- 1 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MRS JUSTICE M G UMA CRIMINAL PETITION NO. 5255 OF 2018 BETWEEN: 1. DAIMLER FINANCIAL SERVICES INDIA PRIVATE LIMITED, OFFICE AT UNIT-202, 2ND FLOOR, CAMPUS-III B, RMZ MILLENNIA BUSINESS PARK, 143, DR.M.G.R. ROAD PERUNGUDI, CHENNAI-600 096. REP.BY ITS AUTHORISED REPRESENTATIVE M.S. DINKAR. 2. MR. HIREN KANJI NEGANDHI, DIRECTOR, DAIMLER FINANCIAL SERVICES INDIA PVT. LTD. 3. MR. GOVINDARAJAN VIJAYABASKAR, DIRECTOR, DAIMLER FINANCIAL SERVICES INDIA PVT. LTD. 4. MR. FRIEDERICH WEICK, DIRECTOR, DAIMLER FINANCIAL SERVICES INDIA PVT. LTD. 5. MR. THOMAS HUNGERLAND, DIRECTOR, DAIMLER FINANCIAL Digitally signed by SWAPNA V Location: high court of karnataka - 2 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 SERVICES INDIA PVT. LTD., 6. MR. FRITZ WILHELM KARBAUM, DIRECTOR, DAIMLER FINANCIAL SERVICES INDIA PVT. LTD. 7. MR. MOHAN S/O GOVINDSA, AGED ABOUT 37 YEARS, AUTHORIZED REPRESENTATIVE OF DAIMLER FINANCIAL SERVICES INDIA PVT.LTD., PETITIONERS NO.2 TO 7 COMMUNICATION ADDRESS IS AT UNIT- 202, 2ND FLOOR, CAMPUS-III B, RMZ MILLENNIA BUSINESS PARK, 143, DR. M.G.R. ROAD, PERUNGUDI, CHENNAI-600 096. SINCE PETITIONER NO.2 TO 7 ARE DIRECTORS AND EMPLOYEES OF THE PETITIONER NO.1 COMPANY, PETITIONER NO.2 TO 7 ARE REPRESENTED BY ITS AUTHORISED REPRESENTATIVE M.S. DINKAR. …PETITIONERS (BY SRI. V. SURESH AND SRI. AMIT DESHPANDE, ADVOCATES FOR PETITIONER NO.1 AND PETITIONER NO.7; V/O/D 12.03.2020, PETITIONERS NO.2 TO 6 ARE DELETED) - 3 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 AND: 1. STATE OF KARNATAKA, BY AUDUGODI POLICE STATION, REPRESENTED BY STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, AMBEDKAR VEEDHI, BENGALURU-560 001. 2. M/S. INTEGRATED CARGO & COURIER SOLUTIONS, NO.352/25, 6TH MAIN ROAD, LAKKASANDRA EXTENSION, HOMBEGOWDANAGARA, AUDUGODI, BENGALURU-560 030 REPREENTED BY ITS MANAGING PARTNER MR. S.PV. N.V. BHADRAM. …RESPONDENTS (BY SMT. RASHMI PATEL, HCGP FOR R-1; SRI. B.S. PRASAD, ADVOCATE FOR R-2) *** THIS CRIMINAL PETITION IS FILED U/S.482 OF CR.P.C PRAYING TO QUASH THE IMPUGNED ORDER OF REFERENCE PASSED BY VI ADDL.C.M.M., BANGALORE IN P.C.R.NO.9800/2017 FOR OFFENCES P/U/S 467,468,471 AND 420 R/W 34 OF IPC DATED 02.12.2017 VIDE ANNEXURE-D AND CONSEQUENTLY TO QUASH THE FIR IN CRIME NO.16/2018 REGISTERED BY AUDUGODI POLICE STATION FOR THE OFFENCES P/U/S 467,468,471 AND 420 R/W 34 OF IPC VIDE ANNEXURE-A, ETC. - 4 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 THIS CRIMINAL PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MRS JUSTICE M G UMA ORAL ORDER Petitioner No.1 being the Company represented by petitioner No.7, is seeking to quash the impugned order dated 02.12.2017 referring the private complaint in P.C.R. No.9800/2017, on the file of the learned VI Additional Chief Metropolitan Magistrate, Bengaluru, registered for the offences punishable under Sections 467, 468, 471, 420 read with Section 34 of IPC for investigation to the Adugodi Police and to quash the FIR in Crime No.16/2018 of Adugodi Police Station for the aforesaid offences, in the interest of justice. 2. Brief facts of the case are that, respondent No.2 as complainant filed the private complaint in P.C.R.No.9800/2017 against accused Nos.1 to 9 alleging commission of the offences punishable under Sections 467, 468, 471 and 420 read with Section 34 of the IPC. 3. Learned Magistrate, referred the matter for investigation to Adugodi Police Station by registering the FIR. - 5 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 Petitioner No.1 being a Company, represented by petitioner No.7 approached this Court seeking to quash the order referring the matter for investigation and registration of the FIR against them and also to pass necessary orders under the circumstances of the case. It is stated that petitioner Nos.2 to 6 even though joined hands in filing the petition, subsequently their names were deleted and therefore, they are not prosecuting the petition. 4. It is the contention of respondent No.2 that he entered into an agreement with accused No.1 in respect of 14 Lorries referred to in the complaint for the purpose of purchasing the same and accused No.1 financed for purchase of the said vehicles. An agreement was entered into between accused No.1 and respondent No.2 in that regard. It is alleged that there were mechanical defects in the vehicle. In spite of that, respondent No.2 paid the instalments except few instalments which he could not pay. Accused No.1 through other accused got blank cheques as security from respondent No.2 and issued notice for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as "N.I. Act"). In the meantime, accused - 6 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 No.1 sold the vehicles without the knowledge of the complainant for a paltry sum. Under such circumstances, the accused have committed the offence punishable under Sections 467, 468, 471 and 420 IPC read with Section 34 of the IPC, and sought for quashing of cognizance of the offence taken by the learned Magistrate. 