Mr Baskar S Vs the State of Karnataka

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 6^TH DAY OF JANUARY, 2025

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BEFORE

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THE HON'BLE MRS JUSTICE M G UMA CRIMINAL PETITION NO. 6431 OF 2019

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BETWEEN:

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MR. BASKAR S, SON OF MR V. SUBRAMANIAN, AGED ABOUT 45 YEARS, DIRECTOR, AMAGI MEDIA LABS, PVT. LTD., 4^TH FLOOR, RAJ ALKAA, PARK, ABOVE DECATHLON, KALENA AGRHARA, BENGALURU - 560 076

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Digitally signed by SWAPNA V Location: high court of karnataka

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MR. SRINIVASAN K.A., SON OF MR. ARUNACHALAM KRISHNAMOORTHY, AGED ABOUT 45 YEARS, DIRECTOR, AMAGI MEDIA LABS PVT. LTD., 4^TH FLOOR, RAJ ALKAA PARK, ABOVE DECATHLON, KALENA AGRHARA, BENGALURU - 560 076

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MR. ARUN RAO, SON OF V.R. VASUDEVA RAO, AGED ABOUT 51 YEARS, M/S. AMAGI MEDIA LABS PVT. LTD., 4^TH FLOOR, RAJ ALKAA PARK, ABOVE DECATHLON, KALENA AGRHARA, BENGALURU - 560 076

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…PETITIONERS

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(BY SRI. UDAY HOLLA, SR. ADVOCATE FOR SRI. RAGHUNATH A.G., ADVOCATE A/W SRI. MANJUNATH HIRAL AND SRI. ABHISHEK D.H. ADVOCATES)

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AND:

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THE STATE OF KARNATAKA BY THE INSPECTOR OF POLICE OF HULIMAVU POLICE STATION, REP: S.P.P. HIGH COURT BUILDING,

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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BENGALURU - 560 001. BENGALURU CITY

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MR. CHANDRASHEKAR SON OF LATE NANJAPPA AGED ABOUT 45 YEARS, RESIDING AT FLAT NO.202, BHARATH RESIDENCY, NO.2, 3^RD MAIN, VINAYAKA LAYOUT, 2^ND STAGE, 9^TH BLOCK, NEAR M.G. PARK, NAGARABHAVI BENGALURU - 560 072

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…RESPONDENTS

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(BY SMT. K.P. YASHODHA, HCGP FOR R1 SRI. CHANDRASHEKAR, PARTY IN PERSON - R2)

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THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE COMPLAINT DATED MARCH 27, 2017 PRODUCED AT ANNEXURE-B FIR IN CRIME NO.100/2017 DATED MARCH, 28, 2017 PRODUCED AT ANNEXURE-A AND THE ORDER DATED IN CC.NO.13863/2019 PENDING BEFORE HONBLE 4^TH ADDITIONAL CHIEF METROPOLITAN MAGISTRATE AT BENGALURU, JUNE 15, 2019 PRODUCED AT ANNEXURE-C, ALONG WITH THE ENTIRE PROCEEDINGS PURSUANT THERETO.

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THIS CRL.P., COMING ON FOR FINAL HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MRS JUSTICE M G UMA

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ORAL ORDER

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The petitioners being accused Nos. 1 to 3 in C.C.No.13863 of 2019, on the file of the learned IV Additional

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Chief Metropolitan Magistrate, Bengaluru, for the offences under Sections 405, 406, 415, 417, 420, 120, 120A, 120B read with Section 34 of Indian Penal Code (for short 'IPC') are seeking to quash criminal proceedings initiated against them.

