The Court of the LX Additional City Civil & Sessions Judge, Bengaluru (CCH 61), presided over by Sri Narashimsa M.V., B.Com., LL.B., allowed the anticipatory bail application in Criminal Miscellaneous No. 2923/2024 on April 2, 2024. The judicial order extended pre-arrest bail protection to Smt. Pavani M.N. (Accused No. 5) in connection with Crime No. 98/2024 registered by the Jayanagar Police Station, Bengaluru. The petitioner, who serves as a Director of M/s. Suraksha Builders and Developers Private Limited, faced apprehension of arrest for alleged offences punishable under Sections 506 (criminal intimidation), 120B (criminal conspiracy), 406 (criminal breach of trust), 409 (criminal breach of trust by public servant, banker, merchant or agent), 420 (cheating), and 477A (falsification of accounts) read with Section 34 of the Indian Penal Code (IPC).
Factual Matrix and Prosecution Allegations
The criminal proceedings originated from a private complaint filed before the IV Additional Chief Metropolitan Magistrate (ACMM) Court, Bengaluru, by D. Gopinath, a shareholder and former Director of M/s. Suraksha Builders and Developers Private Limited. According to the informant, M/s. Suraksha Builders owned lands measuring 5 acres 6.5 guntas in Begur Village and entered into a Joint Development Agreement (JDA) dated February 25, 2011, with M/s. Windsor Edifices Private Limited (managed by Accused No. 1, M. Srinivasa Rao) to construct an apartment complex comprising 332 flats. Under the terms of the JDA, the developer firm was entitled to 66% of the profit/built-up area, while the landowning firm (M/s. Suraksha Builders) was entitled to 34%, corresponding to 113 flats.
The complainant alleged that the developer failed to complete the project within the stipulated 36-month timeline, completing construction only in 2021 when the Bruhat Bengaluru Mahanagara Palike (BBMP) issued an Occupancy Certificate. It was further alleged that Accused Nos. 2 to 5 conspired with Accused No. 1 to cheat minority shareholders, forced the surrender and transfer of shares to Accused No. 1 and his wife, Smt. Pavani M.N. (Accused No. 5), and improperly waived contractual delay penalty clauses. The complainant specifically asserted that Flat No. 518 was sold in 2023 for ₹1,06,83,000/- without shareholder consent, with funds diverted across various accounts, and that two specific flats (Nos. 1505 and 1710) earmarked for his wife were not registered in her name.
Submissions Advanced on Behalf of the Petitioner
Appearing on behalf of the applicant, learned advocate Sri Prathap Yadav R. submitted that the petitioner was innocent and falsely implicated. The defense highlighted that the primary controversy pertained to internal corporate shareholding pattern and contractual JDA implementation between two commercial entities, where M/s. Windsor Edifices holds an 86% majority shareholding in M/s. Suraksha Builders, whereas the complainant holds a minor stake.
The defense emphasized that Smt. Pavani M.N. has been a director of the company since June 5, 1995, and that the allegations were raised by the complainant—who resigned as a director in 2015—to extract monetary benefits and inflate profit claims. Counsel argued that the dispute revolves around company registers, bank statements, and corporate documentation, making custodial interrogation unnecessary.
Prosecution Objections and State Arguments
The Public Prosecutor strongly opposed the grant of anticipatory bail by submitting formal objections alongside a status report from the Investigating Officer. The prosecution submitted that preliminary inquiries indicated a coordinated financial fraud involving unauthorized flat sales, falsification of corporate records, and non-allocation of designated units to entitled shareholders. The state expressed concern that if enlarged on pre-arrest bail, the petitioner might influence witnesses, tamper with corporate accounts, or obstruct the ongoing police investigation.
Judicial Findings and Legal Reasoning
Upon evaluating the FIR, corporate filings from the Registrar of Companies (RoC), shareholding certificates issued by company secretaries, and banking statements, Judge Narashimsa M.V. considered whether the petitioner was entitled to pre-arrest protection under Section 438 of Cr.P.C. The court observed that the core controversy centered around internal corporate governance, shareholding proportions, and contractual compliance under the 2011 Joint Development Agreement.
The court noted that the dispute was fundamentally civil and corporate in nature, arising from commercial dealings between directors and shareholders of M/s. Suraksha Builders and M/s. Windsor Edifices. The court observed that giving a criminal color to a commercial and corporate dispute did not justify custodial detention. Considering that the material evidence comprises documentary records, bank account statements, and RoC filings, physical custody of the director was not required. Observing that the alleged IPC offences do not carry penalties of death or life imprisonment and are triable by a Magistrate, the court concluded that the prosecution’s concerns regarding investigation cooperation could be adequately secured through strict conditions.
Final Order and Imposed Conditions
Answering the point for consideration in the affirmative, the Sessions Court allowed the petition filed under Section 438 of Cr.P.C. and granted anticipatory bail to Smt. Pavani M.N. in Crime No. 98/2024 of Jayanagar Police Station.
The court directed that in the event of her arrest, the petitioner shall be released on bail upon executing a personal bond for ₹50,000/- with one surety for the likesum to the satisfaction of the Investigating Officer, subject to the following conditions:
- The petitioner shall execute a personal bond for a sum of ₹50,000/- with one surety for the likesum.
- The petitioner shall not disturb, threaten, or hamper the prosecution witnesses in any manner.
- The petitioner shall appear before the Investigating Officer on or before April 20, 2024, and cooperate with the investigation in all respects.
- Any violation of the imposed bail conditions shall render the anticipatory bail liable for cancellation.