Karthik Prabu v. State of Karnataka - Criminal Petition

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• Know your Kanoon - Doc Gen Hub - Counter Argument - Case Predict AI - Talk with IK Doc -... Upgrade to Premium [Cites 18, Cited by 0 ] ### Karnataka High Court

Karthik Prabu S/O Santosh Prabhu vs State Of Karnataka on 6 March, 2026

Author: Hanchate Sanjeevkumar

Bench: Hanchate Sanjeevkumar

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NC: 2026:KHC-D:3605
CRL.P No. 104744 of 2025

                    HC-KAR

                IN THE HIGH COURT OF KARNATAKA, AT DHARWAD
                    DATED THIS THE 6TH DAY OF MARCH, 2026
                                          BEFORE
               THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR
                    CRIMINAL PETITION NO. 104744 OF 2025
                          (482 [Cr.PC](https://indiankanoon.org/doc/445276/) /528 OF BNSS)

                    BETWEEN:

                    1.   KARTHIK PRABU
                         S/O. SANTOSH PRABHU,
                         AGE: 23 YEARS,
                         1ST MAIN ROAD, SILVER TOWN,
                         NEHARU NAGAR, HUBBALLI,
                         HUBBALLI-580020,
                         DHARWAD CITY, KARNATAKA.

                    2.   SANTOSH PRABU
                         S/O. VENKATESH PRABHU,
                         AGED 50 YEARS,

Digitally signed
by MALLIKARJUN 1ST MAIN ROAD, SILVER TOWN,
RUDRAYYA
KALMATH
Location: High
Court of
NEHARU NAGAR, HUBBALLI,
Karnataka,
Dharwad Bench
DHARWAD CITY, KARNATAKA,
PINCODE: 580020.

                                                                  ...PETITIONERS
                    (BY SRI SHRIDHAR PRABHU, ADVOCATE)

                    AND:

                    1.   STATE OF KARNATAKA,
                         BY GOKUL ROAD POLICE STATION,
                           -2-
                                         NC: 2026:KHC-D:3605
                                 CRL.P No. 104744 of 2025

HC-KAR

 HUBLI NORTH SUB DIVISION,
 (REPRESENTED BY POLICE SUB INSPECTOR),
 REP. BY SPP, HCK, DHARWAD.

1. KESHAV KAREKAR
   S/O. HARISH KAREKAR,
   AGE: 22 YEARS,
   H. NO.23/7, RAGHAVENDRA COLONY,
   UNAKAL CROSS, HUBBALLI,
   HUBBALLI, DHARWAD CITY,
   KARNATAKA-580023.
   ...RESPONDENTS
   (BY SRI ABHISHEK MALIPATIL, HCGP FOR R1;
   NOTICE TO R2 SERVED)

   THIS CRIMINAL PETITION IS FILED UNDER SECTION 528
   OF THE BHARATIYA NAGARIK SURAKSHA SANHITA, 2023,
   PRAYING TO QUASH THE PRIVATE COMPLAINT PRIVATE FILED
   BY THE RESPONDENT/COMPLAINANT IN PCR NO.222/2025, ON
   THE FILE OF THE COURT OF JMFC-III, HUBBALLI DATED 4TH
   OCTOBER 2025 TO THE EXTENT OF PETITIONER-1/ACCUSED-1
   AND PETITIONER-2/ACCUSED-2 AND QUASH THE IMPUGNED
   ORDER DATED 28TH OCTOBER 2025 PASSED BY THE COURT OF
   JMFC-III, HUBBALLI TO THE EXTENT OF PETITIONER-1/
   ACCUSED-1 AND PETITIONER-2/ACCUSED-2 AND QUASH THE
   FIR IN CRIME NO.0158/2025 REGISTERED BY THE GOKUL ROAD
   POLICE STATION, HUBBALLI DATED 10TH NOVEMBER 2025 THE
   EXTENT OF PETITIONER-1/ACCUSED-1 AND PETITIONER-2/
   ACCUSED-2 FOR OFFENCE PUNISHABLE UNDER SECTIONS 406,
   420, 504, 506 READ WITH SECTION 34 OF IPC AND ETC.

