High Court of Karnataka quashed a private complaint under Section 482 Cr.P.C. holding that the allegations disclosed a civil commercial dispute rather than a criminal offence of cheating.
The criminal petitions were allowed and the proceedings pending in PCR No.12997/2018 were quashed.
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.
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF AUGUST, 2023
BEFORE
THE HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM
CRIMINAL PETITION NO. 4792 OF 2019 C/W
CRIMINAL PETITION NO.4793 OF 2019
IN CRL.P NO.4792/2019 BETWEEN:
MR SHAM BANERJI @ SHYAMOL BANERJI CHIEF EXECUTIVE OFFICER AT I2I TELESOLUTIONS AND TELEMEDICINE PVT LTD AGED 66 YEARS, SON OF MR AMAL KUMAR BANERJI OLD ADDRESS: OFFICE AT 23/24, EPIP 1ST PHASE, KIADB WHITEFIELD, BANGALORE-560066
CURRENTLY AT JP CLASSIC, #157/1, SILVER CORPORATE BLOCK-1 GROUND FLOOR, TOTAL ENVIRONMENT CAMPUS, EPIP - PHASE-II KIADB WHITEFIELD, BANGALORE-560066
...PETITIONER
(BY SRI.LAKSHMI MENON, ADVOCATE)
AND:
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648/L, SWAMY VIVEKANANDA ROAD, BINNAMANGALA, HOYSALA NAGAR INDIRANAGAR, BENGALURU KARNATAKA - 560038
2 . DR PRATHIMA RADHAKRISHNAN MANAGING PARTNER AT BANGALORE FETAL MEDICINE CENTRE 2-E, 2ND FLOOR, RICH HOMES, 5/1 RICHMOND ROAD, BANGALORE - 560025
OFFICE AT 3RD AND 4TH FLOOR, K P HEIGHTS, NO 327-328, 80 FEET ROAD HAL II STAGE, INDIRANAGAR BENGALURU - 560038
…RESPONDENTS
(BY SRI.VINAYAKA.V.S, HCGP FOR R1; SRI.P.B.AJITH, ADVOCATE FOR R2)
THIS CRL.P IS FILED U/S.482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO CALL FOR RECORDS IN PCR NO.12997/2018 ON THE FILE IV ADDL. CHIEF METROPOLITAN MAGISTRATE, BENGALURU AND QUASH THE COMPLAINT AND ALL PROCEEDINGS IN PCR.NO.12997/2018 ON THE FILE OF IV ADDL.C.M.M., BENGALURU AS AGAINST THE PETITIONER.
IN CRL.P NO.4793/2019 BETWEEN:
MR RAJA NARAYAN
MANAGER - APPLICATION SUPPORT I2I TELESOLUTIONS AND TELEMEDICINE PVT LTD AGED 39 YEARS SON OF SIMHACHALAM B
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OLD ADDRESS: OFFICE AT 23/24 EPIP 1ST PHASE, KIADB WHITEFIELD BANGALORE - 560066
CURRENTLY AT J P CLASSIC # 157/1, SILVER CORPORATE BLOCK - 1, GROUND FLOOR TOTAL ENVIRONMENT CAMPUS EPIP - PHASE - II KIADB WHITEFIELD, BANGALORE - 560066
...PETITIONER
(BY SRI.LAKSHMI MENON, ADVOCATE)
AND:
1 . STATE OF KARNATAKA BY STATION HOUSE OF OFFICER INDIRANAGAR POLICE STATION 648/L, SWAMY VIVEKANANDA ROAD, BINNAMANGALA, HOYSALA NAGAR INDIRANAGAR, BENGALURU KARNATAKA - 560038
2 . DR PRATHIMA RADHAKRISHNAN MANAGING PARTNER AT BANGALORE FETAL MEDICINE CENTRE 2-E, 2ND FLOOR, RICH HOMES, 5/1, RICHMOND ROAD, BANGALORE - 560025 OFFICE AT: 3RD AND 4TH FLOOR, K P HEIGHTS, NO 327-328 80 FEET ROAD HAL II STAGE, INDIRANAGAR BENGALURU - 560038
…RESPONDENTS
(BY SRI.VINAYAKA.V.S, HCGP FOR R1;
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SRI.P.B.AJITH, ADVOCATE FOR R2)
THIS CRL.P IS FILED U/S.482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO CALL FOR RECORDS IN PCR NO.12997/2018 ON THE FILE IV ADDL. CHIEF METROPOLITAN MAGISTRATE, BENGALURU AND QUASH THE COMPLAINT AND ALL PROCEEDINGS IN PCR NO.12997/2018 ON THE FILE OF THE IV ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THE PETITIONER.
