Dismissed

Mr Shayak Sen v. State of Karnataka

Karnataka HC24 Nov 2023CRL.P/4843/2021

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed a petition under Section 482 CrPC praying for quashing of proceedings for cheating and criminal breach of trust. The Court held that evidence showed the offence was committed conjointly by the petitioner and his wife, and innocence cannot be determined in such a proceeding; the matter must be tried on merits.

What did the court decide?

Petition dismissed; liberty granted to seek discharge on merits; Trial Court directed to split charges for separate trial if accused absents.

Mr Shayak Sen Vs State of Karnataka — Quashing and FIR | Karnataka HC (2023)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 24^TH DAY OF NOVEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ CRIMINAL PETITION NO. 4843 OF 2021

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BETWEEN:

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MR. SHAYAK SEN, AGED ABOUT 38 YEARS, SON OF DR. MALAY RAJAN SEN, RESIDING AT NO.1302, TERRAPIN, SJR WATERMARK, HARLUR ROAD, OFF SARJAPUR ROAD, BENGALURU - 560 102.

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…PETITIONER

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(BY SRI. TOMY SEBASTIAN, SENIOR ADVOCATE FOR SRI. ALWYN SEBASTIAN, ADVOCATE)

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AND:

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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STATE OF KARNATAKA, BY WHITEFIELD POLICE STATION, BENGALURU CITY, REPRESENTED BY THE STATE PUBLIC PROSECUTOR HIGH COURT BUILDINGS, BENGALURU - 560 001.

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MR. ASHOK KINHA, SON OF LATE CH. YUDHVIR SINGH, AGED ABOUT 43 YEARS, 208, RENENT PRIME, 3^RD FLOOR, WHITEFIELD MAIN ROAD,

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WHITEFIELD, BENGALURU - 560 066. (AUTHORISED SIGNATORY OF M/S. ATHAMUS VENTURE MANAGEMENT PVT.LTD., M/S. EXCEDO REALTY FUND-1 AND M/S. AUTUS DEVELOPERS PVT. LTD.)

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…RESPONDENTS

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(BY SMT. WAHEEDA M.M., HIGH COURT GOVERNMENT PLEADER FOR R1; SRI. S. RAMAKRISHNAN, ADVOCATE FOR R2)

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THIS CRL.P IS FILED U/S.482 OF CR.P.C PRAYING TO QUASH THE ORDER DATED 02.08.2017 PASSED BY THE HONBLE CHIEF JUDICIAL MAGISTRATE, RURAL COURT, BENGALURU IN C.C.NO.6859/2017 PRODUCED AT ANNEXURE-E, TAKING COGNIZANCE OF OFFENCE P/U/S.406, 420 R/W SEC.34 OF THE IPC AGAINST THE PETITIONER HEREIN.

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THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner has challenged the prosecution launched against him in C.C.No.6859/2017 for the offences punishable under Sections 406, 420 read with Section 34 of IPC which is pending trial before the Chief Judicial Magistrate Rural Court, Bengaluru.

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The respondent No.2 being the authorized representative of M/s.Athamus Venture Management Private Limited (hence forth referred to as “Athamus”), M/s.Excedo Realty Fund-I, (hence forth referred to as “ERF-I”) and M/s.Autus Developers Private Limited (hence forth referred to as “Autus”), informed the respondent No.1 on 21.03.2017 about commission of cognizable offences by the petitioner, his wife and ESL Ventures. The respondent No.2 claimed that Athamus, ERF-I and Autus were into the business of Fund Advisory and Management. ERF-I was a SEBI registered Trust fund, while Athamus was its Investment Manager and while Autus was a wholly owned subsidiary of Athamus. He claimed that the accused No.2 approached the complainant on 21.03.2016 along with her father representing that she and her husband (accused No.3/petitioner) were the joint proprietors of M/s.ESL Ventures and that they had sold it to TATA Trent's for a sum of Rs.36,00,00,000/- and were

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to receive the proceeds within two months. Both the petitioner and his wife shared the transaction papers with

