Hyeoksoo Son vs. Moon June Seok

2025 INSC 474
NON-REPORTABLE


IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO……………..OF 2025
(Arising out of SLP(Crl.) No.6917 of 2024)


HYEOKSOO SON AUTHORIZED
REPRESENTATIVE FOR
DAECHANG SEAT AUTOMOTIVE
PVT. LTD. … APPELLANT(S)

VERSUS

MOON JUNE SEOK & ANR. …RESPONDENT(S)


J U D G M E N T


SANJAY KAROL, J.

Leave granted.
2. This appeal is at the instance of the complainant-Company
Signature Not Verified
Digitally signed by
Deepak Guglani
Date: 2025.04.08
19:08:12 IST
Reason:
th
aggrieved by the final judgment and order dated 19 February,
Crl A @ SLP (Crl) No. 6917 of 2024 Page 1 of 16


2024 in Criminal Petition No.5599 of 2023 passed by the High
Court of Karnataka at Bengaluru, whereby under its inherent
powers, the Court quashed the criminal proceedings as well as
the chargesheet in C.C.No.8373 of 2023 which, in turn, was
registered as a result of Crime No.287 of 2022 at Sanjay Nagar
Police Station for offences punishable under Sections 406, 408,
409, 418, 420, 120B read with 34 of the Indian Penal Code, 1860,
pending on the file of III Additional Chief Metropolitan
Magistrate, Bengaluru.

Factual Background & Proceedings leading up to this Appeal
3. The instant case pertains to the alleged fraud having been
committed by the respondent while in the employment of
1
Daechang Seat Automotive Ltd. The present appellant is the
authorized representative of the said Company. The main
business of this company is to manufacture seat related
equipment for cars of the ‘KIA’ make. The services of Mr. Nikhil
K.S. of M/s. N.K. Associates were engaged as Chartered
Accountants and Financial Advisors. Over time, a close
relationship developed. The substance of the dispute is that the
Company was informed that it had wrongly claimed input tax
credit amounting to Rs.9,73,96,225.80p., by N.K. Associates. It
was further said that the said amount owed to the Goods and

1
Hereinafter “the Company”
Crl A @ SLP (Crl) No. 6917 of 2024 Page 2 of 16


Services Tax Department and failure to pay the same entails
serious consequences. N.K. Associates then informed the
Company that it is the standard practice in India for tax amounts
payable to be transferred to the financial advisors who would
then pay it onward to the concerned department. In furtherance
of the same, the Company, after some internal transfer of money
from one account to another, made a transfer from its Indian
Overseas Bank Account, which was used for payments, statutory
or otherwise, totaling to Rs.10,18,54,894.80p. The complaint,
which is appended as Annexure P-3 to the paperbook, provides
the following breakup of payments :

Crl A @ SLP (Crl) No. 6917 of 2024 Page 3 of 16


Extracted hereinbelow is the portion of the said complaint,
which describes the discovery of the alleged deceit perpetrated
by N.K. Associates :
“13. In the month of October, 2022, the management of the
shareholders of the Company in Korea was enquiring into the
state of finances of the Company including statutory
payments. It was noticed that huge payments such as the
aforesaid had been made, and the reason for such payments
was sought from the Indian employees. After enquiry and
discovery, the Company and its shareholder discovered the
following shocking facts :
(a) The GST portal itself has all the information related
to GST payments by the Company;
(b) Rs.7,26,25,840/- was due for GST as suggested by
th
the report Issued by NK & Associates dated 5 March
2022;
(c) On 03.04.2022, GST payment of Rs.7,26,25,840/-
was made by adjusting the input tax credit already
available with the Company;
(d) There was no mismatch of input tax credit showing
on the GST portal;
(e) There was excess credit available with the Company;
(f) From March to October, 2022, the Company had paid
GST through cash/bank (i.e. without utilizing credit)
of only Rs.1,10,662/-; and
(g) The amounts paid by the Company to NK &
Associate and Terminus were never paid by them to
the GST Department.
14. The Company was shocked to learn the above facts.
The Company then made enquiries and discovered that :
(a) The registered address of Terminus is the very same
st
as the office address of NK & Associates, No.36, 1
th
Floor, Jaganath Arcade, 4 Main Road, New NEL
Road, Bengaluru-56094;
Crl A @ SLP (Crl) No. 6917 of 2024 Page 4 of 16


