Central Bureau of Investigation v. Sri M Ramesh

Karnataka HC23 Jan 2025CRL.RP/1242/2024

Case brief

AI extract

What is this about?

CBI criminal revision CRL.RP 1242/2024 (Karnataka HC, Nagaprasanna J, 23-01-2025) against discharge of Inspector M. Ramesh (A-27) under S.227 CrPC in IMA-deposits case Spl.C.No.1055/2019 dismissed; S.227 discharge duty not an empty formality; charge framing gated on S.227 rigour; relies on Kanchan Kumar (2022) 9 SCC 577 and Sanjay Kumar Rai (2021 SCC OnLine SC 367); offences under S.120B/420/406/218/409 IPC, S.9 KPIDFE Act, Ss.7,8,9,11,13(1)(d) r/w 13(2) PC Act; NC: 2025:KHC:3181.

What did the court decide?

The duty of the concerned Court answering an application under Section 227 Cr.P.C. is not an empty formality: the Court must consider the entire record and the documents appended therewith, and after hearing the submissions of the accused and the prosecution, arrive at its decision. ¶52

Central Bureau of Investigation Vs Sri M Ramesh — Corruption | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

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Issue for consideration

Whether the order dated 15-07-2024 passed by the Special Judge in Spl.C.No.1055 of 2019 discharging respondent/accused No.27 under Section 227 Cr.P.C., called in question by the CBI, warrants interference in this Court's revisional jurisdiction under Sections 397/401 Cr.P.C. +1 more

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Court's answer

Applying the Apex Court's principles on discharge, it is imperative for the trial Court, at the stage of discharge, to consider whether sufficient grounds are available to frame the charge against the accused and not act as a mere post office to the prosecution.

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Ratio / Principle

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Key takeaways

Framing of charge under Section 228 Cr.P.C. is conditioned on the rigour of Section 227 being satisfied: only if that rigour is satisfied can the Judge proceed on a presumption that the accused has committed the offence and frame the charge; hence a discharge application must be treated with all seriousness.ratio¶64
No warrant is found to interfere with the well-reasoned order of discharge, which is in tune with the law laid down by the Apex Court in the judgments quoted (Kanchan Kumar and Sanjay Kumar Rai); consequently the revision petition lacks merit.ratio¶157

Detailed headnote1 paragraphs

High Court of Karnataka (M. Nagaprasanna J), CRL.RP No.1242 of 2024, decided 23-01-2025 (NC: 2025:KHC:3181): The CBI challenged the order dated 15-07-2024 of the LXXI Addl. City Civil & Sessions Judge / Special Judge for MLA & MP Cases, Bengaluru (CCH-82), in Spl.C.No.1055 of 2019 (IMA unauthorized-deposits case), discharging respondent M. Ramesh, accused No.27, under Section 227 Cr.P.C. from offences under S.120B r/w Ss.420, 406, 218, 409 IPC, S.9 KPIDFE Act and Ss.7, 8, 9, 11, 13(1)(d) r/w 13(2) PC Act. Held: (i) the duty of the Court answering a Section 227 discharge application is not an empty formality — it must consider the entire record and documents and hear both the accused and the prosecution; (ii) a charge under Section 228 Cr.P.C. can be framed only once the rigour of Section 227 is satisfied; (iii) on the touchstone of Kanchan Kumar v. State of Bihar, (2022) 9 SCC 577 and Sanjay Kumar Rai v. State of U.P., 2021 SCC OnLine SC 367, no warrant was found to interfere with the well-reasoned discharge order. Petition dismissed; the discharge of accused No.27 stands upheld.

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NC: 2025:KHC:3181 CRL.RP No. 1242 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23^RD DAY OF JANUARY, 2025

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BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA

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CRIMINAL REVISION PETITION NO.1242 OF 2024

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BETWEEN:

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CENTRAL BUREAU OF INVESTIGATION, ANTI CORRUPTION BRANCH, NO. 36, BELLARY BRANCH, GANGANAGAR, BENGALURU - 560 032, REPRESENTED BY ITS HEAD OF BRANCH

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…PETITIONER

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(BY SRI PRASANNA KUMAR P., ADVOCATE)

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AND:

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Digitally signed by NAGAVENI Location: HIGH COURT OF KARNATAKA

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SRI M. RAMESH, AGED ABOUT 37 YEARS, COMMERCIAL STREET POLICE STATION, BENGALURU, PRESENTLY, INSPECTOR OF POLICE, STATE CRIME RECORD BUREAU , BENGALURU.

