The High Court of Karnataka allowed a writ petition seeking quashing of criminal proceedings. The court held that police conducted raids and investigations without valid authority under the Karnataka Money Lenders Act and violated CrPC principles regarding FIR registration.
Quashing of proceedings in CC No.79/2017 and the FIR in Crime No.108/2016.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF FEBRUARY, 2022
BEFORE
THE HON’BLE MR.JUSTICE HEMANT CHANDANGOUDAR
WRIT PETITION No.36352/2017 (GM-RES)
BETWEEN :
SRI SWAMY R. T. S/O RUDRAPPA, AGED ABOUT 40 YEARS, BUSINESSMAN, R/AT HOUSE NO.516/49, 6TH CROSS, NEAR SHAMBULINGESHWARA TEMPLE, LENIN NAGARA, DAVANGERE CITY, DAVANGERE-577 535.
...PETITIONER
(BY SRI GOPALAKRISHNA MURTHY, ADVOCATE)
AND :
SANTHEBENNUR VILLAGE, CHANNAGIRI TALUK, DAVANGERE DISTRICT-577 552.
…RESPONDENTS
(BY SRI RENUKARADHYA R.D., HCGP FOR R1, SRI VIJAYKUMAR T., ADVOCATE FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.79/2017 ON THE FILE OF THE SR. CIVIL JUDGE AND JMFC, CHANNAGIRI VIDE ANNEXURE-D AND CONSEQUENTLY QUASH THE FIR IN CRIME NO.108/2016 DATED 6.8.2016 REGISTERED BY THE R-1 VIDE ANNEXURE-B AND ETC., THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R
The 2nd respondent has lodged the first information report against the petitioner alleging that the informant had borrowed loan of Rs.40,00,000/from the petitioner for establishment of a petrol bunk and the petitioner is pressuring the 2nd respondent and his family to come and execute the sale deed in respect of the property, which was mortgaged towards the security for repayment of loan and the petitioner is charging exorbitant interest and the petitioner is also
carrying money lending business without obtaining the licence under the provisions of the Karnataka Money Lenders Act, 1961. The jurisdictional police without registering the FIR at the first instance conducted the raid on the premises of the petitioner and thereafter, seized some documents and thereafter, registered the FIR in Crime No.108/2016. The police after investigation filed the charge sheet against the petitioner for the offences punishable under Section 420 of IPC and Sections 38 and 39 of Karnataka Money Lenders Act, 1961 and Sections 4 and 6 of the Karnataka Prohibition of Charging of Exorbitant Interest Act, 2004. Being aggrieved by the same, this petition is filed.
that Section 15 of the Karnataka Money Lenders Act, 1961, specifies that the officer authorized by the Registrar, Assistant Registrar or any officer authorized
by the State Government has the power to enter the premises of the money lender and call upon him to produce any document or record relating to such business and every such money lender or person shall allow such inspection and produce such record and document. However, in the present case, the police without authority of law has entered the premises of the petitioner and seized the documents. Hence, he submits that the raid conducted by the police is one without authority of law. Further it is submitted that the police without registering the FIR at the first instance has conducted the investigation and the same is contrary to Section 154 of Cr.P.C. In support, he places reliance on the decision of the Hon'ble Apex Court in the case of Lalitha Kumari Vs., State of Uttar Pradesh reported in 2014 (2) SCC 1 .
without obtaining licence under the provisions of Karnataka Money Lenders Act, 1961, was carrying on the business of money lending and as such, registration of FIR by the police and also filing of the charge sheet is justified. Hence, he seeks for dismissal of the petition.
the learned counsel for the parties.
and seize related documents was examined by the Co-ordinate Bench of this Court in Crl.P.No.101569/2016 disposed of on 22.06.2017
wherein at paragraph Nos.11 and 12 it is held as under:
" 11. Therefore, it is only the Registrar and the Assistant Registrar or any other person, who is authorised by the State Government in that behalf only are the persons authorised to enter into the premises of the money lenders to inspect and seize the documents and also to verify whether the business of money lending is
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carried on in accordance with the provisions of money lending or not.
But, admittedly, in the cases on hand, the persons entered into the premises of the alleged money lenders i.e., the petitioners/accused in the above petitions, are neither the Registrars nor the Assistant Registrars nor any person authorised by the State Government in that behalf. There is no material produced to show that the said Police Officer was authorised by the State Government to enter into the premises in case of the alleged offence under the provisions of Karnataka Money Lenders Act. Therefore, the alleged entry into the premises of the petitioners herein is also not in accordance with the mandatory provisions of Karnataka Money Lenders Act.
12. Looking to the materials placed on record and as per the case of the prosecution when the information is said to have been received that some of the persons are charging exorbitant interest to the poor borrowers and they are collecting excess amount from them violating the provisions of Karnataka Money Lenders Act, the Police along with the staff and the panch witness proceeded to the spot, made an entry into the premises of the respective petitioners and they have seized the documents and they came to know that the petitioners are charging exorbitant interest to the loan advanced by them, the documents were seized under the seizure mahazar in the presence of panch witnesses, then arrested the petitioners, came back to the Police Station, then the complaint was lodged and FIR was registered,
so this procedure adopted by the complainant/Police shows that by the time the complaint was lodged and FIR was registered, more than half of the investigation was completed in these matters. Therefore, this clearly shows that even as per the Police, a cognizable offence was committed, and without registering the FIR immediately, the further investigation of the case has been proceeded with, which is against the mandatory requirements of the provisions of Criminal Procedure Code."
Vs., State of Uttar Pradesh.
has made out a case to allow the petition and accordingly, I pass the following
ORDER
Writ petition is allowed.
The impugned proceeding in CC.No.79/2017
pending on the file of the Senior Civil Judge and JMFC, Channagiri, is hereby quashed.
In view of disposal of the main petition, pending I.A. does not survive for consideration and it is
dismissed.
Sd/JUDGE
PB
3 issues framed by the court
Whether the raid conducted by police to seize documents without authority under Section 15 of the Karnataka Money Lenders Act, 1961 is valid.
Whether the police investigation without registering the FIR at the first instance was permissible in law.
Whether the High Court should quash the proceedings in Criminal Court No.79/2017 and the corresponding FIR.
Colour shows how this judgement treated each authority
Lalitha Kumari Vs. State of Uttar PradeshRelied on¶27
Lalitha Kumari Vs., State of Uttar Pradesh reported in 2014 (2) SCC 1 · Who else cites this
Co-ordinate Bench judgment in Crl.P.No.101569/2016Relied on¶34
Crl.P.No.101569/2016 disposed of on 22.06.2017
5 provisions across 4 enactments
Sri Swamy R.T.
State
Syed Riyaz Ahamed
Hemant ChandangoUDar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