(b) Terminus is not having any sign Board or Steel plate
having details of the company at their above
mentioned registered office;
(c) The directors of Terminus are Ms. Anushka Singh
and Mr. Vinay Babu Venugopal;
(d) Anushka Singh is also the designated partner of NKS
Corporate Services LLP;
(e) Form No.AOC-4 of Terminus for the year 2018-2019
and also the capital Increase document of the
Company have been signed by Mr. Ritesh Mergu as
th
their auditor on 10 March 2020 and July 2022
respectively;
(f) Mr. Ritesh Mergu had a relationship with Terminus
even before joining the Company;
(g) Mr. Ritesh Mergu has been acting as an independent
chartered accountant for the aforesaid entities despite
being a full-time employee of the Company;
(h) All the aforesaid Individuals are intimately connected
and working in concert with each other.
15. I submit that the aforesaid persons have made the
Company to trust. and believe them as financial advisors and
employee. The aforesaid persons have caused the Company
to make payment of a huge sum of 10,18,54,894.80/- to them
in the manner aforesaid by making false statements. The said
amounts were entrusted to them by the Company, od and said
amounts have been dishonestly misappropriated and
converted to their own use. They were entrusted with the
hard-earned sums of the Company also in the capacity of
banker, agent, employee etc. and breached the trust of the
Company in the manner aforesaid. All the said amounts have
been swallowed by them. Mr. Nikhil KS and Mr. Ritesh
Mergu have created a web of deceit by abusing their position
as trusted persons. Mr. Vinay Babu Venugopal and Ms.
Anushka Singh are hot only beneficiaries of the above, they
share the same common Intention as Mr. Nikhil KS and Mr.
Ritesh Mergu, and have conspired and agreed to commit
illegalities by illegal means. They are all co-conspirators
Crl A @ SLP (Crl) No. 6917 of 2024 Page 5 of 16


sharing a common evil design, and have together, and for
mutual benefit defrauded the Company.
16. The Company has lost a huge sum of
Rs.9,62,80,189.00/- owning to the aforesaid offences by the
aforesaid persons.”

th
4. The FIR came to be registered on 11 December 2022,
subject matter of the present appeal. In the course of
investigation, a detailed statement of the accused was recorded
th
on 30 December 2022. It has come forth in the said statement
that the complainant was the successor of the respondent herein
as the Chief Financial Officer and upon taking over such position
and inspecting the records of the Company, he found that money
had been debited from the Company’s account(s) on account of
‘GST payment’, but the same had not been credited to the
th
concerned authority. Chargesheet dated 18 March 2023 was
filed before the III Additional Chief Metropolitan Magistrate,
Bengaluru City, being No.287/2022.
th
5. Cognizance was taken by the concerned Court on 6 April
2023.
6. The present respondent, namely, Moon June Seok, who is
accused No.5 before the Trial Court, approached the High Court
2
under Section 482 of the Code of Criminal Procedure, 1973 .
Amongst other grounds it has been urged that some of the

