( 1 ) THE three petitioners herein are accused Nos. 1 to 3 in C. C. 8080/95 before the learned Magistrate who have sought for quashing of entire criminal proceedings therein against them initiated on the private complaint of respondent presented before the learned Magistrate under Sec. 200, Cr. P. C. alleging commission of offences punishable under Secs. 405, 415 and 420 of I. P. C. They have also challenged the order dated 5-4-1995 of the learned Magistrate taking cognizance of the offence under Secs. 406 and 420, IPC against them on the said complaint and directing issue of process to them.

( 2 ) THE petitioners are hereinafter referred to as 'a1', 'a2' and 'a3' and the respondent is henceforth called the 'complainant'.

( 3 ) A few facts emerging from the material on record giving rise to this petition are as under :the complainant and accused are involved in the trade of liquor. Under Ex. P2 contract dated 17-6-1992 entered into between them it was agreed by A1 that he shall manufacture and sell for the complainant Indian Made Foreign Liquor ('imfl' for short) under the brand and trademark of the complainant concern. The further terms of the contract are that the expenses incurred for manufacturing of the said liquor by A1 shall be borne by the complainant and that A1 shall be paid by the latter Rs. 81/- per case of the IMFL and also that A1 is liable to pay the sales tax to the taxation authority in respect of the sales of IMFL so manufactured by the concern of A1 and sold to Mysore Sales International Limited ('msil' for short ). Another term of the agreement was that the amount of sales tax that becomes payable by A1 to the taxing authority on the quantity of manufactured IMFL sold to MSIL at a given time shall be paid in advance to the complainant by A1 enabling the latter to make payment thereof, in turn, to the taxing authority. This amount so paid in advance to A1 was subject to its deduction amount by the complainant on realisation of the respective invoice amount from the MSIL. While the business transactions under the contract between the parties were being carried on broadly on the basis of the said terms A1 gave Ex. P3 authorisation letter dated 28-11-1992 to the purchaser MSIL authorising it to make payments to the complainant directly in respect of supplies of the IMFL made by A1. It was further stated therein that the said authorisation was valid until expressly withdrawn by A1 at any time in future.

( 4 ) UNDER the said letter of authority (Ex. P3) complainant had been receiving payments from the MSIL for the supplies of IMFL made by A1 under the said contract. In order to enable A1 to promptly make payment of the sales tax to the concernned authority on the monthly turnover of A-1's said business to a dealer in IMFL relating to the period from November 1993 to April 1994 complainant paid a total amount of Rs. 4,37,17,000/- to A-1. This apart, further amount of Rs. 23,00,000/- was paid by the complainant to A1 covering the period from May to June, 1994 towards A1's said tax liability. As against the said amount given by the complainant to A1 the actual sales tax amount for the said period that was payable by A1 to the concerned authority was 4,41,52,608/ -. The complainant was all along under the impression that the said amount was promptly paid to the tax authority without any default more so when Ex. P3 letter was written to the complainant by A1 stating that the sales tax of February, 1994 was paid by him. But, surprisingly the concerned D. C. of Commercial Taxes issued Ex. P5 garnishee order dated 2-6-1994 under Sec. 14 of the Karnataka Sales Tax Act the purchaser MSIL calling upon it to make payment of Rs. 3,75,00,000/- towards tax arrears for the period from November, 1993 to April 1994 which was payable in respect of the said IMFL supplies made by A1. Ex. P5 was followed by a reminder letter dated 23-6-1994 of the said D. C. to the MSIL. Then the complainant came to know that A1 having received the sa

Click Here to Read the rest of this document