- 1 - NC: 2025:KHC-D:1199 CRL.P No. 100454 of 2021 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 22ND DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 100454 OF 2021 (482(Cr.PC)/528(BNSS)) BETWEEN: 1. KANAKARAJ S/O. LATE P. R. VISHWANATH SHETTY AGED ABOUT 50 YEARS, SRI. KALPATARU TRADING COMPANY, NO.132B, 4TH MAIN, APMC YARD, YESHWANTHPUR, BENGALURU-560021. 2. ANIL KUMAR S/O. LATE P.R. VISHWANATH SHETTY AGED ABOUT 45 YEARS, SRI. KALPATARU TRADING COMPANY, NO.132B, 4TH MAIN, APMC YARD, YESHWANTHPUR, BENGALURU-560021. …PETITIONERS (BY SRI. NEELENDRA D. GUNDE, ADVOCATE) AND: 1. STATE OF KARNATAKA BY SIRUGUPPA POLICE STATION, SIRUGUPPA CIRCLE, REPRESENTED BY ITS STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA BUIDLING, DHARWAD-580001. 2. M/S BABA KHALANDER RICE INDUSTRIES, REPRESENTED BY ITS PARTNER, H. HUSEN BANU W/O. H. IBRAHIM SAB, AGED ABOUT 32 YEARS, RESIDENT OF 19TH WARD, SADASHIVANAGAR, SIRUGUPPA, BALLARI DISTRICT-583121. …RESPONDENTS (BY SRI. T. HANUMAREDDY, AGA FOR R1; SRI. J. BASAVARAJ, ADVOCATE FOR R2) B K MAHENDRAKUMAR Digitally signed by B K MAHENDRAKUMAR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.01.25 11:20:42 +0530 - 2 - NC: 2025:KHC-D:1199 CRL.P No. 100454 of 2021 THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C., TO CALL FOR RECORDS AND TO, QUASH THE IMPUGNED ORDER DATED 13.10.2020 PASSED BY THE LEARNED CIVIL JUDGE AND JMFC SIRUGUPPA THEREBY TAKING COGNIZANCE AS AGAINST THE PETITIONERS/ ACCUSED NO.1 AND 2 FOR OFFNECES PUNISHABLE UNDER SECTION 447,323,506,341,34,504, 422,420,465,425 OF IPC AND CONSEQUENTLY REGISTERING A CRIMINAL CASE IN C.C.NO.647/2020 AND CONSEQUENTLY QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.647/2020 PENDING ON THE FILE OF LEARNED CIVIL JUDGE AND JMFC SIRUGUPPA. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR ORAL ORDER The petitioners–accused Nos. 1 and 2 are being prosecuted for offences punishable under Sections 447, 323, 506, 341, 34, 504, 422, 420, 465, and 425 of the Indian Penal Code (IPC). 2. The case of the prosecution is that accused Nos. 1 and 2 are partners of a firm dealing in the purchase of rice on a consignment sales basis. Accused No. 3 is a commission agent in Shiraguppa. It is alleged that accused Nos. 1 and 2 entered into an oral agreement with the complainant in 2009-10 for the purchase of rice on a consignment sales basis. 3. Accused Nos. 1 and 2 initially paid the consideration amount for the rice purchased on a consignment sales basis. However, the complainant alleges that for the period between 05.08.2013 and 06.03.2014, the accused refused to pay the amounts due. When the complainant and her husband visited the premises of the proprietorship concern of accused Nos. 1 and 2, it - 3 - NC: 2025:KHC-D:1199 CRL.P No. 100454 of 2021 is alleged that they were threatened with dire consequences and forcibly made to sign blank papers. The said incident allegedly took place on 30.08.2015. 4. The complainant also contends that accused No. 3, as a commission agent, was liable to pay the outstanding dues but failed to do so. On 12.12.2015, accused No. 3 is alleged to have trespassed into the complainant’s house, assaulted the complainant and her husband, and threatened them with dire consequences if they insisted on payment of the balance dues. 5. Instead of honoring the payment, accused No. 3 filed a complaint against the complainant’s husband for offences punishable under Sections 323, 324, 341, 384, 386, 389, 504, 506, and 420 of the IPC. 6. The learned Magistrate referred the complaint of the complainant to the police under Section 156(3) of the Criminal Procedure Code (Cr.PC) for investigation. The police, after completing their investigation, filed a charge sheet for the aforementioned offences, and the learned Magistrate took cognizance of the same. 7. The learned counsel for the petitioners submitted that, in the absence of specific allegations or material evidence to substantiate that accused Nos. 1 and 2 induced the complainant to sell rice under the oral agreement, the continuation of criminal proceedings would amount to an abuse of the process of law. The counsel further argued that the alleged incident of threatening and - 4 - NC: 2025:KHC-D:1199 CRL.P No. 100454 of 2021 forcible signatures on blank papers on 30.08.2015 was followed by a delay in filing the complaint, as it was lodged only on 23.12.2015, without any plausible explanation. This, according to the counsel, indicates that the dispute is civil in nature but has been given a criminal texture to pressurize accused Nos. 1 and 2 into a settlement. 