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(BY SRI NAGENDRA NAIK R., ADVOCATE)

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…RESPONDENT

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THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 15.07.2024 PASSED BY THE LEARNED LXXI ADDL. CITY CIVIL AND SESSIONS JUDGE AND SPECIAL JUDGE FOR MLA AND MP CASES, BENGALURU (CCH-82) IN SPL. CC NO. 1055/2019, ALLOWING THE DISCHARGE APPLICATION FILED BY THE RESPONDENT / ACCUSED NO. 27 UNDER SECTION 227 OF CR.P.C. IN THE PRESENT WHICH HAS BEEN REGISTERED BY THE PETITIONER / CBI FOR THE OFFENCE PUNISHABLE UNDER SECTION 120B R/W SECTION 420, 406, 218 AND 409 IPC AND

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SECTION 9 OF KPIDFE ACT AND SECTION 7, 8, 9, 11 AND 13(1)(D) R/W 13(2) OF THE PC ACT AND RESTORE THE PROCEEDINGS AS AGAINST THE RESPONDENT / ACCUSED NO. 27 AND ETC.,

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THIS CRIMINAL REVISION PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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ORAL ORDER

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The petitioner-Central Bureau of Investigation is at the doors of this Court, calling in question an order dated 15-07-2024 passed in Spl.C.No.1055 of 2019, registered for offences punishable under Sections 120B, 420, 406, 218, 409 of the IPC, Section 9 of the KPIDFE Act and Sections 7, 8, 9, 11 and 13(1)(d) r/w 13(2) of the Prevention of Corruption Act, 1988, by which the application of the respondent-accused No.27 filed under Section 227 of the Cr.P.C. for discharge has been allowed and the respondent has been discharged from the array of accused.

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Facts in brief, germane, are as follows:

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The respondent is a public servant. On 12-08-2016 an Officer of Reserve Bank of India communicates a letter to the Director General and Inspector General of Police of the State of Karnataka observing that he has received information of

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unauthorized deposits by the I Monitory Advisory (‘IMA’ for short). The said letter is treated as a complaint on 08-09-2016 and a direction was issued to the Deputy Commissioner of Police to investigate the same. Correspondences between the departments galore and a report is submitted by the Deputy Commissioner of Police that the IMA is conducting business in accordance with law. The report was sent to the Reserve Bank of India as also to the Securities and Exchange Board of India as was informed by the Reserve Bank of India.

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When things stood thus, on 17-10-2017 the General Manager of Reserve Bank of India communicates to the Principal Secretary, Department of Revenue, Government of Karnataka that certain inputs are received regarding distinct possibility of unauthorized acceptance of deposits by the IMA group and further action was sought to be initiated through the said communication. Based upon the aforesaid communication, the Deputy Secretary, Revenue Department communicates to the Deputy Commissioner, Bangalore Urban District directing him to take action against IMA and its entities and submit a report. On 10-04-2018, in order to protect the interests of

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depositors and financial establishments, Government of Karnataka appoints Assistant Commissioners of all Districts to be the Competent Authorities to carry out the purposes of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (‘the Act’ for short). The Assistant Commissioner, Bangalore North who was the Competent Authority under the Act was directed by the Deputy Commissioner to take action against the IMA group by registering a complaint through the Tahsildar under Section 3 of the Act. The complaint was directed to be registered as was directed by the Deputy Commissioner. A complaint then sought to be registered on 13-08-2018.

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On wanting to register the complaint, the Police of

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Commercial Street who is the jurisdictional police issued an endorsement that there were no irregularities or illegalities committed by the IMA and there was no necessity to immediately lodge the crime. This is communicated to the Tahsildar on 14-08-2018 and later to the Assistant Commissioner and then to the Deputy Commissioner and the Commissioner of Police bringing to their knowledge about the

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endorsement given by the Commercial Street Police. The Deputy Superintendent of Police, CID would then submit a comprehensive report post investigation. After the comprehensive report into the allegations against the group, a complaint again comes to be lodged before the Commercial Street Police alleging non-payment of deposits made by several depositors into the IMA. Now a crime comes to be registered in Crime No.73 of 2019 for the offences punishable under Sections 406 and 420 of the IPC against IMA and its Directors.