5. On filing of the complaint, the learned Magistrate referred it to Adugodi Police under Section 156(3) of the Code of Criminal Procedure,1973 (hereinafter for brevity referred to as "Cr.P.C.") for investigation. Accused No.1 is challenging referring of the matter for investigation and registration of the FIR and also seeking quashing of the criminal proceedings even on merits. 6. Heard Sri. V. Suresh, learned counsel for petitioners No.1 and 7, Smt. Rashmi Patel, learned High Court Government Pleader for the respondent No.1-State and Sri.B.S. Prasad, learned counsel for respondent No.2. Perused the material on records. 7. Learned counsel for the petitioners has raised the following points in support of his contention: - 7 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 (i) Learned Magistrate has not followed the procedure as contemplated under Section 202 (1) of the Cr.P.C. even though accused Nos.2 and 7 are not the residents within the jurisdiction of the learned Magistrate. (ii) Learned Magistrate has not followed the procedure as contemplated under Section 154(3) of the Cr.P.C., ignoring the fact that the complainant has not filed any affidavit as required to be filed as per the directions of the Hon'ble Apex Court in Mrs. Priyanka Srivastava and Another Vs. State of U.P. and others1. (iii) Learned Magistrate has not applied his mind while referring the matter for investigation, since there are blank spaces in the complaint and the same are ignored and therefore, the petition is to be allowed. (iv) Even on merits, learned counsel for the petitioners contended that as per the complainant himself, he had not paid the instalments as agreed and there was default in payment of at least few of the instalments. He also admits issuance of the cheque with his signature and the receipt of notice under 1 (2015) 6 Supreme Court Cases 287 - 8 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 Section 138 of the N.I. Act. The complainant admits that the vehicle in question was sold by the finance company. If at all these are all civil disputes between the parties, they have been given the colour of criminal offence. (v) There was an arbitral proceeding between the parties and the learned Arbitrator has passed the award. In execution of the arbitral award, the vehicles were sold. These facts are suppressed by the complainant while filing the complaint. The loan agreement entered into by the complainant with accused No.1 enables the sale of the vehicles on default by the borrower. Suppressing all these facts, the complainant had approached the criminal Court without any basis and therefore, according to the learned counsel for the petitioners, it is a fit case for allowing the petition and to quash the criminal proceedings. 8. Per contra, it is the contention of the learned counsel for the respondent No.2/complainant that the criminal proceedings cannot be quashed merely on technical grounds and moreover on merits, the learned Magistrate will take into - 9 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 consideration the contentions of the parties and therefore the criminal proceedings cannot be quashed at this stage. 9. In view of the rival contentions urged by the learned counsel for both the parties, the point that would arise for my consideration is: “Whether the Petitioners have made out any grounds to allow the petition and to quash the criminal proceedings initiated against them?" My answer to the above point is in ‘Affirmative’ for the following: R E A S O N S 10. On perusal of the materials on record, prima facie, it is seen that accused No.1 is a Company situated at Chennai and accused No.7 is representing accused No.1 - Company and he is also the resident of Chennai, admittedly, outside the jurisdiction of the learned Magistrate. Section 202(1) of Cr.P.C. refers to 'postponement of issuance of process' if the accused resides at a place beyond the area in which he exercises his jurisdiction. However, the learned Magistrate has not issued the process but only referred matter for investigation under Section 156(3) of Cr.P.C. - 10 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 11. Section 154(3) of Cr.P.C. refers to 'sending of the substance of the information in writing by post to the Superintendent of Police concerned. 12. The Hon'ble Apex Court in Mrs. Priyanka Srivastava's case (supra) held in paragraph 27 as under: "27. In our considered opinion, a stage has come in this country where Section 156(3) Cr.P.C. applications are to be supported by an affidavit duly sworn by the applicant who seeks the invocation of the jurisdiction of the Magistrate. That apart, in an appropriate case, the learned Magistrate would be well advised to verify the truth and also can verify the veracity of the allegations. This affidavit can make the applicant more responsible. We are compelled to say so as such kind of applications are being filed in a routine manner without taking any responsibility whatsoever only to harass certain persons. That apart, it becomes more disturbing and alarming when one tries to pick up people who are passing orders under a statutory provision which can be challenged under the framework