Citation: Amit Bansal v. State of Karnataka & Anr., Criminal Petition No. 2397 of 2020, Karnataka High Court (Justice H.P. Sandesh), decided on 01.10.2026 | CNR No. KAHC010092042020
The company must be made an accused before its directors, managing director or employees can be prosecuted on the strength of allegations that are directed at the company. When police file a B report on a private complaint, the Magistrate can disagree with it, but must consider the B report, protest petition, sworn statement and documents together, and decide whether there is a prima facie case to issue process under Section 204 CrPC or to dismiss under Section 203. Merely rejecting the B report in a cryptic order, without applying the mind, is not enough.
The Karnataka High Court has quashed a cheating and criminal breach of trust case against the managing director of Pearson India Education Services, because the complaint was filed against its officials without making the company itself an accused. It has also laid down a step-by-step procedure for magistrates when police file a “B” report (closure report) on a private complaint. The complainant, who owns the firm that developed the “Kaleido” learning-analytics software, alleged in 2015 that Pearson took the software for a trial in 2014 and then marketed a copy of it under another name. The police registered a case, but later filed a “B” report. After the complainant filed a protest petition, the Magistrate recorded his sworn statement, rejected the B report and took cognizance in 2019. He then recorded a second sworn statement and issued summons in December 2019 under Sections 380, 406, 468, 471, 420 and 120B IPC. The petitioner, Amit Bansal, the fourth accused, said that the allegations were general and aimed only at the company. He argued that nobody’s role had been stated, that a civil suit was already pending, and that the summons were mechanical. Justice H.P. Sandesh agreed, holding that under Aneeta Hada and Pepsi Foods, an offence by the company is a condition for prosecuting those running it, and rejected the complainant’s argument that arraigning the company is not an absolute rule. The court found that the Magistrate had rejected the B report without examining the protest petition, sworn statement or documents or saying where the police erred, and had repeated the same reasoning when issuing summons. It laid down six guidelines. The Magistrate need not reject or accept the B report at an early stage. A protest petition is treated as a complaint. Recording the sworn statement amounts to cognizance. The B report, sworn statement and documents must be weighed together, followed by a decision to issue process or dismiss the complaint. Recording sworn statements twice is a procedural error but does not vitiate the proceedings. The court quashed the case against the petitioner without remanding it, and directed the Registrar General to send the order to all magistrates and the Karnataka Judicial Academy for training.