- 1 - HC-KAR NC: 2026:KHC:18826 CRL.P No. 1555 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF APRIL, 2026 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ CRIMINAL PETITION NO. 1555 OF 2019 (482(Cr.PC) / 528(BNSS)) BETWEEN: NIRANJAN G.S. S/O. SRI C. SESHAIAH 49 YEARS, MANAGER, DISTRICT CENTRAL COOPERATIVE BANK, BILIKERE BRANCH, BILIKERE-571 103, HUNSUR TALUK, MYSURU DISTRICT. (AS IN THE F.I.R) &PETITIONER (BY SRI. NITIN RAMESH, ADVOCATE (THROUGH VC)) AND: 1. THE STATE OF KARNATAKA BY THE STATION HOUSE OFFICER, BILIKERE POLICE STATION, BILIKERE - 571103, HUNSUR TALUK, MYSURU DISTRICT. 2. M.T. SHASHIDHARA S/O (NOT KNOWN TO PETITIONER), MAJOR, BRANCH MANAGER, MYSORE AND CHAMARAJANAGAR DISTRICT COOPERATIVE BANK (LTD)., BILIKERE BRANCH, BILIKERE-571103, HUNSUR TALUK, MYSURU DISTRICT. &RESPONDENTS (BY SRI. RAJATH SUBRAMANYAM, HIGH COURT GOVERNMENT PLEADER FOR RESPONDENT NO.1; Digitally signed by HEMALATHA J Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:18826 CRL.P No. 1555 of 2019 SRI. R. SHIVACHARAN, ADVOCATE FOR RESPONDENT NO.2 (ABSENT)) THIS CRL.P IS FILED UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE PROCEEDINGS SO FAR AS HE IS CONCERNED IN THE FIRST INFORMATION REPORT IN CR.NO.343/2018 DATED 17.09.2018 REGISTERED BY THE SUB-INSPECTOR OF POLICE, BILIKERE POLICE STATION, BILIKERE, HUNSUR TALUK, FOR THE AFORESAID OFFENCES PUNISHABLE UNDER SECTIONS 409, 471, 477A, 420 R/W 34 OF IPC. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE R. NATARAJ ORAL ORDER The petitioner has challenged an FIR drawn in Crime No. 343/2018 by respondent No.1 for the offences punishable under Sections 409, 471, 477A, 420 read with Section 34 of Indian Penal Code, 1860 (henceforth referred to as 'IPC'). 2. The respondent No.2, being the Branch Manager of Mysore and Chamarajnagar District Co-operative Central Bank Ltd. informed respondent No.1 on 16.09.2018 that several financial discrepancies were noticed in the head office of the Mysore and Chamaraj Nagar District Co-operative Central Bank Ltd. In that regard, the Assistant Manager and the Senior Assistant of the Accounts Department were deputed to conduct - 3 - HC-KAR NC: 2026:KHC:18826 CRL.P No. 1555 of 2019 an audit. Accordingly, a six page report was submitted by them to the Assistant Registrar of Cooperative Societies, the Assistant Co-operative Development Officer, the Deputy Registrar of Co-operative Societies, Mysuru and the society. 3. Respondent No.2 was directed to lodge a complaint in view of the financial irregularities pointed out. Accordingly, respondent No.2 lodged a complaint stating that during his tenure at Bilikere Branch of the Society, some members had obtained membership in the Primary Agricultural Co-operative Society and had opened accounts at the said branch. It was further stated that several accounts were opened in the names of farmers with an intention to avail loans. It is alleged that the petitioner herein along with one Mr. Sreeramappa Pujar had misappropriated funds belonging to the members amounting to Rs.13,75,92,487/- and had transferred the same to their personal accounts. Respondent No.2 therefore requested respondent No.1 to initiate suitable action. Consequently, a case in Crime No.343/2018 was registered for the aforesaid offences. - 4 - HC-KAR NC: 2026:KHC:18826 CRL.P No. 1555 of 2019 4. The petitioner being aggrieved by the aforesaid registration of an FIR, has filed this petition. 5. Learned counsel for the petitioner submitted that the audit report cannot be the basis for initiating criminal action against the petitioner. He further submitted that an internal audit report cannot be the basis for prosecuting the petitioner. He also submits that the Mysore and Chamrajnagar District Co- operative Central Bank Ltd., upon statutory audit, had reported that there were no financial improprieties or illegalities including the illegalities alleged against the petitioner by respondent No. 2. He therefore submitted that the continuation of the criminal proceedings against the petitioner is unwarranted. 6. The learned High Court Government Pleader submitted that the question whether there was any misappropriation or not is yet to be investigated by respondent No.1. He submits that in case the Mysore and Chamrajnagar District Co-operative Central Bank Ltd. upon statutory audit, has submitted a report exonerating the petitioner, the investigating officer would consider the same during the course - 5 - HC-KAR NC: 2026:KHC:18826 CRL.P No. 1555 of 2019 of investigation. He however submits that the contentions urged by the petitioner cannot be taken into account to set at nought the investigation. 7. The learned counsel for respondent No.2 is absent and therefore this Court did not have the benefit of his submissions. 8. I have considered the submissions of the learned counsel for the petitioner and the learned High Court Government Pleader for respondent No.1. 9. A perusal of the information furnished by respondent No.2 to respondent No.1 shows that it is based on an internal audit report of the Mysore and Chamrajnagar District Co-operative Central Bank Ltd., which implicated the petitioner and one Mr. Sriramappa Pujari of misappropriating a sum of Rs.13,75,92,487/-. It is specifically alleged that instead of transferring the said amount to the personal accounts of the members/farmers, the same was transferred to the private accounts of the petitioner and the said Mr. Sriramappa Pujari. - 6 - HC-KAR NC: 2026:KHC:18826 CRL.P No. 1555 of 2019 10. Therefore, the least that could be done in the facts and circumstances of this case was an investigation by respondent No.1. The contention of the learned counsel for the petitioner that after statutory audit, the petitioner is given a clean chit, this shall also be considered by the investigating officer before finalising the final report. 11. In that view of the matter, no interference is warranted with the first information report registered against the petitioner. Accordingly, the criminal petition is disposed off. However, the investigating officer shall consider the findings of the statutory audit, other relevant material and the communications of the society to the concerned statutory authorities, and thereafter conclude the investigation in accordance with law. 12. The Investigating Officer shall not effect any arrest until all such material is collected which justifies a custodial interrogation. Sd/- (R. NATARAJ) JUDGE HJ/List No.: 1 Sl No.: 17