- 1 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MRS JUSTICE M G UMA CRIMINAL PETITION NO. 9221 OF 2021 BETWEEN: 1. MR. D. LOKESH, S/O. LATE DASAPPA, AGED ABOUT 65 YEARS, R/AT NO.326, 15TH CROSS, SADASHIVANAGAR, BANGALORE 2. MR. CHELUVARAJU, S/O. LATE DASAPPA, AGED ABOUT 63 YEARS, R/AT NO.48, 18TH CROSS, MUNESHWARA NAGAR, BANGALORE - 560 059. 3. MR. CHINNINGE GOWDA, S/O GEJJE GOWDA, AGED ABOUT 72 YEARS, R/AT MUDDINAGERE, MANDYA TALUK, KILARA POST, MANDYA DIST. 4. MR. D. VISHWANATH, S/O. LATE D. DASEGOWDA, AGED ABOUT 62 YEARS, R/AT NO.748, NARMADANADI ROAD, PIPILINE, BENGALURU - 560 050 5. MR. M. MURALI, S/O. LATE MANJAPPA, AGED ABOUT 55 YEARS, R/AT NO.3317, 5TH CROSS, 1ST MAIN ROAD, GAYATHRI NAGAR, BENGALURU - 560 021 Digitally signed by V N BADIGER Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 6. B. SEENAPPA S/O. LATE. DASAPPA, AGED ABOUT 67 YEARS, R/AT. NO.31, NEW BEL ROAD, RMV 2ND STAGE, BENGALURU - 560 094 …PETITIONERS (BY SRI. SRINIVASA MURTHY .D., ADVOCATE) AND: 1. MR. R. PRAKASH, S/O. LATE S.M. RAJU, AGED ABOUT 54 YEARS, R/A NO.325, 'A' IDEAL HOMES, RAJARAJESHWARI NAGAR, BANGALORE - 560 098. 3. STATE BY ULLAL POLICE STATION, DAKSHINA KANNADA DIST, REPRESENTED BY SPP HIGH COURT BUILDING, BANGALORE - 560 001 …RESPONDENTS (BY SRI. P.P. HEGDE, SR. ADVOCATE SRI. AVINASH .P., ADVOCATE FOR R1 SRI. VENKAT SATHYANARAYAN, HCGP FOR R2 (V/O DT.27.01.2025, PETITION IS FILED BY P3 STANDS ABATED)) THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE CR.NO.80/2019 FOR THE OFFENCE P/U/S 120B, 418, 420, 465, 406, 468, 471, 417, 423 OF IPCM, CHARGE SHEET DATED 04.01.2020 IN C.C.NO.103/2020 ON THE FILE OF I ADDITIONAL SENIOR CIVIL JUDGE AND C.J.M., MANGALURU, D.K. IN SO FAR AS THE PETITIONERS ARE CONCERNED AND SET ASIDE THEIR LIBERTY. THIS CRL.P, COMING ON FOR FINAL HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MRS JUSTICE M G UMA - 3 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 ORAL ORDER Petitioners being accused Nos.1 to 6 are seeking to quash the criminal proceedings initiated against them, now pending in CC.No.103/2020 on the file of the learned I Additional Senior Civil Judge and CJM Mangalore, DK registered for the offences punishable under Sections 120-B, 418, 420, 465, 406, 468, 471, 417 and 423 of IPC (arising out of private complaint PC No.27/2019 and Cr.No.80/2019 of Ullala Police Station. 2. Brief facts of the case are that, respondent No.1 as complainant has filed the private complaint in PC No.27/2019 against accused Nos.1 to 8 alleging commission of the offences as stated above. It is the specific contention of respondent No.1 that he initially entered into registered partnership deed with accused No.1, which is dated 17.05.2006. As per the terms of partnership deed, respondent No.1 was the managing partner and both the partners had jointly agreed to operate the bank account. The grievance of the complainant is that accused No.1, who had no authority to alienate the property belonging to the partnership firm got executed the registered sale deeds in favour of accused Nos.2 to 6, without the knowledge and - 4 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 permission of accused No.1. The sale considerations received by accused No.1 was also not credited to the bank account of the partnership firm. It is also the contention of the complainant that accused Nos.1, 2 and 6 are the brothers and accused Nos.3, 4 and 5 are the employees working under accused No.1. Therefore, it is the contention of the complainant that sham documents are executed by accused No.1 in favour of his brothers and employees to defraud respondent No.1 and thereby he committed the offence as stated above. 3. The Trial Court referred the matter for investigation. After investigation, the charge sheet came to be filed against accused Nos.1 to 6 for the offences punishable under Sections 120B, 417, 418, 406, 420, 423 of IPC while dropping Sections 466, 468 and 471. The Trial Court took cognizance of the offences and registered CC No.103/2020. Petitioners being accused Nos.1 to 6 have approached this Court seeking to quash the criminal proceedings initiated against them in the interest of justice. 