MUNISWAMY K vs STATE OF KARNATAKA
- Court
- Karnataka High Court
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HC-KAR
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CRL.P No. 225 of 2025
CNR: KAHC010006552025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 30 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
CRIMINAL PETITION NO. 225 OF 2025 (482(Cr.PC)
/ 528(BNSS)-)
BETWEEN:
1. MUNISWAMY K
SON OF LATE KRISHNAPPA
AGED ABOUT 57 YEARS,
RESIDING AT NO. 2708,
TH
7 A MAIN RPC LAYOUT,
VIJAYNAGAR,
BANGALORE - 560040.
2. G RAMAPPA
SON OF LATE GOVINDAPPA,
AGED ABOUT 75 YEARS,
RESIDING AT NO. 642
PUTTAPPA TEMPLE STREET,
WARD NO.20,
DEVANAHALLI - 562110.
…PETITIONERS
(BY SRI. M.T. NANAIAH., SENIOR COUNSEL FOR
SRI. P.R. MADHU GOUD &
SRI. HIREMATH M.S., ADVOCATES)
AND:
1. STATE OF KARNATAKA
BY KALISIPALYA POLICE STATION
REPRESENTED BY
THE STATE PUBLIC PROSECUTOR,
HIGH COURT BUILDING
BENGALURU - 560001.
Digitally Signed By:
SURAJ GOVINDA RAJ
13/11/2026, 14:19, Bengaluru
Verified
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2. NEENA D M
AGED MAJOR,
DISTRICT OFFICER,
BACKWARD COMMUNITY WELFARE DEPARTMENT,
BANGALORE URBAN DISTRICT,
V.V.TOWER, AMBEDKAR VEEDHI,
BANGALORE - 560001.
…RESPONDENTS
(BY SRI. RANJITH KUMAR N., HCGP FOR R1;
R2-SERVED)
THIS CRIMINAL PETITION IS FILED U/S 482 CR.PC (FILED U/S
528 BNSS) PRAYING TO CALL FOR THE RECORDS IN CRIME NO.
0118/2021 PENDING ON THE FILE OF IV ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE AT BANGALORE; AND ETC.
THIS CRIMINAL PETITION, COMING ON FOR ADMISSION,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
ORAL ORDER
1. The petitioners are before this Court seeking for the
following reliefs;
a. Call for records in Crime No.0118/2021 pending on
the file of IV Additional Chief Metropolitan Magistrate
at Bangalore;
b. Quash the proceedings in FIR bearing Crime
No.0118/2021 in Kalasi palya.P.S. for offences
punishable under sections 403, 406, 417, 420, r/w 34
of Indian Penal Code, 1860 pending on the file of IV
Additional Chief Metropolitan Magistrate at Bangalore
(Annexure against the Petitioners and consequently
quash the complaint dated 13.07.2021 (Annexure -
B); A),
Digitally Signed By:
SURAJ GOVINDA RAJ
13/11/2026, 14:19, Bengaluru
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c. Pass any other reliefs as deemed fit by this Hon'ble
Court in the circumstances of the case in the interest
of justice and equity
2. On a complaint being submitted by the Deputy
Commissioner, Bangalore, FIR in Crime No.118/2021
came to be registered by the Kalasipalya Police
Station for offences under Section 403, 406, 417, 420
and 34 of IPC. Investigation having been completed,
a charge sheet came to be laid against other
accused. Insofar as the petitioners are concerned,
charge sheet is not laid on account of the interim
order passed by the Coordinate Bench of this Court
on 03.02.2025.
3. The submission of Sri. M. T. Nanaiah, learned Senior
Counsel appearing for the petitioners, is that there
are no grounds which have been made out in support
of the alleged offences. His submission is that a
complaint had been filed by a defeated candidate and
it is for political motivations that the matter had been
taken up.
4. In the present case, the allegation being that an
amount of Rs.1,00,00,000/- which had been
provided as an aid by the Backward Classes
Department is being misused by the petitioners and
Digitally Signed By:
SURAJ GOVINDA RAJ
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certain other accused is completely misplaced. False
allegation had been made by the defeated candidate
resulting in unnecessary harassment of the
petitioners. He submits that the works have been
carried out from the year 2019 to 2021. A utilization
certificate has also been issued in respect thereto
along with a third-party inspection report for the
works having been carried out. Thus, he submits that
the works for which the grant was made by the
Backward Classes Department has been put to use
for the concerned purpose. The allegations are
completely misplaced.
