Vittal Kulal Konaje vs. The State Of Karnataka
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The petitioners, Vittal Kulal Konaje and Vinutha B, are accused in FIR No. 82/2024 registered by Mangalore North Police Station for offences under Sections 409, 420, and 34 of the IPC. The FIR was lodged by the second respondent, Vikaram P Mali, who alleged that the petitioners, owners of M/s Manishk Enterprises and V.K. Sofa Makers, were his customers. Between 2019 and March 31, 2023, M/s Manishk Enterprises purchased materials worth ₹40,93,570/-, and between April 16, 2018, and March 19, 2023, V.K. Sofa Makers purchased materials worth ₹3,98,058/-. The petitioners allegedly failed to pay a balance of ₹12,70,000/-. The petitioners approached the High Court under Section 482 Cr.PC to quash the FIR.
Held
The Court held that the allegations in the FIR did not constitute an offence under Section 420 of the IPC because there was no averment that the petitioners induced the second respondent to supply hardware materials with an intent to deceive. The Court also held that the allegations did not constitute an offence under Section 409 of the IPC, as there was no assertion that property was entrusted to the petitioners; rather, the materials were purchased, and the issue at most amounted to a breach of agreement. The Court reasoned that the essential elements for both offences were conspicuously absent. Continuing the criminal proceedings would be an abuse of the process of law. The Court directed that if the petitioners failed to pay the balance amount, the complainant had the remedy of approaching the appropriate forum for recovery. The FIR was quashed in so far as it related to the petitioners. The order does not preclude the second respondent from claiming any amount due from the petitioners in accordance with the law.
Key Issues
1. Whether the allegations in the FIR, as they stand, constitute an offence under Section 420 of the Indian Penal Code, 1860, considering the absence of an averment regarding inducement with intent to deceive? 2. Whether the allegations in the FIR, as they stand, constitute an offence under Section 409 of the Indian Penal Code, 1860, considering the absence of an averment that property was entrusted to the petitioners? The petitioners argued that there was no allegation of inducement with intent to deceive, a necessary element for Section 420 IPC. They also contended that Section 409 IPC was not attracted as no property was entrusted to them. The second respondent argued that the petitioners, as customers, failed to pay the outstanding amount of ₹12,70,000/-, and the veracity of these allegations required investigation. They also submitted that GST returns were provided to substantiate the claim, as the petitioners had claimed a refund of the GST amount. The State reiterated the second respondent's submissions.
Sections Cited
Section 409, Section 420, Section 34
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Cause title — parties, addresses and appearances
ORAL ORDER
The petitioners, Accused Nos. 1 and 2, who are facing investigation for offences punishable under Sections 409 and 420 read with Section 34 of the IPC, have approached this Court seeking relief.
The second respondent lodged an FIR alleging that the petitioners are the owners of M/s Manishk Enterprises and V.K. Sofa Makers and were customers of the complainant, who is engaged in the hardware business. The complainant and the petitioners had business transactions for several years, during which the petitioners purchased hardware materials from the complainant. It is further alleged that, between 2019 and 31.03.2023, M/s Manishk Enterprises purchased materials worth ₹40,93,570/-, and between 16.04.2018 and 19.03.2023, NC: 2025:KHC:9202 V.K. Sofa Makers purchased materials worth ₹3,98,058/-. Out of the total amount, the petitioners have allegedly failed to pay the balance of ₹12,70,000/-. Consequently, the police registered the FIR for the aforementioned offences.
The learned counsel for the petitioners submits that there is no allegation that the petitioners induced the second respondent to supply hardware materials with an intent to deceive, which is an essential element of the offence under Section 420 of the IPC. He further contends that the offence under Section 409 of the IPC is not attracted, as the petitioners were not entrusted with any property by the complainant.
In response, the learned counsel for the second respondent submits that the petitioners, being customers of the complainant, have failed to pay the outstanding amount of ₹12,70,000/- despite purchasing hardware materials. Therefore, the veracity of the allegations requires investigation. He further states that copies of GST returns have been submitted to substantiate that the petitioners owe the said amount, as they have claimed a refund of the GST amount.
The learned High Court Government Pleader for the respondent-State reiterates the submissions made by the learned counsel for the second respondent.
The arguments of the learned counsel for the parties have been duly considered. NC: 2025:KHC:9202
A perusal of the FIR indicates that the petitioners have allegedly been customers of the second respondent for several years. The allegation against them is that they purchased hardware materials between 16.04.2018 and 19.03.2023 but failed to pay the balance amount of ₹12,70,000/- out of a total sum exceeding ₹41,00,000/-.
The second respondent has categorically admitted that, out of the total amount of over ₹41 lakhs, only ₹12,70,000/- remains due from the petitioners. There is no allegation in the complaint that the petitioners induced the second respondent to supply hardware materials with an intent to deceive, which is an essential element to constitute an offence under Section 420 of the IPC.
Further, there is no assertion in the complaint that the property was entrusted to the petitioners. Instead, the materials were purchased from the complainant, and thus, there is no question of misappropriation of entrusted property. At most, the issue amounts to a breach of the terms and conditions of an agreement. Consequently, the essential elements required to constitute an offence under Section 409 of the IPC are conspicuously absent. In such circumstances, continuing the criminal proceedings would amount to an abuse of the process of law. If the petitioners have failed to pay the balance amount of ₹12,70,000/-, the complainant has the remedy of approaching the appropriate forum for recovery of the said amount. NC: 2025:KHC:9202
Accordingly, the petition is allowed. The impugned FIR in Crime No. 82/2024, registered by the Mangaluru North Police Station and pending before the learned II Additional Senior Civil Judge & Chief Judicial Magistrate, Mangaluru City, insofar as it relates to the petitioners (Accused Nos. 1 and 2), is hereby quashed.
This order shall not preclude the second respondent from claiming any amount due from the petitioners in accordance with the law.
Ordered accordingly. (HEMANT CHANDANGOUDAR) JUDGE
HR List No.: 1 Sl No.: 128
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.