- 1 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS THE 19TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR. JUSTICE K NATARAJAN CRIMINAL PETITION NO.201667 OF 2022 (482(Cr.PC)/528(BNSS)) BETWEEN: 1. SURESH S/O MALLARAO SOLAPURKAR, AGE: 72 YEARS, OCC: BUSINESS, R/O MATHAPATI GALLI, VIJAYAPURA. 2. RAJEEV S/O JAYANT NAYAK AGE: 66 YEARS, OCC: CHARTED ACCOUNTANT, R/O TILAK LANE, GODABOLE MALA, VIJAYAPURA. 3. ASHOK S/O SHAMARAO PADAKI, AGE: 65 YEARS, OCC: RETIRED R/O BEHIND S.P. BUNGALOW, BAGALKOT ROAD, VIJAYAPURA. 4. HANAMANTH S/O KRISHNACHARYA GUDI, AGE: 70 YEARS, OCC: MANAGER, MAHALAXMI CO-OPERATIVE BANK, RAM MANDI ROAD, SHARAF BAZAR, VIJAYPURA. ...PETITIONERS (BY SRI SHIVANAND V. PATTANASHETTI, ADVOCATE) Digitally signed by NIJAMUDDIN JAMKHANDI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 AND 1. SUDIENDRA S/O KRISHNAJI GUNHALKAR, AGE: 69 YEARS, OCC: BUSINESS, R/O GODABOLE MALA, VIJAYAPURA. 2. THE STATE OF KARNATAKA R/BY ADDL. SPP HIGH COURT OF KARNATAKA, KALABURAGI BENCH-585107 , (THROUGH GANDHI CHOWK P.S VIJAYAPURA-586101 ) ..RESPONDENTS (BY SRI A. R. DESAI, ADVOCATE FOR R1; SRI JAMADAR S., HCGP FOR R2) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 21.09.2022 PASSED BY III ADDL. SESSIONS JUDGE, VIJAYAPURA IN CRL.R.P.NO.190/2019 AND CONSEQUENTLY QUASH THE ORDER OF TAKING COGNIZANCE AND ISSUE OF PROCESS DATED 30.09.2019 PASSED BY III ADDL. CJ AT VIJAYAPURA IN C.C.NO. 6218/2019. THIS CRIMINAL PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 12.02.2025, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE K.NATARAJAN RESERVED FOR ORDERS ON: 12.02.2025 PRONOUNCED ON 19.03.2025 - 3 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 CAV ORDER (PER: HON'BLE MR. JUSTICE K NATARAJAN) This Criminal Petition is filed by the petitioners/ accused Nos.1 to 4 under Section 482 of Code of Criminal Procedure, 1973 [for short, ‘the Cr.P.C.’] for quashing the criminal proceedings in C.C.No.6218/2019 pending on the file of the III Addl. Civil Judge, Vijayapura [for short, ‘the Trial Court’] for the offences punishable under Sections 465, 468, 471, 415 read with Section 34 of Indian Penal Code, 1860 [for short, ‘the IPC’]. 2. Heard the arguments of learned counsel for the petitioners, learned counsel for respondent No.1 and learned High Court Government Pleader for respondent No.2. 3. The brief facts of the case are that, respondent No.1 - complainant filed a complaint under Section 200 of Cr.P.C. before the JMFC, 1st Court, Vijayapura contending that he was the Member and the petitioners/accused persons were Chairman, Director, Manager and Accountant - 4 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 of the Vijayapura Mahalaxmi Urban Co-Operative Bank Limited, Vijayapur [hereinafter referred to as the ‘Bank’] for the year 2005-06. It is alleged that the accused persons, with an intention to help one K.D. Joshi, the Proprietor of Joshi Engineering Works, Vijaypaur have closed the loan account by fabricating the documents by showing Rs.16 lakhs as Non-Banking Asset and illegally closed the loan account of Rs.45 lakhs, thereby caused wrongful loss to the Bank and cheated the members of the Bank. Based upon the complaint, the learned Magistrate took cognizance against the petitioners. The same was challenged before the learned Sessions Judge by filing Criminal Revision Petition No.190/2019 which came to be dismissed. Hence, the petitioners are before this Court. 4. The learned counsel for the petitioners has strenuously contended that previously the complaint filed by the complainant has been referred to the police under Section 156 (3) of Cr.P.C. The police have filed ‘B’ final report and a notice was issued by the Trial Court. - 5 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 Accordingly, the complainant filed protest petition. The Trial Court has taken cognizance and issued the summons which was challenged before the Sessions Court by filing Criminal Revision Petition No.68/2013 which was allowed and the matter was remitted back to the learned Magistrate. The said order was challenged by respondent No.1 - complainant before this Court in Criminal Petition No.200025/2015 wherein this Court allowed the petition and set aside the orders of both the Courts and directed the learned Magistrate to pass an order on the ‘B’ final report and thereafter, record the statement of the witnesses after taking cognizance and then proceed to pass order either under Sections 203 or Section 204 of Cr.P.C. Subsequently, the learned Magistrate passed the order by rejecting the ‘B’ final report and after taking cognizance, recorded statement of the complainant and other witnesses, once again issued the process against the petitioners. Once again the petitioners approached the learned Sessions Judge by filing Criminal Revision Petition No.190/2019 which came to be dismissed on 21.09.2022. - 6 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 Feeling aggrieved by the same, the petitioners have filed the present petition and contended that the Trial Court as well as the Sessions Court have committed an error in taking cognizance for the alleged offences. The complaint has been lodged purely based upon the preliminary enquiry report filed by the Deputy Registrar of Co- Operative Societies and as per the said report the complainant was named as an accused in closing the account. The name of the petitioners was not reflected in the said order. There is no final order passed by the Deputy Registrar. During the year 2005-06, the petitioners were not at all the Executive Members and even the recommendation made by the Bank has been accepted by the Deputy Registrar of Co-Operative bank and after