- 1 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 18TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY CRIMINAL PETITION NO.102692 OF 2024 (482(CR.PC)/528(BNSS)) BETWEEN: CHANDRASHEKHAR YELIGAR, AGE. 43 YEARS, OCC. GOVT. EMPLOYEE, R/O. GOGERI VILLAGE, TQ. RON, DIST. GADAG-582 101. … PETITIONER (BY SRI. SRINIVAS B. NAIK, ADVOCATE) AND: 1. THE STATE OF KARNATAKA, REPRESENTED BY STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, DHARWAD BENCH, THROUGH GADAG RURAL POLICE STATION, TALUKA/DISTRICT: GADAG-580 011. 2. SARASWATI W/O PARASHURAM DASAR, AGE. 37 YEARS, OCC. CHIEF BOOK WRITER, R/O. BENTUR VILLAGE, TALUKA/DISTRICT: GADAG-582 101. … RESPONDENTS (BY SMT. GIRIJA S. HIREMATH, HCGP FOR R1; R2-SERVED) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C., PRAYING TO QUASH THE ENTIRE CRIMINAL PROCEEDINGS AGAINST THE ACCUSED NO.2/PETITIONER IN CRIME NO.87/2024 OF GADAG RURAL POLICE STATION, ON THE FILE OF II ADDL. CIVIL JUDGE AND JMFC COURT, GADAG, FOR THE OFFENCES PUNISHABLE UNDER SECTIONS 406 AND 420 OF IPC, IN THE INTEREST OF JUSTICE AND EQUITY. THIS PETITION, COMING ON FOR ADMISSION THIS DAY, ORDER IS MADE THEREIN AS UNDER: RAKESH S HARIHAR Digitally signed by RAKESH S HARIHAR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 ORAL ORDER (PER: THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY) Accused No.2 is before this Court under Section 482 of Cr.P.C. with a prayer to quash the entire proceedings in Crime No.87/2024 registered by Gadag Rural Police Station, for the offences punishable under Sections 406 and 420 r/w 34 of Indian Penal Code. 2. Heard the learned counsel for the parties. 3. FIR in Crime No.87/2024 was registered by Gadag Rural Police Station, Gadag, initially for the offences punishable under Sections 417 and 420 of Indian Penal Code. Assailing the same petitioner had approached this Court in this petition. During the pendency of the petition, investigation is completed and charge sheet has been filed for the aforesaid offences against 5 persons. Petitioner is arraigned as accused No.2 in the charge sheet. 4. Learned counsel for the petitioner having reiterated the grounds urged in the petition submits that - 3 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 only allegation against the petitioner is that he had introduced accused No.1 who had purchased the groundnuts from the farmers and had not paid money to them. He submits that even in the earlier year, accused No.1 had purchased groundnuts from the farmers and had paid them money. He also submits that in a departmental enquiry initiated by his employer, petitioner has been exonerated. He submits that based on the allegations petitioner cannot be prosecuted for the alleged offences. Accordingly, he prays to allow the petition. 5. Per contra, learned HCGP has opposed the petition. 6. In the first information, the first informant has alleged that Gadag Zilla Panchayat along with Gadag Taluk Panchayat had floated a scheme for the purpose of purchase of grains grown by the farmers directly without the intervention of commission agents. Accused Nos.2 to 4 who are working in the Zilla Panchayat had introduced - 4 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 accused No.1 who had purchased the groundnuts crop from the farmers directly. Allegation in the FIR is that accused No.1 had not paid a sum of ₹2,70,12,929/- to 168 farmers from whom he had purchased groundnuts. Petitioner who is working as a District Program Manager in Gadag Zilla Panchayat was arraigned as accused No.2 in the First Information Report which was registered against 4 persons. After completing investigation, charge sheet has been filed against 5 accused. Allegation in the charge sheet is that accused Nos.2 to 4 had introduced accused No.1 to the farmers who had sold the groundnuts to accused No.1. Accused No.5 is the subsequent purchaser of groundnuts from accused No.1. So far as the petitioner herein is concerned, only allegation as against him and the accused Nos.3 and 4 is that they had introduced accused No.1 to the farmers from whom he had purchased the groundnuts and had not paid them the entire money. 7. Material on record would go to show that even in the earlier year, accused No.1 had purchased - 5 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 groundnuts directly from the farmers and had paid the entire money for the groundnuts purchased by him. So far as the allegation now made against accused No.1 is that after he had purchased groundnuts from the farmers, he had only paid half of the amount which was due to pay and the balance amount of ₹2,70,12,929/- was due to be paid by him to 168 farmers. There is no such allegation either in the first information or in the charge sheet that petitioner and other accused who had allegedly introduced accused No.1 to the farmers had conspired with him to cheat the accused. Since it is not in dispute that even during the earlier year, accused No.1 had purchased groundnuts from the farmers, the allegation now made against accused Nos.2 to 4 that they had introduced accused No.1 to farmers becomes doubtful. 