The special court to deal with criminal cases related to MPs/MLAs in Karnataka has refused to discharge former minister C.P. Yogeshwar and other accused persons in the case related to allegations of cheating and fraud against their company Megacity (Bangalore) Developers and Builders Ltd.
However, the court gave them liberty to file a fresh application seeking discharge after the process of recording evidence is completed by the Serious Fraud Investigation Officer (SFIO), New Delhi, which had lodged the complaint of fraud in 2012 against Mr. Yogeshwar, who is the managing director of the company, and directors of the company Manju Kumari, Arun Charantimath, and Sujatha Charantimath.
Ramachandra D. Huddar, the judge of the special court, passed the order while dismissing applications filed by the accused seeking discharge from the case claiming that there is no material to proceed against them.
The court said that the complainant has to lead evidence twice and the accused have got the opportunity to cross-examine twice — once before framing of the charges, and another time after framing of charges — if the court finds material to frame charges after the first stage of recording of evidence. The procedure laid in law and the guidelines do not permit the special court to consider the application for discharge before the first stage of the process of recording of evidence to be led by the prosecution, the judge said.
The charges against them under the Indian Penal Code include siphoning off about ₹37 crore from the company and cheating thousands of people who had paid money for sites in the company's Vajragiri township project, forging of about 450 sale agreements to show that about ₹37 crore was paid to landowners to buy their land and putting this money to personal use.
Lapse by IO
The special court discharged, on technical grounds, Mr. Yogeshwar, his brothers C.P Gangadharaiah, P. Mahadevaiah, and H.R. Ramesh in a separate cheating case based on a complaint by the Megacity (Bengaluru) Developers and Builders Ltd. Site Holders’ Welfare Association. The Criminal Investigation Department (CID) had filed a charge sheet against them in 2010.
The court found serious lapse on the part of the Investigation Officer (IO) in not arraigning the company as an accused as per the law laid down by the apex court as the criminal proceedings cannot be initiated only against the directors without making the company as one of the accused.
Judge Huddar pointed out in the judgment that the court had to come to this conclusion due to perfunctory investigation by the IO, who did not follow basic requirements of investigation by adopting a casual approach though the IO knew that he was conducting an investigation against a company.
“It is made clear that it does not debar the prosecution from taking appropriate action at the right point of time against the company as well as directors, if the law provides,” the special court clarified.