the confirmation the same was closed. Therefore, the petitioners are nothing to do with the commission of offence, hence conducting the proceedings against these petitioners is abuse of process of law and hence, prayed for allowing the petition. - 7 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 5. Per contra, the learned counsel appearing for respondent No.1 has contended that during the year 2005- 06 the very petitioners were the Executive Members. The loan account of K.D. Joshi has been closed by them illegally. Thereby they caused a wrongful loss of more than Rs.45 lakhs. The petitioners are the Chairman, Director, Manager, and Accountant of the said Bank and they caused huge loss because of closing the account. They themselves presented the balance sheet and as per the 77th Annual Report published for the year 2006-07, accused Nos.1 and 2 the Managing Committee and accused Nos.3 and 4 Staff Members working as Manager and Accountant, respectively. The Audit Report also reveals that they closed the account of the K.D. Joshi’s company as Non-Performing Assets [NPA] by ignoring the property of the said company which has been mortgaged with the Bank at the time of borrowing the loan. This is willful conduct of the accused in causing loss to the Bank in closing the accounts. Therefore, there is sufficient material placed on record to show that the accused - 8 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 persons committed the offence. Respondent No.1 was not at all a Member of the Management Committee during the said period, therefore, the question of naming respondent No.1 in the preliminary report by the Deputy Registrar is not correct who was a Member of the Bank only during subsequent years but not at the relevant year 2005-06. The Trial Court, as per the order of the High Court, rightly took cognizance and issued process. Therefore, there is nothing to say that the proceedings are abuse of process of law and petitioners are required to face the trial. Hence, prayed for dismissing the petition. 6. Learned High Court Government Pleader appearing for the State also objected the petition. However, the Trial Court took cognizance on the protest petition filed by respondent No.1. Therefore, the submission of learned High Court Government Pleader is not having any consequence in this petition. 7. Having heard the arguments and perused the records, on perusal of the records the allegation against - 9 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 the petitioners is that they are the Members of the Managing Committee and Staff Members of the Bank. The allegation against them was they closed the account of one K.D. Joshi’s company loan account as Non-Performing Asset. At that time, there was outstanding loan of more than Rs.45 lakhs, thereby, the petitioners are said to have caused loss to the Bank. Therefore, respondent No.1 filed a private complaint under Section 200 of Cr.P.C. Previously, it was referred to the police under Section 156 (3) of Cr.P.C. and the police have investigated the matter and filed ‘B’ final report. Admittedly, the ‘B’ final report has been challenged by respondent No.1. The same was accepted on the previous occasion. Summons was issued by the Magistrate which was challenged before the Sessions Judge in Crl.R.P.No.68/2013 which came to be allowed by the learned Sessions Judge vide order 23.09.2014. Subsequently, the very complainant approached this Court under Section 482 Cr.P.C. in Criminal Petition No.200025/2015 which came to be allowed by this court and remitted the matter back to the - 10 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 learned Magistrate to pass an order on the ‘B’ final report, thereafter take cognizance, if the case is made out, thereafter pass order either under Section 203 or Section 204 of Cr.P.C. vide order dated 15.06.2015. 8. It is seen from the records which reveals that subsequently, based upon the order of this Court, the case was once again restored before the Magistrate. The learned Magistrate accepted the ‘B’ final report and complaint came to be closed on 19.11.2015. Being aggrieved by the same, once again respondent No.1 approached the Sessions Court by filing Crl.R.P.No.19/2016 wherein the learned Sessions Judge set aside the order and directed to pass appropriate order as directed by this Court in Criminal Petition No.200025/2015. Accordingly, once again the matter was taken up by the learned Magistrate who took cognizance for the offence on 23.05.2019 and rejected the ‘B’ final report and enquiry was conducted on respondent No.1 – complainant. Some of the witnesses have been examined. - 11 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 Thereafter, once again the learned Magistrate issued the process as against the accused persons. Once again the accused persons approached the learned Sessions Judge by filing Criminal Revision Petition No.190/2019 which came to be dismissed. Hence, the petitioners are once again before this Court. 