IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH

DATED THIS THE 10TH DAY OF NOVEMBER 2021

BEFORE

THE HON'BLE MR. JUSTICE H.P.SANDESH

CRIMINAL PETITION No.200428/2016

BETWEEN:

• 1. RIZWAN SAYED S/O SYED MOINODIN AGE: 55 YEARS OCC: BUSINESS YFC R/O FLAT NO.203, PLOT NO.21 SECTION 7 GHANSOLI-MUMBAI-400701
• 2. KAIZZAD CAPADIA S/O FARROKH CAPADIA AGE: 48 YEARS, OCC: BUSINESS R/O SALSETTEPARSI-D 201 BH.6 CHS LTD., NEAR PUMP HOUSE ANDHERI (E), MUMBAI
• 3. MR. KALYANI TILAK S/O VAMAN MADHAV TILAK AGE: 40 YEARS, OCC: BUSINESS R/O SALSETTEPARSI-D 201 BH.6 CHS LTD., NEAR PUMP HOUSE ANDHERI (E), MUMBAI
• 4. SULTAN SYED S/O MOINODDIN AGE: 50 YEARS, OCC: BUSINESS R/O PLOT NO.B-J

LINE SHIVAJI NAGAR GOKHANDI-MUMBAI-43

… PETITIONERS

(BY SRI CHAITANYAKUMAR CHANDRIKI, ADVOCATE)

AND:

• 1. KRS FITNESS, PROPRIETORSHIP CONCERN OFFICE SITUATED AT SEDAM ROAD AND ALSO PLOT NO.52 P & T COLONY OLD JEWARGI ROAD, KALABURGI THROUGH ITS PROPRIETOR KRISHNA REDDY S/O C RAMESH AGE: 29 YEARS, OCC: BUSINESS R/O KALABURAGI
• 2. STATE OF KARNATAKA THROUGH M.B.NAGAR POLICE STATION REPRESENTED BY SPP HIGH COURT OF KARNTAKA KALABURAGI BENCH

… RESPONDENTS

(BY SRI GURUBASAVA C. NAIK, ADVOCATE FOR SRI RAMACHANDRA K., ADVOCATE FOR R1; SRI SHARANABASAPPA M. PATIL, HCGP FOR R2)

THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CRIMINAL PROCEDURE CODE, PRAYING TO QUASH THE IMPUGNED ORDER DATED 21.12.2015 PASSED BY 4TH ADDL. JMFC, KALABURAGI, IN P.C.NO.1056/2015 AND ALSO QUASH THE FIR REGISTERED BY THE SECOND RESPONDENT IN CRIME NO.182/2015 AGAINST THE PETITIONERS.

THIS PETITION COMING ON FOR HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R

Heard the learned counsel appearing for the petitioners, learned counsel appearing for respondent No.1 and the learned High Court Government Pleader appearing for respondent No.2-State.

2. This petition is filed under Section 482 of Cr.P.C., by accused Nos.2 to 5 praying to quash the impugned order dated 21.12.2015 passed by IV-Additional JMFC, Kalaburagi, in P.C.No.1056/2015 and also quash the FIR registered by respondent No.2 in Crime No.182/2015 against the petitioners.

3. Factual matrix of the case is that respondent No.1 filed private complaint before the Magistrate making allegation against the petitioners herein that in terms of Franchise Agreement the petitioners have not provided services and committed offence of cheating. The complainant in paragraph-4 of the complaint has stated that due to non-compliance of requirements of customer

services, the complainant has incurred such heavy monetary loss and sustained mental shock. The complainant has paid franchisee fee of Rs.5,61,800/- and even till date the amount is with the accused. The complainant also credited an amount of Rs.4,75,000/ through bank to the accused. When the complaint was filed before the learned Magistrate, the learned Magistrate though comes to the conclusion that the contents of the complaint does not disclose committing of offences invoked against the petitioners, but ordered to investigate the matter by referring the matter to the Investigating Officer under Section 156(3) of Cr.P.C. Hence, the present petition is filed before this Court contending that even looking into the contents of the complaint, it is a civil dispute between the parties with regard to Franchise Agreement and even if there is any violation or noncompliance of terms of agreement, respondent No.1 cannot initiate criminal proceedings against the petitioners and there is provision in the agreement to initiate arbitration proceedings. The learned counsel vehemently