of said Act or under Article 226 of the Constitution of India. But it cannot be done to take undue advantage in a criminal court as if somebody is determined to settle the scores. We have already indicated that there has to be prior applications under Section 154(1) and 154(3) while filing a petition under Section 156(3). Both the aspects should be clearly spelt out in the application and necessary documents to that - 11 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 effect shall be filed. The warrant for giving a direction that an application under Section 156(3) be supported by an affidavit so that the person making the application should be conscious and also endeavour to see that no false affidavit is made. It is because once an affidavit is found to be false, he will be liable for prosecution in accordance with law. This will deter him to casually invoke the authority of the Magistrate under Section 156(3). That apart, we have already stated that the veracity of the same can also be verified by the learned Magistrate, regard being had to the nature of allegations of the case. We are compelled to say so as a number of cases pertaining to fiscal sphere, matrimonial dispute/family disputes, commercial offences, medical negligence cases, corruption cases and the cases where there is abnormal delay/laches in initiating criminal prosecution, as are illustrated in Lalita Kumari are being filed. That apart, the learned Magistrate would also be aware of the delay in lodging of the FIR." (emphasis supplied) 13. In the present case, it is the specific contention of the petitioner that no such procedure is followed by the complainant nor the learned Magistrate satisfied himself about the procedure to be followed by the complainant. Apparently, no affidavit is filed in support of the complaint, in compliance of - 12 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 the directions of the Hon'ble Apex Court in Mrs. Priyanka Srivastava's case (supra). 14. The impugned order dated 02.12.2017 discloses that the learned Magistrate simply proceeded to refer the matter for investigation under Section 156(3) of Cr.P.C. In para.13 of the complaint, even though the complainant stated that the accused themselves have to pay back the amount to the complainant, he left the space blank regarding quantifying the amount to be paid by the accused. If the learned Magistrate had applied his mind before referring the matter for investigation, he would have found out that some portions in the complaint are left blank. 15. Learned counsel for the petitioners has produced a copy of the arbitral award in A.C.P. (DAIMLER)No.99 of 2018. It is stated that the order is passed on 26.04.2018 and the private complaint came to be filed in the year 2017. Learned counsel for the petitioners has also produced copy of the loan agreement entered into between accused No.1 and the complainant where there is an arbitration clause. The terms of the agreement also authorises the finance Company, i.e. - 13 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 accused No.1 to sell the vehicle in case the borrower commits default in payment of the loan instalments. Even as per the complainant, he committed default in payment of few instalments. It is also pertinent to note that the complainant categorically states that he had issued blank cheques with his signature as security to accused No.1. In turn, he received the notice from accused No.1 for the offences punishable under Section 138 of the N.I. Act. It is only thereafter, it appears that the present complaint came to be filed. If all these facts and circumstances of the case are taken into consideration together, prima facie, I am of the opinion that the complainant has chosen to file the private complaint suppressing the material facts of entering into an agreement with the complainant, agreeing for the terms mentioned therein and also suppressing passing of the arbitral award and thereafter selling of the vehicles. The grievance of the complainant is of civil nature which is given the colour of criminal offence. Therefore, I am of the opinion that initiation of investigation by the Police by registering the FIR and the criminal complaint against accused Nos.1 and 7 is in abuse of the process of law. Hence, the same are liable to be quashed. - 14 - NC: 2025:KHC:1320 CRL.P No. 5255 of 2018 16. Accordingly, I answer the above point in the Affirmative and proceed to pass the following: ORDER (i) The petition is allowed. (ii) The impugned order of reference dated 02.12.2017 passed by the learned VI Additional Chief Metropolitan Magistrate, Bangalore, in P.C.R.No.9800/2017, for the offences punishable under Sections 467, 468, 471 and 420 IPC read with Section 34 of the IPC, and the FIR registered in Crime No.16/2018 of Adugodi Police Station, for the aforesaid offences, in so far as the petitioner No.1 (accused No.1) and petitioner No.7(accused No.7) are concerned, are hereby quashed. In view of disposal of the criminal petition, I.A.No.1/2021 for vacating stay stands disposed of. Sd/- (M G UMA) JUDGE BMV* List No.: 1 Sl No.: 22