IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON’BLE SMT.JUSTICE TIRUMALA DEVI EADA Date:08.01.2026 Between:

Naga Madhusudan Salla …Petitioner/Accused And State of Telangana, Rep. by the Public Prosecutor, High Court for the State of Telangana, Hyderabad and another.

… Respondents

ORDER:

This criminal petition is filed seeking to quash the proceedings against the petitioner-accused in FIR No.2402 of 2025 on the file of Madhapur Police Station, Cyberabad, registered for the offences under Section 316(4) and 318(4) of BNS.

2. Heard Sri B. Vamshidhar Reddy, learned counsel for the petitioner and Mr.Jithender Rao Veeramalla, learned Additional Public Prosecutor for the respondent No.1-State.

3. Learned counsel for the petitioner has submitted that the petitioner is one of the Directors of the Company and that he is an authorized person to deal with the transactions of the company and hence, he cannot be alleged with cheating or misappropriation. He further submitted that the act committed by the petitioner, even as per the allegations of the complaint, does not attract the offences under Sections 316(4) and 318(4) of BNS. Even if the de facto complainant is aggrieved by any such withdrawal of amounts, he should approach the Registrar of Companies under the Companies Act or the grievance should be referred to NCLT, but lodging a criminal complaint is not tenable in the eye of law. Hence, he prayed to quash the proceedings against the petitioner.

4. Learned Additional Public Prosecutor has submitted that it is alleged that the petitioner has fraudulently withdrawn an amount of Rs.19.00 lakhs pertaining to the Company without there being any approval of the Board and hence, he has to be tried for the said offences. He has further submitted that the statement of LW.1 clearly establishes that without there being any resolution or approval from the Board, the petitioner has unlawfully withdrawn an amount of Rs.19.00 lakhs, which is against the interest of the Company and in violation of the Company’s financial interest. It is further alleged that he has collected Rs.12.00 lakhs in cash and through UPI from the customers without issuing official receipts or depositing the amounts into the Company’s account. He therefore, prayed to dismiss the petition.

5. Perused the record.

6. A perusal of the record reveals that the petitioner is one of the Directors of the Company along with the de facto complainant. A fraudulent withdrawal of Rs.19.00 lakhs from the Company’s account is alleged against the petitioner.

7. Learned counsel for the petitioner has relied upon the decision of a coordinate Bench of this Court in Crl.P. No.1771 of 2019, wherein the allegations in the complaint was that a Company’s resolution dated 06.02.2017 was fabricated to defraud the Company and its shareholders and in the said resolution, accused No.2 has authorized himself to sell the landed property. It was alleged that without his knowledge, the property of the company was sold by the accused. After referring to the law prevailing under the Companies Act, the Coordinate Bench of this court has held that in the event if the de facto complainant has any grievance, the same can be agitated before the Registrar of Companies or approach a Civil Court seeking cancellation of the sale deed. Since the disputes are amongst the shareholders/ Directors of the Company and the complaint is already pending with the ROC, it is for the parties to approach the ROC and also file complaints in the event of violation of provisions of Companies Act, 2013. By observing so, the proceedings in Crime No.18 of

2019 were quashed.

8. In the said case, the proceedings were already pending before the Registrar of Companies, but in the present case, the allegations prima facie point out a fraudulent withdrawal of the amount by the petitioner herein. The contention of the learned counsel for the petitioner is that the prosecution for the IPC offences is not just and proper and that the pro