Allowed

S.K.Badami v. State of Karnataka

Karnataka HC7 Sept 2021CRL.P/6448/2018

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed a criminal petition under Section 482 CrPC to quash criminal proceedings for cheating and criminal breach of trust against a retired official. The Court ruled that since the loan was sanctioned by the Board and not the individual, and the charges lacked essential ingredients like entrustment and intent to cheat, continuing the trial would be a miscarriage of jus

What did the court decide?

Criminal proceedings in C.C.no.24417/2017 stood quashed qua the petitioner-accused No.6.

S.K.Badami Vs State of Karnataka — Cheque Dishonour | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 07^TH 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.6448 OF 2018

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BETWEEN

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SRI S.K.BADAMI (RETIRED) S/O B.SRINIVAS, AGED ABOUT 78 YEARS, R/O NO.26, 2^ND CROSS, WIDIA LAYOUT, VIJAYANAGAR, BENGALURU – 560 040.

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... PETITIONER

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(BY SRI SATISH R.GIRJI, ADVOCATE (PHYSICAL HEARING))

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AND

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STATE OF KARNATAKA BY HIGH GROUND POLICE, SESHADRAPURAM SUB-DIVISION, BENGALURU – 560 052 REPRESENTED BY STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, BENGALURU – 560 001.

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KARNATAKA STATE FINANCIAL CORPORATION, HP & FS DEPARTMENT, HEAD OFFICE, NO.1/1, THIMMAIAH ROAD, BENGALURU – 560 052.

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REPRESENTED BY ADDITIONAL GENERAL MANAGER SRINIVASAPPA.

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... RESPONDENTS

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(BY SMT.NAMITHA MAHESH B.G., HCGP FOR R1 (PHYSICAL HEARING) DR.T.SOMASHEKARA, ADVOCATE FOR R2 (PHYSICAL HEARING))

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.24417/2017 PENDING ON THE FILE OF IV ADDL.C.M.M., BENGALURU FOR THE OFFENCE P/U/S 409,420,406,468,471 AND 120(B) R/W 34 OF IPC IN SO FAR AS HE AS ACCUSED NO.6 IS CONCERNED.

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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 is before this Court calling in question the criminal proceedings in C.C.No.24417/2017 pending before the IV Additional Chief Metropolitan Magistrate, Bengaluru for the

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alleged offences punishable under Sections 409, 420, 406, 468, 471 and 120B r/w Section 34 of IPC.

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Heard Sri.Satish.R.Girji, learned counsel appearing for

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petitioner, Smt.Namitha Mahesh.B.G., learned High Court Government Pleader appearing for respondent No.1 and Dr.T.Somashekara, learned counsel appearing for respondent No.2.

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Brief facts of the case leading to the filing of the petition as borne out from the pleadings are as follows:

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Petitioner was an employee of the Karnataka State Financial Corporation in the cadre of Assistant General Manager (Legal). During the period when the petitioner was working as Assistant General Manager (Legal) papers were put up before him with regard to the opinion of sanction of loan to accused Nos.1 to 4. In terms of what was placed before the petitioner, loan was advanced not by the petitioner but by the Board of the Corporation which was the Competent Authority to advance

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such loan. Prior to the file reaching the Board for its approval the file would travel through several rungs of scrutiny for such approval. After the Board resolved to advance such loan, the same was advanced in favour of accused Nos.1 to 4 in the year 1994.

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The petitioner sought and was granted voluntary retirement and on said acceptance, was relieved from service on 30.06.2000. At the time when the petitioner was relieved the loan was in order and the accused Nos.1 to 4 who were borrowers were not in default of payment of loan. In the year 2012, when the Corporation realized that the loan had become sticky by default of the loanees in making payment in terms of the agreement that was entered into between the Corporation and the said borrowers, registered a private complaint on 26.03.2013 against the petitioner and another. By then, it was 13 years down the line that the petitioner had ceased to be an employee of the Corporation and 19 years of grant of such loan.

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Pursuant to the registration of the complaint, the learned Magistrate takes cognizance of the offence and issues summons under Section 156(3) of Cr.P.C., pursuant to which, investigation is conducted and charge sheet is filed by the police alleging offences under Sections 409, 420, 406, 468, 471 and 120B r/w Section 34 of IPC. It is at that juncture the petitioner has knocked the doors of this Court and an interim order of stay of further proceedings before the criminal Court is granted which is in operation even as on date.

