Criminal Petition No. 3309 of 2025 · The High Court
Case Details
- 1 - NC: 2025:KHC:11924 CRL.P No. 3309 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 3309 OF 2025 BETWEEN: M R CHOWDAIAH S/O. RAJANNA, AGED ABOUT 48 YEARS, BCM HOSTEL OFF, MYSORE ROAD, WARD NO.06, BEHIND OLD COURT, MALAVALLI TOWN, MANDYA- 571 430. …PETITIONER
Legal Reasoning
(BY SRI. HEMANTH KUMAR K.,ADVOCATE) AND: 1. THE STATE OF KARNATAKA BY MALAVALLI TOWN POLICE STATION, REP. BY STATE PUBLIC PROSECUTOR, HIGH COURT BUILDING, BANGALORE-560 001. 2. RAVISHANKAR.M, SUB-INSPECTOR OF POLICE, MALAVALLI TOWN P.S, MANDYA -571 430. Digitally signed by R HEMALATHA Location: High Court of Karnataka (BY SRI. M R PATIL, HCGP FOR R1 AND R2) …RESPONDENTS THIS CRL.P IS FILED U/S 482 CR.PC (FILED U/S 528 BNNS) BY THE ADVOCATE FOR THE PETITIONER PRAYING TO - 2 - NC: 2025:KHC:11924 CRL.P No. 3309 of 2025 QUASH THE ENTIRE PROCEEDINGS IN C.C NO.45/2020 FOR THE O/P/U/S 420 OF IPC SECTIONS 5 AND 39 OF KARNATAKA MONEY LENDERS ACT 1961 AND SECTION 4, 28 AND 3 OF KARNATAKA PROHIBITION OF CHARGING EXORBITANT INTEREST ACT 2004 WHICH IS PENDING ON THE FILES OF THE CIVIL JUDGE (SR.DN) AND JMFC COURT, MALAVALLI. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR ORAL ORDER The petitioner/accused who is facing trial for the offences punishable under Section 420 of IPC, Sections 5 and 39 of Karnataka Money Lenders Act, 1961, and Sections 4, 28, and 3 of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, is before this Court seeking the following reliefs: "Wherefore, the petitioner humbly prays that this Hon'ble Court be pleased to quash the entire proceedings in C.C.No.45/2020 for the offences punishable under Section 420 of IPC, Sections 5 and 39 of Karnataka Money Lenders Act, 1961 and Sections 4, 28 and 3 of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, which is pending on the files of the Civil Judge (Sr.Dn) & J.M.F.C. Court, Malavalli, in the interest of justice." 2. The prosecution alleges that the petitioner is in the business of lending money to the public without obtaining any licence and is charging exorbitant interest on the money lent by taking empty cheques, mortgage of the property, and other documents as security for repayment of the loan amount. - 3 - NC: 2025:KHC:11924 CRL.P No. 3309 of 2025 3. Heard the learned counsel for the petitioner and learned High Court Government Pleader appearing for respondents. 4. The issue involved in this petition was examined by a Coordinate Bench of this Court in W.P.No.29499/2017, at paragraphs 10 to 13 held as follows: "10. On plain reading of the records it indicates that on the basis of the information given by the Assistant Police Commissioner, the Police Inspector of Cottonpet police station secured pancha witnesses and he has searched the house of accused Nos. 1 and 2 without registration of the case as contemplated under Section 154 of Cr.P.C. Even as could be seen from Section 15 of the Karnataka Money-Lenders Act, 1961, it is the Registrar, Assistant Registrar or any Officer authorized by the State Government are permitted to verify, whether any money lending business has been carried out in accordance with the provisions of the said Act and they are permitted to enter the premises of money lender or any person who in his own has to carry on business of money lending calling upon him to produce any records or documents relating to such business or every such money lender or the person shall allow such inspection and produce such record or document. Hence, the said Section itself clarifies that it is the statutory authority to call for any records or documents from any money lenders or any person for the purpose of verification. the circumstances, 11. Under the Police Inspector is not having any authority to come and search the said premises and even the Assistant Commissioner of Police is not having any authority to issue search warrant. This preposition of law also came up before a Co-ordinate Bench of this Court in Rasquinha v. State of Karnataka [(1975) 2 Kar.L.J. 75] held as under: "Karnataka Moneylenders Act, 1961, S.15- Issue of search warrant. - 4 - NC: 2025:KHC:11924 CRL.P No. 3309 of 2025 Sec. 15 confers power on the statutory authority to call for any record or document from any moneylender or any person for the purpose of verifying whether the business of money lending is carried on in accordance