Sri Sahasrarjun Ghanshyam Khoday vs. State Of Karnataka

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CRL.P/6677/2025HC KarnatakaGSTCNR KAHC01029546202511 August 2025Bench: J.M.KHAZI32 pages
For Petitioner: SRI.D.R.RAVISHANKAR, SR.COUNSEL FOR SRI. SUNIL KUMAR S, ADVOCATEFor Respondent: SRI.VINAY MAHADEVAIAH, HCGP FOR R1; SRI.P.P.HEGDE, SR.COUNSEL FOR SRI.VENKATESH SOMAREDDI, ADVOCATE FOR R2 V/O DTD: 22.05.2025
AI SummaryAllowed

Facts

These petitions were filed under Section 439 of the Code of Criminal Procedure by accused No. 1 (Sri K P Ghanshyam) and accused No. 6 (Sri Sahasrarjun Ghanshyam Khoday), who is the son of accused No. 1. They sought bail in C.C.No.21893/2022, arising from Cr.No.8/2021 of Sheshadripuram Police Station, for offences under Sections 120B, 406, 408, 409, 420, 465, 468, 471 read with Section 34 of the Indian Penal Code. The petitioners were in judicial custody since January 26, 2025. Their bail applications were previously rejected by the III Additional Chief Judicial Magistrate and subsequently by the LXVII Additional City Civil and Sessions Court. The prosecution alleged a conspiracy to generate illegal money by creating fake invoices and transferring Rs. 17.73 Crores from Khoday RCA Industries to Sri Surabhi Enterprises.

Held

The Court held that the petitioners, being partners in the business, are entitled to their share of profits and losses. The alleged misappropriated amount of Rs. 17.73 Crores should, in principle, be adjusted against their entitled profits, although the criminal element of their actions would be addressed by the trial court. The Court noted the existence of a counter-complaint filed by accused No. 1 against respondent No. 2, the filing of a private complaint by accused No. 2, and pending civil suits for partition, indicating that the core of the dispute appears to be between family members involved in running the business. The Court found that the alleged offences were not exclusively punishable with death or imprisonment for life, and the investigation was complete with charge sheets filed. While acknowledging the prosecution's apprehension of witness tampering, the Court observed that respondent No. 2 was also powerful and could balance any pressure. The Court concluded that the apprehension of tampering or absconding could be overcome by imposing stringent conditions. Therefore, the petitions were allowed, and the petitioners were released on bail with specific conditions.

Key Issues

1. Whether the petitioners, as partners of Khoday Eshwarsa and Sons, are entitled to have the alleged misappropriated amount adjusted against their share of profits, thereby mitigating the criminal element of the alleged actions? (Mixed question of law and fact, concerning partnership law and criminal liability). 2. Whether the existence of counter-complaints and pending civil suits between the parties indicates a civil dispute rather than a criminal conspiracy, warranting bail? (Question of law, concerning the nature of dispute). 3. Whether the investigation being completed and charge sheets filed, coupled with the fact that the alleged offences are not exclusively punishable with death or life imprisonment, are sufficient grounds for granting bail? (Question of law, concerning bail provisions). Petitioner's Arguments: - The petitioners, as partners, are owners of the business and entitled to profits. The alleged misappropriated amount should be adjusted against their share. - Accused No. 1 had filed a complaint against respondent No. 2 and his family regarding a joint development agreement dispute, and a 'B' report was filed. - Accused No. 2 filed a private complaint leading to another FIR. - Civil suits for partition are pending. - The dispute is essentially between family members running a business. - Investigation is complete, and charge sheets are filed. - The offences are not exclusively punishable with death or life imprisonment. - The evidence is with the company and employees, who are unlikely to be tampered with. - The petitioners have a heavy stake in the business and are unlikely to abscond. Revenue/State Arguments: - The prosecution and respondent No. 2 apprehended that the petitioners are powerful and might tamper with witnesses. - There was an apprehension that petitioners might threaten or tamper with witnesses and abscond.

