Dismissed

Mr Rajappa B v. the State of Karnataka

Karnataka HC6 Jun 2023CRL.P/412/2021

Case brief

AI extract

What is this about?

In this criminal petition under Section 482 Cr.P.C., the petitioner sought to quash proceedings for cheating and criminal breach of trust alleging unpaid commissions and maturity amounts. The High Court examined the complaint and charge sheet, held that the offences were clearly made out, and dismissed the petition citing the ten-year delay.

What did the court decide?

The criminal petition under Section 482 Cr.P.C. stands dismissed with no orders relating to quashing of proceedings.

Mr Rajappa B Vs the State of Karnataka — Quashing and FIR | Karnataka HC (2023)

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1 - NC: 2023:KHC:19203 CRL.P No. 412 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 6^TH DAY OF JUNE, 2023

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA CRIMINAL PETITION NO. 412 OF 2021

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BETWEEN:

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MR.RAJAPPA B., AGED ABOUT 48 YEARS S/O BACHAPPA R/AT CHANNASANDRA VILLAGE PERUMACHANAHALLI POST, CHINTAMANI TALUK – 563 125.

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…PETITIONER

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(BY SRI. MOHAN CHANDRA P.,ADVOCATE)

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AND:

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THE STATE OF KARNATAKA BY SHO OF K.R.PURAM POLICE STATION REPRESENTED BY

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Digitally signed by PADMAVATHI B K Location: HIGH COURT OF KARNATAKA

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THE STATE PUBLIC PROSECUTOR HIGH COURT OF KARNATAKA HIGH COURT BUILDING BENGALURU – 560 001.

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MR.P.DILEEP ADULT R/AT E-375, JAI BHIM NAGARA KANNAMANGALA POST BENGALURU CITY – 560 067.

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NC: 2023:KHC:19203 CRL.P No. 412 of 2021

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…RESPONDENTS

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(BY SMT.K.P.YASHODHA, HCGP FOR R-1; R-2 SERVED)

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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.21430/2016 PENDING ON THE FILE OF IV ADDL.C.M.M., BENGALURU ON THE BASIS OF CHARGE SHEET FILED BY THE POLICE IN CR.NO.519/2013 ON THE BASIS OF COMPLAINT FILED BY RESPONDENT NO.2 AGAINST THE PETITIONER HEREIN FOR THE OFFENCE P/U/S 406 AND 420 R/W 34 OF IPC.

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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/accused No.1 is before this Court calling in question proceedings in C.C.No.21430 of 2016 registered in Crime No.519 of 2013 for offences punishable under Section 406 and 420 r/w 34 of the IPC.

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NC: 2023:KHC:19203 CRL.P No. 412 of 2021

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Heard Sri P. Mohana Chandra, learned counsel

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appearing for the petitioner and Smt. K.P. Yashodha, learned High Court Government Pleader appearing for respondent No.1.

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Facts as projected by the prosecution, are as follows:-

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A complaint comes to be registered before the Commissioner of Police, Bengaluru who forwards it to the K.R.Puram Police Station for necessary action which becomes a

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crime in Crime No.519 of 2013. The allegation in the complaint was that about 30 agents employed by Samagra Krushi Farm Estates India Private Limited (‘the Company’ for short) were working on commission basis in the said company. It is alleged that the complainant along with four others were appointed as

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collecting agents by the Company for Bengaluru customers. They have collected money on daily basis from the customers and deposited the same with the Company and each customer was given a separate account/identity number and were also given bonds showing the date of opening of the account, installment amount and the closing date. They were also given maturity vouchers. On submission of vouchers, the customers

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were paid by the Company by way of cheques and in few cases by way of cash. This goes on for a long time.

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One fine day the Company stops payment of commission in the year 2012. Out of 275 customers the Company pays maturity amount only to 100 customers and postpones payment to other customers indefinitely, which results in cheating of Rs.7,50,000/-. This forms the basis of the complaint registered before the K.R.Puram Police Station. The Police, after conduct of investigation, file a charge sheet before the concerned Court. The concerned Court registers C.C. No.21430 of 2016 and issues summons to the petitioner and others. The issuance of summons is what drives the petitioner to this Court long after registration of criminal case.

