- 1 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE V SRISHANANDA CRIMINAL APPEAL NO.1286 OF 2024 (KPIDFE) BETWEEN: SRI. MANJUNATH RAMAKRISHNASA KABADI, S/O RAMAKRISHNA, AGED ABOUT 51 YEARS, R/A. KASHINATHA KRUPA, NO. 4213, KABADI ROAD, GADAG BETIGERI, GADAG - 582 102, KARNATAKA. …APPELLANT (BY SRI. MUZAFFAR AHMED, ADVOCATE) AND: 1. STATE OF KARNATAKA BY CHANNAMMANAKERE ACHUKATTU P.S., REPRESENTED BY STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, BANGALORE - 560 001. 2. M/S. CDMA INDIA BY ITS PROPRIETOR, SRI. PRASAHANTH S. SAMBARGI, S/O LATE SHASHIDHAR SAMBARGI, AGED ABOUT 51 YEARS, Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 BANASHANKARI 3RD STAGE, BANGALORE - 560 070. …RESPONDENTS (BY SRI. CHANNAPPA ERAPPA, HCGP FOR R1; SRI. DARSHANGOWDA PATIL, ADVOCATE FOR SRI. SHIVAPRASAD SHANTANAGOUDAR, ADVOCATE FOR R2) THIS CRL.A IS FILED UNDER SECTION 16 KPIDFE ACT OF CR.P.C PRAYING TO GRANT ANTICIPATORY BAIL TO THE APPELLANT/ACCUSED BY DIRECTING THE RESPONDENT POLICE TO ENLARGE THE APPELLANT ON BAIL IN THE EVENT OF HIS ARREST IN CR.NO.42/2024 OF CHANNAMMANAKERE ACHUKATTU POLICE STATION FOR THE OFFENCE P/U/S 9 OF THE KARNATAKA PROTECTION OF INTEREST DEPOSITORS IN FINANCIAL ESTABLISHMENT ACT,2004 R/W SEC.21 OF BANNING OF UNREGULATED DEPOSIT SCHEMES ACT 2019 AND SEC.409, 419, 420 OF IPC DATED 27.02.2024 PENDING ON THE FILE OF THE HONBLE PRINCIPAL CITY CIVIL AND SESSIONS JUDGE(CCH-1) BENGALURU BY IMPOSING CONDITIONS. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE V SRISHANANDA ORAL JUDGMENT Heard the learned counsel Sri. Muzafar Ahmed for the appellant, learned High Court Government Pleader and Sri. Darshan Gowda for Shivaprasad Shantangoudar for respondent No.2. 2. Appeal is filed by the accused in Crime No.42/2024 of Chennammanakere Achchukattu Police - 3 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 Station, Bengaluru, wherein the offence alleged against the appellant are under Sections 409, 419 and 420 of the Indian Penal Code, under Section 9 of the Karnataka Protection of Interest Depositors' in Financial Establishment Act, 2004 and under Section 21 of the Banning of Unregulated Depositors' Scheme Act, 2019. 3. After registration of the case, appellant approached this Court with following prayer: "To grant anticipatory bail to the appellant/accused by directing the respondent police to enlarge the appellant on bail in the event of his arrest in Crime No.0042/2024 of Channammanakere Achukattu Police Station for the offences punishable under Section 9 of the Karnataka Protection of Interests Depositors in Financial Establishment Act, 2004 read with under Section 21 of the Banning of Unregulated Deposit Schemes Act, 2019 and Section 409, 419, 420 of IPC dated 27.02.2024 pending on the file of the Hon'ble Principal City Civil and sessions Judge, (CCH-1) Bengaluru, by imposing conditions as this Hon'ble Court deems fit in the circumstances of the case to meet the ends of justice." - 4 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 4. Learned counsel Sri. Muzafar Ahmed for the appellant contends that the transaction between the appellant and the 2nd respondent is in the nature of loan transaction and not the deposit as is complained. 5. He would further submit that the 2nd respondent has borrowed a sum of Rs.1 Crore from the appellant which has been repaid. Therefore, at no stretch of imagination, the payment of Rs.1 Crore made to the appellant by the 2nd respondent could be treated as deposit so as to attract the provisions of either KPID Act or BUDS Act much less provisions of Sections 409, 419 and 420 of the Indian Penal Code. Therefore, he sought for allowing the appeal. 6. Per contra, the learned High Court Government Pleader and counsel for respondent No.2 opposed the bail grounds by contending that whether at all the amount that has been paid by the 2nd respondent reflected through the bank transaction is to be treated as deposit or not is to be decided by the Investigation Agency after thorough - 5 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 investigation and it is too premature for this Court to agree with the submissions made on behalf of the appellant and thus sought for dismissal of the appeal. 7. Having heard the parties in detail, this Court perused the material on record meticulously. 8. Admittedly, the financial transaction between 2nd respondent and the appellant is established by the statement of accounts filed by the 2nd respondent along with the objection statement. However, whether 2nd respondent made a deposit with the appellant for the purpose of interest or not cannot be decided by this Court as the investigation is still in the inception stage. 9. Prima facie materials would reveal that there was a financial transaction wherein money has flown from the account of the 2nd respondent to the appellant which is reflected in the bank statement. 10. Learned counsel for appellant Sri. Muzafar Ahmed would contend that the payment of Rs.1 Crore by - 6 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 the 2nd respondent to the appellant is not in dispute. But the same is towards the return of the amount borrowed by the 2nd respondent from the appellant. 11. These aspects of the matter are to be investigated by the Investigation Officer by collecting necessary documentary evidence from the custody of the appellant to establish that in fact he had lent Rs.1 Crore to 2nd respondent earlier to the transaction whereby 2nd respondent said to have repaid the amount of Rs.1 Crore to the appellant. Admittedly from the date of registration of the case, investigation has not progressed for want of the presence of the appellant. 12. Since the matter is only with regard to the financial transaction and there is allegation and counter allegation with regard to the transaction, it is just and necessary that if the appellant is directed to join the investigation by appearing before the investigation officer on a particular day and on the very same day, if custodial - 7 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 interrogation if any is concluded and thereafter the appellant is enlarged on bail, ends of justice would be met. Accordingly, without expressing further opinion on the matter, the following Order is passed: ORDER (i) Criminal Appeal is allowed. (ii) Appellant is directed to join the investigation by appearing before the Investigation Officer on 28.02.2025 at 10.00 a.m., (iii) Investigation Officer is at liberty to take the appellant to custody and complete the custodial investigation on the very same day before 5.00 p.m., (iv) Thereafter, the appellant shall be enlarged on bail on taking of bond in a sum of Rs.5,00,000/- (Rupees Five Lakhs only) with one surety for - 8 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 the likesum to the satisfaction of the Investigation Officer. (v) Appellant shall cooperate with the Investigation Officer in all aspects including furnishing of specimen hand writing / signature of the appellant. (vi) Appellant shall also reveal necessary passwords if any for computer login or similar gadgets for the purpose of finding out the necessary entries which are stored in the form of electronic evidence. (vii) Appellant shall attend the Court and appear before the Investigation Officer as and when directed. (viii) Appellant shall mark his attendance before the Investigation Officer on every 3rd Sunday between 10.00 a.m., and 2.00 P.M., till final report is filed. - 9 - NC: 2025:KHC:7486 CRL.A No. 1286 of 2024 (ix) Appellant shall not tamper the prosecution evidence in any manner whatsoever. (x) The appellant shall not leave the jurisdiction of Gadag and Bangalore Urban District without prior permission. Sd/- (V SRISHANANDA) JUDGE SNC List No.: 1 Sl No.: 12 CT: BHK