   THIS PETITION COMING ON FOR ADMISSION, THIS DAY
   ORDER WAS MADE THEREIN AS UNDER:
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   NC: 2026:KHC-D:3605
   CRL.P No. 104744 of 2025

HC-KAR

                             ORAL ORDER (PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR)

 This petition is            filed under Section 528               of   the

Bharatiya Nagarik Suraksha Sanhita, 2023 (for short,

'BNSS') /under Section 482 of Cr.P.C. for seeking for reliefs

of quashing the criminal proceedings initiated against the

petitioners as per following prayers made in the petition:

a) Quash the private complaint filed by the
Respondent/Complainant in PCR No.222/2025,
on the file of the Court of JMFC-III, Hubballi
dated 4th October 2025 to the extent of
Petitioner-1/Accused-1 and Petitioner-
2/Accused-2.

b) Quash the impugned order dated 28th October,
2025 passed by the court of JMFC-III, Hubballi
to the extent of Petitioner-1/ Accused-1 and
Petitioner-2/Accused-2.

c) Quash the FIR in Crime No.0158/2025
registered by the Gokul Road Police Station,
Hubballi dated 10th November, 2025 the extent
of Petitioner-1/Accused-1 and Petitioner-
2/Accused-2 for offence punishable under sections 406, 420, 504 and 506 Read With section 34 of IPC.

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NC: 2026:KHC-D:3605 CRL.P No. 104744 of 2025 HC-KAR

1. The respondent No.2 herein is the complainant. He

has filed complaint in PCR No.222/2025 against the

petitioners and other accused with the allegation that the

accused have made belief the complainant to invest some

amount with the petitioners and other accused. Thereby,

the complainant has invested some amount by forwarding

same to various persons. But the accused have not paid the

amount invested by the complainant. Thus, committed

offence of criminal breach of trust and cheating. When the

complainant had asked his money to the petitioners, the

petitioners have criminally intimidated. Thus, with all the

allegations as indicated in the complaint filed private

complaint before the learned Magistrate. The learned

Magistrate has referring the case to the Police for

registering FIR and investigation. Accordingly, the police

have registered a crime for the offences punishable under Sections 406, 420, 504 and 506 read with Section 34 of

IPC.

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NC: 2026:KHC-D:3605 CRL.P No. 104744 of 2025 HC-KAR

1. The learned counsel for the petitioners submitted

that the entire complaint and its FIR is abuse of process of

Court. Upon bare perusal of the complaint, at the most, it is

disclosed that there is a money transaction between the

complainant and the accused and just because, there is

some variations in giving and taking money that does not

amount to offence of cheating and criminal breach of trust.

If at all the accused are still having balance to pay to the

complainant, then the remedy for complainant is to file civil

suit for recovery of money. But without doing so, filing of

complaint and setting criminal law into motion is nothing

but an abuse of process of law. Therefore, the method

adopted by the complainant is nothing but an act of arm-

twisting the petitioners, putting pressure and taking

coercive action against the petitioners by criminal law.

Therefore, he further submitted that as per the complaint

averments and FIR, complaint was lodged on 25.02.2024.

But, the FIR registered on 10.11.2025, i.e, after a period of

01 year 09 months. Further, in these types of money -6- NC: 2026:KHC-D:3605 CRL.P No. 104744 of 2025 HC-KAR

transactions, whether the allegation is made that the

petitioners have committed offence of criminal breach of

trust and cheating, both cannot go hand to hand. For that

to attract offence under Section 406 of IPC, there must be

entrustment of property. But in the present case, there is

no such entrustment of property to attract the offence

under Section 406 of the IPC. Therefore, upon bare perusal

of the complaint itself, it goes to reveal that the entire

transaction is revolving around the business and the very

transaction which does not attract offence alleged and there

is nothing but harassing the petitioners by adopting method

of arm-twisting. Therefore, prays to quash the proceedings

initiated by the complainant.

1. He places reliance on the decisions of the Hon'ble

Supreme Court in the case of [Arshad Neyaz Khan vs.

State of Jharkhand and Another](https://indiankanoon.org/doc/53416890/), reported in 2025 SCC

OnLine SC 2058 and in the case of Delhi Race Club -7- NC: 2026:KHC-D:3605 CRL.P No. 104744 of 2025 HC-KAR

(1940) Limited and Others vs. State of Uttar Pradesh

and Another, reported in (2024) 10 SCC 690.

1. Notice issued to respondent No.2-complainant is

served, but there is no representation from the 2nd

respondent.

1. On the other hand, Sri Abhishek Malipatil, learned

HCGP submitted that the complaint averments are matter

for trial and prima facie evidence is made out. Therefore,

opposed the petition and hence prays to dismiss the

petition.