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The learned counsel appearing for the petitioner would contend that there can be no offence as alleged in the case at hand as the complainant and others were commission agents and have collected money and deposited the same with the Company. The Company has not paid maturity amount to several customers. There was no dishonest intention of

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cheating the complainant or other public on the part of the Company or its Directors. Non-payment of commission to the complainant and maturity amount to some of the customers would not attract offence under Sections 406 and 420 of the IPC.

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On the other hand, the learned High Court Government Pleader would at the threshold submits that the petition is filed after about 5 years of the charge sheet being filed. She would further contend that the offences are clearly made out against the petitioner as the petitioner has not paid commission amount nor paid customers their money in return after receiving it on a daily basis. The petitioner and others have cheated poor people who would invest on daily basis to get some lumpsum at a later stage. She would contend that both the offences under Sections 406 and 420 are met in the case at hand.

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

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The afore-narrated facts are all a matter of record. A complaint is registered on 18-09-2013 stating that the complainant is one of the 30 agents employed by the Company. The employment of the complainant was for the purpose of collecting money from customers and depositing it in the name of the Company. About 275 customers of the Company who had subscribed to daily payment were paid the amount on maturity and production of vouchers. However, 100 customers were not paid. The amount totaling of 100 customers was Rs.7,50,000/-. This is the crime that is registered against the petitioner. Since the entire issue springs from the complaint, I deem it appropriate to notice the complaint and it reads as follows:

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“…. …. ….

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Re: Complaint against Samagra Krushi Farm Estates India (Petition) Ltd. Company for cheating thousands of persons in the name of Daily (Pigmy) Deposit Scheme.

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1. I am one of the about 30 agents employed by Samagra Krushi Far Estates India (Petition) Ltd. Company on commission basis. Copy of my Identity Card is annexed as Document – 1. I along with 4 persons working under me were the only collecting agents for all the Bangalore Customers.

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2. We were collecting money on daily basis from few hundreds of people/customers and depositing the same with the company. Each of the customers was given separate account / identity number and was given a Bond showing their opening date, installment amount, scheme period and closing date. Upon maturity each customer was given a maturity voucher showing various particulars including their maturity amount. Copy of 5 such bonds with respective maturity vouchers is collectively produced as Document – 2.

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3. On submission of this voucher the customer was paid by the company his maturity amount by way of cheque and in few cases by was of cash. Copy of 2 such cheques is produced as Document – 3.

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4. The company closed its head office in Bangalore during March – April, 2012. The company continued its operations from the office at Chintamani, Chikkaballapura thereafter and is still operating.

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5. The company has stopped paying my agent commission since October, 2012. Further, the company has stopped paying the maturity amounts to thousands of customers from February, 2013. Out of about 275 customers from whom my team had collected money, the company has paid maturity amount only to about 100 customers.

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6. The company had since then postponing making payment maturity amount to nearly 200 customers from whom my team had collected the daily installments on one or other pretext.

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7. I was unable to bear the brunt of the customers after their maturity period fro too long. Many a times I had bowed before the customers in shame

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due to the failure on part of the company to make payments.

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8. I could not bear the ill treatment, harsh words and even threats in some case and succumbing to the mounting pressure, I personally made payment of maturity amounts to nearly 100 customers to the tune of about Rs.2,25,000 by selling off personal gold ornaments. One of the customers had even taken away my personal motorcycle on 11/03/13.

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9. The maturity amounts to the tune of about Rs.5,25,000 remains to be paid to about 100 customers from whom my team had collected the daily installment amounts.

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10. In total, the company has to pay maturity amount to nearly 200 customers from my team side alone to the tune of about Rs.7,50,000 including Rs.2,25,000 paid by me personally. The list of customer’s names along with their account number and maturity amount is annexed as Document-4. The customers to whom I have given my anxious consideration to the submissions made by the learned Senior Counsel and other respective learned counsel and have perused the material on record. Paid personally are indicated alongside their names. Copy of one of the daily account renewal statement details is annexed as Document – 5.

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11. I was been told by Mr.Prabhakar, Managing Director (Finance) that the company has its won finance business and that it shall not cheat any customer and that it shall pay all the maturity amounts and also the agent commissions. However, from past couple of months Mr.Prabhakar has been telling that he has left the company and that he is not answerable. Similar is the response of M.R.Eregowda, Manager (Finance) and other board

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NC: 2023:KHC:19203 CRL.P No. 412 of 2021

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members viz., Rajappa (Managing Direcotor), Prakash and Naveen Kumar.