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During the pendency of investigation by the jurisdictional Police, owing to public outcry, a Special Investigation Team is constituted and during the pendency of investigation by the SIT the matter is transferred to the hands of the Central Bureau of Investigation (‘CBI’ for short). The respondent was nowhere in the picture. The CBI files its charge sheet. Investigation is continued. The CBI files its supplementary charge sheet. Here comes the respondent into picture. The allegation against the respondent herein is, he demanded and accepted illegal gratification on various occasions from Sri Mohammed Mansoor Khan, accused No.1

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through Sri Vaseem to favour IMA for not taking any action on the various complaints registered against IMA. On filing of the charge sheet and drawing up of the respondent as accused No.27, the respondent knocked at the doors of the concerned Court filing an application under Section 227 of the Cr.P.C. seeking discharge from the array of accused. The concerned Court, by its order dated 15-07-2024, discharges the respondent from the array of accused, noticing the fact that there is no evidence to hold the respondent prima facie guilty of the offences. It is this order that has driven the prosecution, the CBI, before this Court in the subject petition.

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Heard Sri Prasanna Kumar P, learned Special Public Prosecutor appearing for petitioner and Sri Nagendra Naik R, learned counsel appearing for respondent.

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The learned Special Public Prosecutor Sri P Prasanna Kumar representing the CBI would contend that the concerned Court has acted beyond jurisdiction, conducted a mini trial and has discharged the accused. It is his vehement submission that there was abundant material to pin the respondent down

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and notwithstanding the same, he has been discharged. He would seek quashment of the order and the respondent being permitted to be tried.

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Per-contra, the learned counsel for the respondent would vehemently refute the submissions to contend that the Court answering discharge does not perform the role of a post man to the prosecution. It has some duties cast upon it under Section 227 of the Cr.P.C. He would, therefore, contend that the concerned Court by a detailed order, which by itself runs into 100 pages has considered the entire spectrum of the law and discharged the accused. This Court, in exercise of its revisional jurisdiction under Section 397 of the Cr.P.C. would not upturn the said order of discharge.

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I have given my anxious consideration to the submissions made by the learned counsel for the respective parties and have perused the material on record.

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The afore-narrated facts are not in dispute. The respondent comes in as an accused at the time when additional

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charge sheet was filed. The filing of the additional charge sheet led the respondent to file an application under Section 227 of the Cr.P.C. Section 227 of the Cr.P.C. reads as follows:

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“227. Discharge.—If, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is not sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for so doing.”

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(Emphasis supplied)

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Section 227 directs that if, upon consideration of the record of the case and documents submitted therewith and after hearing the submissions of the accused and the prosecution in this behalf, the Judge, considers that there is no sufficient ground for proceeding against the accused, he shall discharge the accused and record reasons for so doing. The duty of the concerned Court answering an application under Section 227 can by no stretch of imagination be considered to be an empty formality. The words employed in Section 227 of the CrPC are, ‘if upon consideration of the record’ . Therefore, the Court has to consider the entire record and the documents appended therewith and after hearing the submissions of the accused and

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the prosecution, arrive at its decision. Later, if the judge, considers that there are no sufficient grounds for proceeding against the accused, he can discharge the accused. It thus becomes an important step in a proceeding whether the accused, is to be discharged or put to trial. Section 228 of the Cr.P.C. assumes certain significance and it reads as follows:

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“228. Framing of charge.—(1) If, after such consideration and hearing as aforesaid, the Judge is of opinion that there is ground for presuming that the accused has committed an offence which—

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(a) is not exclusively triable by the Court of Session, he may, frame a charge against the accused and, by order, transfer the case for trial to the Chief Judicial Magistrate, or any other Judicial Magistrate of the first class and direct the accused to appear before the Chief Judicial Magistrate, or, as the case may be, the Judicial Magistrate of the first class, on such date as he deems fit, and thereupon such Magistrate shall try the offence in accordance with the procedure for the trial of warrant- cases instituted on a police report;

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(b) is exclusively triable by the Court, he shall frame in writing a charge against the accused.

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(2) Where the Judge frames any charge under

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clause (b) of sub-section (1), the charge shall be read and explained to the accused, and the accused shall be asked whether he pleads guilty of the offence charged or claims to be tried.”

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(Emphasis supplied)

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Section 228 deals with framing of charge. It begins, if after such consideration and hearing as aforesaid, as aforesaid would

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mean the rigour of Section 227. Only if rigour of Section 227 is satisfied, the Judge can proceed on a presumption that the accused have committed the offence and, therefore, proceed to

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frame the charge. It thus becomes a duty cast upon the concerned court, hearing the discharge application, to treat an application for discharge with all seriousness, as the Damocles sword hanging on the head of an accused can neither be taken away nor charge can be framed on the said accused. It thus has tremendous significance, in the stage of criminal proceedings.

