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Karnataka High Court

Vipul Prakash Patil V. State Of Karnataka & ors.

CRIMINAL PETITION NO. 104152 OF 2022 

Bench- HON’BLE MR JUSTICE V.SRISHANANDA

Decided On 30-05-2023

Facts of the case-

On the 11th of November, 2022, a complaint was filed by Shivanand S/o Channappa Magadumma with the Chikkodi Police Station. The complaint was registered as Crime No. 242/2022 under Section 9 of the Karnataka Protection of Interest Depositors in Financial Establishment Act, 2004 (referred to as the ‘KPID Act’), and under Sections 406 and 420 of the Indian Penal Code (IPC).

The essence of the complaint alleges that Pankaj Namadev Patil and Santosh Gangaram Ghodake, along with the present petitioner, made an offer to return an invested sum of Rs. 1,00,000/- within ten months in installments of Rs. 15,000/-. Based on this offer, the complainant and others invested substantial amounts of money. 

Initially, the Pinomic Company, a limited liability partnership firm, repaid the amount for a few months but subsequently stopped making the payments. Efforts made by the complainant and others to recover the money proved futile, leading them to approach the Chikkodi police and file the complaint.

After registering the case, the police are currently investigating the matter. Meanwhile, the petitioner challenges the registration of the case and seeks to quash the first information report (FIR). The petitioner contends that they are not involved in the alleged fraud in any way. 

Furthermore, the petitioner questions the registration of the case by the Chikkodi police, arguing that without a preliminary satisfaction report filed by the competent authority with the State Government, the registration of the case for the offense punishable under Section 9 of the KPID Act, or any other IPC offenses, would be unwarranted. The petitioner argues that the registration of the case infringes upon their personal liberty and constitutes an abuse of the legal process. Consequently, the petitioner seeks the quashing of further proceedings.

Relevant Provisions

The KARNATAKA PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL ESTABLISHMENTS ACT, 2004 (KPID)	Related to
Sec. 9	Fraudulent default by Financial Establishment.

 

Judgement

Upon reviewing the case records, the bench determined that the registration of the complaint against the present petitioner lacked prima facie documentary evidence to implicate them in the alleged fraud. Consequently, the registration of the complaint against the petitioner was deemed unnecessary and an abuse of the court’s process.

Although the documents presented by Harshawardhan M Patil, the complainant’s counsel, established that money had been received by Pankaj Namadev Patil and Santosh Gangaram Ghodake, the bench held that the complainant failed to provide any documentary evidence, at least at this stage, to establish a connection between the alleged fraud and the present petitioner.

The bench rejected the complainant’s argument that it was the responsibility of the investigating agency to thoroughly investigate the matter and submit a suitable report. It deemed such an argument on behalf of the complainant as unfounded.

Furthermore, the bench stated that no individual should undergo the ordeal of a criminal investigation unless there is substantive material connecting that person to the alleged crime.

JUDGEMENT REVIEWED BY ABHAY SHUKLA

click here to view judgement

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