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2024 (5) TMI 981 - HC - Indian LawsBetting - amount from the punters towards payment of GST and from the winning bettors towards payment of TDS and have not deposited the same to the concerned Department - misappropriation of the money - whether the nature of accusations and allegations made in the first information report prima facie discloses the commission of a cognizable offence or not? - HELD THAT - In almost identical circumstances, the Hon'ble Supreme Court in the case of State of West Bengal vs. Narayan K. Patodia 2000 (4) TMI 777 - SUPREME COURT , wherein the High Court of Calcutta had quashed the first information report on the ground that the person who forwarded the same to the police had no authority to do so, has set-aside the order passed by the High Court of Calcutta. In the said case, FIR was registered under the Indian Penal Code and the provisions of West Bengal Sales Tax Act and FIR contained allegations that on the basis of fabricated documents, the accused had obtained the registration under the Sales Tax Act, which entitled him to make purchase at concessional rate of sales tax and also receive permits for importing spices from outside the state. The High Court had quashed the first information report by expressing its opinion that under the Sales Tax Act, only Bureau of Investigation constituted by the State Government can conduct the investigation or hold inquiry and police officer cannot register first information report for the offence punishable under the Indian Penal Code or any other Act. In the case of ANJAN DASGUPTA VERSUS THE STATE OF WEST BENGAL AND ORS. 2016 (11) TMI 1755 - SUPREME COURT , the Hon'ble Supreme Court has observed that the receipt and recording of first information report is not a condition precedent for setting in motion of a criminal investigation and when information is received with regard to cognizable offence, the police was duty bound to start the investigation. In the present case only for the purpose of verification of the correctness of the credible information received, the first informant, who is a police officer had visited the premises of the Bangalore Turf Club and after holding a preliminary enquiry, being satisfied with regard to the correctness of the first information received by him, had proceeded to lodge a first information before the jurisdictional Police Station, which had culminated in registration of FIR in Crime No. 9/2024 and investigation in the case was conducted only thereafter and therefore, the contention raised by the learned Senior counsel for the petitioners that procedure followed by the police in the present case is contrary to the principles laid down by the Hon'ble Supreme Court in the case of Lalita Kumari 2013 (11) TMI 1520 - SUPREME COURT is devoid of any merit. The only point that arises for consideration before the High Court at that stage is whether the nature of accusations and allegations made in the first information report prima facie discloses the commission of a cognizable offence or not. In the event, it is found that allegations made in the first information makes out a prima facie case for cognizable offence, the investigating agency is required to be permitted to carry on with the investigation. Section 482 of Cr.P.C cannot be a tool to be used by accused to short-circuit a prosecution and close the same without full fledged enquiry, more so, when serious allegations are found against the accused. Section 482 of Cr. P.C. should not be exercised to stifle a legitimate prosecution. When a prosecution is sought to quashed at the initial stage, the test to be applied by the Court is as to whether the uncontroverted allegations made, prima facie makes out the offence/offences. The correctness of the allegations as well as the reliability and credibility of the witnesses cannot be considered by this Court while exercising its powers under Section 482 of Cr. P.C. - In the present case, as stated earlier, the allegations found in the first information and the material collected by the Investigation Officer during the course of investigation prima facie make out a cognizable offence as against the accused and in view of the interim order granted by this Court, the investigation which was under progress has been stalled. The allegations against the accused is of very serious nature and the accused amongst other allegations, allegedly have misappropriated crores of money collected by them towards payment of GST and TDS. The prayer made by the petitioners for quashing the FIR registered against them cannot be granted - Petition dismissed.
Issues Involved:
1. Quashing of FIR u/s 482 Cr.P.C. 2. Applicability of Section 78(1)(a)(i) of the Karnataka Police Act, 1963. 3. Jurisdiction of Police vs. GST Authorities. 4. Preliminary Enquiry by Police before FIR Registration. 5. Allegations of Misappropriation of GST and TDS. Summary: 1. Quashing of FIR u/s 482 Cr.P.C.: Accused Nos. 1 to 26 sought to quash the FIR in Crime No. 9/2024 registered by High Grounds Police Station for offences under Section 78(1)(a)(i) of the Karnataka Police Act, 1963, Section 12 of Karnataka Race Betting Act, and Section 420 of IPC. The court examined whether the accusations and allegations made in the FIR prima facie disclosed the commission of a cognizable offence. 2. Applicability of Section 78(1)(a)(i) of the Karnataka Police Act, 1963: The court noted that Section 78(1)(a)(i) of the Act would not apply to licensed bookies if they strictly complied with the terms of their license. However, unlicensed bookies were not covered under the exception found in Section 2(7) of the Act, making them liable under Section 78(1)(a)(i). The compliance of licensed bookies with their licenses needed verification during the investigation. 3. Jurisdiction of Police vs. GST Authorities: The petitioners argued that only GST authorities could take action for non-deposit of GST and TDS, not the police. The court referenced the Supreme Court's judgment in State (NCT of Delhi) vs. Sanjay, which held that the provisions of special acts do not bar prosecution under the IPC. The court found that the allegations of misappropriation of GST and TDS collected from punters and winning bettors justified the police's involvement. 4. Preliminary Enquiry by Police before FIR Registration: The petitioners contended that the preliminary enquiry by CCB police before FIR registration was illegal. The court referred to the Supreme Court's judgment in Dr. Saleem Ur Rehman, which allowed preliminary enquiries to establish a prima facie case for FIR registration. The court held that the preliminary enquiry conducted by the first informant was lawful. 5. Allegations of Misappropriation of GST and TDS: The court found significant discrepancies in the amounts collected by bookies and the amounts reported. The allegations included unauthorized collection of betting money, failure to maintain proper records, and non-deposit of GST and TDS. The court cited the Delhi High Court's judgment in Ajay Home Product Limited, which held that misappropriation of public money collected as tax constitutes criminal breach of trust. Conclusion: The court dismissed the petition to quash the FIR, emphasizing that the allegations made in the FIR and the material collected during the investigation prima facie disclosed a cognizable offence. The court stressed that the investigation should not be interfered with at the initial stage and that the police have the statutory right to investigate cognizable offences.
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