- 1 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CRIMINAL PETITION NO.7689 OF 2022 BETWEEN: 1. SRI. N. VIJAYRAJ AGED 41 YEARS S/O SRI.NARAYAN RAO RA/T NO.K-140/A, 21ST CROSS BHUVANESHWARINAGARA, DASARAHALLI MAIN ROAD BENGALURU-560 024. ...PETITIONER (BY SRI. SHIVAKUMAR .U, ADVOCATE) AND: 1. THE STATE OF KARNATAKA BY R.T.NAGARA POLICE STATION J.C.NAGARA SUB DIVISION BENGALURU CITY -560 032. REPRESENTED BY SPP 2. SRI.ELUMALAI AGED 40 YEARS S/O PONNANNA R/AT NO.16, MAHARAJA STREET UDAYANAGARA, DOORAVANI NAGARA BENGALURU-560 016. ...RESPONDENTS (BY SRI. RAHUL RAI, HCGP FOR R1; SRI. R. MANJUNATH, ADVOCATE FOR R2) Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN RESPECT OF THE CHARGE SHEET REGISTERED AS C.C.NO.860/2022 PENDING BEFORE THE HONBLE 32nd ADDITIONAL CHIEF METROPOLITAN MAGISTRATE BENGALURU CITY FOR THE ALLEGED OFFENCE P/U/S.341, 504, 506 AND 323 OF IPC. THIS PETITION, COMING ON FOR FRESH MATTERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER This petition is filed by the petitioner - accused seeking quashing of the proceedings pending in C.C.No.860/2022 for the offences punishable under Sections 341, 504, 506 and 323 of IPC on the file the 32nd Additional Chief Metropolitan Magistrate, Bengaluru City. 2. Learned counsel for the petitioner, reiterating the grounds urged in the petition, has attempted to persuade this Court that respondent No.2, despite several - 3 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 contractual arrangements between himself, the petitioner, and other accused, has sought to give a criminal colour to what is essentially a civil dispute. By launching a prosecution alleging offences of forgery and cheating, respondent No.2 is said to have converted a purely contractual disagreement into a criminal case. 3. Referring to two agreements entered into between the petitioner, the other accused, and respondent No.2, learned counsel submitted that the parties had initially agreed to transfer the CL-9 license in favour of respondent No.2 – complainant. Under the terms of these agreements, respondent No.2 paid a sum of Rs.20,75,000/- to one C.M. Lokesh, who acted as Guarantor. Subsequently, under the second agreement dated 22.03.2019, an additional sum of Rs.1,35,00,000/- was deposited with the same Guarantor, with the understanding that upon payment of the balance consideration, a total sum of Rs.2,35,00,000/- would be remitted to the license holder, namely the present petitioner. - 4 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 4. Adverting to a third agreement, counsel submitted that since petitioner No.1 was unable to transfer the license, respondent No.2 entered into a fresh arrangement with one K. Sharada. In the said agreement dated 25.09.2020, the repayment of the sums received by the Guarantor to respondent No.2 was duly acknowledged. 5. On the strength of these three agreements, it was contended that respondent No.2, despite entering into a fresh arrangement with K. Sharada, has lodged a false and motivated complaint against the petitioner. Such a complaint, according to learned counsel, is nothing but an attempt to arm-twist the petitioner and coerce repayment of monies allegedly due under the earlier transactions. 6. Respondent No.2 lodged a complaint on 02.04.2021 alleging that, on 01.04.2021, between 4.30 p.m. and 5.00 p.m., near RT Nagar abutting the CBI Office, the petitioner along with three to four other persons wrongfully restrained him and issued threats to his life. It is further alleged that, despite the subsisting - 5 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 contractual dispute relating to the transfer of the CL-9 license, respondent No.2 approached the CCB Police and, acting on the complaint, a crime was registered and a charge sheet has since been laid. 7. Per-contra, learned counsel for the respondent No.2–complainant contended that an advance consideration of Rs.1,80,00,000/- had in fact been paid to the petitioner. It is further alleged that the petitioner and other accused forged the third agreement purportedly executed between the complainant and K. Sharada. In view of these allegations, it was submitted that sufficient material exists to proceed against the petitioner and, therefore, no indulgence is warranted. 8. Learned HCGP, adopting similar submissions, also urged that the petitioner must face trial and that the present case does not warrant interference by this Court. 9. Having heard the rival submissions and on perusal of the three agreements produced by accused No.1 – - 6 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 petitioner, this Court has given its anxious consideration to the rival contentions. 10. In light of the findings recorded by this Court in connected Crl.P.No.13530/2024, it is evident that respondent No.2 has chosen to initiate criminal prosecution despite the existence of a dispute arising out of the transfer of the CL-9 license and the terms of the agreements entered into between the parties. Therefore, this Court deems it appropriate to extract the relevant portions of the said agreements, which read as under: "1. That the consideration for the transfer of the license is agreed to be a sum of Rs.2,20,75,000/- (Rupees Two Crore Twenty Lakhs Seventy Five Thousand Only) and out of the said sum of Rs.2,20,75,000/- (Rupees Two Crore Twenty Lakhs Seventy Five Thousand Only) a sum of Rs.20,75,000/- (Rupees Twenty Lakhs Seventy Five Thousand Only) has been paid today that is the date of execution of this agreement from transferee P.Elumalai to the Guarantor C.M.Lokesh as a confirmation advance amount and C.M.Lokesh will be individual responsible for the confirmation advance amount. And the remaining sum of Rs.2,00,00,000/- (Rupees Two Crore Only) shall be - 7 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 paid in two (2) payments, first payment of Rs.1,00,00,000/- (Rupees One Crore Only) within 60 days and second payment of Rs.1,00,00,000/- (Rupees One Crore Only) within 120 days from the date of this agreement." 