SRI.RAJENDRA PRASAD AGARWAL vs STATE OF KARNATAKA

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HC-KAR
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 12 DAY OF OCTOBER, 2026


BEFORE

THE HON'BLE MR. JUSTICE V SRISHANANDA

WRIT PETITION NO. 12961 OF 2021 (GM-RES)

BETWEEN:

1.
SRI.RAJENDRA PRASAD AGARWAL,
AGED ABOUT 73 YEARS,
SON OF LATE P.C.AGARWAL,

2.
DR. AMIT AGARWAL,
AGED ABOUT 45 YEARS,
SON OF SRI.RAJENDRA PRASAD AGARWAL,

3. DR. SVETA AGARWAL,
AGED ABOUT 45 YEARS,
WIFE OF DR.AMIT AGARWAL,

4. SMT. PUSHPA AGARWAL,
AGED ABOUT 65 YEARS,
WIFE OF SRI. RAJENDRA PRASAD AGARWAL,

ALL ARE RESIDING AT NO.63,
1ST CROSS, IV MAIN, 2ND STAGE,
DOMLURU, BENGALURU - 560 071.
…PETITIONERS











Digitally

signed by R
MANJUNATHA
Location:
HIGH COURT
OF
KARNATAKA
(BY SRI. GIRIDHAR H., ADVOCATE)
AND:

1. STATE OF KARNATAKA,
BY STATE PUBLIC PROSECUTOR,

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HANUMANTHANAGAR POLICE STATION,
BENGALURU.

2. DR. DIWAKARA CHALUVAIAH,
AGED ABOUT 57 YEARS,
SON OF LATE CHALUVAIAH,
RESIDING AT NO.241,
9TH MAIN, SRINIVASA NAGAR,
HANUMANTHNAGAR,
BANASHANKARI 1ST STAGE,
BENGALURU - 560 050.
…RESPONDENTS
(BY SMT.WAHEEDA M.M., HCGP FOR R1; (R2 SERVED))
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA READ WITH SECTION 482 OF
CR.P.C. PRAYING TO QUASH THE ANNEXURE - B COMPLAINT
DATED 17.2.2021 LODGED BY THE R-2 REGISTERED ON
17.2.2021 AS CRIME NO.0032/2021 BY THE R-1 POLICE AS
PER ANNEXUR-A FIRST INFORMATION REPORT AS AGAINST
THE PETITIONERS AND ETC.,
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:

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CORAM: HON'BLE MR. JUSTICE V SRISHANANDA

ORAL ORDER
Heard Sri Giridhar H., learned counsel appearing for
the petitioner and Smt. Waheeda M.M., learned High Court
Government Pleader appearing for respondent No.1-State.
2. Though respondent No. 2 served with the
notice, remained absent and unrepresented.
3. Petitioners are accused Nos.3 to 6 in Crime No.
32/2021, registered by Hanumanthanagar Police on
17.02.2021 for the offence under Sections 406, 420, 120B
r/w Section 34 of IPC.
4. Facts which are utmost necessary for disposal
of the present petition are as under:
Second respondent herein filed a complaint with
Hanumanthanagar Police alleging that petitioner was
working as a radiologist at Kuwait. In 2015, he visited
India and at that juncture his niece Kanchana who is a

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doctor and her fiancé by name Kabir Das approached the
complainant stating that there is a company called M/s.
Saptagiri Digital Imaging Centre Pvt. Ltd., situated at
Chinmaya Mission Hospital Road, Indiranagar and lured
Rs.
him, enticed him to invest a sum of 1.75 crores with a
promise to have good returns from the said company for
the investment.
5. There was no assured returns to the second
respondent. Therefore he contacted the other directors of
the company namely Amith Agarwal who is petitioner No.2
and accused No. 4 as to why he has not been paid any
profits from the company. At that juncture, second
petitioner Amith Agarwal said to have replied to the
second respondent stating that it is the niece of the
second respondent and her fiancé Kabir Das who did not
run the company properly and the company ran into losses
and since the equated monthly instalments are not paid to
the G. E. Capital Company, they are taking away the

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equipment and therefore further investments need to be
made.
6. Believing the words of second petitioner-
accused No. 4, second respondent further invested some
more amount of Rs.40,00,000/- and thus in all
Rs.2,15,00,000/- was invested but despite such
investment, without even renewing the memorandum of
agreement with the second respondent, petitioners herein
unilaterally terminated the same and with an intention to
cheat the second respondent.
7. Accordingly, police registered the case and are
investigating the matter. Very registration of the FIR is
called in question in this petition on the following grounds:
" The Respondent No. 2 having made allegations of
misrepresentations to him in causing investment of sum
of Rs. 4,10,00,000/- of which a sum of Rs.2,10,00,000/-
as a part amount, was incurred for transfer of redeemable
preference shares and equity shares from Retitioner Nos.