1. The principal offences alleged in the complaint are Sections 406 and 420 of IPC (corresponding to Sections 313 and 318 of BNS, 2023 retrospectively).

2. Section 406 of IPC reads as follows:

"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."
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1. Section 420 of IPC reads as under:

"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."
10. Upon considering the complaint averments, which

runs nearly 17 pages, the complaint goes to prima facie

shows that the allegations in the complaint as if made in the

plaint to be filed in the civil suit. The averments of

complaint are revolving around investment of the amount in

stock, in a real estate and in other business. Also upon

considering the complaint averments, the complainant

himself has said that he has paid various amounts to

various persons and one among the entry is that he has

paid the amount of ₹1,07,400/- to the petitioner

No.1/accused No.1. Further, in the same complaint, the -9- NC: 2026:KHC-D:3605 CRL.P No. 104744 of 2025 HC-KAR

complainant has made a tabular column that accused No.1

has paid and sent a sum of ₹14,18,637/- to the

complainant. Therefore, upon considering these two entries

in the tabular column in the complaint, the complainant

himself has stated that he has received more money from

accused No.1 than what the complainant has shown that he

has paid amount to accused No.1. Therefore, upon

considering the averments made in the complaint, there is

no ingredients that property is entrusted and there is

breach of trust.

1. Further to establish an offence of cheating, prima-

facie there shall be averment the complaint that since

inception point of time, before making the first transaction,

the petitioners had animus in their mind of element of

cheating, but this is lacking in the complaint. Therefore,

whether the ingredients are there so as to proceed with the

trial is to be considered in the light of the interpretation of

law laid down by the Hon'ble Supreme Court.

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1. The Hon'ble Supreme Court in the case of Delhi

Race Club (supra), has pleased to make interpretation of Section 420 of IPC and Section 406 of IPC, it has observed

as follows:

"Difference between criminal breach of
trust and cheating

1. This Court in its decision in S.W. Palanitkar v. State of Bihar reported in (2002) 1 SCC 241 :

2002 SCC (Cri) 129 expounded the difference in
the ingredients required for constituting an of
offence of criminal breach of trust (Section 406 IPC) viz-a-viz the offence of cheating (Section

420). The relevant observations read as under:

"9. The ingredients in order to constitute
a criminal breach of trust are: (i) entrusting a
person with property or with any dominion
over property, (ii) that person entrusted (a)
dishonestly misappropriating or converting
that property to his own use; or (b)
dishonestly using or disposing of that property
or wilfully suffering any other person so to do
in violation (i) of any direction of law
prescribing the mode in which such trust is to
be discharged, (ii) of any legal contract made,
touching the discharge of such trust.

1. The ingredients of an offence of cheating are: (i) there should be fraudulent or dishonest inducement of a person by deceiving him, (ii)(a) the person so deceived should be induced to deliver any property to any person, or to consent that any person shall retain any property; or (b) the person so deceived should be intentionally induced to do

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or omit to do anything which he would not do
or omit if he were not so deceived; and (iii)
in cases covered by (ii)(b), the act of
omission should be one which causes or is
likely to cause damage or harm to the person
induced in body, mind, reputation or
property."
36. What can be discerned from the above is
that the offences of criminal breach of trust
(Section 406 IPC) and cheating (Section 420 IPC)
have specific ingredients.

In order to constitute a criminal breach
of trust (Section 406 IPC): -

1) There must be entrustment with person for
property or dominion over the property,
and

2) The person entrusted: -

a) Dishonestly misappropriated or
converted property to his own use,
or

b) Dishonestly used or disposed of the
property or willfully suffers any other
person so to do in violation of:
i) Any direction of law prescribing the
method in which the trust is
discharged; or
ii) Legal contract touching the
discharge of trust (see: S.W.P.
Palanitkar (supra) reported in S.
W. Palanitkar Vs. State of Bihar,
(2002) 1 SCC 241: 2002 SCC (Cri) 129.

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           Similarly, in respect of an offence under [Section     420](https://indiankanoon.org/doc/1436241/) IPC,   the    essential
           ingredients are: -

1) Deception of any person, either by
making a false or misleading
representation or by other action
or by omission;

2) Fraudulently or dishonestly
inducing any person to deliver any
property, or

3) The consent that any persons shall
retain any property and finally
intentionally inducing that person
to do or omit to do anything which
he would not do or omit (see:

Harmanpreet Singh Ahluwalia
v. State of Punjab reported in
(2009) 7 SCC 712 : (2009) 3 SCC
(Cri) 620.
37. Further, in both the aforesaid sections,
mens rea i.e. intention to defraud or the dishonest
intention must be present, and in the case of
cheating it must be there from the very beginning
or inception.

