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TMI Blog2024 (5) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 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. - HON BLE MR. JUSTICE S. VISHWAJITH SHETTY For the Petitioners : (By Sri Hasmath Pasha, Sr. Counsel For Sri Kariappa N.A, Adv.) For The Respondents : (By Sri Shashikiran Shetty, Advocate General, A/W Sri B.N. Jagadeeesh, Addl. S.P.P A/W Sri Rangaswamy R, HCGP) ORDER 1. Accused Nos. 1 to 26 are before this Court under Section 482 of Cr. P.C. with a prayer to quash the FIR in Crime No. 9/2024 registered by High Grounds Police Station for the offences punishable under Section 78 (1) (a) (i) of the Karnataka Police Act, 1963 (herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized articles to panchanama. The police arrested as many as 66 persons and it is stated that nine persons were absconding. Subsequently, on 13.01.2024, the case was transferred to the CCB Unit for the purpose of further investigation as per the orders of the Commissioner of Police, Bengaluru. It is at this stage, petitioners have approached this Court with a prayer to quash the FIR registered against them in Crime No. 9/2024. 5. Learned Senior counsel for the petitioners submits that petitioners herein are Licensed Bookies and they are licensed to collect the betting amount from punters. He submits that horse racing is kept out of the definition of the word 'Gaming' under the Act. The allegations against the accused is that they have been operating as bookies unauthorizedly. He has referred to the license copy of each of the petitioners and submits that the petitioners have valid license issued by the competent authority. He submits that Section 420 of IPC is not applicable and the same does not get attracted considering the allegations found in the first information. The other offences are non-cognizable in nature and therefore, to avoid compliance of Section 155 (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of investigation have recorded the statement of 21 punters and therefore, it cannot be said that there is no complaint from the public. The punters have stated that the bookies have collected GST at the rate of 25% and while collecting the betting amount, no formal receipts were issued for having received the said amount from them. He submits that the bookies have not maintained any record of the winning bettors nor was any record maintained for having collected 30% of TDS amount from the winning bettors. He also submits that the raid was conducted after completion of four horse races and when the fifth horse race was about to start. The amount of Rs. 3,45,74,040/- was seized after the completion of just four races. For the period from 01.06.2023 to 18.01.2024, totally 1507 races have been conducted in the Bangalore Turf Club and the total collection is shown as only Rs. 24,96,30,667/- for the aforesaid period. If the average from four races that were held on the date of raid is taken into consideration, the total betting amount for the aforesaid period amounts to Rs. 1302,57,69,570/- and as against the same, collection shown for the aforesaid period is Rs. 24,96,30,667/-. He submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the payments collected, in the prescribed formats. The persons who were collecting betting amounts unauthorizedly also had put-up stalls inside the premises of the Bangalore Turf Club, without displaying the license issued to them from the State Government and without maintaining any register or documents. After receipt of such credible information, the first informant who is a Police Officer as defined under Section 2 (16) of the Act, had visited the Bangalore Turf Club premises along with the staff for the purpose of verification of the correctness of the information received by him. After preliminary verification, having found that there was truth in the information received by him, he had approached the jurisdictional Police, namely, High Grounds Police Station, Bengaluru and submitted first information based on which FIR in Crime No. 9/2024 was registered for the offences punishable under Section 78 (1) (a) (i) of the Act, Section 12 of Karnataka Race Betting Act and Section 420 of IPC, against the petitioners herein and others. 11. Section 78 (1) (a) (i) of the Act, reads as follows:- 78. Opening, etc., of certain forms of gaming.-(1) Whoever.- (a) being the owner or occu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t carried out directly or indirectly by the players playing any game or by any third parties.) (ii) Game of Chance includes a game of chance and skill combined and a pretended game of chance or of chance and skill combined, but does not include any athletic game or sport. From a conjoint reading of the aforesaid provisions of law, it is clear that offence under Section 78 (1) (a) (i) would not get attracted for betting accepted or collected by licensed bookies on the day on which horse race is run in an enclosure set apart for the purpose in a race course by the licensee of such race course, provided the licensed bookies have strictly complied the terms of the license. However, in so far as the unlicensed bookies are concerned, the offence under Section 78 (1) (a) (i) of the Act gets attracted as they are not covered under the exception found in Section 2 (7) of the Act. The question whether the licensed bookies have strictly complied the terms of license issued to them by competent authority is a subject which needs verification during the course of investigation and merely for the reason that petitioners are licensed bookies, it cannot be said that Section 78 (1) (a) (i) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such offences and Section 65 (c) of the Act authorizes the police officer to take such other steps consistent with law and with the orders of his superiors to bring the offenders to justice. Section 65 (g) of the Act provides that police officer shall aid another police officer when called on by him or in the case of need in the discharge of his duty, in such ways as would be lawful and reasonable on the part of the officer aided. Therefore, it cannot be said that the first informant, who is a police officer attached to CCB could not have received the credible information and he could not have taken steps to lay such information. 