Karnataka HC Lets ₹37 Lakh Pilot-Training Cheating Case Against Chairman Proceed Despite Company’s Omission From Charge Sheet

The complainant alleged that he paid ₹37,00,000 by RTGS to Shikha Developers Company in February 2015 after being promised pilot training. No training was provided. When repayment was sought, a cheque for ₹15,00,000 was honoured, while cheques for the remaining ₹22,00,000 were dishonoured.

The petitioner, alleged to be the company’s Chairman, was charge-sheeted with another accused for offences under Sections 120B, 406 and 420 read with Section 34 IPC. The company was not arraigned as an accused.

The petitioner sought to quash the charge sheet and proceedings under Section 482 CrPC, arguing, among other things, that there was no initial intention to cheat and that prosecution was barred because the company had not been made an accused.

Section 482 CrPC empowers the High Court to prevent abuse of process and secure the ends of justice.

For cheating under Section 420 IPC, dishonest intention must exist at the inception of the transaction; the Court referred to Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh, (2024) 10 SCC 690.

The Court also considered G. Sagar Suri v. State of U.P., (2000) 2 SCC 636, distinguishing a prosecution lacking specific allegations of an accused’s role from one containing such allegations.

On the omission of the company, it considered the petitioner’s reliance on Aneeta Hada and stated that, under Section 319 CrPC, the company could be added during trial if evidence warranted it.

The Court found specific allegations that the petitioner and the co-accused, identified respectively as Chairman and Managing Director, were involved in the company’s affairs and obtained the complainant’s money on a promise of pilot training that was not provided.

Whether the accused had dishonest intent when receiving the money was, in the Court’s view, a matter for trial; the dishonoured repayment cheques and the alleged failure to provide training did not justify quashing at this stage.

It distinguished G. Sagar Suri because, unlike that case, the present charge sheet contained specific allegations concerning the petitioner’s role.

The company’s omission was attributed to an investigative lapse; the Court held that it did not, in the circumstances, exonerate the petitioner, particularly as the company had been accused in the complaint and could potentially be added under Section 319 CrPC if evidence supported doing so.

It held that the allegations and the question of initial dishonest intent required consideration at trial, and that the company’s omission from the charge sheet did not warrant quashing the proceedings against the petitioner.

The criminal petition was dismissed.