THESE PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 17.07.2023, COMING ON FOR PRONOUNCEMENT OF ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The captioned petitions are filed seeking
quashing of the complaint and all proceedings pending in PCR.No.12997/2018 pending on the file of IV Additional Chief Metropolitan Magistrate, Bengaluru.
2. The facts of the case are as under:
Respondent No.2 has filed a private complaint
alleging that petitioner in CRL.P NO.4792/2019 (Accused No. 1) induced the complainant that
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company would start development of two classes of students viz 'Online' and 'Offline' and entered into an agreement on 1.1.2014. The respondent No.2complainant has further alleged that the agreement dated 1.1.2014 defines specific roles and responsibilities of the respondent No.2-complainant and the company owned by Accused 1 and 2. The complainant has further alleged that first accused is guilty of not submitting monthly statements as assured under the agreement dated 1.1.2014 and was irregular in making payments as and when they were found to be due to the respondent No.2-complainant.
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advertisement is still enrolling students into fresh courses thereby causing enormous financial loss to the complainant. Therefore, Respondent No.2complainant has claimed that the petitioners/Accused 1 and 2 and the company have indulged in cheating Respondent No.2 as well as prospective students. Hence, respondent No.2 has lodged a private complaint under Section 200 of Cr.P.C. alleging that first accused and other directors/officers of the company, including the second accused are guilty of cheating, criminal breach of trust and
misappropriation of funds.
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commercial dispute to a complaint alleging cheating, criminal breach of trust and also violation of Section 63 of the Copyright Act, 1957 (for short 'Act'). Learned Senior Counsel has further taken this Court to the terms of the agreement. Referring to clause 2.1 of the agreement, he has made a counter allegation against respondent No.2-complainant alleging that respondent No.2 and its company have failed to provide training content in time and therefore, "i2i Telesolutions and Telemedicine Private Limited for compelling reasons had to invest money and facilitate the Video content. Therefore, learned Senior counsel would contend that his client's company had to incur heavy expenses in facilitating content creation. He would then refer to Section 51 and 63 of the Act. Referring to these two Sections and Section 17(b) of the Act, he would contend that respondent No.2complainant does not own the copy rights and
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intellectual property rights associated with training content and training material supplied to Online community for publication. Referring to Clause 6 of the agreement, he would contend that the faculty (authors) own all copyrights and therefore, the complaint lodged for the offence punishable under Section 63 of the Act is not at all made out. Even if the entire allegations in the complaint are accepted, no offence is made out under Section 63 of the Act. He would further point out to the statement made by the learned counsel for respondent No.2 who has clearly conceded that his clients would not press the allegations relating to Section 420. While concluding his arguments, he would submit that if these two Sections are ignored, the private complaint for the rest of the offences is not made out. He would point out that the company has not lodged the complaint and further the complaint is not lodged against the
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service provider and therefore, requests this Court to quash the proceedings.
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have continued to enroll the students and therefore, the petitioners/Accused 1 and 2 are guilty of soliciting students. He would further vehemently argue and contend that petitioners/Accused 1 and 2 are personally liable to be punished in accordance with law for cheating and causing wrongful loss to the complainant. Learned counsel has tried to counter the claim of petitioners/Accused 1 and 2 that they have developed training content and therefore, had to incur heavy expenses in facilitating content creation . Referring to the agreement, he would point out that the responsibility of developing training content was retained by the customer. Referring to clause 2.2 of the agreement, he would contend that there is no confusion and as per the agreement, the responsibility was on the customer to develop the training content and deliver it on time as per the training enrollment. Referring to this relevant clause of the agreement, he
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would contend that petitioners/Accused cannot take a stand which is contrary to the terms and conditions indicated in the agreement, which is admitted by both the parties. On these set of defence, he would requests this Court to dismiss the petition. He would conclude his arguments by contending that there is prima facie material against the petitioners/Accused and therefore, the petitions deserve to be dismissed.
vein and has persuaded this Court to dismiss the petitions. Referring to the material on record, he would contend that there is sufficient prima facie material on record and therefore, this is not a fit case to quash the proceedings at this juncture.
appearing for petitioners/Accused and learned counsel appearing for respondent No.2-complainant and the
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learned HCGP. I have also given anxious consideration to the synopsis filed by respondent No.2.
