- 1 - NC: 2025:KHC:10508 CRL.P No. 7452 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 7452 OF 2024 BETWEEN: 1. M/S OM SAI CO-OPERATIVE CREDIT SOCIETY LTD OPP. SUB REGISTRAR OFFICE, GADAG, KARNATAKA - 582101. REPRESENTED BY ITS SECRETARY, MR. ERANNA GURUNATHAPPA MUDAGAL, S/O GURUNATHAPPA MUDAGAL AGED ABOUT 50 YEARS CHANNAGOUDAR ONI BELAGERI, GADAG BELAGERI GADAG - 582 102, KARNATAKA. …PETITIONER (BY SMT. RAHILA FARHEEN, ADVOCATE FOR SRI. MUZAFFAR AHMED, ADVOCATE) AND: 1. STATE BY CHANNAMMANAKERE ACHUKATTU POLICE STATION, REPRESENTED BY STATE PUBLIC PROSECUTOR PROSECUTOR HIGH COURT BUILDINGS BANGALORE - 560 001. 2. SRI PRASHANTH SAMBARAGI PROPRIETOR M/S CDMA INDIA NO.108, 3RD CROSS BANASHANKARI 3RD STAGE BANGALORE - 560 070. …RESPONDENTS (BY SRI. ANOOP KUMAR M.V., HCGP FOR R-1; R-2 SERVED ) Digitally signed by R HEMALATHA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:10508 CRL.P No. 7452 of 2024 THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE FIR IN CRIME NO.42/2024 DATED 27.02.2024, REGISTERED BY THE CHANNAMMAKERE ACHKAT P.S., BANGALORE, FOR THE ALLEGED OFFENSES P/U/S 9 OF THE KARNATAKA PROTECTION OF INTEREST DEPOSITERS IN FINANCIAL ESTABLISHMENT ACT 2004, U/S 21 OF THE BANNING OF UNREGULATED DEPOSIT SCHEMES ACT 2019, AND ALSO U/S 409, 419 AND 420 OF IPC, AGAINST THE DIRECTORS OF M/S OM SAI CO-OPERATIVE SOCIETY, GADAG, PENDING ON THE FILE OF THE HON'BLE PRINCIPAL CITY CIVIL AND SESSIONS JUDGE, BANGALORE. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR ORAL ORDER The petitioner-Society is facing investigation for the offence punishable under Section 9 of the Karnataka Protection of Interest Depositors in Financial Establishments Act, 2004, Section 21 of the Banning of Unregulated Deposit Schemes Act, 2019, and Sections 409, 419, and 420 of the IPC, and is before this Court seeking relief. 2. The 2nd respondent lodged an FIR stating that the Directors of the Co-operative Society induced him to deposit a sum of Rs.1 Crore by promising to pay interest at 12% per annum. It is further stated that, despite receiving the money, the Directors have neither paid any interest nor returned the deposited amount. - 3 - NC: 2025:KHC:10508 CRL.P No. 7452 of 2024 3. The 2nd respondent, although served with notice, did not choose to appear in person or through counsel; therefore, he is being dealt with ex parte. 4. The learned counsel for the petitioner and the learned High Court Government Pleader for the respondent-State were heard. 5. The petitioner has produced a copy of a communication dated 5.8.2020 issued to the President of the Co-operative Society, stating that he had received a sum of Rs.1,04,00,000 (Rupees One Crore and Four Lakhs Only) for procuring the land, of which Rs.1 Crore was returned and the balance of Rs.4 Lakhs was adjusted toward travel and other expenses. The 2nd respondent has not appeared before this Court to challenge the validity of the communication. Therefore, it is implied that the amount received by the 2nd respondent was for the procurement of land and not as a deposit. Moreover, the 2nd respondent has not produced any substantive evidence to establish that the deposit of Rs.1 Crore was intended as a fixed deposit in lieu of the Co-operative Society paying interest at 12% per annum. In such circumstances, the continuation of the investigation would amount to an abuse of the process of law. 6. Accordingly, the petition is allowed. - 4 - NC: 2025:KHC:10508 CRL.P No. 7452 of 2024 7. The impugned FIR in Crime No.42/2024 registered by the Channammanakere Acchu Kattu Police Station, insofar as it relates to the petitioner, is hereby quashed. Sd/- (HEMANT CHANDANGOUDAR) JUDGE HR List No.: 1 Sl No.: 88