The judgment established the importance of proving fraudulent or dishonest intention at the time of inducement for the offense of cheating under Section 420 of IPC and the requirements for criminal breach of trust under Section 409 of IPC.

Rathnakala, J.

1. The petitioner is arrayed as accused in the FIR registered by the respondent/Police in respect of the offence under Sections 409 and 420 of IPC.

2. The allegation is, the petitioner is the former President of Sree Anjaneya Co-operative Bank Limited (for brevity 'the Co-operative Bank'). He was one of the members of the Committee of the Society sanctioned loan; during his tenure, the Committee sanctioned loan to one J.T. Rajan on the security of his immovable property vide resolution dated 9.4.2011 and the loan amount was disbursed on 15.4.2011. Subsequently, the Federal Bank instituted a suit before the Debt Recovery Tribunal alleging that, in respect of the property pledged to the Federal Bank, the Co-operative Bank has sanctioned loan. This petitioner by misusing his official position as the President of the Bank has subsequently tampered the loan application and at column No. 7 page 4 meant for the opinion of the Board Members, endorsed to the effect that the title deed since is a Xerox copy, he has objection to sanction the loan and same shall be recorded in the proceedings of the meeting with his signature dated 9.7.2011, thereby he has cheated the Bank.

3. Sri V. Laxminarayana, learned Senior Counsel for the petitioner submits that, the complainant is the in-charge Manager of the Bank. This petitioner had filed complaints against him and also the present President. To weed out this petitioner from the affairs of the Bank, present complaint is filed vindictively. Even by accepting the entire allegation of the complaint at their face value, then also it will not attract ingredients of Sections 409and 420 of IPC. The complaint allegation will not prima facie show culpable intention of the petitioner. It is a cover-up act by the present Board Members for facing enquiry, criminal proceedings and disqualification proceedings for massive misappropriation and fraudulent acts against the interest of the Bank. This petitioner initiated an enquiry under Section 64of the Karnataka Co-operative Societies Act, 1959 ('the Act' for short) against the complainant and the disqualification proceeding against the present President for gross misappropriation of funds. The acts alleged against the petitioner is totally inconsequential as the Bank has already secured mortgage property in its name and no culpable intention attracting the ingredients of Sections 420 and 409 of IPC are traceable in the act alleged against the petitioner. The loan transaction was of 2011. On the day of the meeting itself, this petitioner recorded his disagreement and the document is marked in evidence before the Joint Registrar of Co-operative Societies during 2012. As per the certified copy of the loan application obtained on 7.7.2015 allegedly marked and the original loan application, which are at Annexures-H and J respectively, clearly show that they are not the same; loan application marked before the Registrar was a forged document written by the Secretary and created by the second respondent/Co-operative Bank. The loan applications are not written or filled up by the applicant Sri J.T. Rajan and they do not bear any serial numbers making it easy for the Bank officials to replace and meddle with. The Manager of the Co-operative Bank himself has created false documents and produced the same with mala fide intention. Section 111(2) of Act is a bar for civil court to take cognizance. Reliance is placed on the judgment reported in 1971 Mys. L.J. SN 287 in the matter of B.Y. Neelegowda vs. C. Marigowda.

4. Sri M.P. Srikanth, learned Counsel appearing for the second respondent would submit that, the complaint averments categorically make out a case that the petitioner being the member of the Loan Sanction Committee along with the other members was responsible to sanction loan in favour of J.T. Rajan on the basis of Xerox copies of his title deeds. Thereafter to shirk off his liability he has endorsed his objections to the loan sanctioned. Now t