8. On the other hand, the learned counsel for respondent No. 2 submitted that the allegations in the complaint disclose that the petitioners, by refusing to pay the dues for the rice purchased, committed the offence of cheating. The counsel contended that the veracity of these allegations can only be determined during the trial and not in this petition. It was further argued that the alleged incident on 30.08.2015, where the complainant and her husband were threatened and forced to sign blank papers, constitutes sufficient grounds to proceed with the trial. 9. The learned Additional Government Advocate for respondent No. 1–State supported the submissions of respondent No. 2’s counsel. 10. It is undisputed that accused Nos. 1 and 2 entered into an oral agreement with the complainant in 2009 for the purchase of rice on a consignment sales basis, with payment to be made after selling the rice to third parties. The complainant alleges that while payments were honored until 2013, accused Nos. 1 and 2 subsequently refused to pay for purchases made between 05.08.2013 and 06.03.2014. However, there is no specific allegation or evidence to suggest that accused Nos. 1 and 2 had - 5 - NC: 2025:KHC-D:1199 CRL.P No. 100454 of 2021 the intention to cheat the complainant at the time of entering into the oral agreement. 11. The Hon’ble Supreme Court, in Vijay Kumar Ghai & Ors. v. The State of West Bengal & Ors., (2022 SAR (Cri) 511), observed that to attract the ingredients of Sections 406 and 420 of the IPC, it is imperative for the complainant to prima facie establish that there was an intention to cheat or defraud right from the inception of the agreement. It must also be shown that such an act resulted in wrongful loss to the complainant and corresponding wrongful gain to the accused. In the absence of these elements, continuation of criminal proceedings would be impermissible. 12. In the present case, the complainant has admitted that the petitioners honored payments from 2009 to 2013. There is no specific evidence to substantiate the claim that accused Nos. 1 and 2 induced the complainant to enter into the oral agreement with a fraudulent intention. Additionally, the allegation that accused Nos. 1 and 2 threatened and forcibly obtained signatures on blank papers on 30.08.2015 is unsupported by corroborative evidence, and there is an unexplained delay in filing the complaint, which was lodged only on 23.12.2015. 13. In view of the above, it is apparent that the dispute arises out of an alleged breach of the terms of the oral agreement, which is civil in nature but has been given a criminal dimension to pressurize the petitioners to enter into a settlement. - 6 - NC: 2025:KHC-D:1199 CRL.P No. 100454 of 2021 ORDER i) The petition stands allowed. ii) The impugned proceedings in CC No.647/2020 pending on the file of the learned Civil Judge and JMFC, Siruguppa, insofar as it relates to the petitioners – accused Nos.1 and 2 is hereby quashed. iii) The Trial Court is hereby directed to proceed against the accused No.3 in accordance with law without being influenced any of the observations made in this order, and the observation made in this order is only for the purpose of this petition. iv) It is needless to state that the respondent No.2 is at liberty to recover the alleged amount due from the accused Nos.1 and 2 in accordance with law, if permissible. Sd/- (HEMANT CHANDANGOUDAR) JUDGE BKM List No.: 1 Sl No.: 36