Allowed

Rajappa S/O Yallappa Totaganti v. the State of Karnataka

Karnataka HC12 Sept 2023CRL.P/100165/2023

Case brief

AI extract

What is this about?

High Court of Karnataka quashed criminal proceedings against a moneylender for alleged violations under the Karnataka Money Lenders Act and IPC. The court held that the FIR was registered without legal authority because police raided and seized documents first, violating the procedural requirement to register an FIR after specific findings.

What did the court decide?

Criminal proceeding in CC.No.205/2016 is quashed insofar as it relates to the petitioner.

Rajappa S/O Yallappa Totaganti Vs the State of Karnataka — Money Laundering | Karnataka HC (2023)

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NC: 2023:KHC-D:10480 CRL.P No. 100165 of 2023

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 12^TH DAY OF SEPTEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA

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CRIMINAL PETITION NO. 100165 OF 2023

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BETWEEN:

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RAJAPPA S/O YALLAPPA TOTAGANTI, AGED ABOUT 43 YEARS, OCC. AGRICULTURE, R/O MARUTHI NAGAR, RANEBENNUR TOWN & TQ., HAVERI DIST-581115.

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… PETITIONER

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(BY SRI. BASAVANAGOUDA .T., ADVOCATE)

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AND:

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VISHAL NINGAPPA PATTIHAL

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Digitally signed by VISHAL NINGAPPA PATTIHAL

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Date: 2023.09.14 10:52:43 +0530

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THE STATE OF KARNATAKA, BY POLICE SUB INSPECTOR, RANEBENNUR TOWN P.S., R/BY STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, DHARWAD-580011.

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I G MANUNATH S/O NOT KNOWN, AGE. NOT KNOWN, D.S.P.D.E., IGP OFFICE EAST ZONE, DAVANAGERE-577002.

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… RESPONDENTS

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(BY SRI. V.S. KALASURMATH, HCGP FOR RF1)

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THIS CRIMINAL PETITION IS FILED U/SEC. 482 OF CR.P.C. SEEKING TO CALL FOR RECORDS IN C.C.NO. 205/2016, PENDING ON THE FILE OF THE II ADDITIONAL CIVIL JDUGE AND JMFC RANEBENNUR AND QUASH THE ENTIRE CRIMINAL PROCEEDINGS INITIATED AGAINST THE PETITIONER HEREIN IN C.C.NO. 205/2016, PENDING ON THE FILE OF THE II ADDITIONAL CIVIL JUDGE AND JMFC, RANEBENNUR, FOR THE O/P/U/SEC. 38,39 OF THE KARNATAKA MONEY LENDERS ACT, 1961, SECTION 3, 4 OF THE

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NC: 2023:KHC-D:10480 CRL.P No. 100165 of 2023

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KARNATAKA PROHIBITION OF CHARGING OF EXORBITANT ACT, 2004, SEC. 420 OF IPC. THIS 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

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question the proceedings in CC.No.205/2016, registered for the offences punishable under Sections 38, 39 of the Karnataka Money Lenders Act, 1961, Sections 3, 4 of the Karnataka Prohibition of Charging of Exorbitant Act, 2004 and Section 420 OF IPC.

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Heard Sri.Basavanagouda T. learned counsel appearing for petitioner and Sri.V.S.Kalasurmath, Learned HCGP for respondent No.1.

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Learned counsel for petitioner submits that issue in the lis stands covered by judgment rendered by the Co-ordinate Bench of this Court in Crl.P.No.102902/2022, disposed of on 9.12.2022. The Co-ordinate Bench has held as follows:

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NC: 2023:KHC-D:10480 CRL.P No. 100165 of 2023

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ORDER

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FIR is registered for the offence punishable under Sections 3 and 4 of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 alleging that the petitioner for personal gain was charging interest at the rate of 10% on the hand loan without obtaining any license. Taking exception to the same, this petition is filed.

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2. The learned counsel appearing for

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the petitioner submits that the respondent – police after conducting the raid seized the diary and other documents before registering the FIR and the same is impermissible in view of the decision of the Hon’ble Supreme Court in the case of Lalita Kumari vs. Govt. of U.P. and Ors. (12.11.2013 -SC): (2014)2 SCC 1. He further submits that the FIR was registered without following the procedure prescribed under Section 5 of the Act. He further submits that an aggrieved person after following the procedure prescribed under Section 5 of the

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NC: 2023:KHC-D:10480 CRL.P No. 100165 of 2023

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Act can lodge the FIR after obtaining permission from the jurisdictional Court. Hence, the FIR registered by the Police SubInspector is one without authority of law.

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3. On the other hand, the learned

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High Court Government Pleader appearing for the State submits that the petitioner having charged the interest at the rate of 10% on the hand loan has committed the offence punishable under Sections 3 and 4 of the Act, 2004. Hence, the registration of the FIR does not warrant any interference.

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4. I have examined the submissions

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made by the learned counsel appearing for the parties.

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5. The informant after conducting

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the raid seized the books which allegedly discloses that the petitioner was charging exorbitant interest on the loan disbursed by him in favour of the borrower. Section 5 of the Act, 2004 specifies that a debtor may

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NC: 2023:KHC-D:10480 CRL.P No. 100165 of 2023

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deposit the money due in respect of a loan received by him from any person together with interest at the rate fixed by the State Government under Section 28 of the Karnataka Money Lenders Act, 1961 into the Court having jurisdiction, along with a petition to record that the amount deposited is in full or part, satisfaction of the loan including the interest and therefore the Court shall, on receipt of a petition and the Court after receiving the petition and after holding an enquiry pass such an order as the case may be.

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6. In the instant case, the Police

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Sub-Inspector without registering the FIR at the first instance has conducted the raid and as such the registration of FIR is one without authority of law and consequently the charge sheet filed for the aforesaid offence also stands vitiated. Accordingly, I pass the following:

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ORDER

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i) Criminal petition is allowed.

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NC: 2023:KHC-D:10480 CRL.P No. 100165 of 2023

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ii) The impugned proceeding in CC

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No.204/2016 pending on the file of the Addl. Civil Judge and JMFC, Ranebennur is hereby quashed insofar as it relates to petitionersaccused Nos.1 and 2.

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