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the complainant and made them believe the transaction to be true. The accused No.2 and the petitioner also expressed interest to invest a sum of Rs.20,00,00,000/with ERF-I and subscribe to equity shares in Athamus. He claimed that after prolonged discussions and negotiations, they entered into an agreement with an anchor investor named Mr.Lalit Tayal on 22.03.2016. He claimed that accused No.2 and the petitioner represented that they were in need of some money to close the financial accounts of Eat Shop Love /Invictus Design by paying its vendors within March-2016 and required short term loan on immediate basis and under took that the loan would be repaid within three to six months. Based on such representations, Autus entered into separate agreement with M/s.ESL Ventures to advance loan of Rs.58,00,000/of which a sum of Rs.20,00,000/- was transferred to the account of the petitioner herein, while the remaining Rs.38,00,000/- was transferred to the account of the accused No.2, towards repayment of the aforesaid loan, three cheques were passed on to the complainant.

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Respondent No.2 claimed that the petitioner and accused No.2 negotiated and finalized the terms of investment and equity under a term sheet dated 22.04.2016, consequent to which a share holder agreement dated 24.04.2016 was entered into between accused No.2 and Athamus and a Contribution Agreement dated 18.05.2016 was entered

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into. Accused No.2 also passed on cheques towards replacement of cheques that were drawn. Respondent No.2 claimed that accused No.2 had committed to invest Rs.20,00,00,000/and had also reserved right to additional equity by raising capital from her previous investor. He further claimed that the accused No.2 and the petitioner on behalf of M/s.ESL Ventures held meetings and promised Athamus and ERF-I that the cheques for Rs.20,00,00,000/- and Rs.30,00,000/- respectively may be submitted for encashment on or before 30.06.2016.

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The respondent No.2 claimed that based on

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these representations and undertakings, accused No.3 was appointed as a Director on the Board of Athamus and

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accused No.3/petitioner was appointed as a Member Investment Committee of ERF-I. Accused No.2 was provided with all the facilities as provided to a Director and she attended the board meetings from time to time. During June-2016, accused No.2 represented that she had transferred an investment of Rs.4,00,00,000/- against Rs.20,00,00,000/- to ERF-I and a sum of Rs.30,00,000/to Athamus. The Board Meeting was held on 13.06.2016 to confirm the transfers made by the accused No.2. However, accused No.2 informed the Board that owing to banking hassles, the transfers failed and that she would again make the transfer. From 13.06.2016, accused No.2 and petitioner were involved in the business activities of the Athamus and ERF-I, even though the petitioner was treated for various ailments. In the meanwhile, accused No.2 represented that she had traveled to Sri Lanka to meet an investor and later visited the office of Athamus and shared a executed subscription agreement entered into with the investor Mr.Howard L. Weldon. From June2016 onwards, the accused No.2 kept on sharing various

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bank transfer details for a sum of Rs.4,00,00,000/- and Rs.30,00,000/respectively and this continued till 18.01.2017. She also represented during the first week of September, that she had transferred a sum of Rs.4,00,00,000/- to ERF-I and Rs.30,00,000/- to Athamus which was published in ‘The Hindu’ Newspaper and same

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was placed before Athamus. During the last week of September-2016, she disclosed that she had received a sum of Rs.9,00,00,000/- from TATA Group for sale of Eat Shop Love. However, to keep the money safe, she had transferred it to one of her friends Mr.Abhijeet Ghosh, who held it from February-2016. She claimed that she would get the amounts from Mr.Abhijeet Ghosh and promised to refund the loan of Autus and meet her obligations on or before 30.10.2016. Later, by 15.12.2016, the accused No.2 represented that she would refund the loan to Autus only if Mr.Abhijeet Ghosh is made a shareholder and a Director in Athamus. Though the complainants offered to meet Mr.Abhijeeth Ghosh, and discuss the issue with him, accused No.2 never brought him for a meeting. This