with the provisions of the Act. The section does not provide as to what the statutory authority should do if there is any disobedience to the demand for record. It is clear from the provision of the section that it does not authorize the Registrar, Asst. Registrar or Officer so authorized to issue search warrant to search or seize any document belonging to the moneylender or any other person." interest have 12. Even as could be seen from the records, though no complaint has been lodged by any aggrieved debtor to the jurisdictional Court as per Section 5 of the Interest Act, the persons claim to have been charged the with exorbitant jurisdictional Court under Section 5 of the Interest Act and seek redressal of the grievance. When the said Act provides that it is only aggrieved person who can file the complaint under Section 5 of the Interest Act and no such circumstances, the proceedings initiated by the police vitiates the entire proceedings and it is in violation of Section 5 of the Interest Act. is pending, under to approach complaint such 13. On going through the entire materials produced and the law that depicts that there is abuse of process of law by the respondent police in following the above said procedure and that they have made search without registering the case, I am of the considered opinion that the petitioners have made out case so as to quash the proceedings. In that light, the petition is allowed. The first information report in Crime No.98/2017 registered by Cottonpet police station for the offences punishable under Sections 40, 38 and 39 of the Karnataka Money- Lenders Act, 1961, Sections 3 and 4 of the Karnataka - 5 - NC: 2025:KHC:11924 CRL.P No. 3309 of 2025 Prohibition of Charging Exorbitant Interest Act, 2004 and Section 420 r/w Section 34 of Indian Penal Code, 1860 pending on the file of XLV Additional Chief Metropolitan Magistrate, Bengaluru are hereby quashed. Whatever the documents and cheques which are so seized by drawing the mahazar, the same may be returned to the petitioners-accused on proper identification and acknowledgement.
Decision
Insofar as prayer Nos.2 and 3 are concerned, they are disposed of as not necessary. In view of disposal of the petition, I.A.Nos. 1 and 2 of 2019 do not survive for consideration and the same are disposed of." 5. In the instant case, the Police inspector without registering the case at the first instance has conducted the raid and the same is impermissible in view of the specific provisions contained in Section 5 of the Interest Act, wherein, it states that the person aggrieved has to approach the jurisdictional Court and need to seek redressal of the grievance. Therefore, when the said Act provides that only the aggrieved person, who can file the complaint under Section 5 of the Interest Act and no such complaint is pending, under such circumstances, the proceedings initiated by the Police, vitiate the entire proceedings and is in a violation of Section 5 of the Interest Act. 6. Section 15 of the Karnataka Money Lenders Act, 1961 confers power on the statutory authority to call for record a document from any money lender for the purpose of verifying whether the business of money lending is carried on in accordance with provisions of the Act. Therefore, the conduct of the raid and seizure of the documents of the - 6 - NC: 2025:KHC:11924 CRL.P No. 3309 of 2025 petitioners by the police is in violation of Section 15 of the Karnataka Money Lenders Act, 1961, and Section 154 of the Cr.P.C., since the offences alleged against the petitioners are cognizable. 7. A perusal of the charge sheet materials would indicate that there is no material to substantiate that the petitioner had induced the borrowers to take a loan by taking empty cheques, and an agreement of sale as security for repayment of the loan with an intention to deceive and In the absence of any essential element to constitute an offence punishable under Sections 79 and 80 of the Karnataka Police Act, the cognizance taken against the petitioner stands vitiated. In such circumstances, the continuation of proceedings would be an abuse of process of law. 8. Accordingly, I pass the following: ORDER i) The Petition is allowed. ii) The proceedings in C.C.No.45/2020, pending on the file of learned Senior Civil Judge and JMFC, Malavalli, is hereby quashed. Sd/- (HEMANT CHANDANGOUDAR) JUDGE BK List No.: 2 Sl No.: 4