contended that arbitration proceedings was initiated by the petitioner before Mumbai Court and upon receiving notice in the arbitration proceedings, the present complaint is filed with mala fide intention. The learned counsel submits that when the complaint is filed stating that the petitioners are having business concern at Mumbai, unless enquiry is conducted as required under Section 202 of Cr.P.C., the learned Magistrate ought not to have entertained the complaint and ordered to investigate the matter by the Investigating Officer. The learned counsel also submits that as per Section 436 of the Companies Act which is amended in 2013, the complaint has to be filed before the Special Court. All these factors are not considered by the learned Magistrate before entertaining the complaint and ordered to refer the matter under Section 156(3) of Cr.P.C., for investigation. The learned counsel also submits that in support of the complaint, the complainant has not filed affidavit. On these grounds, he seeks to quash the proceedings initiated against the petitioners.

4. The learned counsel appearing for respondent No.1 submits that there was an agreement between the petitioners and respondent No.1 that is called as 'Franchise Agreement' and the petitioners have not complied the terms and conditions of the agreement and as a result, respondent No.1 has suffered huge loss. He also submitted that the petitioners have cheated the complainant. Hence, the private complaint is filed and the learned Magistrate has rightly referred the matter under Section 156(3) of Cr.P.C, for investigation.

5. Per contra, the learned High Court Government Pleader appearing for respondent No.2-State would submit that the learned Magistrate has not committed any error and he has only referred the matter under Section 156(3) of Cr.P.C., for investigation and has not taken any cognizance. Hence, the same does not require interference of this Court.

6. Having heard the learned counsel appearing for the petitioners, learned counsel appearing for

respondent No.1/complainant and the learned High Court Government Pleader appearing for respondent No.2-State and on perusal of the material on record, it is evident that respondent No.1 has filed private complaint against the petitioners and the allegation made in the complaint is that it has made payment in terms of Franchise Agreement and other allegation is that the petitioners have committed offence of cheating. The learned counsel for respondent No.1 does not dispute the fact that there is agreement between the parties and there is clause in the agreement that if any dispute arose between the parties, the parties have to invoke arbitration clause. It is also not in dispute that the petitioners approached Mumbai High Court invoking arbitration jurisdiction. When such being the case, filing of private complaint is nothing but an abuse of process. If the complaint is continued, it leads to miscarriage of justice. The petitioners are having business at Mumbai, therefore, if private complaint is filed, before entertaining the complaint, compliance of Section 202 of Cr.P.C., is mandatory. Apart from that, along with the

complaint no affidavit is filed. The learned Magistrate though comes to the conclusion that contents of the complaint do not disclose offences invoked against the petitioners, but proceeded to refer the matter under Section 156(3) of Cr.P.C. When the Court comes to the conclusion that the contents of the complaint do not disclose the offences against the petitioners, the learned Magistrate ought to have dismissed the complaint at the threshold, instead of referring the matter under Section 156(3) of Cr.P.C., or should have considered the complaint and taken cognizance and enquired into the matter. But the same has not been done by the learned Magistrate. It is clear abuse of process at the instance of respondent No.1 by filing private complaint when arbitration proceeding is initiated against him. Hence, it is not a fit case to exercise power under Section 482 of Cr.P.C.

7. This Court in the case of Mr. Prateek Jaswant and another vs. The State of Karnataka and another in Criminal Petition No.1097/2020 disposed

of on 02.03.2021 in detail discussed the scope of Sections 200 and 202 of Cr.P.C., in a case where the respondent/accused is not residing within the jurisdiction of the Court in which complaint is filed and the said judgment is aptly applicable to the case on hand.

8. In view of the observations made above, I pass the following:

ORDER

The petition is allowed.

The impugned order dated 21.12.2015 passed by IV-Additional JMFC, Kalaburagi, in P.C.No.1056/2015 and the FIR registered in Crime No.182/2015 by respondent No.2- M.B.Nagar Police Station against the petitioners are hereby quashed.

Sd/- JUDGE

NB*