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continued for long and the accused No.2 did not take any steps. The respondent No.2 therefore, claimed that M/s.ESL Ventures were carrying on a fraudulent business of cheating and defrauding many persons, such as, the complainants and duping them of the loan amount. The respondent No.2 alleged that the accused No.2 and her husband were forging signatures and impersonating others and were creating screen shots of bank entries including RTGS, NEFT for carrying on criminal activities of cheating and committing breach of trust. The respondent No.2 claimed that though the accused No.2 and her father met the complainants on 24.01.2017 and 27.01.2017 and assured that the loan of Autus would be repaid immediately and the fund investment offer also would be complied, however, neither of them did anything. In the meanwhile, the accused No.2 and the petitioner had filed a petition for divorce. The respondent No.2 apprehending that false medical certificates could have been created to defeat its rights and get away from the criminal activities indulged by both of them, the respondent No.2 requested

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the respondent No.1 to initiate suitable action against the petitioner and accused No.2.

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Based on this, respondent No.1 registered a case in Crime No.119/2017 for the offences punishable under Sections 468, 471, 406, 420 read with Section 34 of IPC and took up investigation. After investigation a charge-sheet was filed for the offences punishable under Sections 406 and 420 read with Section 34 of IPC. The Trial Court perused the charge-sheet and entire material produced along with charge-sheet and took cognizance for the offences punishable under Sections 406 and 420 read with Section 34 of IPC and issued process to the petitioner. Being aggrieved by the same, this petition is filed.

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Learned Senior counsel representing the

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petitioner submitted that, the petitioner was in receipt of only a sum of Rs.20,00,000/- under the loan agreement dated 22.03.2016 and that he had repaid a sum of Rs.10,00,000/on 29.09.2016 and a sum of

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Rs.10,00,000/- on 07.10.2016. He submits that the entire transaction was between the accused No.2 and the complainants and the petitioner was in no way involved in the transaction as he was unwell and was under treatment. He further submits that the petitioner had filed a petition for dissolution of the marriage with accused No.2 in M.C.No.4204/2018 and that a mutual settlement was arrived at, in terms of which, the marriage between the petitioner and the accused No.2 was dissolved on 13.09.2019. He therefore, contends that after dissolution of marriage, the accused No.2 has tried to implicate the petitioner in offences, which he did not commit. He submits that since the petitioner has already repaid a sum of Rs.20,00,000/- that he received with interest, he cannot be prosecuted for any offences punishable under Sections 406 and 420 read with Section 34 of IPC. He pointed out to an e-mail dated 02.02.2017 addressed by the accused No.2 to the petitioner wherein, she owned up her mistake and therefore, he submits that the petitioner cannot be

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prosecuted for any offences punishable under Sections 406 and 420 read with Section 34 of IPC.

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The learned Senior counsel submitted that even

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after perusal of the charge-sheet, there is no material to indicate that the petitioner was ever appointed as Director of either Athamus or ERF-I or Autus and it was accused No.2, who was appointed as a Director. In this regard, he has placed on record the information sourced from the Registrar of Companies which indicate that the accused No.2 was made a Director of Athamus with effect from 29.05.2017. He submits that the petitioner was in no way concerned with the transaction that was entered into between the accused No.2 and her father with Athamus. He further contends that the statement of the witnesses cited in the charge-sheet also indicate that the petitioner was unwell and therefore, the complicity of the petitioner in the commission of offences punishable under Sections 406 and 420 read with Section 34 of IPC is ruled out. Therefore, he prayed that the prosecution launched

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against the petitioner may be set at naught. He also contended that the petitioner had not signed any agreement entered into between the accused No.2 and Athamus, ERF-1 and Autus and therefore, he contends that the petitioner cannot be held liable for the offences.