5. In this regard, he relies on the charge sheet material
which has been placed on record including a report
where the report itself indicates that the works have
been carried out. Hence, he submits that when the
works for which the amounts were granted have
been carried out, the question of any offence as
alleged would not arise.
6. His submission by relying on the decision of the
Delhi Race Club (1940) Ltd vs
Hon'ble Apex Court in
The State Of Uttar Pradesh [2024 SCC OnLine SC
2248] is that offences under Sections 406 and 420
cannot go hand in hand, they being separate and
Digitally Signed By:
SURAJ GOVINDA RAJ
13/11/2026, 14:19, Bengaluru
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distinct, the FIR which has been registered against
the petitioners cannot be continued insofar as the
petitioners are concerned.
7. Learned HCGP, by relying on the charge sheet
material, more particularly the bank account
statement of Corporation Bank, submits that the
grant amount was deposited in the bank account of
the Kumbhara Sangha.
8. On 16.03.2019, an amount of Rs.10,00,000/- had
been transferred to one Shri P. Krishnappa; an
amount of Rs.10,00,000/- had been transferred to
one Smt. T. S. Roopa, who is the wife of petitioner
No.1; an amount of Rs.10,00,000/- was transferred
to Sarvagna Mahila Sahakari Sangha;
9. On 18.03.2019, an amount of Rs.10,00,000/- had
been transferred to accused no.5- S.Nandini; an
amount of Rs.5,00,000/- had been transferred to
accused no.4-Nagesh.N and an amount of
Rs.5,00,000/- was transferred to P.Muniraj, an
amount of Rs.25,00,000/- was transferred to BPR
Constructions, and another amount of Rs.5,00,000/-
was transferred to Nagesh N, who is accused no.4.
Digitally Signed By:
SURAJ GOVINDA RAJ
13/11/2026, 14:19, Bengaluru
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10. On 19.03.2019, an amount of Rs.25,00,000/- was
transferred to BPR Constructions and on 20.03.2019
an amount of Rs.5,00,000/- was transferred to Real
Metals and Systems.
11. His submission is that the entire amount of grant
deposited in the account of the petitioners on
16.03.2019, came to be transferred out of the
account by 20.03.2019. His submission is that these
amounts have been siphoned off by the petitioners
and the other accused and it is in furtherance of the
same that the chargesheet has been laid, taking into
account the various statements of the witnesses and
the inspection of the building which has been
conducted.
12. He therefore submits that the charge sheet clearly
makes out a case against the petitioners for the
misuse of the said funds, the interim order passed in
favour of the petitioners has to be vacated,
permitting the respondents to complete the
investigation insofar as the petitioners are concerned
and file the final report.
13. Heard Sri.M.T.Nanaiah, learned Senior Counsel for
Sri.P.R. Madhu Goud learned counsel for the
Digitally Signed By:
SURAJ GOVINDA RAJ
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petitioners and Sri.Ranjith Kumar N., learned HCGP
for respondent No.1.
14. Respondent No.2 though served has chosen to be
unrepresented.
15. Section 406 of the IPC is reproduced hereunder for
easy reference:
406. Punishment for criminal breach of trust .—
Whoever commits criminal breach of trust shall be
punished with imprisonment of either description for a
term which may extend to three years, or with fine, or
with both.
16. Section 406 is the punishment for offence under
Section 405.
17. Section 405 is reproduced hereunder for easy
reference:
405. Criminal breach of trust .—Whoever, being in any
manner entrusted with property, or with any dominion over
property, dishonestly misappropriates or converts to his
own use that property, or dishonestly uses or disposes of
that property in violation of any direction of law prescribing
the mode in which such trust is to be discharged, or of any
legal contract, express or implied, which he has made
touching the discharge of such trust, or wilfully suffers any
other person so to do, commits “criminal breach of trust”.
Explanation 1.—A person, being an employer of an
establishment whether exempted under section 17 of the
Employees' Provident Funds and Miscellaneous Provisions
Act, 1952 (19 of 1952) or not who deducts the employee’s
contribution from the wages payable to the employee for
credit to a Provident Fund or Family Pension Fund
established by any law for the time being in force, shall be
Digitally Signed By:
SURAJ GOVINDA RAJ
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deemed to have been entrusted with the amount of the
contribution so deducted by him and if he makes default in
the payment of such contribution to the said Fund in
violation of the said law, shall be deemed to have
dishonestly used the amount of the said contribution in
violation of a direction of law as aforesaid.