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The Apex Court, in plethora of judgments, has considered the role of the concerned Court at the time of answering a discharge application. It becomes apposite to refer to the judgment of the Apex Court in the case of KANCHAN

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KUMAR v. STATE OF BIHAR¹ wherein it is held as follows:

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“ …….

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11. The short question arising for consideration is whether the appellant is entitled to be discharged of the proceedings initiated against him under the PC Act.

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12. Section 227 CrPC relating to discharge is as under :

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1 (2022) 9 SCC 577

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13. The threshold of scrutiny required to adjudicate an application under Section 227CrPC, is to consider the broad probabilities of the case and the total effect of the material on record, including examination of any infirmities appearing in the case. In Prafulla Kumar Samal [Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4 : 1979 SCC (Cri) 609] it was noted that : (SCC p. 9, para 10)

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“10. Thus, on a consideration of the authorities mentioned above, the following principles emerge:

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(1) That the Judge while considering the question of framing the charges under Section 227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out.

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(2) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained the Court will be fully justified in framing a charge and proceeding with the trial.

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(3) The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application. By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused.

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(4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced court cannot act merely as a Post Office or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.”

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(emphasis supplied)

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14. In Sajjan Kumar v. CBI [Sajjan Kumar v. CBI, (2010) 9 SCC 368 : (2010) 3 SCC (Cri) 1371] , the Court cautioned against accepting every document produced by the prosecution on face value, and noted that it was important to sift the evidence produced before the Court. It observed that : (SCC pp. 376-77, para 21)

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“21. On consideration of the authorities about the scope of Sections 227 and 228 of the Code, the following principles emerge:

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(v) At the time of framing of the charges, the probative value of the material on record cannot be gone into but before framing a charge the court must apply its judicial mind on the material placed on record and must be satisfied that the commission of offence by the accused was possible.

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(vi) At the stage of Sections 227 and 228, the court is required to evaluate the material and documents on record with a view to find out if the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. For this limited purpose, sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case.”

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(emphasis supplied)

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15. Summarising the principles on discharge under Section 227CrPC, in Dipakbhai Jagdishchandra Patel v. State of Gujarat [Dipakbhai Jagdishchandra Patel v. State of Gujarat, (2019) 16 SCC 547 : (2020) 2 SCC (Cri) 361] , this Court recapitulated : (SCC p. 561, para 23)

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“23. At the stage of framing the charge in accordance with the principles which have been laid down by this Court, what the court is expected to do is, it does not act as a mere post office. The court must indeed sift the material before it. The material to be sifted would be the material which is produced and relied upon by the prosecution. The sifting is not to be meticulous in the sense that the court dons the mantle of the trial Judge hearing arguments after the entire evidence has been adduced after a full-fledged trial and the question is not whether the prosecution has made out the case for the conviction of the accused. All that is required is, the court must be satisfied that with the materials available, a case is made out for the accused to stand trial. A strong suspicion suffices. However, a strong suspicion must be founded on some material. The material must be such as can be translated into evidence at the stage of trial. The strong suspicion cannot be the pure subjective satisfaction based on the moral notions of the Judge that here is a case where it is possible that the accused has committed the offence. Strong suspicion must be the suspicion which is premised on some material which commends itself to the court as sufficient to entertain the prima facie view that the accused has committed the offence.”

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(emphasis supplied)

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16. Without getting into too many details, we consider it to be appropriate and in fact sufficient to confine our inquiry to three heads of expenditure indicated in the charge-sheet itself. This limited inquiry will also satisfy the requirements of Section 227CrPC.

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17. The first objection pertains to the inclusion of an amount of Rs 55,000, recorded as the balance amount in the appellant's bank account during the check period, and accordingly counted as an expenditure in

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the charge-sheet. However, the bank passbook filed by the appellant, which was available to the investigating officer and the Special Judge (Vigilance), evidently records a balance amount of only Rs 11,998 during the check period. The difference in the figures was not explained by the prosecution. Accordingly, the Special Judge (Vigilance) and the High Court failed to reconcile such a simple and straightforward inconsistency in the prosecution's evidence. We are of the opinion that only an amount of Rs 11,998, recorded in the appellant's bank passbook during the check period as the balance amount, is validly admissible as expenditure under this head.

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18. The second objection relates to the inclusion of an amount of Rs 53,467 as expenditure towards repayment of the loan from BSFC. However, the amount repaid towards loan instalments was already deducted from the appellant's gross salary, and the deducted figure was recorded as the total disposable income with the appellant during the check period. Hence, the loan repayment cannot be separately counted as an expenditure yet again. This is a glaring mistake. The Special Judge (Vigilance) as well as the High Court did not consider this objection on the ground that a roving inquiry is not permissible at the stage of discharge.