1. 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.

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1. 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 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.

2. At the most, the court of the Additional
   Chief Judicial Magistrate could have issued
   process for the offence punishable under Section
   420 of the IPC i.e. cheating but in any
   circumstances no case of criminal breach of trust
   is made out. The reason being that indisputably
   there is no entrustment of any property in the
   case at hand. It is not even the case of the
   complainant that any property was lawfully
   entrusted to the appellants and that the same has
   been dishonestly misappropriated. The case of the
   complainant is plain and simple. He says that the
   price of the goods sold by him has not been paid.
   Once there is a sale, Section 406 of the IPC goes
   out of picture. According to the complainant, the
   invoices raised by him were not cleared. No case
   worth the name of cheating is also made out.

3. The aforesaid exposition of law makes it
   clear that there should be some entrustment of
   property to the accused wherein the ownership is
   not transferred to the accused. In case of sale of
   movable property, although the payment may be
   deferred yet the property in the goods passes on
   delivery as per Sections 20 and 24 respectively of

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     the Sale of Goods Act, 1930.

"20. Specific goods in a deliverable
state. -- Where there is an unconditional
contract for the sale of specific goods in
a deliverable state, the property in the
goods passes to the buyer when the
contract is made and it is immaterial
whether the time of payment of the price
or the time of delivery of goods, or both,
is postponed.

xxx xxx xxx

1. Goods sent on approval or "on sale or return". -- When goods are delivered to the buyer on approval or "on sale or return" or other similar terms, the property therein passes to the buyer--

a) when he signifies his approval or
acceptance to the seller or does any
other act adopting the transaction;

b) if he does not signify his approval
or acceptance to the seller but
retains the goods without giving
notice of rejection, then, if a time
has been fixed for the return of the
goods on the expiration of such
time, and, if no time has been fixed,
on the expiration of a reasonable
time."
49. From the aforesaid, there is no manner of
any doubt whatsoever that in case of sale of
goods, the property passes to the purchaser from
the seller when the goods are delivered. Once the
property in the goods passes to the purchaser, it
cannot be said that the purchaser was entrusted
with the property of the seller. Without
entrustment of property, there cannot be any
criminal breach of trust. Thus, prosecution of

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     cases on charge of criminal breach of trust, for
     failure to pay the consideration amount in case of
     sale of goods is flawed to the core. There can be
     civil remedy for the non-payment of the
     consideration amount, but no criminal case will be
     maintainable for it. [See : [Lalit Chaturvedi and
     Others v. State of Uttar Pradesh](https://indiankanoon.org/doc/13684948/) reported in
     2024 12 SCC 483: 2024 SCC Online SC 171
     and Mideast Integrated Steels Ltd. v. State
     of Jharkhand reported in 2023 SCC Online
     Jhar 301."

1. Therefore, in order to attract the offences of Sections 406 and 420 of IPC, mens rea i.e., the intention to

defraud or the dishonest intention must be present and in

the case of cheating, it must be there from the very

beginning or inception.

1. But considering the complaint averments, there

are various financial transactions between the complainant

and the accused and the complaint is not only against the

accused, but also with other accused has made several

financial transactions. Even according to the complaint

averments as stated by the complainant himself, the

amount of transaction reciprocally between the parties is

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invested in stock trading and real estate etc. Therefore, at

some point of time, due to difficulties in running business

there might be some lapses in making prompt payment of

the amount. This certainly does not show that the

petitioners have dishonest intention of to defraud at very

inception point of time. Therefore, the complaint averments

revolve regarding financial transactions in a routine course

of business attracting civil dispute.

1. Further, I placed reliance on the judgment of the

Hon'ble Supreme Court in the case of [Arashad Neyaz

Khan](https://indiankanoon.org/doc/53416890/) (supra), which has observed as under:

1. The contents of the complaint as well as the FIR would have to be read in light of the ingredients of Sections 406 and 420 IPC and the law settled by this Court through various judicial dicta. On perusal of the complaint dated 29.01.2021, it is noted that the complainant/respondent No.2 has filed the said complaint invoking Sections 406, 420 and 120B IPC. For ease of reference, the aforesaid Sections are extracted as under:

"406. Punishment for criminal breach
of trust.-- Whoever commits criminal
breach of trust shall be punished with

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imprisonment of either description for a
term which may extend to three years, or
with fine, or with both.

xxx

1. 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. xxx 120B. Punishment of criminal conspiracy.-(1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.