2
Hereinafter’Cr.P.C.’
Crl A @ SLP (Crl) No. 6917 of 2024 Page 6 of 16


Sections in which the charges have been drawn up against the
accused are not met, even superficially; the respondent is not
3
named in the FIR ; he has been made an accused only on the basis
of the statement of a co-accused which, it has been submitted by
placing reliance on Surinder Kumar Khanna v. Intelligence
4
Officer, Directorate of Revenue Intelligence , is impermissible
in law. There is also an allegation that the respondent herein
received a sum of money being Rs.1,80,00,000/-, which the High
Court has referred to as Rs.1,80,000/-.
7. The High Court in its impugned judgment recorded as
under :
“7……There is no prima facie material placed on record for
framing charge against the petitioner-accused No.5 for
having received money from the main accused, he is the
salaried person obtaining salary from the company. The
petitioner has explained that he has received some money
from the Korean National as a loan and he said to be received
some Indian money from the persons going to Korea and he
used to pay Korean currency in their country. Except to the
voluntary statement, there is nothing recovered by the police
to show he has received money as a bribe from the accused
No.1. The accused Nos.1 to 4 received Rs.10 crores towards
the payment of GST, but accused Nos.1 to 4 misappropriate
the same. If at all the petitioner received any bribe, definitely
it will not be for meagre amount of Rs.1,80,000/-.
8 That apart, he was the only person who was forwarding the
file to the Managing Director for approval. The main bills
are prepared and advised by the accused Nos.1 to 4. He was
only forwarding agent working on behalf of the company.

3
Pg. 127 Memo of Appeal before High Court
4
(2018) 8 SCC 271
Crl A @ SLP (Crl) No. 6917 of 2024 Page 7 of 16


The Managing Director is the final authority to approve the
bills for releasing the amount. The Managing Director was
not an accused who has actually released the fund to accused
No.1. There is no role to play by this petitioner, except
forwarding the bills to the Managing Director. Therefore,
without any material evidence collected against the petitioner
that the contention of the learned counsel for respondent that
the petitioner has conspired with accused Nos.1 to 4 and
misappropriated nearly Rs.10 crores, cannot be acceptable.”

Submissions of the Parties

8. It is in the aforesaid backdrop that the complainant is
before us. We have heard Mr. Siddharth Luthra and Mr. Rajiv
Shakdher, learned Senior Counsel for opposing parties as also
Mr. V.N. Raghupathy, learned counsel appearing for the
respondent-State.
8.1 Submissions on behalf of the appellant, chiefly can
be recorded as under :
i) The inherent power of the High Court ought to be
exercised sparingly and an endeavour cannot be made
to examine the reliability or genuineness of the
allegations made in the chargesheet.
ii) The Court cannot conduct a ‘mini trial’ or engage in
an inquiry, testing the veracity of the allegations. The
allegations have to be taken at face value and it is to be
examined whether a prima facie case is to be made out
Crl A @ SLP (Crl) No. 6917 of 2024 Page 8 of 16


or not. The truth or falsity in the allegation can only
be determined upon trial. Reference is made to
Neeharika Infrastructure Pvt. Ltd. v. State of
5
Maharashtra ; Priti Saraf & Ors. v. State of NCT of
6 7
Delhi & Ors. ; and Kaptan Singh v. State of U.P. .
iii) It is submitted that the amount of bribe received by
the respondent was Rs.1,80,000/-, as considered by the
High Court, and the quantum received as bribe, be it
high or low, cannot be a ground for quashing. Reliance
is placed on Niranjan Hemchandra Sashittal v. State
8
of Maharashtra .
iv) As the Chief Financial Officer, the respondent was
in control of the finances of the Company and the other
co-accused persons were brought into the fold of the
operations, at his behest, therefore, he is not at liberty
to state that he is only a forwarding agent. In fact, it is
submitted, he is a vital link in the chain.
v) In continuation of the above, it is submitted that the
respondent No.1 was not able to justify the recovery of
Rs.9,69,000/- from his residence. Moreover, accused

5
(2021) 19 SCC 401
6
(2021) 16 SCC 142
7
(2021) 9 SCC 35
8
(2013) 4 SCC 642
Crl A @ SLP (Crl) No. 6917 of 2024 Page 9 of 16


