Bengaluru, April 5, 2024 – In a significant legal development, the LV Addl. City Civil and Sessions Judge of Bengaluru (CCC-56), Sri Shriram Narayan Hegde, has granted anticipatory bail to two individuals, B. Ramaswamy and Ranganath S.K., who were facing charges related to cheating and forgery concerning a local industries factory. The order, passed on April 5, 2024, allows the petitioners/accused to be released on bail in the event of their arrest in connection with Cr. No. 114/2024, registered at the Basaveshwaranagar Police Station.

The case involves alleged offences under Sections 420 (Cheating), 465 (Forgery), 468 (Forgery for purpose of cheating), and 471 (Using as genuine a forged document) of the Indian Penal Code (IPC). The petitioners, B. Ramaswamy, aged 75, and Ranganath S.K., aged 36, both residents of Railway Gollahalli Village, Nelamangala Taluk, had filed the petition (Crl. Misc. No. 3154/2024) under Section 438 of the Code of Criminal Procedure (Cr.P.C.) seeking protection from arrest.

Background of the Case and Prosecution Allegations

The charges stemmed from a complaint filed by Sri Pavan Kumar M., the Director of ‘Lakshmi Cement and Ceramics Industries’ factory, located in Basaveshwaranagar, Bengaluru. According to the prosecution’s brief, the accused No. 1, B. Ramaswamy, was a Director of the Industries from 2002 to 2010. The core allegation is that Ramaswamy, despite allegedly no longer holding any right over the company, obtained a PAN card and bank account details in the Industries’ name and misused them with the intent to cheat shareholders. He is also accused of making several correspondences in the name of the factory, leading to the registration of the complaint. The investigation by the Basaveshwaranagar Police is currently ongoing.

Defense Argument Centers on Corporate Dispute and Arbitration

The defense, represented by advocate Sri Shreeram T. Nayak, strongly refuted the charges, asserting that the petitioners are innocent. The plea highlighted the long-standing corporate dispute surrounding the Industries. It was submitted that Petitioner No. 1, B. Ramaswamy, was a Director from 2002 to 2010. The defense detailed a historical dispute among the Directors, including an incident where one Sanjeev Ramesh Khanbdelwal, a former Managing Director, had attempted to remove the existing directors, including Ramaswamy. This was challenged in O.S. No. 7186/2010, which was later settled, confirming Ramaswamy’s continuation as a Director.

Crucially, the defense pointed out that Ramaswamy himself appointed the current complainant as a Director in 2017. The primary thrust of the defense argument was that the present complaint is a ‘counter-blast’ to ongoing civil and arbitration proceedings. The court was informed about a share transfer agreement dated February 22, 2019, between Ramaswamy and one Srinivasaiah Medisetty. Following Medisetty’s death in October 2019, a dispute arose, which led Ramaswamy to file Civil Misc. Petition (CMP) No. 186/2022 before the Hon’ble High Court of Karnataka. The defense submitted a copy of the High Court order from CMP No. 186/2022, which confirmed that an Arbitrator has already been appointed to resolve the corporate conflict.

The petitioners emphasized their willingness to cooperate with the investigation and confirmed their status as permanent residents, thereby mitigating the risk of absconding.

Court’s Reasoning and Conditions for Bail

The Learned Public Prosecutor vehemently opposed the bail plea, arguing that there was a prima facie case against the accused, and their release could lead to tampering with prosecution witnesses or absconding.

After hearing both sides and perusing the records, the court framed the point for determination: “Whether the petitioners / accused has made out sufficient grounds to grant an order of anticipatory bail by resorting to special powers vested in this Court under Section 438 of Cr.P.C.?”

The court noted the key submission by the petitioner’s counsel, which included the Hon’ble High Court order in CMP No. 186/2022 confirming the appointment of an Arbitrator. While acknowledging that the alleged offences are non-bailable, the court observed that they are not punishable with death.

Finding the petitioners to be permanent residents and noting their readiness to cooperate with the investigation, the court determined that “reasonable conditions will meet the apprehension of the prosecution.” This reasoning led the court to answer the point for determination in the AFFIRMATIVE.

Consequently, the bail petition was allowed. In the event of their arrest in connection with Cr. No. 114/2024, B. Ramaswamy and Ranganath S.K. are to be released on bail upon executing a personal bond of Rs. 50,000/- each, along with one surety for the like sum, subject to stringent conditions.

The conditions imposed by the court are:

1. The petitioners/accused shall appear before the Investigating Officer within 10 days from the date of the order.
2. They shall not tamper with prosecution witnesses in any manner.
3. They shall co-operate with the Investigating Officer as and when called for investigation.
4. They shall not involve in any criminal activities.
5. They shall attend the court regularly on all the dates of hearing, without fail.

This ruling underscores the judiciary’s approach to balance the need for police investigation with the protection of personal liberty, particularly in cases rooted in long-standing commercial or corporate disputes that are already subject to arbitration. The granting of anticipatory bail provides Ramaswamy and Ranganath S.K. temporary relief while the investigation and parallel civil proceedings continue.