- 1 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE G BASAVARAJA CRIMINAL APPEAL NO. 1592 OF 2025 (U/S 14(A) (2)) BETWEEN: MR. VISHWANATH R. NAYAK, S/O. LATE. RAMA NAYAK, AGED ABOUT 81 YEARS, R/AT NO.7-42, GURU KRIPA, RAMA NAGARA, JUNIOR COLLEGE ROAD, KUTHYAR, BELTHANGADY, D.K. 574214. …APPELLANT (BY SRI. DHANANJAY KUMAR., ADVOCATE) AND: STATE OF KARNATAKA, BY SUB-INSPECTOR OF POLICE, BELTHANGADY POLICE STATION, D.K. REPRESENTED BY STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, BENGALURU-560 001. …RESPONDENT (BY SRI. RANGASWAMY .R, HCGP) THIS CRL.A. IS FILED U/S 14(A)(2) OF SC/ST (POA) ACT, 2015, PRAYING TO ALLOW THIS APPEAL AND RELEASE THE APPELLANT ON BAIL IN THE EVENT OF HIS ARREST IN CRIME NO. 36/2025 REGISTERED BY THE BELTHANGADY POLICE STATION, ON THE FILE OF PRINCIPAL DISTRICT AND SESSIONS JUDGE, D.K., MANGALURU, FOR THE OFFENCES PUNISHABLE UNDER SECTION 9 OF KARNATAKA PROTECTION OF INTEREST DEPOSITORS EXORBITANT ACT 2004. Digitally signed by LAKSHMINARAYAN N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 THIS APPEAL COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE G BASAVARAJA ORAL JUDGMENT The appellant has preferred this appeal against the order passed by the Principal District and Sessions Judge, D.K., Mangaluru in Crl. Misc. Nos.452/2025, 455/2025, 456/2025 and 467/2025 dated 25.06.2025. Among these petitions, the appellant herein Mr. Vishwanath R. Nayak, is the petitioner in Cr.l Misc. No. 455/2025. 2. The brief facts leading to this appeal are that, on the basis of the complaint filed by Dayananda Nayak, Belthangadi Police have registered the case in Crime No. 36/2025 against the accused No. 1 to 14 for the Commission of offences punishable under Section 9 of the Karnataka Protection of Interest Depositors Exorbitant Act, 2004. The present appellant who is accused No.3 has filed application under Section 482 of BNSS, 2023 for grant of anticipatory bail. Same came to be rejected by the Special - 3 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 Court as per the order dated 25.06.2025. Being aggrieved by this order, the appellant has preferred the appeal. 3. The learned counsel for the appellant would submit that, the concerned authorities have initiated the proceedings under Section 64 of Karnataka Co-operative Societies Act, 1959 and the same is pending and the enquiry is not yet concluded. However the FIR is filed. Hence, the same is not sustainable under law. Thereafter, the concerned authorities have also sought for attachment of property of present appellant and other third parties. Same is stayed by the Co-ordinate Bench of this Court in WP No.17574/2025 and interim order till the next date of hearing is granted by this Court in the said writ petition. Against accused No.4-Pramod R. Naik, the Co-ordinate Bench of this Court has granted stay in WP No.17392/2025. It is also submitted that the concerned Officer has passed an order for re-audit and re-audit report is not submitted. Hence, the present - 4 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 proceedings are not sustainable under law. On all these grounds, it is sought for allowing this appeal. 4. Despite sufficient opportunity is provided, objection is not filed. However, the learned High Court Government Pleader, Sri.Rangaswami.R would submit that there are prima-facie materials to attract the alleged commission of offence. This is a big scam of Rs.40 Crore deposited by the depositors. Hence, the accused is required for investigation. Accordingly, sought for dismissal of this appeal. 5. I have examined the materials placed before this Court. On the basis of the complaint filed by Dayananda Naik, Belthangadi Police have registered the case in Crime No.36/2025 against accused Nos.1 to 14 for the offence under Section 9 of the Karnataka Protection of Interest Depositors Exorbitant Act, 2004, which is punishable with imprisonment for a term which may extend up to 6 years and with fine, which may extend to Rs.1,00,000/-. - 5 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 6. It is noticed that the provision of law has not been properly mentioned in the First Information Report, the correct provision of law is under Section 9 of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004. 7. The present appellant is one of the Directors of Sree Rama Credit Co-operative Society. In para No.30 and 31, the trial Court has observed as under: 30. The petitioner of Crl.Misc.Nos.467/2025 and 456/2025 have produced copy of the orders of Deputy Registrar of Co-operative Society dated 03.06.2025 which disclose that the Deputy Registrar suo-moto registered the case against accused Nos.1 to 14 and one Raghavendra Director of the society, wherein the property of accused Nos.1 to 5, 8, 10, 13 are attached. 