Explanation 2.—A person, being an employer, who deducts
the employees’ contribution from the wages payable to the
employee for credit to the Employees' State Insurance Fund
held and administered by the Employees' State Insurance
Corporation established under the Employees’ State
Insurance Act, 1948 (34 of 1948), shall be deemed to have
been entrusted with the amount of the contribution so
deducted by him and if he makes default in the payment of
such contribution to the said Fund in violation of the said
Act, shall be deemed to have dishonestly used the amount
of the said contribution in violation of a direction of law as
aforesaid.
18. Section 420 of the IPC is reproduced hereunder for
easy reference:
420. Cheating and dishonestly inducing delivery
of property .—Whoever cheats and thereby
dishonestly induces the person deceived to deliver any
property to any person, or to make, alter or destroy
the whole or any part of a valuable security, or
anything which is signed or sealed, and which is
capable of being converted into a valuable security,
shall be punished with imprisonment of either
description for a term which may extend to seven
years, and shall also be liable to fine.
19. Sections 415 to Section 418 are reproduced
hereunder for easy reference:
415. Cheating .—Whoever, by deceiving any person,
fraudulently or dishonestly induces the person so deceived
to deliver any property to any person, or to consent that
any person shall retain any property, or intentionally
induces the person so deceived to do or omit to do anything
which he would not do or omit if he were not so deceived,
Digitally Signed By:
SURAJ GOVINDA RAJ
13/11/2026, 14:19, Bengaluru
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and which act or omission causes or is likely to cause
damage or harm to that person in body, mind, reputation
or property, is said to “cheat”.
Explanation.—A dishonest concealment of facts is a
deception within the meaning of this section.
416. Cheating by personation .—A person is said to
“cheat by personation” if he cheats by pretending to be
some other person, or by knowingly substituting one person
for another, or representing that he or any other person is
a person other than he or such other person really is.
Explanation.—The offence is committed whether the
individual personated is a real or imaginary person.
417. Punishment for cheating .—Whoever cheats shall
be punished with imprisonment of either description for a
term which may extend to one year, or with fine, or with
both.
418. Cheating with knowledge that wrongful loss
may ensue to person whose interest offender is
bound to protect. —Whoever cheats with the knowledge
that he is likely thereby to cause wrongful loss to a person
whose interest in the transaction to which the cheating
relates, he was bound, either by law, or by a legal contract,
to protect, shall be punished with imprisonment of either
description for a term which may extend to three years, or
with fine, or with both.
20. The principal contention urged on behalf of the
petitioners is that the offences punishable under
Sections 406 and 420 of the Indian Penal Code,
1860, being distinct and mutually exclusive, cannot
be invoked simultaneously on the same set of
allegations. Reliance is placed upon the judgment of
the Hon’ble Supreme Court in Delhi Race Club
(1940) Ltd. v. State of U.P., [(2024) 10 SCC 690].
Digitally Signed By:
SURAJ GOVINDA RAJ
13/11/2026, 14:19, Bengaluru
Verified
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21. The question, therefore, is whether, having regard to
the allegations and the material collected during
investigation, the invocation of Sections 406 and 420
IPC against the petitioners is impermissible in law, or
whether the facts alleged disclose the ingredients of
the respective offences so as to warrant continuation
of investigation.
22. In Delhi Race Club (supra), the Hon’ble Supreme
Court explained the distinction between the offences
of cheating and criminal breach of trust. In
paragraphs 40 and 41, as extracted and considered
by a co-ordinate bench of this Court in K.S.
Keerthikumar v. State of Karnataka & Anr.,
[Criminal Petition No.11 of 2026, decided on
29.09.2026], the Supreme Court observed:
“Since the learned counsel for the petitioner referred
to Delhi Race Club (supra), it is necessary to notice
the following paragraphs in the aforementioned
judgment.
“40 . To put it in other words, the case of cheating
and dishonest intention starts with the very
inception of the transaction. But in the case of
criminal breach of trust, a person who comes into
possession of the movable property and receives it
legally, but illegally retains it or converts it to his
own use against the terms of the contract, then the
question is, in a case like this, whether the retention
is with dishonest intention or not, whether the
retention involves criminal breach of trust or only a
Digitally Signed By:
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civil liability would depend upon the facts of each
case”.”
23. The Hon’ble Supreme Court further observed:
“ 41 . …In case of cheating, the intention of the accused
at the time of inducement should be looked into which
may be judged by a subsequent conduct, but for this,
the subsequent conduct is not the sole test. Mere
breach of contract cannot give rise to a criminal
prosecution for cheating unless fraudulent or
dishonest intention is shown right from the beginning
of the transaction i.e. the time when the offence is
said to have been committed...”
