Sri Raghuprasad S/O Vishwanath Naki vs. State Of Karnataka

Facts

The petitioners, accused Nos. 1, 2, and 3, sought to quash the FIR registered against them in Crime No. 78/2023 by the Hubbali Sub-Urban Police Station for offences under Section 420 read with Section 34 of the Indian Penal Code. The de-facto complainant alleged that Accused No. 1 introduced Accused No. 2, an in-charge/clerk at Kendriya Bhandar, Panjim, Goa, who represented that orders for supply of materials could be obtained without tender with good profit. The complainant became a member by depositing Rs. 50,000/- and received a work order for dustbin trolleys. Accused No. 2 allegedly directed the complainant to get supplies through Accused No. 3, the Director of Rushabdev Venture Private Limited. The complainant paid Rs. 3,14,26,348/- to Rushabdev Ventures for the supply of 7330 dustbin trolleys. Bills totaling Rs. 4,27,22,758/- were raised on Kendriya Bhandar. The complainant also paid Rs. 12,41,850/- towards GST after being questioned by Commercial Tax officials. Despite non-supply of materials, Accused No. 2 evaded inquiries, and only Rs. 75,00,000/- was repaid through another company of Accused No. 3. The remaining amount of Rs. 3,52,22,758/- with interest was allegedly payable.

Held

The Court held that the criminal petitions filed by the accused seeking to quash the FIR were dismissed. The Court found that the investigation was pending and, based on the FIR and complaint, there was a commercial transaction between the de-facto complainant and the accused. The complaint indicated that a substantial bill of Rs. 4,12,22,758/- was pending, including GST, and the accused were allegedly due to pay GST. The accused disputed the entire contents of the complaint and the liability to pay Rs. 3,14,26,348/-. Prima facie, Accused No. 3 received a significant sum through RTGS and handed it to Accused No. 1, but neither supplied the material nor returned the amount. The Court concluded that there was a triable issue requiring full-fledged investigation, and a criminal complaint cannot be quashed solely because the allegations appear to be of a civil nature. The Court noted that the dishonest intention at the inception of the contract needed to be probed by the investigating officer. The Court distinguished the cited case of A.M. Mohan, stating that in that case, the investigation was complete, whereas here, it was ongoing. The Court also referred to the ratio in M/s Neeharika Infrastructure Pvt.Ltd. Vs. State of Maharashtra, holding that disputed questions of fact cannot be gone into under Section 482 of Cr.P.C. Therefore, the petitions were dismissed.

Key Issues

1. Whether the ingredients of Section 420 of the Indian Penal Code are attracted to the facts of the case, warranting the registration of the FIR? (Question of law and fact) 2. Whether the criminal law has been abused by the de-facto complainant due to the recovery of money arising out of a contract, and if the complaint discloses any offence against the accused? 3. Whether the delay in lodging the complaint, filed on 02.06.2023 for incidents between 19.10.2021 to 10.12.2021, warrants quashing the FIR? Petitioner's arguments: The petitioners contended that the ingredients of Section 420 of IPC are not attracted, making the FIR registration illegal and an abuse of process. They argued that the de-facto complainant is using criminal law to recover money arising from a contractual dispute. They also highlighted a delay of two years in lodging the complaint. They relied on decisions in A.M. Mohan Vs. State, Sri Amit Garg Vs. the State of Karnataka, State of Haryana & others Vs. Bhajan Lal, Indera Mohan Goswami, Ramesh Rajagopal Vs. Devi Polymers, and Madhavrao Jiwajirao Scindia. Revenue/State and de-facto complainant's arguments: They argued that a huge amount is involved, and the accused persons cheated the de-facto complainant with a malafide intention from the inception. They asserted that there is prima facie material against the accused and prayed for the dismissal of the petitions.