Sections Cited

Section 439, Section 34, Section 120B, Section 406, Section 408, Section 409, Section 420, Section 465, Section 468, Section 471, Section 156(3)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
- 1 - HC-KAR NC: 2025:KHC:30984 CRL.P No. 6733 of 2025 C/W CRL.P No. 6677 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MS. JUSTICE J.M.KHAZI CRIMINAL PETITION NO. 6733 OF 2025 (439(Cr.PC) / 483(BNSS)) C/W CRIMINAL PETITION NO. 6677 OF 2025 IN CRL.P No. 6733/2025 BETWEEN: SRI K P GHANSHYAM S/O LATE K. L. A. PADMANABHASA, AGED ABOUT 53 YEARS, R/AT NO. 9 AND 9/1, SHESHADRI ROAD, BENGALURU-560009 (NOW IN JUDICIAL CUSTODY …PETITIONER (BY SRI.D.R.RAVISHANKAR, SR.COUNSEL FOR SRI. SUNIL KUMAR S, ADVOCATE) AND: 1. STATE OF KARNATAKA BY SHESHADRIPURAM P.S. REPRESENTED BY STATE PUBLIC PROSECUTOR, HIGH COURT BUILDING, BENGALURU - 560001 2. SRI. BRIJMOHAN K. S. S/O K. L. SWAMY, AGED ABOUT 46 YEARS, R/A M/S. KHODAY RCA INDUSTRIES, Digitally signed by REKHA R Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:30984 CRL.P No. 6733 of 2025 C/W CRL.P No. 6677 of 2025 (KHODAY ESWARASA & SONS) NO. 11, RACE COURSE ROAD, OPP. TO RAILWAY DIVISIONAL OFFICE, BENGALURU-560009 …RESPONDENTS (BY SRI.VINAY MAHADEVAIAH, HCGP FOR R1; SRI.P.P.HEGDE, SR.COUNSEL FOR SRI.VENKATESH SOMAREDDI, ADVOCATE FOR R2 V/O DTD: 22.05.2025) THIS CRL.P IS FILED U/S 439 CR.PC (FILED BY 483 OF BNSS) BY THE ADVOCATE FOR THE PETITIONER PRAYING TO ENLARGE THE PETITIONER/ACCUSED NO.1 ON REGULAR BAIL IN CRIME NI.8/2021 REGISTERED BY SHESHADRIPURAM P.S FOR OFFENCES P/U/S 120B, 406, 408, 409, 420, 465, 468, 471 R/W 34 OF IPC WHICH IS NOW PENDING ON THE FILE OF III ADDITIONAL CHIEF JUDICIAL MAGISTRATE AT BENGALURU IN C.C.NO.21893/2022 ON SUCH TERMS AND CONDITIONS. IN CRL.P NO. 6677/2025 BETWEEN: SRI SAHASRARJUN GHANSHYAM KHODAY S/O K.P GHANSHYAM, AGED ABOUT 32 YEARS, R/AT NO.9/1, SHESHADRI ROAD, BENGALURU-560009 (NOW IN JUDICIAL CUSTODY) ...PETITIONER (BY SRI.SHYAM SUNDAR, SR.COUNSEL FOR SRI.LAKSHMI KANTH.G, ADVOCATE) AND: 1. STATE OF KARNATAKA BY SHESHADRIPURAM P. S. REPRESENTED BY STATE PUBLIC PROSECUTOR, - 3 - HC-KAR NC: 2025:KHC:30984 CRL.P No. 6733 of 2025 C/W CRL.P No. 6677 of 2025 HIGH COURT BUILDING, BENGALURU-560001 2. SRI. BRIJMOHAN K. S. S/O K. L. SWAMY, AGED ABOUT 46 YEARS, R/A. M/S. KHODAY RCA INDUSTRIES, (KHODAY ESWARASA AND SONS) NO. 11, RACE COURSE ROAD, OPP. TO RAILWAY DIVISIONAL OFFICE, BENGALURU-560009 ...RESPONDENTS (BY SRI.VINAY MAHADEVAIAH, HCGP FOR R1; SRI.P.P.HEGDE, SR.COUNSEL FOR SRI.VENKATESH SOMAREDDI, ADVOCATE FOR R2) THIS CRL.P IS FILED U/S 439 CR.PC (FILED U/S 483 BNSS) BY THE ADVOCATE FOR THE PETITIONER PRAYING TO ENLARGE THE PETITIONER / ACCUSED NO.6 ON REGULAR BAIL IN CR.NO.8/2021 REGISTERED BY SHESHADRIPURAM P.S., FOR OFFENCE P/U/S 120B, 406, 408, 409, 465, 468, 471, 420 R/W 34 OF IPC, WHICH IS NOW PENDING ON THE FILE OF III ADDL. CJM AT BENGALURU IN C.C.NO.21893/2022. THESE PETITIONS, COMING ON FOR DICTATING ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MS. JUSTICE J.M.KHAZI - 4 - HC-KAR NC: 2025:KHC:30984 CRL.P No. 6733 of 2025 C/W CRL.P No. 6677 of 2025

