(Dipankar Datta and Augustine George Masih, JJ.)
Krishna Campus Pvt. Ltd. and Others _____________ Appellant(s);
v.
State of Karnataka and Another _________________ Respondent(s).
Criminal Appeal Nos. 5298-5300 of 2025 [Arising out of SLP (Crl.) Nos. 19942-19944 of 2025 @ Diary No. 53215 of 2025], decided on December 8, 2025
The Order of the court was delivered by
Order
1. Delay condoned.
2. Leave granted.
3. The High Court of Karnataka, by the impugned judgment and order dated 13th June, 2025, has quashed a complaint case under Section 420, Indian Penal Code, 1860, subject to conditions relating to payment by the appellants on the amount due to the complainants and has, thus, disposed of a clutch of petitions under Section 482, Code of Criminal Procedure, 19731 of the appellants.
4. It is not in dispute that registration of crime at the instance of the complainants, being home buyers, against the appellants (developers/builders) fell for examination before the High Court. Paragraph 9 of the judgment of the High Court captures the question which the High Court felt it was tasked to decide, i.e., “should the complainants who parted with their funds way back in 2014, be left to reclaim merely the principle (sic, principal) amount, strip off its time value or, should they be compensated for the betrayal and delay with a fair return for their investment”.
5. The High Court answered the above question as follows:
“10. In the considered view of this Court, to deny the complainants such recompense would be to reward the transgression and diminish the sanctity of trust and would be putting a premium on the activity of the accused. The conduct of the accused, as observed, squarely attracts the rigors of Sections 406 and 420 of the IPC. The amount that these complainants gave to the accused, way back in 2014, was to be held in trust. The said amount has been diverted with a dishonest intent and what was promised to be delivered to the complainants is sold to strangers.
11. In the aforesaid circumstance, a mere restitution of the principle amount would be but, a pale shadow of justice. Therefore, this Court deems it fit, in the facts and circumstances of the case, just and equitable as well, that the complainants be paid the interest on the amount paid by them in 2014, till its return at 18% p.a.
12. The petitioners-accused shall ensure that such interest is paid in full, to the complainants within 12 weeks from the date of receipt of the copy of this order.
13. For the aforesaid reasons, the following:
ORDER
(i) Criminal Petitions are disposed.
(ii) In view of the foregoing reasons and on the aforequoted conditions as found in paragraphs 10 and 11, the Crimes registered in Crime Nos. 143/2023 and 484/2023 before the Bellanduru Police Station, Bengaluru, and pending on the file of the XLI Addl. Chief Metropolitan Magistrate, Bengaluru City stand quashed.
(iii) The accounts of the petitioners shall be de-frozen.
(iv) The quashing of the criminal proceedings and the direction to de-froze the accounts would be subject to the condition of payment of interest on the amount at 18% p.a. from the date the petitioners have received the payment from the second respondent, till its return in terms of the observations made in the course of the order.
(v) The petitioners in the event would fail to comply with the payment of interest within 12 weeks as directed, they would run the risk of the revival of these proceedings, as these proceedings are now obliterated on tacit settlement between the parties.”
6. We have heard learned senior counsel for the parties.
7. In our considered opinion, the High Court posed a wrong question for an answer and, hence, arrived at an erroneous conclusion. What fell for examination was registration of a crime. If registration of the crime did not suffer from any illegality, the High Court should have dismissed the petitions under Section 482 of the Cr. PC; conversely, it could have allowed the petitions if the crime had been registered despite the complaint not disclosing any cognisable offence. However, keeping examination in that behalf aside, what the High Court did appears to be in the teeth of multiple decisions of this Court where it has been held that the process of criminal justice should not be transformed into a process for recovery of the quantum of money allegedly cheated.
8. For the reason aforesaid, we set aside the impugned judgment and order under challenge and order a remand to the High Court. The petitions under Section 482, Cr. PC shall be heard afresh and decided on its own merits by the High Court, in accordance with, law as expeditiously as possible.
9. The appeals stand partly allowed on the aforesaid terms.
10. Pending applications, if any, stand disposed of.
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Special Leave Petition (Criminal) Diary No(s). 53215/2025
[Arising out of impugned judgment and order dated 13-06-2025 in CRLP No. 4855/2023 13-06-2025 in CRLP No. 10795/2023 13-06-2025 in CRLP No. 10941/2023 passed by the High Court of Karnataka at Bengaluru]
M/s. Krishna Campus Pvt. Ltd. & Ors.….Petitioner(s)
Versus
State of Karnataka & Anr. Etc. Etc.….Respondent(s)
(IA No. 296027/2025 – Condonation of Delay in Refiling/Curing the Defects and IA No. 296026/2025 – Exemption from Filing O.T.)
UPON hearing the counsel the Court made the following
ORDER
Delay condoned. Leave granted.
The appeals are partly allowed in terms of the non-reportable signed order.
Pending applications, if any, stand disposed of.
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1 Cr. PC