11. This Court further finds it appropriate to reproduce Clause-1 of the second agreement for transfer of license dated 22.03.2019, which reads as follows: "1. That the consideration for the transfer of the License is agreed to be a sum of Rs.2,35,00,000/- (Rupees Two Crores Thirty Five Lakhs Only) and out of the said sum Rs.2,35,00,000/- (Rupees Two Crore Thirty Five Lakhs Only), a sum of Rs.1,35,00,000/- (Rupees One Crore Thirty Five Lakhs Only) has been paid today as confirmation advance that is the date of execution of this agreement from the Transferee P.Elumalai to the Guarantor C.M.Lokesh as a confirmation advance amount as Transferee P.Elumalai came in touch to License Holder through Guarantor - C.M.Lokesh. C.M.Lokesh will be holding the advance amount of Rs.1,35,00,000/- till the date of License get transferred. The Guarantor - C.M.Lokesh will be solely responsible for the advance amount. The License Holder is not responsible for advance amount of Rs.1,35,00,000/- on the date of License Transfer, full amount of Rs.2,35,00,000/- will be paid to the License Holder. Till the date of License Transfer, the advance amount of Rs.1,35,00,000/- will - 8 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 be in the custody of Guarantor C.M.Lokesh and the remaining sum of Rs.1,00,00,000/- shall be paid by the Transferee P.Elumalai in one payment within 120 days from the date of this agreement in the following manner; a) Rs.20,00,000/- by way of cheque bearing No.000001 dated ______ drawn on HDFC Bank, Bangalore. b) Rs.20,00,000/- by way of cheque bearing No.000002 dated _______ drawn on HCFC Bank, Bangalore. c) Rs.10,00,000/- by way of cheque bearing No.000003 dated ________ drawn on HDFC Bank, Bangalore. d) Rs.50,00,000/- by way of cash." 12. Insofar as the disputed third agreement for transfer is concerned, Clause-7 assumes significance and is therefore extracted herein below, which reads as follows: "7. The parties agree that the Agreements for Transfer of liquor license dated 10.10.2018 and 22.03.2019 entered into between Transferee and the Facilitators are hereby declared as cancelled with immediate effect upon execution of this Agreement. The parties further agrees that the amounts though not - 9 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 as much as referred in the Agreements dated 10.10.2018 and 22.03.2019 but whatever paid by the Transferee to the Facilitators has been paid to the Transteror and neither the Transferor nor the Transferee shall have no claim whatsoever over the Facilitators under the Agreements for Transfer of liquor license dated 10.10.2018 & 22.03.2019." 13. On a careful examination of all the three agreements placed before this Court, it emerges that respondent No.2 had entered into an agreement with the present petitioner – accused No.1 and had paid certain sums to the Guarantor, namely C.M. Lokesh. While the complainant asserts that though the payments were made to the Guarantor, the amounts were in reality received by petitioner No.1, this Court finds that such assertion, even if accepted on its face, does not convert the transaction into a criminal offence. What is evident from the record is that the entire dispute between the parties is rooted in contractual arrangements and reciprocal obligations relating to the transfer of a CL-9 license. - 10 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 14. The complaint lodged by respondent No.2 on 02.04.2021 alleges that the petitioner, along with others, wrongfully restrained and issued threats to the complainant. However, on an overall assessment of the charge sheet materials, this Court is of the view that the allegations of threat and intimidation appear to be nothing but an exaggerated version projected by respondent No.2 only with the object of exerting pressure on the petitioner for recovery of the monies said to have been paid under the earlier agreements. The substratum of the dispute, therefore, remains one of recovery of money allegedly advanced pursuant to the contractual dealings. 15. Even if the entire charge sheet is accepted in its entirety, what clearly emerges is that the allegations relate to a commercial transaction between the parties in connection with the transfer of a CL-9 license. The dispute is therefore predominantly civil in nature, and no criminal liability can be fastened on the petitioner merely on - 11 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 account of the failure of the transaction or the alleged non-refund of the amount said to have been advanced. 16. This Court has, in fact, while disposing of Criminal Petition No.13530/2024, already observed that respondent No.2 – complainant is at liberty to work out his remedies before the competent civil Court in accordance with law for recovery of such amounts as may be legally due. That liberty equally holds good in the present case as well. 17. In the considered view of this Court, permitting the criminal prosecution to proceed further would amount to an abuse of the process of law and would defeat the ends of justice. To prevent such abuse and to protect the petitioner from unnecessary criminal trial when the dispute is essentially civil in nature, this Court deems it fit to quash the proceedings and proceeds to pass the following; ORDER (i) The petition is hereby allowed. - 12 - HC-KAR NC: 2025:KHC:34664 CRL.P No. 7689 of 2022 (ii) The charge sheet in C.C.No.860/2022, arising out of Crime No.76/2021, pending on the file of the Court of the 32nd Additional Chief Metropolitan Magistrate, Bengaluru City, for offences punishable under Sections 341, 504, 506, and 323 of IPC, is hereby quashed insofar as the present petitioner – accused No.1 is concerned. (iii) Liberty is, however, reserved in favour of respondent No.2 – complainant to avail appropriate remedies before the competent Civil Court in the manner known to law. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE NBM List No.: 1 Sl No.: 0