The Karnataka High Court has allowed the Criminal Investigation Department (CID) to proceed with filing its chargesheet before the Special Court in a case involving BJP MLA and former minister Ramesh Jarkiholi. The case revolves around allegations of breaching the conditions attached to a ₹439 crore loan that was taken from the Karnataka State Cooperative Apex Bank and other affiliated cooperative banks.
The court, through a single-judge bench led by Justice Pradeep Singh Yerur, passed this order during a hearing on Tuesday. The judge observed that since the investigation had been completed and the petitioner had participated and cooperated in the inquiry, the chargesheet could now be submitted.
"In view of the petitioner having participated and cooperated in the investigation, the respondent state having conducted the investigation and ready to file the chargesheet. It may be filed before the special court, upon filing of the chargesheet the special court shall not precipitate the matter till further orders are passed by this court."
During the hearing, the court raised a query on whether the petitioner, Ramesh Jarkiholi, was cleared or implicated in the final report. Responding to this, the public prosecutor informed the court that Jarkiholi had indeed been implicated in the case. The chargesheet prepared by the CID runs over 2,000 pages and is expected to be filed before the Special Court within the week.
This order was given while hearing a criminal petition filed by Ramesh Jarkiholi, along with Vasant V Patil and Shankar A Pawade. The petitioners had sought the quashing of an FIR registered against them by the Vishveshwarapuram Police Station. The charges were framed under Sections 406 (criminal breach of trust), 420 (cheating) and 34 (common intention) of the Indian Penal Code.
The petitioners’ counsel argued that all three were directors of Soubhagya Laxmi Sugars Ltd, the company linked to the loan, and had resigned from their positions. The argument stressed that the act of resigning from the board did not in itself amount to an offence, as the resignation did not alter their liability as guarantors.
The counsel further submitted that the guarantors had already provided assurance to the bank, agreeing to remain liable until the loan was fully repaid. He also pointed out that their status as directors had no effect on the guarantee itself, which clearly outlined their continued responsibility regardless of their position.
During the proceedings, the Additional Special Public Prosecutor (SPP) confirmed to the court that the chargesheet was complete and would be submitted before the Special Court by the end of the week. However, the petitioners objected to this, contending that filing the chargesheet before the petition was resolved would render their petition meaningless.
Following the arguments from both sides, the High Court permitted the CID to go ahead with filing the chargesheet. At the same time, the court directed the Special Court to avoid taking any further action on the matter until additional orders are issued by the High Court.
The court has scheduled the next hearing of the case for June 3.
Case Title: Ramesh Jarkiholi & Others AND M/s The Karnataka State Cooperative Apex Bank Ltd & ANR
Case No: Criminal Petition No 416/2024.
