Safiya Malik

The High Court of Karnataka at Bengaluru Single Bench of Justice Hemant Chandangoudar quashed the criminal proceedings initiated against the petitioner under Section 98 of the Karnataka Police Act, 1963. The Court recorded that the statutory requirements for initiating investigation into a non-cognizable offence had not been complied with, rendering the proceedings legally untenable.

The petitioner, R. Amarnath, aged 49 years and associated with M/s Dilip Buildcon Pvt. Ltd., approached the High Court seeking quashing of proceedings in C.C. No. 976/2019 pending before the Principal Civil Judge and JMFC, Challakere. The complaint originated from an incident dated 2nd April 2019 during the Lok Sabha Elections. According to the prosecution, at around 2:00 PM, the complainant along with staff, while performing election duty, intercepted the petitioner’s vehicle at a check post. Upon inspection, the petitioner was found in possession of cash amounting to Rs. 8,38,250 without any valid documents substantiating its lawful possession.

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The prosecution sought to prosecute the petitioner under Section 98 of the Karnataka Police Act, which criminalizes possession or conveyance of stolen or fraudulently obtained property if the person fails to satisfactorily account for such possession to the Magistrate.

Learned counsel for the petitioner, Sri Rohan Kothari, argued that the entire proceedings were vitiated due to non-compliance with Section 155(2) of the Code of Criminal Procedure, 1973, which mandates prior permission from the Magistrate before police can investigate a non-cognizable offence.

The High Court Government Pleader, Sri M.V. Anoop Kumar, representing the State, defended the initiation of proceedings but did not produce any material indicating compliance with Section 155(2) of Cr.P.C.

Justice Hemant Chandangoudar, after hearing both parties, meticulously examined the statutory framework and the facts of the case. The Court recorded: "It is pertinent to note that the offence punishable under Section 98 of the Act is a non-cognizable offence. As per the provisions of Section 155(2) of the Code of Criminal Procedure, 1973, when the police seek to investigate a non-cognizable offence, it is mandatory for them to obtain prior permission from a Magistrate before initiating any investigation."

The Court further noted: "However, in the present case, the investigation was conducted by the police without obtaining the requisite order under Section 155(2) of Cr.P.C. This non-compliance with the statutory requirement renders the investigation as well as the consequent cognizance of the alleged offences legally untenable and vitiated."

Addressing the applicability of Section 98 of the Karnataka Police Act, the Court observed:

"Section 98 of the Act provides that whoever is found in possession of, conveys in any manner, or offers for sale or pawn, anything which there is reason to believe is stolen property or property fraudulently obtained, shall, if he fails to satisfactorily account for such possession or act to the satisfaction of the Magistrate, be punished with imprisonment upon conviction."

Critically examining the evidence, the Court remarked: "The materials on record, including the charge sheet, do not indicate that the complainant had any reasonable belief or suspicion that the cash found in possession of the petitioner was stolen property or was fraudulently obtained."

The Court categorically held that: "The mere possession of a large amount of cash without valid documents does not, by itself, constitute an offence under Section 98 of the Act. To establish an offence under this provision, it must be demonstrated that the property in question is either stolen or fraudulently obtained."

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Concluding its observations, the Court stated: "In the absence of any such allegation or reasonable suspicion on record, the essential ingredients required to establish the commission of an offence under Section 98 of the Act are conspicuously absent. Therefore, allowing the proceedings to continue would amount to an abuse of the process of law."

On these grounds, the High Court allowed the petition and quashed the criminal proceedings. The Court directed: "The impugned proceedings in C.C. No. 976/2019 pending before the Principal Civil Judge and JMFC, Challakere, are hereby quashed."

Advocates Representing the Parties

For the Petitioner: Sri Rohan Kothari

For the Respondent:  Sri M.V. Anoop Kumar, High Court Government Pleader

Case Title: Shri R. Amarnath v. The State of Karnataka & Another

Neutral Citation: NC: 2025: KHC:13643

Case Number: CRL.P No. 50 of 2024

Bench: Justice Hemant Chandangoudar

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