COMMON ORDER These two petitions are filed under the Section 439 of the code of criminal procedure seeking bail in C.C.No.21893/2022, on the file of III ACMM, Bengaluru, arising out of Cr.No.8/2021 of Sheshadripuram PS for the offences punishable and Sections 120-B, 406, 408, 409, 420, 465, 468, 471 r/w Section 34 IPC.

2.

While Crl.P.No.6733/2025 is filed by accused No.1, Crl.P.No.6677/2025 is filed by accused No.6, who is no other than the son of accused No.1. 3. For the sake of convenience, parties are referred to by their ranks before the trial Court.

4.

In support of the petition, accused Nos.1 and 6 have contended that accused Nos.1 and 2 are the partners of Khoday Eshwarsa and sons. A deed of reconstitution of partnership dated 31.05.2017 was executed in Khoday RCA HC-KAR NC: 2025:KHC:30984 Industries, operating at Building No.11, Opposite to Railway Division Office, Race Course Road, Bangalore City. Accused Nos.1 and 2, CWs-1 to 6 are the partners among others. The other partners of the company had given accused No.2 the authority to conduct the business relating to Khoday RCA Industries by opening current account number 0402201052375, at Canara Bank, Avenue Road branch. Similarly, accused No.1 holds the responsibility relating to the production, sale, and purchase of the units and accused No.6, hold the responsibility for finance. Accordingly, accused Nos.1, 2 and 6 are engaged in the business of manufacturing liquor products in Khoday RCA Industries and selling them through KSBCL.

5.

Accused No.3 is the owner of Devagiri Bulk Carriers and Devagiri Enterprises, which was supplying spirit on contract basis to Khoday India Ltd and Khoday RCA Industries company belonging to M/s Khoday Eswarasa and Sons. Accused No.4 is employed as Manager HC-KAR NC: 2025:KHC:30984 since 30.03.1994 at Khoday RCA industries. Accused No.5 is the mother of accused No.

3.

They are the owner/Proprietor of a company named Sri.Surabhi Enterprises, which according to the prosecution, created with intention of making illegal money.

6.

It is alleged that accused Nos.1, 2 and 6 with an intention of deceiving the partners of Khoday RCA Industries i.e, CWs-1 to 6 and three other partners, by betraying the trust of the other partners entered into a conspiracy to earn illegal money. Accused No.1 entered into an IMFL Promotional Agreement dated 19.07.2017 with accused No.3 to increase the sale of products like XXX rum, sovereign pure brandy, Hercules Old mature 3X Rama and similar other products of Khoday RCA industries through KSBCL depot. However, accused No.3 on the instructions of accused Nos.1, 2, 4 and 6, with the help of CW-16 and using his mother’s (accused No.5’s) documents got GST registered under the name of Surabhi Enterprises HC-KAR NC: 2025:KHC:30984 on 03.08.2017. In order to manage the financial affairs of the said Surabhi Enterprises, the following accounts were opened. i. Corporation Bank, Salagame Road, Hassan bearing A/c No.:510101003283590 ii. ICICI Bank, Hassan bearing A/c No:105905015862 iii. Karnataka Gramin Bank, Hassan bearing A/c No:12062110000157

6.