24. The Hon’ble Supreme Court, in paragraphs 42 and
43 of Delhi Race Club , further explained the
distinction in the following terms:
“ 42. Whereas, for the criminal breach of trust, the
property must have been entrusted to the accused or
he must have dominion over it. The property in
respect of which the offence of breach of trust has
been committed must be either the property of some
person other than the accused or the beneficial
interest in or ownership of it must be of some other
person. The accused must hold that property on trust
of such other person. Although the offence i.e. the
offence of breach of trust and cheating involve
dishonest intention, yet they are mutually exclusive
and different in basic concept.”
25. The Hon’ble Supreme Court further held:
“ 43. There is a distinction between criminal breach of
trust and cheating. For cheating, criminal intention is
necessary at the time of making a false or misleading
representation i.e. since inception. In criminal breach
Digitally Signed By:
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of trust, mere proof of entrustment is sufficient. Thus,
in case of criminal breach of trust, the offender is
lawfully entrusted with the property, and he
dishonestly misappropriated the same. Whereas, in
case of cheating, the offender fraudulently or
dishonestly induces a person by deceiving him to
deliver any property. In such a situation, both the
offences cannot co-exist simultaneously.”
26. The aforesaid principles have been considered by the
co-ordinate bench of this Court in K.S.
Keerthikumar (supra). In paragraph 28, the co-
ordinate bench noticed the factual background of
Delhi Race Club , namely, that the complainant
therein alleged that goods had been supplied and the
purchaser had not paid the dues. The Hon’ble
Supreme Court had concluded that the ingredients of
Sections 406 and 420 IPC were not made out in the
circumstances of that case.
27. In paragraph 30, the co-ordinate bench observed:
“ 30. As can be noticed from the paragraphs No.40 to
43 in Delhi Race Club (supra) extracted above, it is
evident that the Apex Court has not laid down a ratio
that there cannot be simultaneous prosecution of
offences under Sections 406 and 420 IPC in every case
where the charges are framed under aforementioned
provisions…”
28. The co-ordinate bench further observed:
“ 30. …To put it simply, the facts in Delhi Race Club
(supra) did not attract any of the said offences.”
Digitally Signed By:
SURAJ GOVINDA RAJ
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29. In paragraph 31, the co-ordinate bench held:
“ 31 . It is required to be noticed that if the complaint
refers to two or more distinct transactions/incidents
and if such transactions/incidents independently
attract the offences under Sections 420 and 406 of the
IPC, then there cannot be any bar to try the accused
for both the offences.”
30. In paragraph 32, the co-ordinate bench further
observed:
“ 32 . The contention that the offences under Sections
406 and 420 of IPC cannot be tried together cannot
be accepted as an inflexible thumb rule. In a given
case, the facts may attract both the offences. In some
cases it may attract either one of the two. It can be
explained with illustrations as under:
Illustration-1 - A and B are aware that C has met with
an accident and is in need of money for the treatment.
–
A transfers money to B with an express mandate that
B should pay the money to C to meet the medical
expenses. –
B does not pay the money to C, however B
misappropriates the same.
Illustration -2 –
A and B are aware that C has met with an accident
and is in need of money for the treatment.
- A pays money to B with instruction to pay to C. B,
misappropriates the same.
B thereafter induces A to pay more money saying C
is in need of money.
Digitally Signed By:
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A believes and pays money to B. Again B
misappropriates.”
31. The co-ordinate bench illustrated the distinction in
paragraphs 33 and 34. In Illustration 1, money is
entrusted to a person with an express mandate to
pay it to a third person. The recipient instead
misappropriates the money. The co-ordinate bench
held that Section 406 IPC may be attracted, but
Section 420 IPC would not be applicable in the
absence of inducement preceding the transfer.
32. In Illustration 2, the recipient first misappropriates
the entrusted amount and thereafter induces the
giver to transfer additional money by representing
that the third person is still in need of money. The
co-ordinate bench held that both Sections 406 and
420 IPC may be attracted, since the subsequent
transfer was preceded by a further inducement.
33. The co-ordinate bench thus observed in paragraph
34:
“ 34 . However, in Illustration -2 both Sections 406 and
420 of IPC are attracted. The reason is that when A
pays money for the second time, there is an
inducement before delivery.”