4. Heard Sri. Srinivasa Murthy D., learned counsel for the petitioners and Sri.P.P.Hegde, learned Senior Advocate for - 5 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 Sri.Avinash P., learned counsel for respondent No.1 and Sri. Venkat Sathyanarayan, learned High Court Government Pleader for respondent No.2. Perused the materials on record. 5. Learned counsel for the petitioners contended that admittedly respondent No.1 and accused No.1 are the partners of the registered partnership firm and the partnership deed is dated 17.05.2006. Respondent No.1 admittedly entered into an agreement of sale with one Somshekara Gowda on 05.05.2007 without the knowledge and consent of accused No.1 and agreed to sell one of the properties of the firm for Rs.16,00,000/- out of which, he received Rs.11,50,000/- as advance. When respondent No.1 could enter into an agreement to sale with the third parties to sell the property and accepted the consideration amount without the consent and knowledge of accused No.1, respondent No.1 cannot have any grievance against petitioners for the five sale deeds executed by him in favour of accused Nos.2 to 6. It is also the contention of the learned counsel for the petitioners that as per the terms of registered partnership deed, there is an arbitration clause and the dispute between the parties is to be referred to arbitration. Accordingly, respondent No.1 has initiated arbitral proceedings, which is - 6 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 pending consideration. Accused No.1 has filed the suit for declaration in OS.No.201/2019 which was decreed, and respondent No.1 has preferred RFA, which is pending consideration before this Court. There are civil litigations between the parties. Therefore, initiation of criminal proceedings is in abuse of process of law. 6. Learned counsel for the petitioners further contended that respondent No.1 while filing the private complaint has not filed any affidavit in compliance of direction issued by Hon'ble Apex Court in Priyanka Srivastava and another Vs State of U.P1. Further it is stated that there is inordinate delay in filing the complaint. Hence, prays for allowing the petition and to quash the criminal proceedings. 7. Per contra, learned Senior Advocate for respondent No.1 and learned High Court Government Pleader for respondent No.2 opposing the petition submitted that admittedly, registered partnership deed was entered into between respondent No.1 and accused No.1. No right is given to accused No.1 to alienate the properties belonging to the firm 1 2015(6) SCC 287 - 7 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 without joining hands with respondent No.1. Accused Nos.1, 2 and 6 are brothers and accused No.3, 4, 5 are the employees working under accused No.1. Therefore, it is clear that accused No.1 without the knowledge of respondent No.1 sold several items of properties in favour of his kith and kin under five different sale deeds and misappropriated the sale consideration. Thereby committed the offences as stated above. 8. Learned Senior Advocate contended that with regard to the agreement to sale referred to by the learned counsel for the petitioner, entered into between respondent No.1 with one Somashekar, agreeing to sell one item of the property and receiving advance of Rs.11,50,000/-, said amount was credited to the bank account of partnership firm and the same was not misappropriated by respondent No.1. On the other hand, in respect of the sale consideration amount said to have been received by accused Nos.1 under five different sale deeds execute in favour of accused Nos.2 to 6, not even a single paisa was credited to the Bank account of the partnership firm. On the other hand, the entire amount was misappropriated by accused No.1. Under such circumstances, it - 8 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 is a clear case of cheating committed by accused No.1 and therefore, the Trial Court was right in taking cognizance of the offences on the basis of the materials collected by the Investigating Officer while filing the charge sheet. Thus, he submits that no grounds are made out for quashing the criminal proceedings. 