1 It is further alleged that accused Nos.3 and 5 have not employed any workers nor carrying out any marketing promotion of liquor products of Khoday RCA Industries in any part of Karnataka and the same is registered just for name sake and is a company without registered office. 6.2 It is alleged that though Sri. Surabhi Enterprises was in the name of accused No.5, accused Nos.1 to 4 and 6 with an intention to make illegal gain, on various dates between 19.08.2017 to 07.08.2020, have a created invoice summaries, debit note, invoice, debit note (Incentive), HC-KAR NC: 2025:KHC:30984 Invoice debit note (TA and DA), Employees invoice, vehicle and transportation expenses, bills and other fake invoices and created documents bearing seal of accused No.3’s signature and got illegally transferred a sum of Rs.17.73 Crores from account No:40220105376 to the above referred three different accounts of Sri.Surabhi Enterprises. Out of the said amount, 20% was given to accused Nos.3 and 5 and on various dates, 80% was self drawn by accused No.3 upon the directions of accused No.1 and the same was received by accused No.1 through accused No.4 and thereby they have breached the trust of their partners viz, CWs-1 to 6 and other partners.

7.

Accused No.1 and 6 are in custody since the date of their arrest i.e., from 26.01.2025 4.30 p.m at Delhi. They filed bail application on 27.01.2025 before the III Addl.Chief Judicial Magistrate, Bengaluru in C.C.No.21893/2022. The same came to be rejected on 22.02.2025. Aggrieved by the same, they approached HC-KAR NC: 2025:KHC:30984 LXVII Addl.City Civil and Sessions Court in Crl.Misc.No.1941 and Crl.Misc.1942/2025. They were rejected on 08.04.2025. 8. Being aggrieved by the rejection of bail application filed by them, accused Nos.1 and 2 have filed this petition on the following among other: GROUNDS i. Accused Nos.1 and 6 have not at all committed the alleged offences and the same is just a fabricated and concocted story to harass them and wreck vengeance and rope in them in a non-bailable offence. The alleged offence has taken place in between June 2017 to August 2020. There is inordinate delay in filing the complaint without any explanation. As a counter blast to the complaint filed by accused No.2, the father of accused No.1, which was registered in Cr.No.26/2021, this complaint is filed. HC-KAR NC: 2025:KHC:30984 ii. Respondent No.2 Brijmohan K.S, is no other than the cousin of accused No.

1.

There is civil dispute between the parties and suit for partition is pending. To take advantage in the civil suit, it is being given criminal colour. The respondent police hand in glow with respondent No.2 has registered the case to pressurize the accused persons to settle the matter and to take unfair advantage. More than 15 civil disputes are pending between the accused No.1 and respondent No.2 before multiple forums, including the Supreme Court. There are no material to attract the provisions for which it is filed.

iii. In the present case, the amount in dispute is Rs.17.73 Crores. The dispute revolve around members of the family and the State is not in anyway affected. The sole intention of respondent No.2 is to keep accused Nos.1 and 6 behind the bar due to the family enimity. The whole dispute relates to a partnership firm. The parties to the present dispute belongs to the same family and are HC-KAR NC: 2025:KHC:30984 cousins. In fact, during the proceedings in Spl(Crl)No.5391/2025, the Hon'ble Supreme Court suggested the parties to sit across and settle the matter. The entire case is based on documentary evidence like books of account and ledgers. Accused No.1 is suffering from ill health, including heart ailment. Already investigation is completed and charge sheet is filed and therefore there is no impediment to grand bail. The charge sheet consists of 17 volumes, 3847 pages and 110 witnesses. It may take very long to conclude the trial. No purpose would serve by keeping the accused Nos.1 and 6 in custody. They are law abiding citizens and ready to abide by any conditions that may be imposed and hence the petition.

9.

