THE HONOURABLE SMT. JUSTICE K. SUJANA CRIMINAL PETITION No.3591 of 2025

ORDER:

This Criminal Petition is filed seeking the Court to quash the proceedings against the petitioner/accused No.1 in C.C.No.1620 of 2024 on the file of the learned XI Additional Chief Metropolitan Magistrate, Secunderabad, registered for the offences punishable under Sections 406, 409, 417, 420, 383 read with 120b of the Indian Penal Code, 1860 and Section

156(3) of Code of Criminal Procedure, 1973.

2. The brief facts of the case are that respondent Nos.2 and 3/de facto complainants, landlords of open land in Sy.No.253 Part, admeasuring 6534, square yards, at Rampally village, Keesara Mandal, Medchal-Malkajgiri District, filed a joint complaint before the learned XI Addl. Chief Metropolitan Magistrate, Secunderabad under Section 200 Cr.P.C. against the petitioner/accused No.1, Sri Allamsetty Kesava Rao (Chartered Accountant), and accused No.2, M/s D.S. Engineering Works LLP represented by its Managing Partner, Sri Veerapaneni Tirumala Durga Rao. The complaint, forwarded under Section 156(3) Cr.P.C. to the Station House Officer, Mahankali Police Station, alleges that the accused induced the complainants to offer their property as collateral by promising to secure a loan of Rs.4 crores (plus Rs.1 crore additional unsecured loan) and a 5% share in the partnership firm. A Memorandum of Understanding dated 02.01.2023 and a tentative offer letter dated 11.12.2022 were executed. The complainants deposited original title documents with accused No.1 (the auditor), while M/s D.S. Engineering Works LLP was to deposit post-dated installment cheques. Contrary to the agreement, the accused failed to honor disbursement commitments, and accused No.1 improperly handed over the original documents to accused No.1 without the consent of the complainants. Subsequently, M/s D.S. Engineering Works LLP initiated O.S.No.116 of 2023 seeking recovery of Rs.74 lakhs, which the complainants allege is contrary to the MoU and amounts to cheating, criminal breach of trust, and conspiracy. The accused are alleged to have misused the title deeds to file a false civil suit and extort money, causing substantial mental and financial distress, and thereby attracting offences under Sections 403, 406, 415, 420, 120-B, and 383 IPC. Challenging the same, the petitioner/accused No.1 filed the present Criminal Petition to quash the proceedings against him.

3. Heard Sri Rama Rao Immaneni, learned counsel appearing on behalf of the petitioner as well as Sri M. Vivekananda Reddy, learned Assistant Public Prosecutor appearing on behalf of respondent No.1 – State and Sri K.R.K. Gargeya, learned counsel appearing on behalf of respondent Nos.2 and 3 – de facto complainants.

4. Learned counsel for the petitioner submitted that the proceedings in the subject crime amounts to an abuse of process and are intended to circumvent the authority of a competent Civil Court seized of the matter in O.S.No.116 of 2023 and that the dispute arises from a civil contract between the parties, duly reduced into writing by way of a Memorandum of Understanding dated 02.01.2023. As per Clause 9 thereof, failure to fulfill the loan arrangement would entitle the parties to seek specific performance or recovery of dues before the Civil Court. He further submitted that the petitioner has already initiated such proceedings for recovery of Rs.75,00,000/- and the original documents form part of the Court record in that suit. Despite this, the present criminal case has been entertained, even though there is no allegation of misappropriation under Section 409 IPC, which requires specific entrustment in the capacity of a public servant, banker, agent, etc., a role the petitioner never assumed.

5. Learned counsel for the petitioner contended that the petitioner, having over 35 years of experience as a reputed Chartered Accountant, merely acted in a professional capacity and had no dominion over the property except in furtherance of the a