(2) Whoever is a party to a criminal
conspiracy other than a criminal conspiracy
to commit an offence punishable as aforesaid
shall be punished with imprisonment of either
description for a term not exceeding six
months, or with fine or with both."
17. In Inder Mohan Goswami vs. State of
Uttaranchal, (2007) 12 SCC 1 ("Inder Mohan
Goswami"), while dealing with Section 420 IPC,
this Court observed thus:

"42. On a reading of the aforesaid section, it
is manifest that in the definition there are

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two separate classes of acts which the
person deceived may be induced to do. In
the first class of acts he may be induced
fraudulently or dishonestly to deliver
property to any person. The second class of
acts is the doing or omitting to do anything
which the person deceived would not do or
omit to do if he were not so deceived. In the
first class of cases, the inducement must be
fraudulent or dishonest. In the second class
of acts, the inducing must be intentional but
need not be fraudulent or dishonest.
Therefore, it is the intention which is the gist
of the offence. To hold a person guilty of
cheating it is necessary to show that he had
a fraudulent or dishonest intention at the
time of making the promise. From his mere
failure to subsequently keep a promise, one
cannot presume that he all along had a
culpable intention to break the promise from
the beginning."
19. It is settled law that for establishing
the offence of cheating, the complainant/
respondent No.2 was required to show that the
appellant had a fraudulent or dishonest intention
at the time of making a promise or
representation of not fulfilling the agreement for
sale of the said property. Such a culpable
intention right at the beginning when the
promise was made cannot be presumed but has
to be made out with cogent facts. In the facts of
the present case, there is a clear absence of
dishonest and fraudulent intention on the part of
the appellant during the agreement for sale. We
must hasten to add that there is no allegation in
the FIR or the complaint indicating either
expressly or impliedly any intentional deception
or fraudulent/dishonest intention on the part of
the appellant right from the time of making the
promise or misrepresentation. Nothing has been
said on what the misrepresentations were and
how the appellant intentionally deceived the

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     complainant/ respondent No.2. Mere allegations
     by the complainant/ respondent No.2 that the
     appellant failed to execute the agreement for
     sale and failed to refund the money paid by the
     complainant/respondent No.2 does not satisfy
     the test of dishonest inducement to deliver a
     property or part with a valuable security as
     enshrined under [Section 420](https://indiankanoon.org/doc/1436241/) IPC."

1. Upon keeping the principle of law laid down by the

Hon'ble Supreme Court and upon bare perusal of the

complaint, apparently there is a laxity in making out

ingredient of offences alleged in the complaint as alleged for

offences under Section 406 and Section 420 of the IPC. The

entire complaint averments prima facie goes to reveal that

the petitioners may be owing some amount to the

complainant and this is a purely a case of recovery of

money which can be adjudicated in civil proceedings. But

certainly do not attract the ingredients of Sections 406 and 420 of IPC. Therefore, upon considering the principle of law laid down by the Hon'ble Supreme Court, the complainant

fails to refer the case for trial for trying the offences

alleged. The trial for alleged offence in prosecution in a

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criminal case is different from a trial of prosecuting a civil

case for recovery of money. For recovery of money,

prosecution of a criminal case is nothing but abuse of

process of Court. What the complainant has remedy to

recover the amount in the civil law, but without doing so,

launching criminal case is not permissible. Therefore, when

this is the abuse of process of Court is made out by the

counsel for the petitioners, then certainly, an inherent

power can be involved under Section 482 of Cr.P.C./under

Section 528 of the BNSS, so as to quash the proceedings

initiated against the petitioners. Therefore, the Court is of

the opinion that the complainant by lodging a private

complaint before the learned Magistrate has committed an

abuse of process of Court for the reasons that were

explained, therefore the criminal proceedings initiated

against the petitioners is liable to be quashed. Accordingly,

it is quashed. Therefore, the appeal is allowed.

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   The     complainant   is      at    liberty   to   initiate   civil

proceedings if he has any grievances.

Sd/-

(HANCHATE SANJEEVKUMAR)
JUDGE

CKK /CT-AN
List No.: 1 Sl No.: 68