In support of his arguments, learned Senior counsel representing accused Nos.1 and 6 has relied upon the following decisions: HC-KAR NC: 2025:KHC:30984 (i) (viii) Delhi Race Club (1940) Ltd & Ors Vs. State of 5 SLP Crl.No.3838/2025 6 2025 SCC Online SC 116 7 1964 SCC Online SC 185 8 (2024) 10 SCC 690 9 Crl.P.No.10969/2017 Dt:25.04.2019 10 Crl.P.No.922/2022 Dt:23.08.2022 11 (2024) 8 SCC 254 HC-KAR NC: 2025:KHC:30984 (xii) N.V.Subba Rao Kesavarapu Vs. T.Yeshwanth Rao (N.V.Subba Rao Kesavarapu)12 (xiii) Shekhar Prasad Mahto @ Shekhar Kushwaha respondent No.2/complainant is the partner of M/s Khoday Eshwarsa and sons operating under the trade name Khoday RCA Industries. It is into the business of manufacturing Indian made foreign liquor since about 60 years. Khoday RCA Industries is the license holder. Accused No.2 along

12 Crl.P.No.1713/2022 Dt:30.04.2025 13 W.P(Crl)No.55/2025 Dt:07.02.2025 14 (2022) 10 SCC 51 15 (2025) 5 SCC 799 16 2025 SCC Online 1228 HC-KAR NC: 2025:KHC:30984 with father of complainant K.L.Swamy are among the other Directors and authorized signatories to operate the bank accounts including Canara Bank, Avenue Road Branch A/c No.0402201052375. While business operations of Khoday RCA Industries is managed by 11 partners, accused Nos.1 and 2 are primarily entrusted with the day-to-day operations and general administration of the business, including manufacture, marketing, sales, collections and finances. They are responsible for identifying and release of payments to various service providers and suppliers of raw materials.

10.

1 Accused No.1 K.P.Ghanasham was entrusted to take decisions in respect of every single payment to be made for Khoday RCA Industries and approve or disapprove the same. His father accused No.2 K.L.A.Padmanabhasa was authorized to release payments. During August 2020, several complaints were received regarding non supply of products. Even though since HC-KAR NC: 2025:KHC:30984 January 2017 upto August 2020, a sum of Rs.17.73 Crores is shown as expenditure towards promotional and marketing activities, as per invoices raised by one Sri.Surabhi Enterprises, claiming TA and DA, expenses and vendor/supplier incentives, it was found that the bills had no signature except a stamp and there were no supporting documents, details of the sale executives, etc. It was evident that there was a major fraud played by Sri.Surabhi Enterprises through accused No.3 Dharmendra and others. The bills approved by accused No.1 K.P.Ghanamsham on the face of it looked false and fabricated. On the basis of such documents, the payments were made by accused No.2 K.L.A.Padmanabhasa. 10.2 Accused No.4 Ramachandra Singri, who is working as Manager is the main co-ordinator for all the transactions with Sri.Surabhi Enterprises and accused No.3 Dharmendra. A transaction audit reveal that there were huge irregularities to the tune of Rs.17.73 Crores. The documents are fabricated. No promotional activities were HC-KAR NC: 2025:KHC:30984 held. The documents were created to siphon of and misappropriate funds from the firm. Feed back from the 500 retailers confirmed that there are no promotional and marketing activities since 4 years. Sri.Surabhi Enterprises is not having an office and it is only a place of residence. Accused No.3 Dharmendra is only a transporter of spirit who operates few tankers including those of the firm in the name and style of Devagiri Enterprises and Devagiri Bulk and Carriers. After the fraud was deducted in September 2020 and enquiries were made, the accused have stopped raising bills. All the accused have conspired to misappropriate and commit fraud and caused loss of Rs.17.73 Crores to the firm and other partners and made unlawful gain. 10.3 In this regard complaint is filed. Based on the same, case is registered and investigation is taken up. After detailed investigation, charge sheet is filed. Since the investigating officer failed to conduct proper investigation by arresting the accused persons, petitions were filed for a HC-KAR NC: 2025:KHC:30984 direction to conduct further investigation. As per the directions given by this Court, accused Nos.1, 2 and 6 were arrested and based on the further investigation, additional charge sheet is filed. The allegations made are very grave. In the event of granting of bail, there is likelihood of petitioners threatening and tampering the witnesses and pray to dismiss the petitions.

