissed the criminal revision petition.

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Crl.P.No.5957/2016

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Petitioners seek quashing of the orders at

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Annexures-A and Z on the ground that the sale in question was with the consent of Canara Bank and in that regard there was a finding in O.S. No.90/2010 filed by the Canara Bank. Therefore, it is contended that, the facts of the case do not make out the offences alleged against the petitioners.

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The petitioners have submitted the copies of the judgment in O.S.No.90/2010 and R.F.A. No.725/2014 (DEC). Those records show that the Canara Bank filed that suit for declaration that the sale deed dated 12.03.2007 executed by MCCW in favour of MCI is null and void etc. Issue in that case was also whether the sale deed executed in favour of MCI was in violation of the orders in O.A. and to defraud the Canara Bank. The Additional Senior Civil Judge, Chikkamagaluru on adjudication, dismissed the said suit.

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Crl.P.No.5957/2016

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In para Nos.33 and 34 of the said judgment, the Court categorically held that the sale was with the knowledge and consent of the Canara Bank pending O.A. No. 114/2001 and thus dismissed the suit. Challenging the said judgment and decree, Canara Bank preferred R.F.A. No.725/2014 before this Court. On 29.03.2019, Canara Bank withdrew the said appeal. Therefore, the finding of the Civil Court in O.S.No.90/2010 that the sale was with the knowledge and consent of the Canara Bank attained finality.

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Under such circumstances, the contention that the sale deed was executed in favour of respondent No.2 when the interim injunction order was in operation is apparently unsustainable. In the light of such clear findings of the Civil Court, even if the impugned proceedings against the petitioners were to continue that will be only a futile exercise, since there is no chance of conviction.

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Therefore, the petition is allowed. The impugned order of the Trial Court taking cognizance and

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Crl.P.No.5957/2016

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the order of the revisional Court confirming the said order are hereby quashed.

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Sd/JUDGE

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Sri a Vishwanath v. State of Karnataka

Case brief

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Sri a Vishwanath v. State of Karnataka

Case brief

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