9. He further submitted that even though the arbitral proceedings were initiated by respondent No.1, the same was in respect of some other property and not in respect of the subject matter of the sale deeds executed by accused No.1. Under such circumstances, he prays for dismissal of the petition. 10. 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?" - 9 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 My answer to the above point is in ‘Negative’ for the following: R E A S O N S 11. It is the specific contention of respondent No.1 that he entered into a registered Partnership Deed dated 17.05.2006 with accused No.1 and was carrying on business under the name and style of M/s Prolok Project. This fact is not in dispute. Accused No.1 admits that he is the partner with respondent No.1 under the registered Partnership Deed dated 17.05.2006. Learned counsel for the petitioners fairly concedes that no terms of the registered Partnership Deed entitles accused No.1 to sell any portion of the properties belonging to the firm unilaterally. However, he justifies the stand of accused No.1 in executing five different sale deeds in favour of accused Nos. 2 to 6 on the ground that respondent No.1 himself entered into agreement to sale on 05.05.2007 with one Somashekhar Gowda agreeing to sell one of the property for Rs.16,00,000/- out of which, he received Rs.11,50,000/-. It is the specific contention of the complainant that the advance of Rs.11,50,000/- received from Somashekhar Gowda was not - 10 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 taken away by respondent No.1 nor did he misappropriated the same. But the entire amount was credited to the bank account of the partnership firm. He relies on the bank statement produced with the statement of objections in support of his contention. However, admittedly, the sale consideration amount under the five disputed sale deeds executed in favour of accused Nos.2 to 6 was never credited to the bank account of the partnership firm, but the same was taken by accused No.1. 12. When the terms of the registered Partnership Deed dated 17.05.2006 does not authorize accused No.1 to sell the properties under the sale deed without bringing it to the notice of respondent No.1, and moreover when admittedly, accused No.1 appropriated the said consideration amount under five different sale deeds, I am of the opinion that there are prima facie materials to support the contention of the complainant that he was cheated, accused No.1 misappropriated the amount and there is criminal breach of trust. Simply because there is delay in filing the complaint, the same cannot be the sole ground to quash the criminal proceedings. - 11 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 13. Regarding the contention raised by the learned counsel for the petitioners that there is non compliance of the directions issued by the Hon'ble Apex Court in Priyanka Srivastava (supra) as no affidavit is filed to suggest compliance with the requirements of Section 154(3) of Cr.PC, learned counsel for respondent No.1 in response places reliance on the decision in SAS Infratech Pvt. Ltd v/s State of Telangana and Another2 to contend that the same cannot be a ground to quash the criminal proceedings, if at all it is a curable defect where the same can be cured by respondent. 14. Even though, it is the contention of the learned counsel for the petitioners that Arbitral proceedings is initiated and is pending consideration, admittedly, the sale deeds which are in dispute are not the subject matter of the Arbitral proceedings or the suit for declaration filed by accused No.1. Under such circumstances, there are prima facie materials to proceed against the petitioners and it is not a fit case for quashing the criminal proceedings. 2 2024 SCC Online SC 4046 - 12 - NC: 2025:KHC:8264 CRL.P No. 9221 of 2021 15. Accordingly, I answer the above point in the ‘Negative’ and proceed to pass the following: ORDER The petition is dismissed. In view of disposal of the main petition, pending IA No.1 of 2022 stands disposed off. Sd/- (M G UMA) JUDGE BH/SPV List No.: 1 Sl No.: 17