No.1 and the respondent, both, in their statements have
acknowledged the receipt of Rs.1,80,00,000/- in
identical instalments, on the same dates and locations
– clearly establishing the latter’s role as co-
conspirators.
8.2 Per contra , Mr. Rajiv Shakdher, the learned Senior
Counsel appearing for respondent No.1 submitted as
follows:
i) The High Court’s observation that there was no
direct evidence against respondent No.1 is correct.
ii) The appellant is under the wrong assumption that as
‘CFO’ he had control over the Company’s fund(s),
when, in fact, his role was administrative due to
language barriers.
9
iii) Section 409 of the Indian Penal Code, 1860 is not
applicable to the respondent since he is not a public
servant, banker, agent or merchant. He is only an
employee with no dominion or entrustment of
property.
iv) Voluntary statement of co-accused cannot form the
sole basis of conviction. Reliance is placed on CBI v.

9
Hereinafter ‘IPC’
Crl A @ SLP (Crl) No. 6917 of 2024 Page 10 of 16


10
V.C. Shukla ; Dipakbhai Jagdishchandra Patel v.
11
State of Gujarat & Anr. ; and Karan Talwar v. State
12
of Tamil Nadu .
v) There is an unexplained delay of 8 months in
lodging the FIR. That, along with the incorporation of
Section 409 IPC, without prior intimation to the
jurisdictional Court, casts doubt on the veracity of the
allegations.

Our View
9. The short question that this Court is to consider is, whether
the High Court was justified in quashing the proceedings against
respondent No.1 in the manner that it did so.
10. The contours of exercise of the powers under Section 482
Cr.P.C. have been expressed in various judgments. In the well-
13
known case of State of Haryana v. Bhajan Lal this Court,
while recognizing that it would not be possible to account for all
possibilities, detailed seven circumstances where the exercise
would be justified. Pandian J., held thus :

10
(1998) 3 SCC 410
11
(2019) 16 SCC 547
12
2024 SCC OnLine SC 3803
13
1992 Supp (1) 335
Crl A @ SLP (Crl) No. 6917 of 2024 Page 11 of 16


“102…
(1) Where the allegations made in the first information report
or the complaint, even if they are taken at their face value and
accepted in their entirety do not prima facie constitute any
offence or make out a case against the accused.
(2) Where the allegations in the first information report and
other materials, if any, accompanying the FIR do not disclose
a cognizable offence, justifying an investigation by police
officers under Section 156(1) of the Code except under an
order of a Magistrate within the purview of Section 155(2) of
the Code.
(3) Where the uncontroverted allegations made in the FIR or
complaint and the evidence collected in support of the same
do not disclose the commission of any offence and make out
a case against the accused.
(4) Where, the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated under
Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are
so absurd and inherently improbable on the basis of which no
prudent person can ever reach a just conclusion that there is
sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the
provisions of the Code or the concerned Act (under which a
criminal proceeding is instituted) to the institution and
continuance of the proceedings and/or where there is a
specific provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the
aggrieved party.
(7) Where a criminal proceeding is manifestly attended with
mala fide and/or where the proceeding is maliciously
instituted with an ulterior motive for wreaking vengeance on
the accused and with a view to spite him due to private and
personal grudge.”

Crl A @ SLP (Crl) No. 6917 of 2024 Page 12 of 16


Consistently, this case stands followed. In Neeharika
14
Infrastructure (P) Ltd. v. State of Maharashtra , these
principles, while followed, were further expanded and clarified.
15
[See: Para 13] [See also: P.M. Lokanath v. State of Karnataka ;
16 17
Karuppudayar v. State ; and Naresh Aneja v. State of U.P. ]
11. What is, therefore, to be seen is whether, in the present
facts, any of the seven circumstances/situations mentioned in
Bhajan Lal (supra) are justifiably met. One of the submissions
advanced on behalf of respondent No.1 was that reliance solely
on the statement of the co-accused is not justified. We find this
submission to be incorrect for presently, respondent No.1’s own
statement also presents some corroboration for the statement of
accused No.1. The relevant extracts from both statements are as
follows :

