- 1 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF AUGUST, 2025 BEFORE THE HON'BLE MS. JUSTICE J.M.KHAZI CRIMINAL PETITION NO. 10558 OF 2022 (482(Cr.PC) / 528(BNSS)) BETWEEN: DR. P. BOREGOWDA AGED ABOUT 70 YEARS, NO. 181, 1ST SOUTH CROSS, ANIKETANA ROAD, I BLOCK, KUVEMPUNAGAR, MYSORE-570 023, KARNATAKA. …PETITIONER (BY SRI. KESHAV MURTHY K R, ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENTED BY STATE PUBLIC PROSECUTOR, HIGH COURT BUILDING, BENGALURU-560 001. 2. SRI. KRISHNAPPA. B. DEPUTY SECRETARY RWS DEPARTMENT, M.S. BUILDING, DR. AMBEDKAR VEEDHI, BENGALURU-560 001. …RESPONDENTS (BY SRI.VENKAT SATYANARAYAN.A, HCGP FOR R1) Digitally signed by REKHA R Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 THIS CRL.P IS FILED U/S.482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO QUASH THE CHARGE SHEET FILED BY THE RESPONDENT NO.1 POLICE AGAINST THE PETITIONER/ACCUSED NO.2 IN CR.NO.440/2015 IN C.C.NO.31073/2021 FOR THE OFFENCES P/U/S 409, 420 AND 120(B) R/W 34 OF IPC, ON THE FILE OF HALASURUGATE P.S., PENDING ON THE FILE OF III ADDL.C.M.M., BENGALURU. THIS PETITION, COMING ON FOR DICTATING ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MS. JUSTICE J.M.KHAZI ORAL ORDER Petitioner who is arraigned as accused No.2 has filed this petition under Section 482 of the Code of Criminal Procedure, to quash the charge sheet in C.C.No.31073/2021, on the file of III Additional Chief Metropolitan Magistrate, Bengaluru, for the offences punishable under Sections 409, 420, 120B r/w Section of IPC, arising out of Cr.No.440/2015 of Halasuru Gate PS Bengaluru. 2. In support of the petition, petitioner has contended that in pursuance to the complaint filed by Sri.Krishnappa. B, Deputy Secretary, RWS Department, case was registered in Cr.No.440/2015 on 14.11.2015. - 3 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 2.1 A committee was constituted under the stewardship of Sri.Punnati Sridhar, IFS, Principal Conservator of Forest and Executive Director, Mahatma Gandhi Rural Development organization to enquire into long term depositing of money in other Bank accounts instead of depositing in the main stream account, in the departments of Rural Development and Panchayatraj. After collecting inputs from various departments, the Committee submitted 3 interim reports dated 05.05.2015, 24.07.2015 and 28.07.2015. A final report was filed on 29.09.2015. 2.2 As per the said report, out of Rs.1335 Crores, Rs.505 Crores is placed out of the main stream account and in the second interim report, it is alleged that Gazetted Manager Sri.B.S.Rayageri, is called upon to show cause for having not facilitated the required information by the Committee. On 05.10.2015, the Hon'ble Minister on some credible information directed internal financial - 4 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 advisor to submit report on 07.10.2015, wherein he has made observation that 101 accounts have been opened in Syndicate bank, BWSSB branch and Rs.539 Crores is parked in the said accounts during 2010-11. Out of the said accounts, in A/c No.04462010099220, surplus amount of Rs.495 Crores is parked. Similarly, in A/c No.04462010098830, a sum of Rs.44.17 Crores is parked. 2.3 Sri.B.S.Rayageri, Gazetted Manager has intentionally omitted to produce Government documents before the Committee, thereby money explicitly meant for Government activities is diverted from the main stream account and thereby he has demonstrated non co- operation to the Committee and committed criminal breach of trust and thereby violated finance code and other rules. He has committed the offences punishable under Sections 408, 415, 420 and 460 IPC. After investigation, the concerned police have filed charge sheet in C.C.No.31073/2021 on the file of IV ACMM, Bengaluru, - 5 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 for the offences punishable under Sections 409, 420, 120B r/w Section 34 IPC against 6 accused including the petitioner. Later it was transferred to III ACMM, Bengaluru. 