11.

In support of his arguments learned counsel for respondent No.2 has relied upon the following decisions: (i) HC-KAR NC: 2025:KHC:30984

12.

Heard arguments of the learned Senior counsel representing accused Nos.1 and 6 as well as respondent No.2/defacto complainant. Also heard learned High Court Government Pleader representing the State and perused the record.

13.

The undisputed facts are that respondent No.2 and accused Nos.1 and 6 are members of the same family. They are the partners of M/s Khoday Eshwarasa and Sons, operating under the trade name Khoday RCA Industries ('KRCAI' for short). The firm is in the business of manufacture and sale of Indian made foreign liquor (IMFL) since about 60 years. KRCAI is the excise license holder. Since the year 2002 this unit is lease to Khoday India Ltd (KIL) which is the flagship company of Khoday group.

14.

It is also not in dispute that KIL being the flagship company of Khoday group, is into several other

21 (2022) 15 SCC 515 HC-KAR NC: 2025:KHC:30984 businesses, while distilleries is its core business. The finances of all the business divisions are managed under this flagship company. Accused No.2 K.L.A. Padmanabhasa along with K.L.Swamy, the father of respondent No.2 are among the other Directors in the company who are authorized signatories to operate the Bank accounts including A/c No.0402201052375 of Canara Bank, Avenue Road branch, Bengaluru, which is stated to have been closed after the fraud came to light.

15.

It is also not in dispute that while the business operations of KRCAI is managed by all the 11 partners, accused No.2 K.L.A Padmanabhasa and his son accused No.1 K.P.Ghanasham were primarily entrusted with day-to- day operations and general administration of the business, including manufacturing, marketing, sales, collections and finance. They were responsible for identifying and release of payments to various service providers and suppliers of raw material. Accused No.1 was entrusted to take decisions HC-KAR NC: 2025:KHC:30984 in respect of every single payment made for KRCAI and approve or disapprove the same and accused No.2 K.L.A Padmanabhasa was authorized to release the payments.

16.

It is alleged that in the month of August 2020, several complaints were received from the retailers regarding non supply of the products and no promotional activities. However, it was found that in all a sum of Rs.17.73 Crores were spent towards promotional and marketing activities, as per the invoices raised by Sri.Surabhi Enterprises, claiming commission, TA and DA expenses and vendor/supplier incentives. These bills were not signed and not supported by any documents.

17.

It is further alleged that a major fraud is committed by Sri.Surabhi Enterprises through accused No.3 Dharmendra and the said bills were approved by accused No.1 Ghanasham without any supporting documents and payments were approved by accused No.2 K.L.A Padmanabhasa and accused No.4 Ramachandra Singri was the Manager. A transaction audit was initiated. A HC-KAR NC: 2025:KHC:30984 document called as IMFL promotional agreement purported to have been entered into between KRCAI represented by accused No.1 Ghanasham as partner Sri.Surabhi Enterprises represented by accused No.3 Dharmendra as an authorized representative. However, no promotional activities were held. Only based on fabricated documents, amounts were drawn. There is also no office of Sri.Surabhi Enterprises. Accused No.3 Dharmendra is only a transporter of spirit who operates few tankers, including for the firm, through entity known as Devagiri Enterprises and Devagiri Bulk Carriers. Suspecting fraud and irregularities respondent No.2 filed the complaint, it was registered in Cr.No.8/2021 against accused Nos.1 to 5. After detailed investigation, charge sheet came to be filed for the offences punishable under Sections 120-B, 406, 408, 465, 468, 471, 420 and 201 r/w Section 34 IPC.

18.

After conducting further investigation, the concerned police have filed additional charge sheet including the offence punishable under Section 409 IPC. HC-KAR NC: 2025:KHC:30984

19.

It is pertinent to note that at the end of the charge sheet, a note is made by the investigating officer (Sri.Chandan Kumar N, Assistant Commissioner of Police) to the effect that accused Nos.1, 2, 4 and 6 are absconding and after their arrest and recovery of documents and instruments for preparing the fake documents, additional charge sheet would be filed under Section 173(8) of Cr.P.C.