31. Admittedly the petitioners did not dispute the deposit of money by the complainants ad others in the society, which is more than 40 crores of - 6 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 rupees. The petitioners have not placed any materials on record to show that what was the date of maturity of the deposited amounts of the complainants is refunded with interest, which is shown in the complaint. There is a prima-facie case against the petitioners that they have committed the offence punishable u/s 9 of the KPIDFE Act. It is not the stage to consider the delay in filing of the complaint. The materials placed on record by the petitioners themselves discloses that all is not well in the society. Further, the audit report of the orders of Deputy Registrar of Co-operative Society dated 03.06.2025 which disclose that the Deputy Registrar suo-moto registered the case against accused Nos. 1 to 14 and one Raghavendra - Director of the society, wherein it is observed that there is misappropriation of Rs.30,45,24,278/- and ordered to attach the property of accused Nos.1 to 5, 8, 10, 13. The petitioners of Crl. Misc. 452/2025 have not placed any materials on record that they are the daily wagers and they have resigned to the society on - 7 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 20.01.2024. The petitioners being the Chief Executive Officer and Directors of the society and they cannot absolve their liability to repay the deposited amount with interest. As rightly submitted by the learned Public Prosecutor name game is going on in the society saying that they are not liable for the mismanagement and misappropriation of the amount and others are liable for that. The depositors have deposited their hard-earned money in the society expecting that it will help them in future. Learned in-charge Public Prosecutor has not placed any materials to show that the case is transferred to COD, but the case is under investigation. It is an economic offence. The petitioners have committed serious offence. As alleged more than 40 crores of amount is not refunded and it is misused. The custodial interrogation of the petitioners is very much necessary. If they are granted bail they may tamper the prosecution witnesses and sell their properties and abscond. If the petitioners are released on bail it will give wrong signal to the society. Learned - 8 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 Advocate appearing for the petitioner in Crl. Misc. No.456/2025 relied on the ruling in Criminal Appeal 692/2023 (supra) wherein it is held that the accused who is not the director of the financial establishment, who has resigned, then the Sec.9 of the Act not attracted and hence the bar u/s 18 of the Act cannot be invoked and he further relied on the ruling in Criminal Petition No.1522/2020 (supra) wherein it is held that the anticipatory bail was granted as there is no serious allegations against the accused. The facts and circumstances of the case of above rulings are different and hence with respect to the rulings they are not applicable to the case on hand. In this regard the learned in-charge Public Prosecutor rightly relied on the ruling in Criminal Petition No.9014/2021 (supra) wherein the anticipatory bail petition with respect to the offences punishable u/s 9 of the Act was rejected and the same is aptly applicable to the case on hand Hence, they are not entitled for anticipatory bail. Hence, Point No.1 is answered in the Negative. - 9 - HC-KAR NC: 2025:KHC:43245 CRL.A No. 1592 of 2025 8. The trial Court has properly appreciated the materials on record in accordance with law and facts. I do not find any error/illegality in the impugned order passed by the trial Court. The stay of the proceedings pertaining to Pramod.R.Naik (accused No.4) in WP No.17392/2025, is not a ground to allow this petition. The alleged commission of offence is grievous and heinous in nature. If the accused is released on bail, it will affect the society at large. Considering the nature and gravity of offence and involvement of the accused, I am of the opinion that it is not just and proper to allow this appeal. Hence, I proceed to pass the following: ORDER Appeal is dismissed. Sd/- (G BASAVARAJA) JUDGE KBM List No.: 1 Sl No.: 81