2.4. Being aggrieved by the same, petitioner has filed this petition on the following among other; GROUNDS (i) The petitioner is innocent of the offences alleged and he has been falsely implicated. The allegations made in the complainant does not attract the ingredient of the said offences. Respondent police have erred in investigating the matter though it comes under the jurisdiction of the Vidhana Soudha Police. (ii) On 23.01.2017, respondent police have received first information from Sri.Krishnappa B, but they have not registered the case. Only after Dr.N.Nagalambika Devi, Principal Secretary, Rural Development and Pachayatraj Department, marked a reminder addressed to the ADGP, - 6 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 Law and Order, State Police Headquarter, her reminder is treated as complaint and on the basis of it, case is registered in Cr.No.118/2018. Since, Dr.N. Nagalambika Devi, is the wife of ADGP, the concerned police have registered the case. Ultimately, they have filed 'B' report on 09.01.2019, on the recommendation of officer of the rank of ACP. (iii) However, the same police have filed charge sheet in Cr.No.440/2015 on 22.10.2021 i.e., after lapse of 3 years of submitting 'B' report. It amounts to double jeopardy. The material placed on record is not sufficient to rope in the petitioner. In the charge sheet, the investigating officer has sought leave of the Court to file additional charge sheet, if additional documents are made available. Even after lapse of one year, no additional charge sheet is filed. (iv) The statement of CW-3 N.Ashok Reddy, reveal that 97 accounts were opened at the instance of accused No.3 Ramakrishna, Principal Secretary, RDPR. Such being - 7 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 the case, petitioner is not even remotely responsible. He worked in the said office from 09.07.2009 to 24.05.2011. He was responsible for opening only 8 accounts as per the guidelines of Central Government captioned as 'Program Account' (main account). The subsequent 6 accounts were opened to streamline the financial discipline and the entire program of NRDWP. The decision to open these 6 accounts was in the backdrop of certain complaints from the District level Officers. In this regard a meeting of all CAOs of Zilla Panchayat, Executive Engineers of RWS under the Chairmanship of Principal Secretary, RDPR was held and in the said meeting it was resolved to open 6 accounts on 6 components. Since it was a new scheme and in an initial stage, petitioner as an administrator was expected to formulate the smooth sailing of the scheme. Hence, 6 accounts in question were sheer necessity. It was not his unilateral decision. (v) In fact in Cr.No.118/2018, the investigating officer gave an opportunity to the petitioner to submit his written - 8 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 explanation and ultimately filed 'B' report. However, in Cr.No.440/2021, no such opportunity was given. The auditor Sri.Shivarudrappa has misconceived the sequence of events, wherein opening of 6 accounts dates back to 06.04.2010 and thereby erred in holding petitioner as responsible. The money kept in these 6 accounts were exclusively utilized for the endeavour of Government. In fact auditor Shivarudrappa's report does not allege embezzlement, rather repeatedly mention reconciliation of the bank accounts. However, the successors of the petitioner have not bothered to reconcile the bank accounts till date. Rather they have resorted to mudslinging. The loss of interest on the fixed deposits is attributable to accused Nos.3 and 4. (vi) Earlier government water supply activities were streamlined under the stewardship of Deputy Commissioners and the said amount was kept in Andhra Bank account. On the advent of NRDWP scheme, the funds made available to the Deputy Commissioner were made - 9 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 over to the same account in the Andhra Bank to ensure and prevent abuse of funds and this decision had prior approval of Secretary, RDPR. (vii) The respondent police have wrongly construed that accused Nos.1 and 3 are working in the office of petitioner. They are the Officers attached to RDPR Secretariat. Petitioner had no control over them. None of the provisions for which charge sheet is filed are attracted as against the petitioner and hence, the petition. 