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12. The company has closed its website www.samagrakrushi.com. Copy of the web page showing the domain name as expired on 29/08/2013 is annexed as Document-6. Copy of the company brochure is annexed as Document-7.

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13. The company has cheated me, other agents and thousands of innocent customers most of whom are poor people like daily wagers, small vendors, laborers etc. apart from conducting breach of trust of these thousands of customers.

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14. I, therefore, request your kind self to –

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i Initiate appropriate legal action against Samagra Krushi Farm Estates India (Petition) Ltd. And its board members for cheating the public and its agents; restrain them from further cheating any other/new customers;

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ii. Initiate appropriate legal action against Samagra Krushi Farm Estates India (Petition) Ltd. So as to cause immediate payment of maturity amounts to the nearly 200 customers from my team side alone which is about Rs.7,50,000 including Rs.2,25,000 paid by me personally; and,

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iii. Pass any other necessary orders for speedy justice to me and all the customers who are being cheated by the company.

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15. The address of Samagra Krushi Farm Estates India (P) Ltd. Company, its addresses and the names of some of its directors and their contact numbers is as under:

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Head Office (CLOSED)

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10 - NC: 2023:KHC:19203 CRL.P No. 412 of 2021

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Samagra Krushi Farm Estates India (P) Ltd. #15/16, Ground Floor, 2^nd Cross Sai Colony, Bhattarahalli Virgonagar Post, Old Madras Road Bangalore – 560 049.

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Other office (operating)

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Samagra Krushi Farm Estates India (P) Ltd., Gajanana Circle, Chitamani Taluk Chikkaballapura – 563 125. Ph No.08154255566

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Board Members

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1. Rajapppa - 09731583745 2. Prabhakar - 09341402043, 09845135550 3. M.R.Eregowda - 09742916038 4. Prakash - 09902405777 5. Naveen Kumar - 09590326179.”

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The complaint is that the scheme that the petitioner and others ran was a pigmy deposit scheme. The complaint in its minute details narrates how the money was collected and the collected money was returned on the dates of their maturity to some customers and had hoodwinked several other customers. The Police after investigation have filed a charge sheet. The summary of the charge sheet, as obtaining in Column No.17 reads as follows:

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“17. PÉÃ¹£À ¸ÀAQë¥ÀÛ ¸ÁgÁA±À

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11 -

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NC: 2023:KHC:19203 CRL.P No. 412 of 2021