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familiarizes himself with the statements that first accused company's representative would forward.
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contract would not give rise to an offence of cheating and only in those cases of breach of contract would amount to cheating where there was any deception played at the very inception. To sustain a criminal trial, the complaint must disclose criminal offence. The complaint does not disclose any criminal offence at all and is purely a civil dispute between the parties for which the remedy lies before the civil Court. The Apex Court in the matter of Indian Oil Corporation
.vs. M/s.NEPC India Limited and others1 has held that the complainant who initiates or persists with the prosecution, being fully aware that criminal proceedings are fully unwarranted and his remedy lies only in civil law, should himself be made accountable at the end of such misconceived criminal proceedings. In the present case on hand, it is clearly a commercial dispute and the parties are already litigating in the Arbitration proceedings.
1 2006(3) SCC Cri 736
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"This Court has time and again drawn attention to the growing tendency of the complainants attempting to give the cloak of a criminal offence to matters which are essentially and purely civil in nature, obviously either to apply pressure on the accused, or out of enmity towards the accused, or to subject the accused to harassment. Criminal courts should ensure that proceedings before it are not used for settling scores or to pressurize parties to settle civil disputes. But at the same time, it should be noted that several disputes of a civil nature may also contain the ingredients of criminal offences and if so, will have to be tried as criminal offences, even if they also amount to civil disputes."
2 (2009)8 SCC 751
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The above cited judgment clearly gives an indication that Court have on numerous occasions, refused to encourage criminal prosecution when it is found that though remedy lies only in civil law, criminal proceedings are initiated, this Court has exercised its inherent power under Section 482 of Cr.P.C. to quash any offences where the ingredients of the offence alleged is not made out.
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provisions pertaining to fraud, criminal breach of trust, cheating as well as provisions of Section 63 of the Act. On reading the complaint, I have not found any specific allegations which would attract Section 63 of Act. Even if allegations and the material on record are accepted in entirety, the findings in regard to Section 63 of the Act in the preceding paragraph would only lead to one inference that no offence is made out under Section 63 of the Act even otherwise. On the contrary, I would find that there is absolutely no foundation even in the complaint to make out a case under Section 63 of the Copy Right Act, 1957. Even clause (6) of the agreement dated 1.1.2014 also prima facie indicates that it is the faculty (authors) who own all copyrights and intellectual property rights associated with training content and training material supplied to ONLINE COMMUNITY for publication. Therefore, the complainant cannot take a stand
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contrary to what is indicated in the agreement which is evident from clause (6) of the agreement. Therefore, even the offences as indicated under Section 63 of the Copy Right Act, 1957 is not made out.
ORDER
(i) The criminal petitions are allowed.
(ii) The proceedings pending in
PCR.No.12997/2018 pending on the file of *IX Additional Chief Metropolitan Magistrate, Bengaluru, are hereby quashed.
Sd/JUDGE
*alb/-
* Corrected vide Court order dated: 16.11.2023 .
2 issues framed by the court
Whether proceedings under a private complaint for cheating and breach of trust can be quashed under Section 482 Cr.P.C. when they constitute a disguised commercial dispute.
Whether the complaint discloses the ingredients of an offence under Section 63 of the Copyright Act, 1957.
Colour shows how this judgement treated each authority
Indian Oil Corporation vs. M/s.NEPC India Limited and othersRelied on¶14
Indian Oil Corporation vs. M/s.NEPC India Limited and others
Mohammed Ibrahim and others .vs. State of Bihar and anotherRelied on¶15
Mohammed Ibrahim and others .vs. State of Bihar and another
1 provisions across 1 enactments
MR SHAM BANERJI
MR RAJA NARAYAN
STATE OF KARNATAKA
DR PRATHIMA RADHAKRISHNAN
SACHIN SHANKAR MAGADUM
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