3. Learned High Court Government Pleader representing respondent No.1 State and learned counsel for respondent No.2 would submit that on 13.11.2015, a complaint came to be filed by Sri.B.Krishnappa, Deputy Secretary against B.S.Rayageri, Gazetted Manager, alleging that as per the report submitted by the committee under the Presidentship of Sri.Punnati Sridhar, it is found that in all Rs.1335 Crores was kept in the bank. However, it was found that out of it, Rs.505 Crores were kept in out of mainstream banks. During the investigation by the - 10 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 Committee, the said B.S.Rayageri did not furnish relevant documents. 3.1 The auditor has given report that Rs.539 Crores were kept in 101 Accounts in Syndicate Bank since 2010- 11. In A/c No.04462010099220, surplus amount of Rs.495 Crores is parked. Similarly, in A/c No.04462010098830, a sum of Rs.44.17 Crores is parked. Since necessary details were not furnished as to at whose instance, these accounts were opened and reconciliation statement is also not furnished, the Government is not in a position to ascertain the misappropriation. B.S.Rayageri has not maintained the records properly and failing to keep Rs.539 Crores in the mainstream account, he has cheated the Government and therefore, the matter may be investigated. 4. Based on the said complaint, case in Cr.No.440/2015 was registered and charge sheet is filed as against accused Nos.1 to 6 including the petitioner. - 11 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 There is prima facie material to proceed against the petitioner. Matter requires detailed trial. It is not a case for quashing the proceedings and pray to dismiss the petition. 5. Heard arguments and perused the record. 6. It is not in dispute that at the relevant point of time, accused No.1 was the Gazetted Manager in Rural Water Supply and Sewage Department, accused No.2, the Director, accused No.3 Deputy Secretary, Rural Drinking Water Supply and Sewage Department, accused No.4 was the Manager Syndicate Bank, BWSSB branch, Bengaluru, accused No.5 was the Manager, Andhra Bank Gandhinagar branch, Bengaluru and accused No.6 was the Manager of Dena Bank, Indiranagar branch, Bengaluru. 7. The specific allegations made against the accused persons are that for the year 2010–11, together from the Central Government and State Government Rs.1,335 Crores were allotted for various schemes to the Department of Rural Drinking Water Supply and Sewage. - 12 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 There was also a tripartite agreement that the said amount should be kept in the Fixed Deposit in a single bank. Accused Nos.2 and 4 were signatory to the said agreement. It is alleged that despite being aware of the same, in collusion with accused Nos.4 to 6 and in violation of the said agreement, 104 accounts were opened in Syndicate Bank and one each account was opened in Dena bank and Andhra bank and the Rs.505 Crores were kept in these accounts instead of keeping them in a single account of mainstream bank and thereby loss of interest to the tune of Rs.269.04 Crores was caused. 8. It is contended by the petitioner that in respect of the same incident, two complaints are filed in the same police station i.e., Halasur Gate PS, i.e, in Cr.No.440/2015, which resulted in filing charge sheet in C.C.No.31073/2021 and Cr.No.118/2018, in which ‘B’ report is filed. It is pertinent to note that in the respect of the allegations made against the accused persons, a complaint dated 13.11.2015 came to be filed by one - 13 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 Krishnappa Under Secretary to the Department of Rural Drinking Water and Sewage, Bengaluru. It was registered in Cr.No.440/2015 and after conducting detailed investigation charge sheet is filed in C.C.No.31073/2021. 9. It is pertinent note that on 05.03.2018, Dr. N Nagambikadevi, Chief Secretary to the Government of Karnataka Rural Development and Panchayat Raj Department, addressed a letter to Additional Director General of Police, Law and Order, State Police Headquarter, Bengaluru, stating that even though a complaint is filed with the Halasuru gate police, so far there is no progress in the investigation. It appears when this letter was forwarded to the concerned police, instead of verifying as to what happened to the earlier complaint, it is registered in Cr.No.118/2018 and ultimately a 'B' report came to be filed by the police inspector, Halasur gate PS. - 14 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 10. When already a case was registered