Karnataka HC Refuses To Quash Case Against Co-Operative Factory Official’s Son And Wife Over Funds Transferred To Their Accounts

The petitioners, arrayed as accused Nos. 5 and 6, sought to quash proceedings in Special (P.C.) No. 2 of 2019 arising from Crime No. 166 of 2016.

The prosecution alleged that funds connected with Vanivillas Co-operative Sugar Factory were misappropriated and transferred from accused No. 2 to accounts in the petitioners’ names; petitioner No. 1 was described as accused No. 1’s son and petitioner No. 2 as his wife.

The petitioners denied involvement and argued, among other things, that petitioner No. 2 had divorced accused No. 1 in 2009 and that the ingredients of cheating were absent.

The charge sheet invoked Sections 409, 420 and 120B read with Section 37 of the IPC and Sections 9, 13(1)(c) and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988.

The petition was brought under Section 482 of the Code of Criminal Procedure, which the Court considered in deciding whether to quash the criminal proceedings.

The charge sheet alleged offences under Sections 409, 420 and 120B read with Section 37 of the IPC, and under Sections 9, 13(1)(c) and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988.

The Court did not set out a separate doctrinal test or rely on cited precedents; its stated approach was to assess whether the collected material and the trial court’s consideration of it warranted interference at the quashing stage.

The Court relied on the charge-sheet material alleging that funds had been transferred to accounts in the petitioners’ names and noted that the petitioners had not denied the transfers.

It considered the petitioners’ arguments against their involvement but held that the allegations and material required examination at trial.

Although it observed that the Prevention of Corruption Act offences did not attract against these petitioners, it found that the other alleged offences could proceed.

The Court also found no basis to fault the trial court’s cognizance, having regard to its consideration of the charge-sheet material.

It held that the allegations concerning transfers to their accounts raised matters for trial, while observing that the Prevention of Corruption Act offences did not attract against them.