20.

Before going to the discussion as to whether accused Nos.1 and 6 are entitled for bail, it is necessary to refer to some of the proceedings held before various Courts. (i) On 12.07.2021, in Crl.P.No.2493/2021, Co- ordinate Bench of this Court has rejected the petition filed by accused No.1 Ghanasham for anticipatory bail. (ii) In W.P.No.7294/2021, respondent No.2/ complainant approached this Court for a direction to the Government to constitute a special team of investigating officers to conduct further investigation and take steps to HC-KAR NC: 2025:KHC:30984 arrest the accused persons and to recover incriminating material. When it came up for orders, a submission was made by learned High Court Government Pleader that as per the request of respondent No.2 to the Commissioner of Police, the investigating officer is changed and in the light of the said submission, on 17.08.2021, the said petition came to be disposed of with a direction to the Government to consider the representation of respondent No.2 to see that the investigation is conducted fairly and properly. (iii)

Respondent No.2/complainant filed Civil Contempt Petition No.902/2021, alleging willful disobedience of directions given in W.P.No.7294/2021 dated 17.08.2021. The contempt proceedings were dropped on 17.02.2022 after making an observation that the new investigating officer has taken charge and submitted action taken report even before the orders were passed in W.P.No.7294/2021. (iv) The respondent No.2/complainant also filed W.P.No.16631/2022 against State Government and other HC-KAR NC: 2025:KHC:30984 officials as well as accused No.1 Ghanasham, with a prayer for direction to the concerned police officials to execute non-bailable warrant against accused No.1 Ghanasham. In turn accused Nos.1, 2 and 6 filed W.P.No.16991/2022 to quash the criminal proceedings initiated against them in Cr.No.8/2021. By a common order dated 10.01.2025, the Co-ordinate Bench of this Court allowed the petition filed by respondent No.2 and dismissed the petition filed by accused Nos.1, 2 and 6. (v) Accused Nos.1 and 6 approached this Court in Crl.P.No.13878/2024 for anticipatory bail. Vide order dated 25.01.2025, the said petitions came to be dismissed. (vi) Vide order dated 22.02.2025, the trial Court has rejected the regular bail applications filed by accused No.1 Ghanasham and accused No.6 Sahasrarjuna. (vii) In Crl.Misc.1941/2025, vide order dated 08.04.2025, the Sessions Court has rejected the bail application filed by accused No.1 Ghanasham. HC-KAR NC: 2025:KHC:30984 (viii) Against the said order accused approached the Hon'ble Supreme Court in SLP(Crl)No.4790/2025. It came to be dismissed on the ground that already accused are arrested and as such the petition has become infructuous.

21.

In the meanwhile, accused No.2 who was aged 82 years died.

22.

Through the present petitions, accused Nos.1 and 6 are seeking regular bail, by contending that the investigation is completed and charge sheet and additional charge sheet are filed. No longer their custodial presence is required. They would undertake to abide by any conditions that may be imposed.

23.

It is submitted on behalf of respondent No.2 that petitioners are highly influential. The maximum punishment that could be imposed for the offence under Section 409 IPC is imprisonment for life. In the event of granting bail, petitioners may threaten or tamper with the witnesses and HC-KAR NC: 2025:KHC:30984 also abscond and thereby protract the proceedings and pray to reject the petitions.

24.

On the other hand, it is submitted on behalf of petitioners that in fact, during investigation, the petitioners and other accused appeared before the investigating officer and cooperated in the entire investigation. Since their presence was not required, they were not arrested, but in the charge sheet instead of stating that they are not arrested, it is shown that they are absconding.

25.

At the outset it is relevant to note that accused Nos.1 and 2, CWs-1 to 6 are partners of Khoday Eshwarasa and Sons. Accused No.6 Sahasrarjuna is the son of accused No.1 Ghanasham. As rightly submitted by the learned Senior counsel representing the petitioners, in their capacity as the partners, petitioners are also owners of the properties and business of the partnership firm and entitled for a share the profits and losses. If at all they are guilty of misappropriation of Rs.17.73 Crores as alleged in the HC-KAR NC: 2025:KHC:30984 charge sheet, the said amount is liable to be adjusted as against the profits which they are entitled. Of course there is element of criminality attached to the alleged action taken by them, which would be taken care by the trial Court.