with regard to the allegations made in the complaint dated 13.11.2015, the concerned police ought to have verified the same and reported to the Additional Director General of Police, Law and Order about the progress of the case, instead of once again registering a case and conducting a parallel investigation. The letter of Dr. N Nagambikadevi, Chief Secretary to the Government of Karnataka, Rural Development and Panchayat Raj Department cannot be treated as a complaint. It is more in the form of a reminder. It appears without going through the contents of the said letter, blindly the concerned police have registered one more case and proceeded with the matter. Therefore, the subsequent registering of Cr.No.118/2018 and filing of ‘B’ report can be taken into consideration. 11. Now coming to the allegations made in the charge sheet. It is pertinent to note that to enquire into the allegations of misuse of funds released for the Rural - 15 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 Drinking Water and Sewage Scheme, during 2020–2021, a committee was constituted and after conducting detailed enquiry, it submitted a report dated 13.03.2023 stating that as per the NRDWP Rules of the Government of India, the allotment should be kept in a single savings bank account of a Nationalised Bank. It is ascertained that since the Central Government was releasing the funds in six separate components, if the entire amount was kept in single account, it would be inconvenient and not practical for asserting the details. Therefore, in a meeting held between the Chief Secretary, Rural Development and Panchayath Raj Department, Directors of SWSM/KRWSSA and Zila Panchayath development officers, for administrative convenience, six accounts were opened and in this regard official memorandum dated 08.04.2009 and 18.06.2010 were issued, which was contrary to the directions given by the Government of India. 12. The Committee observed that though the amount kept in Fixed Deposit account has earned - 16 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 additional interest, it has led to confusion. The Committee has also negotiated with the Chief of the Syndicate Bank, Canara Bank and said banks have agreed to pay additional interest of Rs.13,97,82,736/- and as such the Government is benefited. The Committee has opined that even though it is alleged that the action of accused persons opening accounts in Syndicate Bank, Andhra bank and Dena Bank was with the intention of making unlawful gain, the report of the Committee and charge sheet have not disclosed any such misappropriation of any funds or any unlawful gain made from the bank by the accused persons. 13. At page-27, para-6, the Committee has decided to withdraw the complaints and suits filed on the said subject. The petitioner and other accused have acted on the advice and directions given by the head of the department and based on the Official Memorandum issued by them. The Committee has given a clear chit to the officials/accused of misconduct. In fact in the ‘B’ report - 17 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 filed in Cr.No.118/2018, the Investigating Officer has taken into consideration the Committee report. In Cr.No.440/2015, the investigating officer has not examined whether in fact any misappropriation is made and whether the accused persons have benefited by opening accounts in various banks instead of maintaining a single account. In the light of committee giving a clean chit, continuation of the criminal proceedings against the petitioner amount to abuse of the process of the Court and as such liable to be quashed and accordingly the following: ORDER (i) Petition filed by the petitioner/accused No.2 under Section 482 Cr.P.C is hereby allowed. (ii) The criminal proceedings initiated against the petitioner/accused No.2 in C.C.No.31073/2021, on the file of III Additional Chief Metropolitan Magistrate, Bengaluru, for the offences punishable - 18 - HC-KAR NC: 2025:KHC:29926 CRL.P No. 10558 of 2022 under Sections 409, 420, 120B r/w Section 34 of IPC, arising out of Cr.No.440/2015 of Halasuru Gate PS Bengaluru, is hereby quashed so far as accused No.2 is concerned. (iii) The Registry is directed to send a copy of this order to the trial Court through e-mail. Sd/- (J.M.KHAZI) JUDGE RR List No.: 1 Sl No.: 43