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19. The third objection relates to the inclusion of Rs 1,58,562 as the value of the articles found during a search conducted in the appellant's house on 21-22000, twelve years after the check period of 1974 to 1988. There is nothing to indicate, even prima facie, that these articles found during the search in the year 2000 were acquired during the check period. In the absence of any material to link these articles as having been acquired during the check period, it is impermissible to include their value in the expenditure. We are therefore of the opinion that the appellant's objection about inclusion of this amount in the list of expenditure is fully justified. Unfortunately, even this objection, which did not require much scrutiny of the material on record, was not considered by the Special Judge (Vigilance) or the High Court.

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20. The three heads of expenditure discussed hereinabove must be excluded from the

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appellant's total alleged expenditure during the check period. First, the appellant's actual balance amount reflected in the bank passbook i.e. Rs 11,998, as against the purported account balance of Rs 55,000, must be taken into account. Further, the second and third amounts, as indicated above, must be excluded from the appellant's total expenditure mentioned in the charge-sheet. Accordingly, the total expenditure comes only to Rs 2,69,355, and not Rs 5,24,386, which is based on certain mistakes that we have indicated hereinabove. It is this expenditure of Rs 2,69,355 which is to be contrasted with the income of Rs 3,01,561 during the check period. These facts clearly demonstrate that there is no prima facie case made out by the prosecution and therefore the appellant was entitled to be discharged.

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21. The conclusions that we have drawn are based on materials placed before us, which are part of the case record. This is the same record that was available with the Special Judge (Vigilance) when the application under Section 227 CrPC was taken up. Despite that, the Special Judge (Vigilance) dismissed the discharge application on the simple ground that a roving inquiry is not permitted at the stage of discharge. What we have undertaken is not a roving inquiry, but a simple and necessary inquiry for a proper adjudication of an application for discharge. The Special Judge (Vigilance) was bound to conduct a similar inquiry for coming to a conclusion that a prima facie case is made out for the appellant to stand trial. Unfortunately, the High Court committed the same mistake as that of the Special Judge (Vigilance).”

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(Emphasis supplied)

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A little earlier to the judgment in the case of KANCHAN KUMAR , the Apex Court in the case of SANJAY KUMAR RAI

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v. STATE OF UTTAR PRADESH AND ANOTHER² , holds as

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follows:

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“…… ……

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13. At the outset, we may note that the High Court has dismissed the Criminal Revision on the ground of lack of jurisdiction under Section 397 of Cr.P.C. The High Court did not examine the issue in detail to find out whether the continuation of proceedings will amount to abuse of process of law in this case. The impugned order cites the decision of this Court in Asian Resurfacing (supra) wherein it was noted as under:—

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“…Thus, we declare the law to be that order framing charge is not purely an interlocutory order nor a final order. Jurisdiction of the High Court is not barred irrespective of the label of a petition, be it under Sections 397 or 482 CrPC or Article 227 of the Constitution. However, the said jurisdiction is to be exercised consistent with the legislative policy to ensure expeditious disposal of a trial without the same being in any manner hampered. Thus considered, the challenge to an order of charge should be entertained in a rarest of rare case only to correct a patent error of jurisdiction and not to re-appreciate the matter.”

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14. It appears to us that while limiting the scope of a criminal revision to jurisdictional errors alone, the High Court apparently under-appreciated the Judgment in Asian Resurfacing (supra). We say so at least for two reasons. First, the material facts in the above-cited case dealt with a challenge to the charges framed under the Prevention of Corruption Act, 1988 (“POCA”). The cited judgment itself enlightens that not only is POCA a special legislation, but also contains a specific bar under Section 19 against routine exercise of revisional jurisdiction. Second, This Court in Asian Resurfacing (Supra) while expressing concern regarding the need to tackle rampant pendency and delays in our

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2 2021 SCC OnLine SC 367

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criminal law system, followed the ratio laid down in an earlier decision in Madhu Limaye v. State of Maharashtra as can be seen from the following extract:

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“27. Thus, even though in dealing with different situations, seemingly conflicting observations may have been made while holding that the order framing charge was interlocutory order and was not liable to be interfered with under Section 397(2) or even under Section 482 CrPC, the principle laid down in Madhu Limaye [Madhu Limaye v. State of Maharashtra, (1977) 4 SCC 551 : 1978 SCC (Cri) 10] still holds the field. Order framing charge may not be held to be purely an interlocutory order and can in a given situation be interfered with under Section 397(2) CrPC or 482 CrPC or Article 227 of the Constitution which is a constitutional provision but the power of the High Court to interfere with an order framing charge and to grant stay is to be exercised only in a exceptional situation.”