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zÉÆÃµÁgÉÆÃ¥ÀuÁ ¥ÀvÀæzÀ°è £ÀªÀÄÆ¢¹gÀÄªÀ J-1, J-2, J-3, J-4 ªÀÄvÀÄÛ J-5 DgÉÆÃ¦UÀ¼ÀÄ ªÀÄvÀÄÛ EvÀgÀgÀÄ ¸ÉÃjPÉÆAqÀÄ 2011-2012£ÉÃ ¸Á°£À°è “¸ÀªÀÄUÀæ PÀÈ¶ ¥sÁgÀA J¸ÉÖÃmïì EArAiÀiÁ ¥ÉæöÊªÉÃmï °«ÄmÉqï” JA§ PÀA¥É¤AiÀÄ PÀZÉÃjAiÀÄ£ÀÄß ¨ÉAUÀ¼ÀÆgÀÄ £ÀUÀgÀzÀ PÀÈµÀÚgÁd¥ÀÄgÀ ¥ÉÆ°Ã¸ï oÁuÁ ¸ÀgÀºÀ¢ÝUÉ ¸ÉÃjzÀ ¨sÀlÖgÀºÀ½îAiÀÄ ¨sÀV¤ ºÉÆÃmÉ¯ï »A¨sÁUÀzÀ ¸Á¬Ä PÁ¯ÉÆÃ¤AiÀÄ 2£ÉÃ PÁæ¸ï £ÀA.15/16 gÀ°è PÀZÉÃjAiÀÄ£ÀÄß vÉgÉzÀÄ ¸ÀzÀj PÀA¥É¤UÉ §AqÀªÁ¼ÀªÀ£ÀÄß ¸ÀAUÀæºÀ ªÀiÁqÀ®Ä ¸ÁQë-1 gÀªÀgÀ£ÀÄß vÀ£Àß KeÉAmï DV £ÉÃ«Ä¹PÉÆAqÀÄ, CªÀgÀ ªÀÄÆ®PÀ ¸ÁQë-2, 3, 4, 5, 6 ªÀÄvÀÄÛ ¸ÁQë-7 gÀªÀgÀAvÀºÀ ¸ÁªÀðd¤PÀjAzÀ ¦Vä ªÀÄÆ®PÀ MlÄÖ ¸ÀÄªÀiÁgÀÄ 7,50,000/gÀÆ.UÀ¼À£ÀÄß ¸ÀAUÀæºÀ ªÀiÁrzÀÄÝ, ¦Vä ºÀtªÀ£ÀÄß PÀlÄÖªÀªÀjUÉ ¨ÁAqï C£ÀÄß ¤Ãr, ¨ÁAqï ªÉÄZÀÆåjn DzÀ PÉ®ªÀjUÉ ZÉPï C£ÀÄß ¤Ãr, ZÉPï ¤ÃrzÀÝªÀjUÉ ºÀt dªÀiÁ DUÀÄªÀAvÉ £ÉÆÃrPÉÆ¼ÀîzÉÃ, ºÀt PÀnÖzÀÝªÀjUÉ ºÀtªÀ£ÀÄß ªÁ¥À¸ÀÄì PÉÆqÀzÉÃ ªÉÆÃ¸À ªÀiÁqÀÄªÀ zÀÄgÀÄzÉÝÃ±À¢AzÀ¯ÉÃ ªÉÄÃ®ÌAqÀ PÀZÉÃjAiÀÄ£ÀÄß DgÉÆÃ¦UÀ¼ÀÄ ªÀÄÄaÑPÉÆAqÀÄ ºÉÆÃV ¦Vä ºÀtªÀ£ÀÄß PÀnÖzÀÝªÀjUÉ MlÄÖ ¸ÀÄªÀiÁgÀÄ 7,50,000/- gÀÆUÀ¼À£ÀÄß ªÉÆÃ¸À ªÀiÁrgÀÄªÀ ªÉÄÃgÉUÉ DgÉÆÃ¦UÀ¼ÀÄ ªÉÄÃ®ÌAqÀ PÀ®A£À jÃvÀå ²PÁëºÀð C¥ÀgÁ¢üPÀ PÀÈvÀåªÉ¸ÀVgÀÄvÁÛgÉ. DzÀÝjAzÀ DgÉÆÃ¦vÀgÀ «gÀÄzÀÞ F zÉÆÃµÁgÉÆÃ¥ÀuÁ ¥ÀvÀæ.”

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The charge sheet clearly indicates that the complainant and others have induced the subscribers to pay money on daily basis as they were pigmy agents. Pigmy is a small scale saving that is done by daily wagers and labourers. The Company ought to have returned the amount when it gets matured. The maturity amount is returned to 275 customers, but denied to 100 customers. Those customers form crux of the complaint.

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The offences alleged are the ones punishable under Sections 406 and 420 of the IPC. Section 406 of the IPC which

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has its ingredients in Section 405 of the IPC is clearly met in the case at hand. The Company was in the position of a trust that is endowed by the customers for return of their money at a

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12 - NC: 2023:KHC:19203 CRL.P No. 412 of 2021

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later stage in lumpsum. The money is not returned. Non-return of money to 100 customers is a matter of record. Therefore, the accused have misappropriated the amount belonging to 100 customers. The ingredients of Section 405 is entrustment of a property and it being misappropriated, is clearly met in the case at hand. The other offence alleged is under Section 420 of the IPC. Section 415 of the IPC mandates that the victim should have been induced by the accused with a dishonest intention for it to become an offence under Section 420 of the IPC. The inducement to invest as pigmy deposit on daily basis is clearly met. If there was no dishonest intention at the outset, money should have been returned back to the customers. Therefore, both the offences are clearly met.

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The crime is of the year 2013; the charge sheet is filed in the year 2016 and the present petition is now considered in the year 2023, 10 years have passed by. The deposits made by 100 customers to whom payment is denied of their hard earned money are naturally facing all hardships. Under the circumstances the concerned Court shall make all

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NC: 2023:KHC:19203 CRL.P No. 412 of 2021

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13 -

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endeavours to conclude the proceedings within an outer limit of

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six months, if not earlier.

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Finding no merit in the criminal petition, the petition

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stands dismissed.

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Consequently, I.A.No.1 of 2021 also stands disposed.

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Sd/JUDGE

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BKP

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List No.: 1 Sl No.: 88

Mr Rajappa B v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

Mr Rajappa B v. the State of Karnataka

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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