34. The principles emerging from the aforesaid
judgments are that the ingredients of cheating and
Digitally Signed By:
SURAJ GOVINDA RAJ
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criminal breach of trust are distinct and must be
independently examined. Section 420 IPC requires
dishonest or fraudulent inducement at the inception
of the transaction, while Section 406 IPC requires
entrustment or dominion over property followed by
dishonest misappropriation, conversion, use or
disposal contrary to the terms of the entrustment.
35. The judgments do not permit the same factual act to
be mechanically characterised as both offences.
However, where the allegations disclose distinct
factual acts or transactions, each independently
satisfying the ingredients of the respective offence,
the mere fact that both provisions are invoked would
not, by itself, render the prosecution impermissible.
36. In the present case, the allegation is that the
Kumbhara Sangha approached the Backward Classes
Department seeking a grant of ₹1,00,00,000/- for
renovation of its building. The grant was sanctioned
and deposited in the bank account of the Sangha on
16.03.2019. The representation on the basis of
which the grant was sought was that the amount
would be utilised for the specified renovation works.
Digitally Signed By:
SURAJ GOVINDA RAJ
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37. The allegation, therefore, is not merely of a failure to
repay money advanced in a commercial transaction.
The amount is stated to have been sanctioned as a
Government grant for a specified purpose. The
question whether the grant was sought by making a
dishonest representation, and whether the amount
was thereafter entrusted for the stipulated purpose
and dishonestly diverted, requires consideration in
the light of the material collected during
investigation.
38. The learned HCGP has relied upon the bank account
statement of the Sangha, which forms part of the
charge-sheet material. The statement indicates that
₹
the grant amount of 1,00,00,000/- was credited to
the account on 16.03.2019 and an amount of
₹
1,10,00,000/- including the entire grant amount,
was transferred out of the account over the following
four days. The transfers relied upon by the
prosecution are as follows:
Date Transfers referred to
in the material
Digitally Signed By:
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16.03.2019 ₹30,00,000/-
18.03.2019 ₹50,00,000/-
19.03.2019 ₹25,00,000/-
20.03.2019 ₹5,00,000/-
Total ₹1,10,00,000/-
39. The particulars of the individual recipients and the
transfers are set out in the material placed before
the Court. The prosecution relies upon the fact that
the grant was transferred out of the Sangha’s
account within four days of its receipt, including
transfers to persons and entities alleged to be
connected with the accused.
40. The above transactions, taken together with the
allegation that the grant was sanctioned for
renovation works, constitute material requiring
investigation into whether the amount was utilised in
accordance with the purpose for which it was
sanctioned.
41. The bank statement, is a relevant circumstance
which, when considered with the representations
made for obtaining the grant, the nature and
conditions of the sanction, the subsequent transfers,
the statements of witnesses and the inspection
Digitally Signed By:
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material, would have a bearing upon the ingredients
of the offences alleged.
42. The petitioners’ contention is that the renovation
works were carried out between 2019 and 2021 and
that a utilisation certificate and third-party
inspection report have been produced in support of
such contention. These materials are relevant to the
issue of utilisation of the grant and will have to be
considered by the Investigating Officer and, if
necessary, by the competent Court at the
appropriate stage.
43. However, the existence of a utilisation certificate or
inspection report does not, at this stage, conclusively
resolve the allegations concerning the purpose for
which the grant was obtained, the manner in which
the funds were transferred, or the alleged
involvement of the petitioners in those transfers. The
contents and evidentiary value of those documents,
as well as their reconciliation with the bank
transactions and the other material, are matters
requiring appropriate examination.
44. It is also necessary to bear in mind that the grant
was sanctioned to the Kumbhara Sangha. Petitioner
Digitally Signed By:
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No.1 is stated to be its President and petitioner No.2
its Secretary. Their office-bearership, by itself,
cannot be treated as sufficient to establish criminal
liability. The investigation must examine the
individual role of each petitioner, including their
alleged participation in seeking the grant, the
representations made to the Department, their
authority or dominion over the funds, and their
alleged involvement in the subsequent transfers or
utilisation of the grant.
45. Applying the principles laid down in Delhi Race Club
and the subsequent reasoning of the Co-ordinate
bench in K.S. Keerthikumar , it cannot be said, at
this stage, that the invocation of Sections 406 and
420 IPC is barred merely because both provisions
have been included in the FIR.
46. The allegations, as placed before this Court, concern,
on the one hand, the representation allegedly made
by the Kumbhara Sangha to obtain a Government
grant of ₹1,00,00,000/- for renovation works and,
on the other, the alleged diversion or dishonest
utilisation of the grant after it was received for the
specified purpose.