14. Learned Senior counsel for the petitioners has strenuously contended that even before registration of the FIR, first informant and other staff of the CCB had entered into the premises of Bangalore Turf Club and have held a preliminarily investigation which is illegal. The Hon'ble Supreme Court in the case of Dr. Saleem Ur Rehman (supra), in paragraph No. 30 has observed as follows:- 30. So far as the submission on behalf of the respondent that in the present case by conducting a preliminary enquiry, detailed investigation has been made and only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23 to 18.01.2024. 17. In the case of Ajay Home Product Limited and Another vs. The State and Another reported in (2007) SCC Online Delhi 711, the High Court of Delhi, in paragraph Nos. 17 to 20, has observed as follows:- 17. The argument of the learned counsel for the petitioners that no offence under Section 409 was revealed from the facts is baseless argument. The petitioner No. 2 had collected Central Sales Tax from the customers @ 4% on the sales proceeds. The amount of this tax collected was public money which the petitioner was supposed to deposit with the Sales Tax Department as per law. The petitioners were thus holding the amount collected from buyers in trust and they were bound by law to deposit the same with the government. The petitioner misappropriated this money and did not deposit the money with the government. The offence is squarely covered under Section 405 of IPC which defines criminal breach of trust. The Illustration (e) of Section 405 IPC which reads as under: (e) A, a revenue officer, is entrusted with public money and is either directed by law, or bound by a contract, express or implied, with the Government, to pay into a certain treasury all the public mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees, which the department would have otherwise charged. The ingredients of cheating are thus clearly made out in this case. The ingredients of forgery are present because forged documents were prepared and submitted. The ingredients of section 471 of IPC also exit. 18. Even in the present case, the allegation against accused is that they have collected the 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 and on the other hand, they have misappropriated the same. Therefore, as rightly contended by learned Advocate General, it cannot be said that there is absolutely no material to invoke the offences punishable under the provisions of Indian Penal code as against the accused. 19. Learned Senior counsel for the petitioners has submitted that even if the allegations made against accused are presumed to be true, it is only the competent authority of the GST Department, who can take action and the police have no jurisdiction to register a criminal case on the ground that the accused have not deposited the GST or TDS amount before the concerned Department. In the case of State (NC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision is not a complete and absolute bar for taking action by the police for illegal and dishonestly committing theft of minerals including sand from the riverbed. The Court shall take judicial notice of the fact that over the years rivers in India have been affected by the alarming rate of unrestricted sand mining which is damaging the ecosystem of the rivers and safety of bridges. It also weakens riverbeds, fish breeding and destroys the natural habitat of many organisms. If these illegal activities are not stopped by the State and the police authorities of the State, it will cause serious repercussions as mentioned hereinabove. It will not only change the river hydrology but also will deplete the groundwater levels. 70. There cannot be any dispute with regard to restrictions imposed under the MMDR Act and remedy provided therein. In any case, where there is a mining activity by any person in contravention of the provisions of Section 4 and other sections of the Act, the officer empowered and authorised under the Act shall exercise all the powers including making a complaint before the Jurisdictional Magistrate. It is also not in dispute that the Magistrate shall in such cases ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter giving our thoughtful consideration in the matter, in the light of the relevant provisions of the Act vis- -vis the Code of Criminal Procedure and the Penal Code, we are of the definite opinion that the ingredients constituting the offence under the MMDR Act and the ingredients of dishonestly removing sand and gravel from the riverbeds without consent, which is the property of the State, is a distinct offence under IPC. Hence, for the commission of offence under Section 378 IPC, on receipt of the police report, the Magistrate having jurisdiction can take cognizance of the said offence without awaiting the receipt of complaint that may be filed by the authorised officer for taking cognizance in respect of violation of various provisions of the MMDR Act. Consequently, the contrary view taken by the different High Courts cannot be sustained in law and, therefore, overruled. Consequently, these criminal appeals are disposed of with a direction to the Magistrates concerned to proceed accordingly. 