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(emphasis supplied) 15. In Madhu Limaye (supra), this Court authoritatively held:

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“9… Sometimes the revisional jurisdiction of the High Court has also been resorted to for the same kind of relief by challenging the order taking cognizance or issuing processes or framing charge on the grounds that the Court had no jurisdiction to take cognizance and proceed with the trial, that the issuance of process was wholly illegal or void, or that no charge could be framed as no offence was made out on the allegations made or the evidence adduced in Court.

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10. … Even assuming, although we shall presently show that it is not so, that in such a case an order of the Court taking cognizance or issuing processes is an interlocutory order, does it stand to reason to say that inherent power of the High Court cannot be exercises for stopping the criminal proceeding as early as possible, instead of harassing the accused up to the end? The answer is obvious that the bar will not operate to prevent the abuse of the process of the Court and/or to secure the ends of justice. The label of the petition filed by an aggrieved party is immaterial.

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(emphasis supplied)

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16. The correct position of law as laid down in Madhu Limaye (supra), thus, is that orders framing charges or refusing discharge are neither interlocutory nor final in nature and are therefore not affected by the bar of Section 397 (2) of CrPC. That apart, this Court in the above-cited cases has unequivocally acknowledged that the High Court is imbued with inherent jurisdiction to prevent abuse of process or to secure ends of justice having regard to the facts and circumstance of individual cases. As a caveat it may be stated that the High Court, while exercising its afore-stated jurisdiction ought to be circumspect. The discretion vested in the High Court is to be invoked carefully and judiciously for effective and timely administration of criminal justice system. This Court, nonetheless, does not recommend a complete hands off approach. Albeit, there should be interference, may be, in exceptional cases, failing which there is likelihood of serious prejudice to the rights of a citizen. For example, when the contents of a complaint or the other purported material on record is a brazen attempt to persecute an innocent person, it becomes imperative upon the Court to prevent the abuse of process of law.

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17. Further, it is well settled that the trial court while considering the discharge application is not to act as a mere post office. The Court has to sift through the evidence in order to find out whether there are sufficient grounds to try the suspect. The court has to consider the broad probabilities, total effect of evidence and documents produced and the basic infirmities appearing in the case and so on. [Union of India v. Prafulla Kumar Samal]. Likewise, the Court has sufficient discretion to order further investigation in appropriate cases, if need be.

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18. This brings us to the present case wherein the High Court has not gone into the

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merits of the case and did not analyze the case in light of the settled law referred to above.

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19. The High Court has committed jurisdictional error by not entertaining the revision petition on merits and overlooking the fact that ‘discharge’ is a valuable right provided to the accused. In line with the fact that the High Court and the court below have not examined the fairness of criminal investigation in this case and other related aspects concerning improvement of witness statements, it is necessary for the High Court to reconsider the entire matter and decide the revision petition afresh. Accordingly, we set aside the impugned order dated 28.11.2018 and remand the case back to the High Court for its reconsideration in accordance with law.”

¶135

(Emphasis supplied)

¶136

The Apex Court, in the afore-quoted judgments, has clearly considered the role of the concerned Court in answering an application seeking discharge of the accused. The Apex Court holds that it has a duty to entertain the petition and examine all the materials, though not by conducting a rowing enquiry and it is more imperative for the trial Court to consider at the stage of discharge, whether sufficient grounds are available to frame the charge against the accused and not act as a mere post office to the prosecution. Therefore, on the touchstone of the principles laid down by the Apex Court, the issue in the case at hand requires to be considered.

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NC: 2025:KHC:3181 CRL.RP No. 1242 of 2024

¶139

The concerned Court, while noticing the allegations against the petitioner clearly holds that the prosecution relied on the statement of two approvers, one Wasim and the other Naveed Ahmed, who narrate that they have paid to the petitioner, the Police Inspector. The concerned Court observes that the statements nowhere spoken about any money being transferred or paid to the petitioner. It is only the case of the prosecution that the approvers have so said, but the approvers have not said so. Other than the afore-said statements which do not have an iota of corroboration, the concerned Court holds that there is nothing against the petitioner. The summation reads as follows:

¶140

SUMMATION

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To sum up, the main allegation which has been leveled in the present case against accused no. 27 Mr M Ramesh is that he was the Police Inspector of Commercial Street Police Station at relevant point of time and he had not initiated any action with respect to the complaint lodged by Mr. Krishna Deshpande in the year 2016 alleging of certain irregularities being noticed at IMA. It is also pertinent to note that immediately after the receipt of the said complaint, he had conducted a preliminary enquiry and had also requested competent authorities to furnish necessary details with respect to registration of M/s IMA and its entities on the basis of the same, he had collected necessary details from ROC

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and had arrived at a conclusion that the IMA was a registered firm carrying out its financial activities and as such no illegalities were to be found. The said report came to be forwarded to his higher authority which was also accepted by them. It is relevant to note that thereafter a SLCC meeting was conducted including RBI officials and other competent authority members wherein it was resolved that the concerned authorities that is the Chief Secretary was required to issue necessary directions to the competent authorities to sensitize with respect to lodging of complaints for the offences committed under Section 3 of KPIDFE Act. It is also relevant to note in this regard the subsequently another complaint was lodged by Mr. M S Kanapuri alleging of illegal activities in the IMA and its group of entities. The complaint when carefully appreciated indicates that he had suspected that M/s IMA and its group of entities were not carrying out business in accordance with law and they were not registered with appropriate authorities. However, the records which were collected by the investigating agency clearly indicated that M/s IMA and group of companies were registered and were having necessary certificate to carryout business. Repeatedly it is made clear that mere possession of certificate to carryout business is not approving the act of IMA or its group of entities, but the count is only appreciating the role of the present accused person at that relevant point of time to ascertain whether the act of the accused attracts the rigors of Prevention of Corruption Act. It is also relevant to note that subsequently in SLCC meeting, the auditor of M/s IMA and its entity was summoned and he had explained about the financial activities which were being carried out by IMA and its group of companies. At that juncture none of the members of SLCC had raised any qualms with respect to carrying out of the financial activities and later on, the GM of RBI himself had proposed to get the complaint closed on the basis of the investigation conducted by the police inspector. By looking into the aforesaid aspects, it is crystal clear

¶145

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nothing incriminating is pointed out against the present accused person. The other set of argument which has been leveled against the present accused person is that he had not initiated any action on the basis of the complaint which was lodged by Mr S.G. Prasanna Kumar, the then Deputy Tahsildar of Yelahanka Taluk alleging about the irregular activities of IMA and its entities in his complaint. It is relevant to note from the records and the documents produced by the prosecution that the present accused person had sought for legal advice to ascertain their competency to register complaint under Section 3 of KPIDFE Act. The legal advisor, Mr M.H.Bhaskar had specifically narrated the contents of the case by referring to the complaint and documents furnished to him and had opined that it was the competent authority who has to register the complaint and acting upon the legal advice the present accused person had issued an endorsement stating that they were not able to register the complaint and to conduct the investigation. By looking into all these aspects, the contention alleged by the prosecution that the accused in furtherance of the criminal conspiracy entertained by him with other accused persons had not discharged his duty so as to enable other accused persons to enrich themselves is not forthcoming in the materials produced in the charge sheet to frame charges. Last but not the least, it is also pertinent to note that the Hon'ble High Court of Karnataka by its kind order had quashed the proceedings Mr Ajay Hilori who was the DCP. East at that point of time who had accepted the report furnished by the investigating agencies. By looking into all these aspects, it is crystal where the prosecution has not produced necessary materials to indicate the alleged references committed by the accused person. I have also bestowed my anxious reading to the fact that the present accused person is alleged to have committed offence under Section 120 B of IPC. In order to prove the concept of conspiracy, necessary materials are required to be produced to indicate his active involvement in the

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offenses. However, the material produced before the court only indicates that the accused Inspector had not initiated any action on the basis of the complaint lodge by Mr. Krishna Deshpande at the inception and an endorsement came to be issued stating that there was no illegality committed by M/s IMA and its group of entities. For the sake of arguments, it is to be noted that the said report was even accepted by SLCC and in its meeting which consisted of the General Manager of RBI himself. By looking into the said aspect, it is crystal clear that the provision of Section 120 B of IPC cannot be pressed into service against the present accused person. With respect to invoking of the provision of Prevention of Corruption Act, there are no materials to indicate that there was a illegal gratification obtained by the present accused person to close the complaint. It is pertinent to note that the prosecution is relying upon the statement of the approver Mr Wasim and also Mr. Naveed Ahmed wherein it has been narrated that certain amount was paid to Police Inspector Мг М Ramesh, the present accused here in However the entire gist of the approver statement on careful appreciation indicates that there was no iota of allegation being leveled against the present accused persons of demanding illegal gratification or handing over the amount. All that it has been stated by the investigating agency is that they had collected necessary materials from the email dump which was recovered at the behest of Naveed who had turned approver. However, the email dump which has been allegedly recovered by the investigating agency is also not recovered in accordance with the provisions of law by complying the provision of section 65 B of Indian Evidence Act. By looking into all these aspects, there are no materials to frame the charges against the present accused persons and as such he is entitled for discharge. Accordingly, I answer Point No.1 in the Affirmative.