26.

At the same time, it is also relevant to note that even before respondent No.2 choose to file the complaint, accused No.1 Ghanasham has filed a complaint on 05.02.2021, in Cr.No.26/2021 of Upparpet P.S against respondent No.2 Brijmohan, his two brothers and father. It is alleged that the accused persons have entered into a joint development agreement with Prestige Knotting Hills Company for development and construction of Flats in land measuring 36 acres, including in Sy.No.31/2 (old No.31) and other survey numbers and also land situated at Konanakunta belonging to the company/partnership on behalf of all the partners, with an understanding that the proceeds would be shared amongst the partners. However, out of 850 Flats, they have sold 500 Flats and failed to pay HC-KAR NC: 2025:KHC:30984 Rs.1000 Crores towards the share of accused No.1 Ghanasham. On 02.02.2021, at 9.30 a.m, when accused No.1 Ghanasham, his father K.L.A. Padmanabhasa, wife Jayalakshmi @ Neeta and son accused No.6 Sahasrarjuna went to the house of respondent No.2 and others to speak regarding the said dispute, they were abused and threat was given to their life.

27.

Based on this complaint, the concerned police have registered a case in Cr.No.26/2021. However, later they have filed 'B' report on the said complaint.

28.

It is pertinent to note that accused No.2 has filed private complaint in PCR.No.6701/2021. It is referred to the concerned police i.e., Commercial Street PS for investigation under Section 156(3) of Cr.P.C and registered in Cr.No.46/2021. HC-KAR NC: 2025:KHC:30984

29.

Suit for partition in O.S.No.2035/2019 and O.S.No.4709/2019 are pending.

30.

Thus, basically the dispute is between the family members who are running a business in the name and style of KRCAI. It appears together they were facing the entire world and now after falling out, they are against each other. Though the offences alleged are non-bailable, they are not exclusively punishable with death or imprisonment for life and as such there is no impediment to grant bail, especially when the investigation is completed charge sheet and additional charge sheet are filed. The nature of allegations made against the accused persons are such that the entire evidence against them is available with respondent No.2 and the company and the witnesses are no other than their employees and also the retailers.

31.

It is the apprehension of prosecution and respondent No.2 that the petitioners are very powerful and HC-KAR NC: 2025:KHC:30984 they may tamper with the witnesses. At the same time, respondent No.2 is far more powerful and he would certainly balance the pressure that may be exerted by the accused persons to influence the witnesses, especially when they are the employees and sellers of the liquor manufactured by the company. The fact that there is possibility of the petitioners threatening or tampering with the witnesses is not a justification for refusing bail to them. At the same time, petitioners are having heavy stake in the business run by the company. Such being the case, there is no possibility of they absconding. The apprehension of the prosecution that petitioners may threaten or tamper with the witnesses and also abscond may be over come by imposing stringent conditions.

32.

In the result, the petitions succeed and accordingly, the following: HC-KAR NC: 2025:KHC:30984 ORDER Crl.P.No.6733/2025 and Crl.P.No.6677/2025 are allowed. Petitioners/accused Nos.1 and 6 are released on bail with the following: CONDITIONS (i) Accused Nos.1 and 6 shall execute personal bond for Rs.10,00,000/- (Rupees Ten Lakhs only) each, with two sureties each for the like sum. (ii) They shall not threaten or tamper with the witnesses either directly or indirectly nor shall they abscond. (iii) They shall not leave the country without the permission of the trial Court. (iv) They shall furnish their residential address proof and shall inform the trial Court, if there is any change in the address. HC-KAR NC: 2025:KHC:30984 (v) They shall not indulge in any criminal activities. (vi) They shall be regular in attending the Court proceedings. (J.M.KHAZI) JUDGE

RR List No.: 1 Sl No.: 46

Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.