- 1 - HC-KAR NC: 2025:KHC:36018 CRL.P No. 6783 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CRIMINAL PETITION NO.6783 OF 2024 BETWEEN: 1. SRI. KARTHIK .D.R S/O REVANNARADHYA AGED ABOUT 27 YEARS R/AT SIT BACK GATE TUMAKURU - 572102 AND ALSO R/AT DODDAGUNI VILLAGE GUBBI TALUK TUMAKURU-572211 …PETITIONER (BY SRI.YASHAVANTHSWAMY A.M, ADVOCATE) AND: 1. STATE OF KARNATAKA STATE BY TUMAKURU TOWN POLICE STATION TUMAKURU REP BY STATE PUBLIC PROSECUTOR HIGH COURT BUILDING BENGALURU-560 001 2. SRI. ARUN R S/O RAJASHEKARAIAH K AGED ABOUT 37 YEARS R/AT 7TH CROSS, MARUTHI NAGARA TUMAKURU TOWN TUMAKURU - 572 103 …RESPONDENTS (BY SRI. ANOOP KUMAR, HCGP FOR R1; SRI. PARAMESWARAPPA .C, ADVOCATE FOR R2) Digitally signed by CHAITHRA A Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:36018 CRL.P No. 6783 of 2024 THIS CRL.P IS FILED U/SEC.482 CR.PC PRAYING TO QUASH THE FIR AND COMPLAINT REGISTERED BY THE TUMKURU TOWN POLICE STATION AGAINST THE PETITIONER/ACCUSED IN CR.NO.259/2024, FOR THE OFFENCE P/U/S 420, 406, OF IPC AND U/S 66(D) OF IT ACT, PENDING ON THE FILE OF THE LEARNED PRL. CIVIL JUDGE (SR.DV) AND CJM COURT TUMKURU AT TUMKURU. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER The petitioner is seeking quashing of the proceedings pending in Crime No.259/2024 for the offence punishable under Sections 420 and 406 of IPC read with Section 66D of the Information Technology Act on the file of the learned Principal Civil Judge (Sr. Dvn) and CJM Court, Tumakuru. 2. Heard learned counsel appearing for the petitioner, learned counsel appearing for the respondent No.2 - complainant and learned HCGP. 3. The substance of the complaint is that respondent No.2 – complainant, at the request of the petitioner, - 3 - HC-KAR NC: 2025:KHC:36018 CRL.P No. 6783 of 2024 advanced a hand loan amounting to Rs.19,20,000/-. The complaint further discloses that, on demand, the petitioner has admittedly repaid a sum of Rs.5,00,000/-, but the remaining amount of Rs.14,20,000/- is alleged to have been withheld. On these assertions, respondent No.2 lodged a complaint before the jurisdictional Police Station. The Police, without undertaking a preliminary assessment as to whether the dispute was civil or criminal in nature, proceeded to register a criminal case against the petitioner. The petitioner has, therefore, approached this Court seeking quashing of the criminal proceedings contending that the allegations, even if taken at face value, essentially disclose a civil dispute concerning recovery of money and do not satisfy the ingredients of the offences alleged. 4. Per-contra, the learned counsel for respondent No.2 – complainant has relied upon the order dated 29.07.2024 to contend that the petitioner himself has acknowledged the liability and pursuant to an interim - 4 - HC-KAR NC: 2025:KHC:36018 CRL.P No. 6783 of 2024 order of this Court, has made a part-payment of Rs.5,00,000/-. It is urged that such payment is indicative of the petitioner’s admission of debt and therefore, the complaint cannot be brushed aside as merely civil in nature. It is submitted that the Investigating Agency ought to be permitted to inquire into the matter so as to ascertain whether the petitioner has, in fact, committed the offences punishable under Sections 420 and 406 of the IPC. 5. Having heard the learned counsel on both sides and on perusal of the complaint and materials on record, this Court has given its anxious consideration to the matter. The complaint itself unequivocally records that the complainant extended a hand loan of Rs.19,20,000/- to the petitioner and that, upon demand, the petitioner has paid an amount of Rs.5,00,000/-. 6. The gist of the complaint is that the balance amount of Rs.14,20,000/- has not been paid and the - 5 - HC-KAR NC: 2025:KHC:36018 CRL.P No. 6783 of 2024 petitioner is said to have denied liability beyond the amount already repaid. A plain reading of the complaint reveals that the petitioner’s payment of Rs.5,00,000/ militates against the existence of any dishonest intention at the inception of the transaction a sine qua non for invoking Section 420 of the IPC. It is well settled that to constitute an offence under Section 420, the intention to cheat must exist right from the beginning of the transaction; mere subsequent failure to pay or honour a commitment does not, by itself, amount to cheating. 7. Be that as it may, the records disclose that while the complainant asserts entitlement to recover the balance sum of Rs.14,20,000/-, the petitioner disputes such claim and contends that the entire legally payable amount has already been discharged. The dispute thus centres around the quantum of amount, if any, still due and payable a matter which is squarely within the domain of a civil court. - 6 - HC-KAR NC: 2025:KHC:36018 CRL.P No. 6783 of 2024 8. This Court cannot remain oblivious to the manner in which jurisdictional Police Officers are entertaining complaints of this nature. The complaint, on its face, relates to a loan transaction and pertains to recovery of money. Yet, without applying their mind or scrutinising whether the essential ingredients of the penal provisions were attracted, the Investigating Officers have mechanically registered a crime and, in effect, donned the mantle of recovery agents. Such actions are contributing to an ever-increasing flood of petitions seeking quashing of proceedings where essentially civil disputes are being converted into criminal prosecutions, often in collusion with the Police. The present case is a classic example of such an erroneous approach. The Police, in the facts of the case, ought to have issued an NCR endorsement and advised the complainant to avail an appropriate civil remedy for recovery of the alleged dues. Since the allegations, even if accepted in toto, disclose only a civil liability and no criminal intent at inception, this Court is of - 7 - HC-KAR NC: 2025:KHC:36018 CRL.P No. 6783 of 2024 the considered view that the continuation of criminal proceedings would amount to abuse of process of law. 9. Accordingly, this Court proceeds to pass the following: ORDER (i) The petition is hereby allowed. (ii) The proceedings pending in Crime No.259/2024 for offences punishable under Sections 420 and 406 of the IPC and under Section 66(D) of the Information Technology Act, pending before the learned Principal Civil Judge (Senior Division) & CJM, Tumakuru, are hereby quashed. (iii) It is, however, made clear that nothing in this order shall preclude respondent No.2 – complainant from initiating appropriate recovery proceedings, if so advised, before the competent civil forum. - 8 - HC-KAR NC: 2025:KHC:36018 CRL.P No. 6783 of 2024 All pending interlocutory applications, if any, stand disposed of. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE NBM List No.: 1 Sl No.: 7