Smt Mummthaj Begum Vs the State of Karnataka

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1 - NC: 2025:KHC-D:11750 CRL.P No. 100716 of 2025

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IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 10^TH DAY OF SEPTEMBER, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY

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CRIMINAL PETITION NO. 100716 OF 2025 (482(CR.PC)/528(BNSS))

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BETWEEN:

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SMT. MUMMTHAJ BEGUM W/O. LATE HAYATH IBRAHIM, AGED ABOUT 51 YEARS, R/O. 9^TH WARD, NEAR HIRA SCHOOL, RAJAJINAGAR, HOSAPETE, DIST. VIJAYANAGAR-583 201.

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TASLEEM BANU W/O SYED ZUBER, AGED ABOUT 31 YEARS, OCC. HOUSEHOLD WORK, R/O. SHANTILAL ESTATE, NEAR MES COLLEGE, JOWRI NAGAR, SOUTH GOA, GOA-403 401.

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Digitally signed by RAKESH S RAKESH HARIHAR SHARIHAR Location:HIGH COURTOF KARNATAKA DHARWAD BENCH

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SYED JUBER S/O SYED ZAKIRA, AGED ABOUT 35 YEARS, OCC. BUSINESS, R/O. SHANTILAL ESTATE, NEAR MES COLLEGE, JOWRI NAGAR, SOUTH GOA, GOA-403 401.

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JAVEED M. S/O. MOULASAB, AGED ABOUT 32 YEARS, OCC. BUSINESS, R/O. ARAVIND NAGAR, HOSAPETE, TQ. HOSAPETE, DIST. VIJAYANAGAR-583 201.

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ARIFA BEGUM W/O. M. JAVEED, AGED ABOUT 27 YEARS, OCC. HOUSEHOLD WORK, R/O. ARAVIND NAGAR,

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HC-KAR

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HOSAPETE, TQ. HOSAPETE, DIST. VIJAYANAGAR-583 201.

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SRI. R. NABI RASOOL W/O. RIYAZ ALI, AGED ABOUT 29 YEARS, OCC. DRIVER, R/O. 9^TH WARD, SIDDALINGAPPA CHOWKI, HOSAPETE, TQ. HOSAPETE, DIST. VIJAYANAGAR-583 201.

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… PETITIONERS

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(BY SRI. G.I. GACHCHINAMATH, ADVOCATE)

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AND:

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THE STATE OF KARNATAKA, BY TOWN POLICE STATION, HOSAPETE, VIJAYANAGAR, REPRESENTED BY STATE PUBLIC PROSECUTOR, DHARWAD-583 201.

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SRI. M. ANEESH W/O M. WALI BASHA, AGED ABOUT 40 YEARS, OCC. BUSINESS, R/O D.NO.111, 19^TH WARD, NEAR MOMINA, MASJID KURUBARA STREET, HOSAPETE, TQ. HOSAPETE, DIST. VIJAYANAGAR-583 201.

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… RESPONDENTS

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(BY SMT. GIRIJA S. HIREMATH, HCGP FOR R1; SRI. SHARANAPPA S. KOLIWAD, ADVOCATE FOR R2)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C. (UNDER SECTION 528 OF BNSS, 2023), PRAYING TO QUASH THE PROCEEDINGS IN RESPECT OF FIR NO.07/2025 REGISTERED BY THE TOWN POLICE STATION, HOSAPETE FOR THE OFFENCES PUNISHABLE UNDER SECTIONS 61(1), 316(2), 318(4) R/W 3(5) OF BNS ACT 2023 AND SECTION 21(1)(2)(3) OF BUDS ACT, 2019 ON THE FILE OF PRL. DISTRICT AND SESSION JUDGE, BALLARI IN SO FAR IT PERTAINS TO PETITIONERS/ACCUSED NO. 1 AND 4 TO 8 BY ALLOWING THE CRIMINAL PETITION.

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NC: 2025:KHC-D:11750 CRL.P No. 100716 of 2025

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HC-KAR

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THIS PETITION COMING ON FOR ADMISSION, THIS DAY, ORDER IS MADE THEREIN AS UNDER:

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ORAL ORDER

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(PER: THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY)

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Petitioners are before this Court with a prayer to quash the entire proceedings in Crime No.7/2025 registered by Hospet Town Police Station, Vijayanagara District, for the offences punishable under Sections 61(1), 316(2), 318(4), 3(5) of BNS, 2023, and Sections 21(1)(2) & (3) of the Banning of Unregulated Deposited Schemes Act, 2019 (for short, ‘Act of 2019’) pending before the Court of Prl. District & Sessions Judge, Ballari.