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1,3 and 4 in Sapthagiri Digital Imaging Centre Private
Limited under Annexure P Memorandum of Understanding
on the premises that agreement with Chinmaya Mission
Hospital for the purpose of managing and running a
diagnostic centre, with worth of Rs. 7,00,00,000/-
valuation, would be renewed to earn significant revenue
therefrom, laid Annexure J demand for repayment of said
investment amount as well damages from the Petitioners
and the said company on account of failure to comply
with Annexure P Memorandum of Understanding, non
discloser of termination agreement with Chinmaya Mission
Hospital, noncompliance of clause 5 of Annexure P
Memorandum of understanding with regard to handing
over of certain responsibility, attribution of
misappropriation of the said investment amount as well
the amount alleged to have been realized on sale of all
the equipment of Sapthagiri Digital Imaging Centre
Private Limited by the Petitioners thereafter invoked
arbitration clause as per Annexure N Notice seeking
appointment of Arbitrator, after lapse of more than a year
and three months, the Respondent No, 2 to abuse process
of court and to put the Petitioners to oppression and

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prejudice and injustice, with a malafide intention, lodged
Annexure B Complaint with Respondent No. 1 police to
give colour of criminality for invoking of provisions of
Sections 406, 420, 120 B read with Section 34 of Indian
Penal Code by relating the same non repayment of
investment amount of Rs. 2,10,00,000/-on false
allegation of inducement on the part of the Petitioners
and 2 others in parting of the said quantum of amount by
the Respondent No. 2 to the Petitioners and 2 others on
misrepresention of similar cause of action in an altogether
different, inconsistent and contrary version.

The Respondent No. 2 on invoking of clause 5 of
Annexure R Memorandum of Understanding by seeking
concurrence of the Petitioners in appointment of
Arbitrator by getting issuance of Annexure N Notice for
resolution of dispute related to the investment made
pursuant of Annexure R Memorandum of Understanding,
is statutorily estopped in initiation and continuation of
criminal prosecution as against the Petitioners pursuant to
Annexure A First Information Report, by relating the same
alleged investment of amount of Rs. 2,10,00,000/-and

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making false, altogether different, inconsistent and
contrary allegations and version of inducement on the
part of the Petitioners and others in parting of the said
quantum of amount by the Respondent No. 2 to the
Petitioners as investment with assured return by way of
profit on alleged false representation in the light of laying
of demand for repayment of the said amount on getting
issued Annexure L Demand Notice on making allegations
in simpliciter of investment and default in repayment of
alleged same quantum of amount in a sum of Rs.
2,10,00,000/- as misappropriation.

Great oppression and prejudice and extreme injustice is
caused to the Petitioners on initiation and continuation of
criminal prosecution against the Petitioners pursuant to
Annexure A First Information Report by relating the same
alleged quantum of amount of Rs. 2,10,00,000/- on false,
altogether different, inconsistent and contrary allegations
and version of inducement on the part of the Petitioners
and 2 others in parting of the said quantum of amount by
the Respondent No. 2 investment with alleged assured
return by way of profit on alleged false representation

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after lapse of one year from laying claim of demand of
repayment and seeking of resolution of the dispute
related to his investment by invoking of Arbitration Clause
5 of the Annexure R second set of Memorandum of
Understanding on getting issuance of Annexure L
Statutory Demand Notice and the Annexure N Notice to
both the Petitioners and Sapthagiri Digital Imaging Centre
Private Limited on making allegations in simpliciter of
investment and default in repayment of alleged same
quantum of amount in a sum of Rs. 2,10,00,000/- by the
Petitioners and Sapthagiri Digital Imaging Centre Private
Limited.

The malafide intention of the Respondent No. 2 is clearly
manifest in attributing criminality in Annexure B
Complaint on the part of the Petitioners Nos. 3 and 4
without referring their specific role in the entire process of
his investment of money that too they have transferred
their respective Equity Shares of Sapthagiri Digital
Imaging Centre Private Limited in favour of the
Respondent No. 2 and have submitted Annexure E, F and
G statutory security transfer form and have submitted

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their resignation as Directors of Sapthagiri Digital Imaging
Centre Private Limited with effect from 25.01.2019 in
terms of Annexures H Form No. DIR-12 submitted to the
concerned statutory authority.