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Per contra, learned counsel for the respondent No.2 submitted that the petitioner is not innocent as claimed by him. He submits that, the transaction between three entities and the accused No.2 was also in the full presence of the petitioner and he had partaken in the discussions and consequent agreements entered into. He submits that the very fact that a sum of Rs.20,00,000/was transferred to the account of the petitioner indicates his involvement in the transaction and therefore, he is deemed to have knowledge of the transaction. He contends that it is not the case of the petitioner that the said sum of Rs.20,00,000/- was mistakenly transferred to his account. He pointed out to the account extract and stated that the petitioner had used a sum of

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Rs.20,00,000/- for his personal needs and necessities and therefore, contends that the petitioner is also involved in the commission of offences, more particularly, in compelling the complainants to believe the transaction of sale of M/s.ESL ventures to TATA group and the consequent promise to deposit a sum of Rs.20,00,00,000/in ERF-I. He therefore submits that the claim made by the petitioner that he was not involved in any of the transactions with three entities regarding the investment of Rs.20,00,00,000/- and receipt of Rs.58,00,000/- to square off certain liabilities. He contended that at any rate, these are all questions of fact which have to be established by the petitioner before the Trial Court and not certainly in the petition under Section 482 of Cr.P.C.

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He further contends that the proceedings for dissolution of the marriage of the petitioner with the accused No.2 is stage managed only to avoid being prosecuted. He submits that if the petitioner was honest and if the dissolution of marriage proceedings were

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genuine, then there was no love lost between the petitioner and the accused No.2. Therefore, the joint petition filed in M.C.No.4204/2018 must have dealt with the liabilities incurred by the accused No.2. On the contrary, he contends that the settlement did not refer to Crime No.29/2017 registered by the Bengaluru City Cyber Police and various other proceedings pending before various Courts. He therefore, submits that the petition for dissolution of marriage is clearly stage managed to avoid being prosecuted.

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I have considered the submissions made by learned Senior counsel for the petitioner as well as the learned counsel for the respondent No.2.

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A perusal of the charge sheet and the materials produced along with it disclose that the petitioner and the accused No.2, as a couple, had represented before the complainant that they were the joint proprietors of M/s. ESL Venture and that they had sold the said entity to TATA Group for a sum of Rs.36,00,00,000/-. They had also

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showed certain news articles about the transaction between M/s.ESL Venture and TATA Group to make the complainant believe about the transaction. It also indicates that the petitioner and the accused No.2 had represented that a sum of Rs.20,00,00,000/- would be invested in Excedo Realty Fund-I (ERF-I) and some equity shares would be subscribed in Autus Developers Pvt. Ltd., Based on this, they had represented that to clean off debt in the annual statement, they were in need of some funds and consequently had received a sum of Rs.58,00,000/- of which a sum of Rs.20,00,000/- was transferred to the account of the petitioner. The account extract placed on record indicates that a sum of Rs.20,00,000/- transferred was utilized by petitioner for his own needs and necessities. Long thereafter, the petitioner retransferred the loan of Rs.20,00,000/- received by him through two transfers of Rs.10,00,000/- each.

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The material placed on record indicates that the

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petitioner and the accused No.2 had made all these

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representations and had compelled the complainants to part with a sum of Rs.58,00,000/- of which a sum of Rs.20,00,000/- was refunded by the petitioner herein. The fact that the petitioner had held a sum of Rs.20,00,000/in his account and used the same for his needs and necessity, until it was returned in September, 2016, goes to show that the petitioner was fully aware of the transaction between them and also the fact that he had received the said sum from Autus Developers Pvt. Ltd as a loan to clear certain liabilities found in the annual statement of M/s. ESL Ventures. Therefore, the contention of the learned Senior Counsel for the petitioner that the petitioner was innocent and that he has repaid a sum of Rs.20,00,000/- was inconsequential, as the offence was committed, not only by the petitioner but also by accused No.2 as a couple. Therefore, as rightly contended by the learned counsel for the respondent No.2, this Court cannot determine the innocence of the petitioner in a proceeding under Section 482 of Cr.P.C.

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Hence, this petition lacks merits and is

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dismissed. It is however open for the petitioner to seek

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discharge in accordance with law.

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The Trial Court shall take steps to secure the presence of accused No.2 failing which, the charges against her shall be split up and separate trial shall be conducted against the petitioner herein in accordance with law.

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Sd/JUDGE

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KBM - para 1 to 10 HJ - para 10 to till end List No.: 1 Sl No.: 20 CT:SNN

Mr Shayak Sen v. State of Karnataka

Case brief

What is this about?

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Mr Shayak Sen v. State of Karnataka

Case brief

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