Point of Law: In order to proceed against a person with criminal action, complainant or prosecuting agency must make out a prima facie material whereby some nexus could be established to alleged crime with a person.

ORDER :

Heard Sri.Pramod Kathavi, learned Senior counsel on behalf of Sri.Ramachandra A Mali for the petitioner and Sri.Harshawardhan M Patil, learned counsel for respondent No.2 and learned High Court Government Pleader for respondent No.1 – State.

2. Sri.Harshawardhan M Patil has filed a memo

3. This petition is filed under Section 482 of with documents. The same is taken on record. Cr.P.C. with the following prayer:

“To quash the complaint and the FIR Dtd 11.11.2022 registered in Chikodi P.S. Crime No. 242/2022, registered for the offences punishable U/s 406, 420 of IPC and Sec. 9 of Karnataka Protection of Interest of Deposits in Financial Establishment Act 2004 on the file of Prl. District and Sessions Judge, Belagavi insofar as the same relate to the petitioner/accused No. 1 herein as the same being illegal and not sustainable in law.”

4. Brief facts of the case are as under:

A complaint came to be filed by Shivanand S/o Channappa Magadumma on 11.11.2022 with Chikkodi Police Station which was registered in Crime No.242/2022 under the provisions of Section 9 of Karnataka Protection of Interest Depositors in Financial Establishment Act, 2004 (for short, ‘KPID Act’) and under Sections 406 and 420 of IPC.

5. Gist of the complaint averments reveal that there was an offer made by Pankaj Namadev Patil and Santosh Gangaram Ghodake along with the present petitioner that if a sum of Rs.1,00,000/- is invested, they would return the amount within ten months in installments of Rs.15,000/-. Accordingly, the complainant and others invested huge sums of money. Initially, in order to gain the confidence of the complainant and other investors, Pinomic Company, a limited liability partnership firm repaid the amount for few months and thereafter stopped paying the amount. The efforts made by the complainant and others to recover the money went in vain and left with no alternative they approached Chikkodi police and filed the complaint.

6. The police after registering the case, are investigating the matter. In the meantime, the petitioner herein has challenged the very registration of the case and sought for quashing of first information report contending that the petitioner is noway involved in the alleged fraud. The petitioner also questioned the very registration of the case by Chikkodi police inasmuch as in the absence of any preliminary satisfaction report lodged by the competent authority with the State Government, registration of case for the offence punishable under Section 9 of KPID Act or for that matter the other IPC offences would not arise at all and therefore registration of the case would affect the personal liberty of the petitioner and also results in abuse of process of law and sought for quashing of further proceedings.

7. Reiterating the grounds urged in the petition, Sri.Pramod Kathavi, learned Senior counsel vehemently contended that having regard to the scheme of KPID Act, registration of a case by the police is impermissible unless there is a preliminary enquiry to be conducted by the competent authority based on the complaint or suo moto information and there must be a satisfactory report that the fraud has occurred in a given case resulting in further proceedings before the Special Court and registration of the case etc., and in the case on hand, Chikkodi police have directly registered the case as if it is an IPC offence without there being any satisfactory report on record and till today there is no enquiry conducted by the competent authority in the alleged fraud and therefore the very registration of the case is bad in law and sought for quashing of further proceedings.

8. Alternatively, Sri.Pramod Kathavi also contended that even assuming that the case as against Pinomic Ventures LLP stands established, the complaint itself is silent as to the role played by the present petitioner and therefore very registration of the case as against the present petitioner is incorrect and it affects his personal liberty and con