Allowed

Anand v. Vs State by Ccb (Eow) Bangalore

Karnataka HC2 Aug 2023CRL.P/986/2023

Case brief

AI extract

What is this about?

Crl.P. filed under Section 482 CrPC to quash criminal proceedings for money lending offences. Quashed because prosecution initiated via police report without first depositing money and filing a petition as mandated by Section 5 of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004.

What did the court decide?

The impugned proceedings in CC No.7716/2020 pending before the 1st ACMM, Bangalore, are hereby quashed.

Anand v Vs State by Ccb (Eow) Bangalore — Money Laundering | Karnataka HC (2023)

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NC: 2023:KHC:27057 CRL.P No. 986 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 2^ND DAY OF AUGUST, 2023

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR

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CRIMINAL PETITION NO. 986 OF 2023

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BETWEEN:

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ANAND V AGED ABOUT 35 YEARS S/O LATE VENKATAGOWDA RESIDING AT NO. 55, 11TH CROSS, SRMV LAYOUT NAGASANDRA POST BANGALORE-560 073

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PERMANENT ADDRESS: HANUMANAKATTE VILLAGE K.R.PEETE TALUK, MANDYA

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…PETITIONER

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(BY SRI. C N RAJU, ADVOCATE)

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

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AND:

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STATE BY CCB(EOW) BANGALORE REPRESENTED BY SPP HIGH COURT OF KARNATAKA AT BANGALORE-560 001.

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…RESPONDENT

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(BY SRI. K S ABHIJITH, HCGP)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, PRAYING TO SET ASIDE THE ORDER TAKING COGNIZANCE BY THE 1ST A.C.M.M. AT BENGALURU IN C.C.NO.7716/2020 DATED 06.08.2020, ARISING OUT OF CR.NO.276/2017 OF BAGALAGUNTE POLICE, BENGALURU FOR THE OFFENCE PUNISHABLE 41, 29 OF KARNATAKA MONEY LENDERS ACT,

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NC: 2023:KHC:27057 CRL.P No. 986 of 2023

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1961, SEC.3 AND 4 OF KARNATAKA PROHIBITION OF CHARGING EXORBITANT INTEREST ACT, 2004, AND SECTION 420 OF IPC BY ALLOWING THIS PETITION.

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

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ORDER

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The petitioner - accused is prosecuted for the offences punishable under Sections 41, 38 of the Karnataka Money Lenders Act, 1961 and Sections 4, 3 of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004.

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The case of the prosecution is that, the accused herein is in the business of lending money without obtaining license, and was charging exorbitant interest on the money lent to the public. The cognizance of the aforesaid offences is impugned in this petition.

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Heard the learned counsel for the petitioner - accused and the learned High Court Government of the respondent -State.

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Admittedly, the FIR was registered by the Inspector of Police, Bagalagunte Police Station. The issue involved in this petition was examined by the coordinate Bench of this Court in Crl.P No.15/2020, wherein it has been held as follows:

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"7. I have perused the grounds urged in the petition and also the documents produced by the learned counsel for the petitioner in support of his case.

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NC: 2023:KHC:27057 CRL.P No. 986 of 2023

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Looking to the allegations made in the complaint, the offences 10 alleged are under Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 i.e., under Sections 3 and 4. When that is so, the procedure contemplated under Section 5 of the said Act is to be followed. Section 5 of the said Act reads as follows:

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Deposit of money and presentation of petition to Court and the procedure thereof.-

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(1) A debtor may 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 therefor, as the case may be.

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(2) The Court shall, on receipt of a petition under sub-section(1), refer a copy of the petition to the person mentioned in the petition, directing him to give his replies within a period of fifteen days as may be granted by the Court. The Court may, after due inquiry and after considering the 11 versions of both the parties, pass orders recording the satisfaction of the loan, and interest therefor in full or in part, as the case may be."

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In the instant case also, there has been no such complaint to the jurisdictional Court by the borrowers alleging that petitioner had charged exorbitant interest as stated in the complaint. Thus, initiation of the prosecution against the petitioner on the basis of Police report is illegal. Records would clearly disclose that registration of the complaint by

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NC: 2023:KHC:27057 CRL.P No. 986 of 2023

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respondent No.2 is without taking recourse Section 5 of the Exorbitant Interest Act, 2004, and such further proceedings would be illegal."

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In view of the above, the continuation of criminal proceeding will be an abuse of process of law. Accordingly, I pass the following:

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ORDER

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i) Criminal petition is allowed.

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ii) The impugned proceeding in CC No.7716/2020 arising out of Crime No.276/2017 pending on the file of the learned 1st ACMM, Bangalore, is hereby quashed.

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Sd/JUDGE

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BKM

Anand v. Vs State by Ccb (Eow) Bangalore

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Anand v. Vs State by Ccb (Eow) Bangalore

Case brief

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