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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2. Brief facts of the case are that, respondent No.2

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has filed the first information with Hulimavu police against accused Nos. 1 to 3 alleging commission of the offence as stated above. It is alleged that he was working with M/s. Amagi Media Labs Private Limited (for short 'the company') from 05.08.2010 to 28.01.2016 as Team member. Accused Nos. 1 and 2 were the Co-founders and Directors and accused No.3 is the Chief Finance Officer of the company. The accused have induced respondent No.2 to work as a consultant and had obtained his resignation letter. Accordingly, respondent No.2 was made to resign from the job, believing the words of the accused, and the resignation was accepted. Even thereafter, the accused have not honoured the commitment given under the consultancy letter dated 19.10.2015. Thereby, they have committed criminal breach of trust and cheating. Hence, respondent No.2 requested the police to register the case and to initiate legal action against the accused. The police have registered the case in Crime No.100 of 2017 of Hulimavu police station and took up investigation. After investigation, the police have filed B-report stating that no offence as alleged was committed. Respondent No.2 filed the protest petition, which

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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was accepted by the Trial Court vide order dated 15.06.2019, taking cognizance for the offence under Sections 405, 406, 415, 417, 120, 120A, 120B read with Section 34 of IPC and registered C.C.No.13863/2019. Being aggrieved by the same, the petitioners are before this Court.

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Heard Sri Uday Holla, learned senior advocate for Sri Raghunath A G, learned counsel along with Sri. Manjunath Hiral and Sri. Abhishek D.H for the petitioners, Smt. K.P.Yashodha, learned High Court Government Pleader for respondent No.1 and Sri. Chandrashekar - party in person Respondent No.2. Perused the materials on records.

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In view of the rival contentions urged by the learned counsel for both the parties, the point that would arise for my consideration is:

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“Whether the Petitioners have made out any grounds to allow the petition and to quash the order dated 15.06.2019 taking cognizance of the offence and the criminal proceedings initiated against them?"

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My answer to the above point is in ‘Affirmative’ for the following:

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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R E A S O N S

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It is the contention of respondent No.2 that, he was working as a team member in M/s. Amagi Media Labs Private Limited since 05.08.2010 till 28.01.2016. Accused Nos. 1 and 2 being the Co-founders and Directors issued consultancy letter dated 19.10.2015 i.e., when respondent No.2 was still in the service of the company, they induced him to resign from the job. Believing the words of accused Nos.1 and 2, respondent No.2 resigned from the company and his resignation letter was accepted. Even thereafter, the accused have not honored the undertaking given in the consultancy letter dated 19.10.2015 and thereby, they have committed criminal breach of trust and cheating, and thus, they are liable for prosecution.

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Learned Senior Advocate for the petitioners has resisted registration of the criminal case by taking cognizance by the Trial Court on five grounds i.e., (1) Company is not made as a party (2) Even according to the complainant, it is purely a civil dispute (3) Even if the allegations made by respondent No.2 has to be accepted, it does not constitute criminal misappropriation as there is no entrustment of any money or valuables and none of the allegations are made to

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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invoke Section 420 of IPC (4) No criminal conspiracy is alleged and (5) Criminal complaint was filed with malafide intention, without there being any material in support of his contention that the company had promised to allot 2,000 shares or to give consultancy charges. Under such circumstances, criminal proceedings is an abuse of the process of law and is liable to be quashed.

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Per contra, it is the contention of respondent No.2, who appeared in person, that admittedly, he worked as a team member in the company. Even though the company is not arrayed as an accused, he can do so when the matter is pending before the Trial Court by invoking Section 319 of Cr.PC. He further submits that, even though the allegations give rise to civil right and he has approached the Labour Court to enforce the consultancy letter dated 19.10.2015, it will not bar registration of the criminal case. It is his further contention that, the allegations made against accused Nos.1 and 2 equally holds good against accused No.3 and also against the company and it amounts to criminal misappropriation and cheating. There is no malafide intention on the part of the complainant. The oral evidence given by the accused before the Labour Court

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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makes out strong prima facie case against the petitioners. Therefore, the petitioners have to face the trial. It is not a case for quashing the criminal proceedings. Accordingly, prays for dismissal of the petition.

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The main grievance of respondent No.2 is that, the company had promised to allot 2000 shares and to pay consultancy charges as per consultancy letter dated 19.10.2015. The same was not honoured by accused Nos. 1 and 2 and thereby, they have committed the above mentioned criminal offences. It is not the contention of respondent No.2 that he has entrusted any valuables to the petitioners. It is also not the contention of respondent No.2 that, the petitioners from the beginning were having an intention to cheat him. It is his contention that on 19.10.2015, the consultancy letter as per Annexure-R1 was issued. Believing the terms of consultancy letter, he resigned from the job during November-2015. The resignation letter was accepted by the company with effect from 29.01.2016. If at all respondent No.2 had any grievance against the company to claim 2,000 shares and also consultancy charges, he could have raised the issue atleast

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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while resigning from the job or atleast immediately, after acceptance of his resignation.