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The learned counsel appearing for the petitioner Sri.Satish.R.Girji would submit that the petitioner was not the sole officer who had to clear the loan to be advanced to the borrowers - accused Nos.1 to 4. The file was placed before the Managing Director and later before the Board. It is the Board which has taken the decision to approve the loan and none of the members of the Board or the Managing Director are proceeded against and it is only the petitioner and the officer who had inspected the property are proceeded against. He

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would urge that the complaint registered under Section 200 of Cr.P.C. was not supported by an affidavit as is required under the law and would place reliance upon the judgment of the Apex Court in the case PRIYANKA SRIVASTAVA AND ANOTHER VS. STATE OF UTTAR PRADESH AND OTHERS reported in (2015)6 SCC 287 .

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On the other hand, Dr.T.Somashekara, learned counsel appearing for respondent No.2 would vehemently refute the contentions advanced by the learned counsel appearing for the petitioner and would contend that it is the act of the petitioner in giving a report which was favourable to the borrowers, the Managing Director and the Board have taken a decision to lend money, which ultimately has become sticky on account of default.

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7.1. Learned counsel would further submit that none of the others are proceeded against as the documents that were given by the borrowers at that time as collateral security or

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primary security were all in order and they were all original documents, scrutiny of which had been made prior to advancement of the amount to the borrowers and despite all this would submit, the petitioner is required to undergo trial to come out clean in the entire episode.

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I have given my anxious consideration to the submissions made by the learned counsel appearing for the respective parties and have perused the material on record.

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It is not in dispute that the loan was advanced to the borrowers who are accused Nos.1 and 4 in the year 1994 on a scrutiny of the documents that were submitted for advancement of said loan and the documents were indeed scrutinized prior to the grant of said loan.

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Learned counsel for the respondent No.2- Corporation has submitted that the documents that were placed for advancement of loan were all originals. It is the collateral

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security that was given by one Smt.Parvathamma who is accused No.4, the loan was granted, this was later found to be forged and bogus. The petitioner had no doubt given an opinion on the documents that were placed before him, but he was not the one who had advanced such loan. The file did pass through several rungs of officers and reached the Board and the Board ultimately approved grant of loan to the borrowers. Therefore, fault cannot lie with the petitioner alone for him to be singled out and a criminal proceeding to be registered against him for offences under Sections 409, 420, 406, 468, 471 and 120B r/w Section 34 of IPC. Primarily, the allegation against the petitioner is one of cheating and criminal breach of trust.

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For an allegation of offence punishable under Section 406 of IPC there must be entrustment and such entrustment should be misappropriated with a criminal intention by the accused. The case at hand is not the case where even an allegation of such a kind is made in the complaint. The complaint or the submission that is now made is that the

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petitioner was not diligent enough in looking into the documents while giving his opinion. Non conduct of due diligence by the petitioner cannot result in an offence under Section 406 of IPC for criminal breach of trust as the complaint nowhere would link to the ingredients that are necessary for an offence under Section 406 of IPC.

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Insofar as the offence under Section 420 of IPC is concerned, the petitioner gives an opinion with regard to the documents that were placed before him for advancement of such loan and the loan is not sanctioned by the petitioner, but by the Board. Section 420 of IPC clearly indicates what amounts to cheating as obtaining under Section 415 of IPC. For an offence under Section 420 of IPC, the intention to cheat must be at the outset of a transaction. As stated in the complaint or submitted by the learned counsel appearing for the complainant, the intention to cheat cannot be made out against the petitioner as even according to them, the allegation is that the petitioner has not conducted due diligence while giving an opinion for

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advancement of such loan. The petitioner cannot be said to have committed the offence under Section 420 of IPC which deals with cheating and dishonestly inducing a person deceived to deliver any property to any person. Such inducement can neither be gathered in the complaint nor in the charge sheet that is filed by the police.

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The charge sheet is filed only on the basis of the correspondences between the Corporation and the police which does not inspire confidence, as it is verbatim similar to what is alleged in the complaint. Therefore, there is neither criminal breach of trust as is found in Sections 405 and 406 of IPC or cheating as is found in Sections 415 and 420 of IPC. Therefore, permitting the trial against the petitioner to continue, at this juncture, particularly for the offences alleged against the petitioner for a loan that was advanced by the Board in the year 1994 would amount to abuse of the process of law and result in miscarriage of justice. For the aforesaid reasons, I pass the following:

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ORDER

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(i) Criminal Petition is allowed.

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(ii) The criminal proceedings in C.C.No.24417/2017 pending before the IV Additional Chief Metropolitan Magistrate, Bengaluru, stand quashed qua the petitioner-accused No.6 in the petition.

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Sd/JUDGE

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bkp CT:MJ

S.K.Badami v. State of Karnataka

Case brief

What is this about?

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S.K.Badami v. State of Karnataka

Case brief

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