Digitally Signed By:
SURAJ GOVINDA RAJ
13/11/2026, 14:19, Bengaluru
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47. If the allegations are accepted as true, the
representation that the grant would be utilised for
renovation works, allegedly made with dishonest
intention at the inception and resulting in the grant
being sanctioned and released, prima facie attracts
the ingredients of cheating punishable under Section
420 IPC.
48. Further, the grant, having been sanctioned and
entrusted for a specified purpose, and the allegation
that the amount was thereafter transferred and
utilised contrary to that purpose, prima facie attracts
the ingredients of criminal breach of trust punishable
under Section 406 IPC.
49. The allegations thus disclose both the initial
inducement leading to delivery of the grant and the
subsequent alleged dishonest diversion of the
entrusted funds. In the light of the principles
explained in Delhi Race Club , and K.S.
Keerthikumar , the allegations, if established, may
attract both offences.
50. This Court is not, at this stage, recording a finding
that the petitioners have committed the offences
alleged. The limited question is whether the material
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placed before the Court warrants permitting the
investigation to proceed to its lawful conclusion.
Having regard to the nature of the grant, the
representation allegedly made for obtaining the
same, the purpose for which it was sanctioned, the
bank transactions relied upon by the prosecution
indicating that substantial amounts were transferred
out of the Sangha’s account within a short period
after receipt of the grant, and the other charge-sheet
material referred to by the learned HCGP as laid
against the other accused, this Court is of the
considered opinion that, if the allegations are
ultimately established, the ingredients of the
offences punishable under Sections 406 and 420 IPC
are prima facie made out. The material, therefore,
cannot be held to be wholly devoid of basis so as to
warrant termination of the proceedings at this stage.
51. The contention that the complaint was initiated by a
defeated candidate for political reasons also does
not, by itself, warrant termination of the
proceedings. The FIR is stated to have been
registered on the complaint submitted by the Deputy
Commissioner. In any event, the question for
consideration is whether the allegations and the
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material collected disclose a matter requiring
investigation, and not merely the political
background or motivation attributed to the
complainant.
52. It is relevant that the investigation has been
completed and a charge sheet has been filed against
the other accused for the offences alleged in the FIR.
Insofar as the petitioners are concerned, the charge
sheet has not been filed on account of the interim
order passed by this Court on 03.02.2025. In these
circumstances, the appropriate course is to permit
the respondent-State to complete the investigation
insofar as the petitioners are concerned and to file
the appropriate final report in accordance with law.
53. The petitioners shall be at liberty to raise all
contentions available to them, including the
applicability of Sections 406 and 420 IPC in the light
of Delhi Race Club and K.S. Keerthikumar , before
the competent Court at the appropriate stage.
54. In the above background, this court passes the
following:
Order
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dismissed
(i) The petition is .
(ii) The interim order dated 03.02.2025, insofar as
it has restrained the respondent-State from
completing the investigation and filing the final
report in respect of the petitioners, stands
vacated.
(iii) The respondent-State is permitted to complete
the investigation insofar as the petitioners are
concerned and to file the appropriate final
report in accordance with law.
(iv) It is clarified that the observations made in this
order are confined to the question whether the
investigation may proceed. They shall not be
construed as findings on the guilt of the
petitioners or as a determination that the
ingredients of Sections 406 and 420 IPC have
been conclusively established.
(v) The Investigating Officer shall examine the
allegations against each petitioner individually
and consider the applicability of the offences
alleged in the light of the principles laid down
in Delhi Race Club (1940) Ltd. v. State of
Uttar Pradesh, [(2024) 10 SCC 690]
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particularly paragraphs 40 to 43 thereof, as
extracted and considered in K.S.
Keerthikumar v. State of Karnataka &
Anr., [Criminal Petition No.11 of 2026 , decided
on 29.09.2026], particularly paragraphs 27 to
34 thereof.
(vi) All contentions of the petitioners on the merits,
including the alleged utilisation of the grant for
the sanctioned purpose and the applicability of
Sections 406 and 420 IPC, are left open to be
urged before the competent Court in
accordance with law.
This Court has been assisted by Mr. Sourav, Law
Clerk, in the formulation of this Judgment.
Digitally Signed By:
SURAJ GOVINDA RAJ
13/11/2026, 14:19, Bengaluru
Verified
(SURAJ GOVINDARAJ)
JUDGE
PRS
List No.: 1 Sl No.: 1