The possibility of conviction of the Petitioners pursuant to
Annexure A First Information Report on the basis of
Annexure B Complaint lodged by the Respondent No. 2 is
remote and bleak as the content of Annexure J Demand
Notice dated 30.10.2019 cause issued by the Respondent
No.2 and the Annexure L Notice cause issued by the
Respondent No.2 seeking concurrence of the Petitioners
and Sapthagiri Digital Imaging Centre Private Limited for
appointment of the Arbitrator for resolving the dispute
prima facie reveal overwhelming and predominate civil in
character to the dispute arising out of process of taking
over the management of Sapthagiri Digital Imaging
Centre Private Limited.

Exercising of inherent power of this Hon'ble Court to
quash Annexure A First Information Report, registered by
the Respondent No. 1 on the basis of Annexure B

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Complaint lodged by the Respondent No. 2, is evidently
required in the ends of justice in the light of giving of
colour of criminality to a dispute predominantly civil in
character by narrating altogether different and contrary
version by the Respondent No. 2 in his Annexure B
Complaint with that of content of in Annexure L Demand
Notice caused issued by him make it a clear instance to
abuse of process of court."
8. Sri. Giridhar M., learned counsel for the
petitioner reiterating the grounds urged in the petition
would contend that the non-payment of the profit and non
renewal of the memorandum of understanding would par
take the nature of civil litigation which has been given the
criminal colour by the second respondent with the active
collusion of the jurisdictional police and her niece namely
Dr. Kanchana who is also named as an accused in the case
on hand only with an intention to coerce the petitioners to
settle the civil liability and thus, sought for quashing the
pending Criminal case.

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9. Per contra, Smt.Waheeda M.M., learned High
Court Government Pleader would support the continuation
of the criminal case as after the investment of Rs.1.75
crores also, second petitioner herein got invested
Rs.
40,00,000/- from the second respondent and non
renewal of the Memorandum of Understanding, and
unilaterally closing the ties of the second respondent with
the M/s. Saptagiri Digital Imaging Centre Pvt. Ltd., has
thus, resulted in prima facie attracting the ingredients of
the offences alleged against the petitioners herein and
thus, sought for dismissal of the writ petition.

10. Having heard the arguments of both sides, this
court perused the material on record meticulously.
11. On such perusal of the material on record, it is
Rs.
noticed that investment of 1.75 crores into the M/s.
Saptagiri Digital Imaging Centre Pvt. Ltd by the second

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respondent stands established as there is no dispute with
regard to the same.
12. When there was no profit paid to the second
respondent, second respondent contacted the second
petitioner namely Amith Agarwal who is accused No. 4,
wherein, the second petitioner told the second respondent
Rs.
to make further investment of 40,00,000/-.
13. Believing the words of the second petitioner,
second respondent further invested sum of Rs.40,00,000/-
thus, in all Rs.2.15 crores of amount is invested by the
second respondent in Mr. M/s. Saptagiri Digital Imaging
Centre Pvt. Ltd.
14. Admittedly, the petitioners are the other
directors of the company. When the profit was not paid,
there was an enquiry by the second respondent. At that
juncture, he came to know that the Memorandum of
Understanding entered into by the second respondent with
M/s. Saptagiri Digital Imaging Centre Pvt. Ltd was also not

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renewed and thereby not only the profit was paid to the
second respondent but also sum of Rs.2.15 crores
invested by the second respondent left with the M/s.
Saptagiri Digital Imaging Centre Pvt. Ltd., for which the
present petitioners are also directors. Whether it is
Kanchana and her fiancé Kabir Das are responsible for the
loss of the company or these petitioners also had a role in
it are matters of investigation.
15. Thus, the contentions urged by the learned
counsel for the petitioners that, the transaction is purely
civil in nature cannot be countenanced in law. Element of
cheating and investment being made with a false promise
is prima facie found on record by the complaint itself.
16. In view of the aforementioned, the following:
ORDER
i) The petition stands dismissed.

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ii) However, petitioners are at liberty to
challenge the adverse report if any in accordance
with law.
Ordered accordingly.

Sd/-
(V SRISHANANDA)
JUDGE







HR
List No.: 1 Sl No.: 30