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Point No.2: In view of above observations on Point No.1, I proceed to pass the following:

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ORDER

¶155

The application filed U/Sec.227 of Cr.P.C, by the accused No.27 Mr.M.Ramesh is hereby allowed and he is discharged for the offences for the offences punishable under Section 120B read with Section 420, 406, 218 and 409 of IPC and under Section 9 of Karnataka Protection of Interest of Depositor in Financial Establishments Act, 2004 and Sec.7, 8, 9, 11 and 13(1)(d) r/w 13(2) of the Prevention of Corruption Act alleged against him.”

¶156

It do not find any warrant to interfere with the well-

¶157

reasoned order of discharge, which is in tune with the law as laid down by the Apex Court in the afore-quoted judgments.

¶158

Finding no merit in the petition, the petition stands

¶159

rejected.

¶160

Sd/-

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______________________

¶162

JUSTICE M. NAGAPRASANNA

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Bkp/CT-ASC List No.: 19 Sl No.: 61

Procedural history

How this case reached the court

AI extract

Order under challenge
Order dated 15-07-2024 in Spl.C.No.1055 of 2019 (Spl. CC No. 1055/2019) allowing the discharge application of respondent/accused No.27 filed under Section 227 Cr.P.C. and discharging him from the array of accused for offences under S.120B r/w Ss.420, 406, 218, 409 IPC, S.9 KPIDFE Act and Ss.7, 8, 9, 11, 13(1)(d) r/w 13(2) PC Act.¶21
Learned LXXI Addl. City Civil and Sessions Judge and Special Judge for MLA and MP Cases, Bengaluru (CCH-82) · 15-07-2024
Prior proceeding
On 12-08-2016 an RBI Officer communicated a letter to the Director General and Inspector General of Police, Karnataka, about unauthorized deposits by IMA; treated as a complaint on 08-09-2016 and the Deputy Commissioner of Police investigated and reported that IMA was conducting business in accordance with law.¶25
Prior proceeding
On 17-10-2017 the GM, RBI communicated to the Principal Secretary, Department of Revenue, Government of Karnataka, inputs regarding possible unauthorized acceptance of deposits by the IMA group; the Deputy Secretary, Revenue Department, directed the Deputy Commissioner, Bangalore Urban, to take action against IMA and its entities.¶26
Prior proceeding
On 10-04-2018 the Government of Karnataka appointed Assistant Commissioners of all Districts as Competent Authorities under the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004; the Assistant Commissioner, Bangalore North, was directed to register a complaint through the Tahsildar under Section 3 of the Act; complaint sought to be registered on 13-08-2018.¶29
Prior proceeding
The Commercial Street Police (jurisdictional police) issued an endorsement, communicated on 14-08-2018 onwards up the hierarchy, that there were no irregularities or illegalities by IMA and no necessity to immediately lodge the crime.¶31
Prior proceeding
After a comprehensive report by the DSP, CID, a complaint alleging non-payment of deposits was lodged before the Commercial Street Police and Crime No.73 of 2019 was registered under Sections 406 and 420 IPC against IMA and its Directors.¶34
Prior proceeding
During the police investigation a Special Investigation Team was constituted owing to public outcry, and the matter was transferred to the CBI, which filed its charge sheet.¶35
Prior proceeding
On the CBI's supplementary/additional charge sheet the respondent was drawn up as accused No.27, with the allegation that he demanded and accepted illegal gratification on various occasions from Sri Mohammed Mansoor Khan (accused No.1) through Sri Vaseem to favour IMA; he thereupon filed an application under Section 227 Cr.P.C. seeking discharge.¶38
Prior proceeding
By its order dated 15-07-2024 the concerned Court discharged the respondent from the array of accused, noticing that there was no evidence to hold him prima facie guilty of the offences; this order was carried to the High Court in the present revision.¶38

Central Bureau of Investigation v. Sri M Ramesh

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Central Bureau of Investigation v. Sri M Ramesh

Case brief

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