8. In the enquiry held by the Gadag Zilla Panchayat against accused Nos.2 to 4, on similar allegations, they have been exonerated and the enquiry report dated 30.04.2024 is made available to this Court. - 6 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 In the said report, it is specifically stated that on 08.04.2024, accused No.1 Maruthigouda was summoned to the police station and he had admitted before the police about he purchasing groundnuts directly from the farmers and he also had stated that he had sold the said groundnuts to some others and had not received money from them and therefore, he had sought time before the police for making payment to the farmers from whom he had purchased the groundnuts. 9. There is no such allegation against the petitioner herein, either in the first information or in the charge sheet that at the time of introducing accused No.1 to the farmers, he had any intention to cheat the farmers and only for the said purpose, he had introduced accused No.1 to the farmers. Even otherwise the allegation of non payment of the money to the farmers from whom groundnuts were purchased is only as against accused No.1. There is no allegation in the first information or in - 7 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 the charge sheet that petitioner was benefited in any way by introducing accused No.1 to the farmers. 10. In the case of Delhi Race Club (1940) Ltd. And Others v. State of Uttar Pradesh and Another - 2024 INSC 626 after referring to Sections 406 and 420 of IPC, the Hon'ble Supreme Court has observed that in both the aforesaid Sections, mens rea i.e. intention to defraud or the dishonest intention must be present and in the case of cheating, it must be there from the very beginning or inception. In paragraph No.30 of the said Judgment, the Hon'ble Supreme Court has observed as follows:- “30. The distinction between mere breach of contract and the offence of criminal breach of trust and cheating is a fine one. In case of cheating, the intention of the accused at the time of inducement should be looked into which may be judged by a subsequent conduct, but for this, the subsequent conduct is not the sole test. Mere breach of contract cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right from the beginning of the transaction i.e. the time when the offence is said to have been - 8 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 committed. Therefore, it is this intention, which is the gist of the offence. Whereas, for the criminal breach of trust, the property must have been entrusted to the accused or he must have dominion over it. The property in respect of which the offence of breach of trust has been committed must be either the property of some person other than the accused or the beneficial interest in or ownership’ of it must be of some other person. The accused must hold that property on trust of such other person. Although the offence, i.e. the offence of breach of trust and cheating involve dishonest intention, yet they are mutually exclusive and different in basic concept. There is a distinction between criminal breach of trust and cheating. For cheating, criminal intention is necessary at the time of making a false or misleading representation i.e., since inception. In criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both the offences cannot co-exist simultaneously.” 11. Under the circumstances, I am of the opinion that if the impugned criminal proceedings is allowed to - 9 - HC-KAR NC: 2025:KHC-D:10390 CRL.P No.102692 of 2024 continue as against the petitioner, based on the allegations made in the charge sheet, the same will amount to abuse of process of law. The petitioner who is a government servant is likely to be put into hardship and embarrassment because of the impugned criminal proceeding and therefore, I am of the opinion that it is a fit case where this Court needs to exercise its powers under Section 482 of Cr.P.C. in order to secure the ends of justice. Accordingly, the following: ORDER Criminal Petition is allowed. The entire proceedings in Crime No.87/2024 registered by Gadag Rural Police Station, for the offences punishable under Sections 406 and 420 r/w 34 of Indian Penal Code is hereby quashed as against the petitioner. Sd/- (S.VISHWAJITH SHETTY) JUDGE VMB CT:BCK LIST NO.: 1 SL NO.: 69