9. On perusal of the statement on record and the submission of the learned counsel for the respondents, this Court is required to verify whether the petitioners were Executive Members of the said Bank during the year 2005-06 as Chairman, Secretary, Manager and Accountant of the said Bank. In this regard the 77th Annual Report of the Bank has been released during the year 2006-07. The said document reveals the name of four petitioners mentioned in the report. The first and second accused were Chairman and Director, the third and fourth accused were mentioned as Manager and Accountant of the Bank. The learned counsel for respondent No.1 also produced the 75th annual report for the year 2004-05. Once again name - 12 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 of these petitioners shown in the Management Committee as well as Staff Members. The learned counsel for the petitioners has contended as per the preliminary enquiry report, the Deputy Registrar of Societies has held totally 13 persons were the Members of the said Bank and name of the petitioners were not shown in the list but the complainant’s name shown as S.K.Gunhalkar in Sl.No.7. Therefore, it is contended the Sardeshpande and 13 members were responsible for transferring the loan account to NPA. On the other hand, the counsel for respondent No.1 produced the Annual Report for the year 2004-05 where the names of petitioner Nos.1 and 2 shown as Chairman and Director and petitioner Nos.3 and 4 shown as Manager and Accountant and they have approved the resolutions and accounts between 01.04.2004 till 31.03.2005 and other resolutions were approved in the meeting dated 24.09.2005 The another report is produced for the year 2005-06 and meeting was held on 24.09.2006. The petitioners once again approved the resolutions passed in the previous year. At that time, - 13 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 the petitioners were the Members of the administration of the said Bank. 10. On careful perusal of the opinion of the Deputy Registrar, where it is stated the land belongs to M/s. Joshi Engineering Works and M/s. Joshi Metal Industries, the properties were already got transferred to the name of the Bank though they are trying to sell during auction sale but nobody came forward. Therefore, the properties were forfeited to the Bank. However, the Enquiry Report also says a resolution was passed in the Executing Committee Meeting on 30.06.2005 and the same was transferred to NPA account and they requested the Deputy Registrar of Societies for permission to close. Accordingly, the Deputy Registrar, by order dated 07.07.2005 in No. Dgï.eÉ ¥ÀvÀÄÛ/AiÀÄÄ.¹.©/D.ªÀiÁ/¹.Dgï.2/2005-06, granted permission for closing the account. Accordingly, the same was closed and it is also referred they have decided not to obtain the permission of the RBI. The report of the Deputy Registrar - 14 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 of Societies under Section 64 of the Karnataka Co- operative Societies Act, 1959, stated that the loss was Rs.10,08,964/- principal amount and interest Rs.35,05,965/-, total Rs.45,14,929/- and once again it is stated that Sri M. G. Sardeshpande and others are responsible for closing the account who were the Executive Members of the Bank. Of course, the name of the petitioners was not mentioned in the preliminary report of the Deputy Registrar. On the other hand, the very Annual Reports of the Bank for the year 2004-05, 2005-06 and 2006-07 clearly reveal that transferring the account of M/s. Joshi Metal Industries, Vijayapur and M/s. Joshi Engineering Works, Vijayapur was done during the Financial Year 2003-04 and the meeting has been conducted on 30.06.2005. It clearly reveals during the year 2005 i.e. 30.06.2005 for holding the meeting for the Financial Year 2003-04, the petitioners were the President, Director, Manager and Accountant of the Bank. Admittedly, the account has been transferred to NPA. Therefore, the contention of the petitioners cannot be - 15 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 accepted that they are not responsible for closing the account. Though a document is produced showing the name of the complainant and others were responsible for the meeting held on 23.07.2007, but actually the meeting was held on 30.06.2005 as per the balance sheet as on 31.10.2004 and they obtained the permission of the Deputy Registrar only on 07.07.2005. Such being the case, the extract of the meeting obtained and produced by the police dated 23.07.2007 is not correct. Therefore, the contention of the petitioners’ counsel cannot be accepted that complainant was the member of the Executive Committee during the year 2005. On the other hand, the complainant and other three witnesses are examined before the Trial Court and based upon the statement of the witnesses, the learned Magistrate proceeded to take cognizance and issued process. If at all any defence available to the petitioners that they have obtained permission of the Deputy Registrar and closed the account, they can agitate the same before the Trial Court - 16 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 in their cross-examination. Such being the case, this is not a fit case for quashing the proceedings. 11. That apart, on perusal of the records, the complainant was agitating and filing the private complaint. Subsequently, the copies were taken, the petitioners have approached Sessions Court for thrice, and twice before this Court. The matter pertains to the year 2004-05 and complaint came to be filed by the complainant long back. Though the police have filed ‘B’ final report, but the Trial Court considering the materials on record and rightly took the cognizance and issued the process. Therefore, I do not find that the proceedings against the petitioners is abuse of process of law for quashing the same. The petition is devoid of merit and is liable to be dismissed. 12. Accordingly, the petition filed the petitioners/ accused Nos.1 to 4 under Section 482 of Cr.P.C. is dismissed. Interim order granted by this Court is vacated. - 17 - NC: 2025:KHC-K:1737 CRL.P No. 201667 of 2022 The office to send back the Trial Court records immediately and the petitioners are directed to appear before the Trial Court, without any further notice, on 03.04.2025. Sd/- (K NATARAJAN) JUDGE SWK List No.: 1 Sl No.: 1 CT:SI