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The materials on record disclose that, before acceptance of resignation letter, the company had sent an email to respondent No.2, enclosing full and final settlement report, seeking confirmation of the same from respondent No.2. It is pertinent to note that on 09.02.2016, respondent No.2 has replied to the said mail asking the company to go ahead to settle the claim as soon as possible. Strangely, even then, there is no reference to the consultancy letter dated 19.10.2015 said to have been issued by accused No. 1. It is also pertinent to note that, respondent No.2 has sent a mail to accused No.1, enquiring about the functioning of the company and its development, and also enquired about the share buyback scheme. But strangely, respondent No.2 has not referred to the consultancy letter dated 19.10.2015. There is absolutely no reason as to why respondent No.2 has not referred to the consultancy letter, now referred to by him till 17.09.2016 even though he had correspondence with the company even after resigning from the job. It is only for the first time on 21.09.2016, respondent No.2 sent a mail making

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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his claim based on the consultancy letter for issuance of shares and also for consultancy charges.

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Even if the consultancy letter dated 19.10.2015 relied on by respondent No.2 is to be taken into consideration, there is no reference to allotment of 2,000 shares, nor there is any undertaking to pay consultancy charges. There is absolutely no material to accept the contention that respondent No.2 resigned from the job as induced by the petitioners. Even if that is true, he should have raised his grievance with the petitioners and the company immediately after his resignation. I do not find any reasonable ground for not raising such grievance even after tendering resignation.

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During the course of arguments, respondent No.2 contended that, 600 shares were allotted in his favor during 2013. He places reliance on Annexure-R4. This Annexure-R4 is inconsistent with the contention taken by respondent No.2 that the company allotted 1000 shares and promised to allot 2000 more shares but have not allotted the same. When allotment of 1000 shares during 2010 and allotment of 600 equity shares are evidenced by documents, the contention of respondent

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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No.2 that everything was kept in secret since he was the employee in the company, cannot be accepted.

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It is also pertinent to note that respondent No. 2 has already approached the Labour Court to have his remedy in terms of consultancy letter. It is stated that the evidence of both the parties are being recorded by the Labour Court. Under such circumstances, respondent No. 2 is at liberty to pursue his remedy before the Labour Court. I do not find any requirement of the penal provisions invoked by the Trial Court to contend that there is criminal breach of trust, misappropriation or cheating. Therefore, I am of the opinion that continuation of criminal prosecution is an abuse of the process of law.

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I have gone through the impugned order passed by the Trial Court. It has proceeded to reject the B-report filed by the Investigating Officer and took cognizance of the offence based only on the averments made in the complaint and notice issued to the company before filing the complaint. The Trial Court has not taken into consideration the detailed B-report filed by the Investigating Officer. Under such circumstances, I find considerable force in the contention taken

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NC: 2025:KHC:128 CRL.P No. 6431 of 2019

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by the petitioners. Therefore, I am of the opinion that the criminal proceeding is liable to be quashed.

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Accordingly, I answer the above point in the Affirmative and proceed to pass the following:

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ORDER

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(i) The petition is allowed.

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(ii) The FIR registered in Crime No.100/2017 of Hulimavu Police Station, pending in C.C.No.13863 of 2019, on the file of the learned IV Additional Chief Metropolitan Magistrate, Bengaluru for the offences under Sections 405, 406, 415, 417, 420, 120, 120A, 120B read with Section 34 of IPC, is hereby quashed.

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The observations made by this Court is only for the purpose of disposal of this petition and shall not influence the Labour Court, where the matter between the petitioners and respondent No.2 is said to be pending consideration.

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Sd/(M G UMA) JUDGE

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SPV

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List No.: 2 Sl No.: 40

Mr Baskar S v. the State of Karnataka

Case brief

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Mr Baskar S v. the State of Karnataka

Case brief

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