Sangamesh vs The State of Karnataka and Others

Budihal R.B., J.—Though the matter is listed for admission but with the consent of both sides, it is taken up for final disposal.

Respondent No. 2-complainat though served with the notice, remained absent and there is no representation.

This petition is filed by the petitioner-accused under Section 482 of Cr.P.C. requesting the Court to quash the entire proceedings pertaining to Crime No. 78/2015 registered in Gangavati Town PS for the offence under Section 4 of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 and read with Section 504, 342, 506 and 34 of IPC pending on the file of Prl. Civil Judge (Jr. Dn.) and JMFC, Gangavati.

The brief facts of the prosecution case that respondent No. 2 lodged a complaint before respondent No. 1-Police authorities stating that he had borrowed hand loan from the petitioner that, on 24.07.2014 a sum of Rs. 15,000/-, further on 04.08.2014 a sum of Rs. 5,000/- and on 10.09.2014 a sum of Rs. 3,000/-, totally a sum of Rs. 23,000/-. It is further alleged that petitioner had taken the interest for a sum of Rs. 2,250/- for Rs. 15,000/-, Rs. 750/- for Rs. 5,000/- and a sum of Rs. 400 for Rs. 3,000/-.

It is also alleged by the complainant that in the month of December 2014, petitioner, at about 11.00 p.m. came along with two other assistants when he was standing near Pavan Bar and Restaurant and asked the balance money and later they had taken him to their finance and make them to sit in their finance. On the next day at about 10.00 a.m. when the complainant requested the petitioner telephonically that he will be paid the entire amount and then they leave the complainant, on 24.03.2015 he paid a sum of Rs. 10,000/- and also paid a sum of Rs. 30,000/- in spite of that further stated that petitioner had asked another sum of Rs. 44,000/- and further stated that on 11th day the petitioner had again asked Rs. 14,000/- interest and on the basis of these allegations made by the complainant, the respondent No. 1 herein registered the case as against the petitioner.

Heard the arguments of the learned counsel appearing for the petitioner-accused and also the learned HCGP appearing for the respondent No. 1-State.

Learned counsel for the petitioner has submitted that even if the allegations in the complaint are admitted, the transaction is covered by the provisions of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004. He has submitted that according to the allegations made in the complaint, if the petitioner insisted the complainant to pay exorbitant interest on the amount said to have been borrowed from the petitioner, proper procedure would have been to invoke Section 5 of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 and then to proceed in the matter. But inspite of doing so, in this case, when the complaint has been lodged by the complainant, respondent No. 1-Police without verifying all these legal aspects in the matter, immediately registered the complaint and proceeded with the matter. He has also submitted that the entire materials collected and the procedure followed are in violation of the provisions of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, and they are totally illegal and not sustainable in law. In this connection, learned counsel has relied upon the order passed by this Court in Crl. P. No. 101394/2015 dated 18.09.2015, in Crl. P. No. 101214/2015 and Cr. P. No. 101215 dated 17.11.2015. Hence, submitted that petition be allowed and the proceedings be quashed.

Per contra, learned HCGP has submitted that as per the complaint averments made by respondent No. 2-complainant herein, the Police have registered the case and proceeded with the matter.

Learned HCGP has also submitted that there is no illegality committed in proceeding with the matter after registering the complaint nor there is violation of any of the provisions of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004. Hence, he has submitted that there is no merit in the petition and same is to be rejected.

I have perused the grounds urged in the petition and all the documents produced along with the petition. Looking to the allegations made in the complaint, FIR and other materials produced, the main crux of the matter in this case is regarding the financial transaction between respondent No. 2 and the petitioner. It is stated that respondent No. 2 borrowed the amount from the petitioner from time to time, which is already mentioned above in detail and on the said amount petitioner herein was collecting huge interest from the complainant. These allegations even if taken to be true, as per the case of the prosecution then, the transaction is governed by the provisions of the said Act i.e., Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 and in that case the proper procedure ought to have been followed by respondent No. 2-complainant to approach the Court and to deposit the amount what was due, as contemplated under Section 5 of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004. Section 5 of the said Act reads as under:

Deposit of money and presentation of petition to court and the procedure thereof.-

(1) A debtor may deposit the money due in respect of a loan received by him from any person together with interest at the rate fixed by the State Government under section 28 of the Karnataka Money Lenders Act, 1961 into the Court having jurisdiction, along with a petition to record that the amount deposited is in full or part, satisfaction of the loan including the interest therefor, as the case may be.

(2) The Court shall, on receipt of a petition under sub-section (1), refer a copy of the petition to the person mentioned in the petition, directing him to give his replies within a period of fifteen days as may be granted by the Court. The Court may, after due inquiry and after considering the versions of both the parties, pass orders recording the satisfaction of the loan and interest therefor in full or in part, as the case may be.

In this case without verifying the correct provisions of law, which is applicable to the transaction, straightaway the respondent No. 1-Police registered the case and proceeded with the matter.

I have perused the order passed by this Court in another petition, which is almost having the similar set of facts, wherein the Court has observed as under:

"I have also perused the order passed by this Court which is relied upon by the learned counsel for the petitioner. Under similar set of facts in the said case this Court has already taken decision that the procedure adopted by the Police is not in accordance with law. Therefore, this Court allowed the petition and order for quashing the procedure summarily. But, however, with a liberty to the Police to proceed with the matter in accordance with law."

Therefore, perusing all these materials placed on record, I am of the opinion that whatever the action taken by respondent No. 1-Police on the basis of the complaint lodged by respondent No. 2, is totally in violation of the mandatory provisions of law. Therefore, the proceedings initiated and proceeded with are illegal and not sustainable in law.

Accordingly, petition is allowed and the proceedings pertaining to Crime No. 78/2015 registered in Gangavati Town PS for the offence under Section 4 of Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 and read with Section 504, 342, 506 and 34 of IPC pending on the file of Prl. Civil Judge (Jr. Dn.) and JMFC, Gangavati, are hereby set-aside. Respondent No. 1-Police are at liberty to take appropriate action against the petitioner herein, in accordance with law.