Statement of Moon Juneseok-Respondent No. 1
“One day in May, 2022 Nikhil Kumar Singh came to
Bellary Road near Hiranandani Villa, where I live, and gave
me a sum of Rs.1,00,00,000/- in cash. Then one day in June,
2022 when I went to the Gold Pinch hotel, Nikhil Kumar came
in a car outside the hotel and gave me a sum of Rs.80,00,000/-
in cash. When I was texting Nitesh Merugu on the Kakao app
on my mobile phone, I sent the message by mistake to the HR
& Admin Group, which includes our company’s HR & Admin
and Finance Officers. The message was seen by the HR

14
(2021) 19 SCC 401
15
2025 SCC OnLine SC 301
16
2025 SCC OnLine SC 215
17
(2025) 2 SCC 604
Crl A @ SLP (Crl) No. 6917 of 2024 Page 13 of 16


Manager and others in that group and I deleted it before
everyone could see it. Since then I have been suspicious in our
office and I have been maintaining myself in such a way that
nothing has happened.
Nikhil Kumar Singh has given me around Rs.1,80,00,000/-
in cash and out of that money, I have led luxurious life and the
remaining money has been kept in my house No.346, at
Hiranandani Villa, Devanahalli where I live. The Samsung
mobile phone through which I had sent the message to the HR
and Admin Group is with me and I will produce it.”

Statement of Nikhil Kumar Singh- Accused No. 1
“Mr. Moon Juneseok, the CFO of Daechang Seat Automotive
Private Limited Company had transferred a sum of rupees
thirteen crores. In may 2022, I went to Hiranandani Villa, near
Bellary Road, where Mr. Moon lives, and gave him a sum of
Rs.1,00,00,000/- by way of cash. In the month of June 2022,
I went to the Gold Pinch Hotel to give Mr. Moon a sum of
Rs.80,00,000/- in a car outside the hotel.”

12. When his own statement acknowledges the possibility that
he had received money from accused No.1, which the latter has
also alluded to, there prima facie appears to be a connection.
This, however, is not the only connection between these two
persons. It was on accused No.1’s recommendation that
respondent No.1 ‘appointed’ one Ritesh Merugu, who is accused
No.2, as Accounts Manager. Furthermore, we are surprised by
the fact that the CFO of a company and an alleged chartered
accountant, both readily agreed to not put ink to paper to
formalise this relationship between them, and sans the same
Crl A @ SLP (Crl) No. 6917 of 2024 Page 14 of 16


found it completely alright to share all financial details and books
of accounts.
13. Well, let it be proven in a trial that there is no evidence
against Respondent No.1 and he, as such, deserves to be
acquitted. At this stage, we are unable to convince ourselves that
coming to such a conclusion would be just, reasonable, and
proper, more so, keeping in view the large amounts of money
involved. The rule of law has a responsibility to protect the
investments of foreign investors, while at the same time ensuring
that any person accused of mishandling such funds is really and
fully protected by the power of the phrase ‘innocent till proven
guilty’. The appeal is, therefore, allowed.
14. The judgment, referred to in paragraph one, is set aside,
and the proceedings under C.C.No.8373 of 2023 are revived and
restored to the file of III Additional Chief Metropolitan
Magistrate, Bengaluru. The parties are directed to appear before
th
the said Court on 16 April 2025. The Registry is to
communicate a copy of this judgment to the Court concerned for
necessary action.



Crl A @ SLP (Crl) No. 6917 of 2024 Page 15 of 16


15. Pending applications, if any, shall stand disposed of.


…………….....................………J.
(SANJAY KAROL)


……...................…………………J.
(AHSANUDDIN AMANULLAH)
New Delhi;
April 8, 2025.

Crl A @ SLP (Crl) No. 6917 of 2024 Page 16 of 16