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Heard the learned Counsel for the parties.

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FIR in the present case has been registered invoking the offences punishable under the Act of 2019 and also for the offences punishable under Sections 61(1), 316(2), 318(4), 3(5) of BNS, 2023, wherein Section 318(4) of BNS, 2023, is pari materia to Section 420 of IPC. Section 7 of the Act of 2019 reads as under:

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“7. Competent Authority. — (1) The appropriate

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Government shall, by notification, appoint one or more

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officers not below the rank of Secretary to that Government, as the Competent Authority for the purposes of this Act.

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(2) The appropriate Government may, by notification, appoint such other officer or officers as it thinks fit, to assist the Competent Authority in discharging its functions under this Act.

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(3) Where the Competent Authority or officers appointed under sub-section (2), for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of such information and particulars as may be prescribed, that any deposit taker is soliciting deposits in contravention of section 3, he may, by an order in writing, provisionally attach the deposits held by the deposit taker and the money or other property acquired either in the name of the deposit taker or in the name of any other person on behalf of the deposit taker from the date of the order, in such manner as may be prescribed.

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(4) The Competent Authority shall, for the purposes of sub-section (3), have the same powers as vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while conducting investigation or inquiry in respect of the following matters, namely:—

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(a) discovery and inspection;

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(b) enforcing the attendance of any person, including any officer of a reporting entity and examining him on oath;

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(c) compelling the production of records;

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(d) receiving evidence on affidavits;

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(e) issuing commissions for examination of

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witnesses and documents; and

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(f) any other matter which may be prescribed.

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(5) The Competent Authority shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this section.

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(6) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

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(7) Every proceeding under sub-sections (4) and (5) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

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(8) Subject to any rules made in this behalf by the Central Government, any officer referred to in subsection (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act:

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Provided that the officer or officers referred to in sub-section (2) shall not—

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(a) impound any records without recording his reasons for so doing; or

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(b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the Competent Authority.”

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Section 7 of the Act of 2019 specifies that appropriate Government shall, by notification, appoint one or more persons not below the rank of Secretary to that Government as the Competent Authority for the purpose of this Act and Section 8 of the Act of 2019 specifies that appropriate Government shall, with the concurrence of the Chief Justice of the concerned High Court, by notification, constitute one or more courts known as the designated courts for such area or areas to deal with the matters which the provisions of the Act of 2019 applies. Section 27 of the Act of 2019 provides that no designated court shall take

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cognizance of an offence punishable under that Section, except upon a complaint made by the Regulator.

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From a reading of the aforesaid provisions, it is very clear that the Government is required to first appoint a Regulator and thereafter designate a court to deal with the matters to which the provisions of the Act of 2019 applies and the designated court can take cognizance only on a complaint in writing made by the Regulator.

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In the present case, the impugned proceedings are initiated based on the first information received from the Police Officer attached to Hospet Town Police Station, Vijayanagara District, and the FIR has been registered invoking the offences punishable under the Act of 2019, which is not permissible.

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So far as the offences punishable under the provisions of IPC is concerned, the said offences are cognizable in nature and

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the necessary ingredients so as to make out a prima facie case for the said offences is found in the first information.

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The Hon'ble Supreme Court in the case of M/S.

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NEEHARIKA INFRASTRUCTURE PVT. LTD. VS STATE OF

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MAHARASHTRA & OTHERS – 2021 SCC OnLine 315 and also in the case of SKODA AUTO VOLKSWAGEN (INDIA) PRIVATE

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LIMITED VS STATE OF UTTAR PRADESH & OTHERS – (2021)5 SCC 795 , has observed that police have a right to investigate in a case where FIR has been registered for cognizable offences and only in exceptional circumstances, the High Court can stall the investigation in a case registered for cognizable offences.

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In almost identical circumstances, this Court in Crl.P.No.201497/2024 and connected cases, while quashing similar FIRs registered for offences punishable under the Act of 2019 is concerned, has allowed the police to continue investigation for the offences punishable under the provisions of IPC. Under the circumstances, I am of the opinion that the impugned criminal proceedings insofar as it relates to the registration of FIR for offences punishable under the Act of 2019, is required to be quashed. According to the following order:

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Petition is allowed in part. The FIR in Crime No.7/2025 registered by Hospet Town Police Station, Vijayanagara District, in so far as it relates to the offences punishable under Sections 21(1) (2) & (3) of the Banning of Unregulated Deposited

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