20. In the present case, allegation against the accused is that the licensed bookies who have collected GST amount from the punters and TDS amount from the winning bettors have failed to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the ground that the provisions of the Sales Tax Act did not provide the police officer to register a case and investigate in respect of the offence under the Penal Code. 22. The Hon'ble Supreme Court in the case of Neeharika Infrastructure Private Limited (supra), in paragraph No. 13, has observed as follows:- 13. From the aforesaid decisions of this Court, right from the decision of the Privy Council in Khwaja Nazir Ahmad, the following principles of law emerge: 13.1. Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into cognizable offences. 13.2. Courts would not thwart any investigation into the cognizable offences. 13.3. However, in cases where no cognizable offence or offence of any kind is disclosed in the first information report the Court will not permit an investigation to go on. 13.4. The power of quashing should be exercised sparingly with circumspection, in the rarest of rare cases . (The rarest of rare cases standard in its application for quashing under Section 482 Cr.PC. is not to be confused with the norm which has been formulated in the context of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jan Lal, has the jurisdiction to quash the FIR/complaint. 13.15. When a prayer for quashing the FIR is made by the alleged accused, the Court when it exercises the power under Section 482 Cr.PC., only has to consider whether or not the allegations in the FIR disclose the commission of a cognizable offence and is not required to consider on merits whether the allegations make out a cognizable offence or not and the court has to permit the investigating agency/police to investigate the allegations in the FIR. 23. In the case of Anjan Dasgupta (surpa), 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. 24. In the case of Skoda Auto Volkswagen (India) Private Limited vs. State of Uttar Pradesh and Others reported in (2021) 5 SCC 795 , the Hon'ble Supreme Court in paragraph Nos.41 and 42, has observed as follows:- 41. As cautioned by this Court in State of Haryana v. Bhajan Lal, the power of quashing should be exercised very sparingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be made either at the Club's totalizators (the totes) by purchasing tickets of Rs 5 denomination or with the bookmakers (bookies) who are licensed by the Club and operate within the first enclosure. The totalizator is an electronically operated device which pools all the bets and after deducting betting tax and the Club charges, works out a dividend to be paid out as winnings to those who have backed the successful horses in the race. Bookmakers, on the other hand, operate on their own account by directly entering into contracts with the individual punters who come to them and place bets on horses on the odds specified by the bookmakers. The bookmakers issue to the punters printed betting cards on which are entered the bookmaker's name, the name of the horse backed, the amount of bet and the amount of prize money payable if the horse wins. The winning punters collect their money directly from the bookmaker concerned. The net result is that 75% of the tote collections of each race are distributed as prize money for winning tickets, 20% is paid as betting tax to the State Government and the remaining 5% is retained by the Club as commission. Similarly, the bookmakers colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sposed of on 16.06.2021 and Crl. P. No. 4090/2023 disposed of 16.08.2023, on which reliance has been placed by learned Senior counsel for the petitioners cannot be made applicable to the facts and circumstances of the present case. 30. In the case of Lalita Kumari (surpa), the Hon'ble Supreme Court in paragraph No. 86, has observed as follows:- 86. Therefore, conducting an investigation into an offence after registration of FIR under Section 154 of the Code is the procedure established by law and, thus, is in conformity with Article 21 of the Constitution. Accordingly, the right of the accused under Article 21 of the Constitution is protected if the FIR is registered first and then the investigation is conducted in accordance with the provisions of law. 31. 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, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Supreme Court has observed that it is the right conferred upon the investigating agency to conduct the investigation and reasonable time should be given to the investigating agency to conduct the investigation unless it is found that the allegations in the FIR do not disclose any cognizable offence at all or the complaint is barred by any law. 35. An investigation in a case is carried on for the purpose of collecting necessary materials for proving the offence disclosed in the first information. If the investigating agency is not given a free hand to collect necessary materials for establishing the offence and if a proper enquiry is not done, there are all chances of the offender succeeding in escaping from the clutches of law, which could be detriment to the cause of the justice. If the Court is satisfied that allegations made and materials collected prima facie make out an offence, the Court should normally not interfere with the investigation into the offence. In such situations, the fact that investigating officer has not invoked the proper penal provisions or that he has registered FIR invoking a wrong penal provision becomes immaterial and it is for the Court to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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