Karnataka HC Refuses to Quash FIR in Rs 1.40 Crore NEET Seat Fraud Case, Rejects 'Civil Dispute' Plea

The Karnataka High Court declined to quash an FIR against a couple accused of fraudulently taking Rs 1.40 crore from a mother on the false promise of securing an MBBS seat for her daughter.

On 12 August 2026, Justice M. Nagaprasanna of the High Court of Karnataka at Bengaluru dismissed two criminal petitions filed under Section 482 of the Code of Criminal Procedure (also filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita) seeking to quash CR No. 220 of 2026, registered by Bagalagunte Police Station. The accused — Dr. Shilpa Aravali and her husband Kiran Kumar P — had sought to have the FIR wiped out at the threshold on the ground that the dispute was purely civil in nature. The Court found that the complaint, taken at face value, prima facie disclosed the ingredients of cheating under Section 420 and criminal breach of trust under Section 406 of the Indian Penal Code, warranting investigation rather than termination of the criminal process.

How the Complaint Came to Be Filed

The complainant, Smita Prasad, is employed with Himalaya Wellness Company and her husband, Rajeev Ranjan Kumar, works as an Assistant General Manager with Canara Bank. Their elder daughter, Arushi Ranjan, appeared for the NEET examination in 2023 but did not secure a rank sufficient for a government medical college seat. The family began exploring management quota admissions at private medical colleges.

In February 2023, Smita Prasad visited Prakriya Hospital on Tumkur Road, Bengaluru, to consult her brother, Dr. Dwijendra Prasad, who worked there as a physician. It was during this visit that she met Dr. Shilpa Aravali, who was also working at the hospital. After learning of the family's predicament, Dr. Shilpa Aravali represented to the complainant, over telephone, that she and her husband had strong contacts and influence in private medical colleges and could secure an MBBS seat for Arushi.

Relying on this assurance, the complainant agreed to pay the demanded sum. Initially, Rs 35,00,000 was paid in cash in June 2023, with the meeting reportedly taking place near the parking lot outside Prakriya Hospital. The complainant was then informed that the admission had been successfully arranged, and was instructed to transfer an additional Rs 1,05,00,000 to the bank account of Kiran Kumar P held with IDFC First Bank, Basaveshwaranagar Branch. The complainant made four RTGS transfers: Rs 35,00,000 on 24 July 2023; Rs 35,00,000 on 5 August 2023; Rs 20,00,000 on 29 August 2023; and Rs 15,00,000 on 20 September 2023. The total amount paid to the accused thus stood at Rs 1,40,00,000.

Dr. Shilpa Aravali also collected Arushi's academic and personal documents via WhatsApp on 24 July 2023 and 25 September 2023, purportedly to complete admission formalities. After receiving the entire sum, the accused began delaying confirmation. On 28 December 2023, Dr. Shilpa Aravali informed the complainant that she could not secure the seat and sought more time. The complainant declined and demanded a full refund. Despite repeated follow-ups, meetings, and assurances — including claims that funds would be arranged through property sales — no amount was returned.

The complainant initially approached Kaggalipura Police Station, which registered a zero FIR and transferred it to Bagalagunte Police Station. CR No. 220 of 2026 was formally registered on 7 June 2026 for offences under Sections 406, 420, and 34 of the IPC. Within weeks, both accused filed the present petitions before the High Court.

The Accused's Case for Quashing

Sri Ananda Ramachandra Dass, appearing for both petitioners, argued that the matter was a plain money transaction between the parties, and that criminal law had been set into motion purely as a device to recover money. He characterised it as a civil transaction that took place three years ago, and pointed to the three-year delay in registering the crime as evidence that the incident alleged had never taken place. He also contended that the complainant's brother and Kiran Kumar P were known to each other through several transactions, and that this relationship was being exploited to arm-twist accused No. 2.

Sri K. Nageshwarappa, the High Court Government Pleader appearing for the State, countered that the crime had been registered only eight weeks before the hearing, that the investigation was ongoing, and that the offences were clearly made out on the face of the complaint. He sought dismissal of both petitions.

Why the Court Declined to Quash at the Threshold

Justice Nagaprasanna set out the legal position squarely. The issue, as framed by the Court, was whether a crime ought to be “obliterated at its very threshold, merely on the plea that the criminal proceedings have been instituted as a device for recovery of money.”

The Court began by examining the complaint in full and identifying what it disclosed on its face. Its observation was direct: neither the medical seat nor the money had returned to the complainant. The seat promised had never fructified; the Rs 1,40,00,000 paid had never been returned.

Turning to Section 406 of the IPC (punishment for criminal breach of trust), the Court traced the foundational requirement to Section 405 — entrustment of property coupled with dishonest misappropriation. On the facts alleged, the Court found this element prima facie satisfied. A sum of Rs 1,40,00,000 had been entrusted to the accused for one specific purpose: to secure an MBBS seat. The seat never came; the money never returned. The allegation that the accused dishonestly appropriated the sum was, at the nascent stage of investigation, sufficient to attract the ingredients of Section 405 and warrant investigation under Section 406.

For Section 420 of the IPC (cheating and dishonestly inducing delivery of property), the Court examined Section 415, which requires deception coupled with a dishonest intention existing at the inception of the transaction. The Court found this element also prima facie present. The complaint alleged that the accused held themselves out as persons with influential contacts in private medical colleges, induced the complainant to part with an enormous sum on the strength of that representation, and then neither secured the seat nor returned the money.

The Court drew a sharp distinction that runs to the heart of the civil-versus-criminal debate: if the accused were, from the very inception, conscious that their assurance was incapable of fulfilment, the representation was not an innocent promise that subsequently failed but a deception embedded in the genesis of the transaction. That is a question which investigation must answer, not a finding the Court could make one way or the other at the quashing stage.

The Court addressed the two arguments pressed by the petitioners in turn. On the delay in approaching the police, the Court noted that the complaint itself offered an explanation — the accused had continued to hold out assurances and dodge the complainant for close to two years before she finally went to the police. Whether that explanation ultimately holds up is a matter for investigation, not a ground to terminate the criminal process at its inception.

On the “civil dispute” characterisation, the Court was categorical: “Every transaction involving money does not, by that circumstance alone, shed its criminal complexion.” The mere utterance of the expression “civil dispute” cannot function as a talisman. Where the very foundation of a transaction is alleged to have been laid in deception, and the victim is induced to part with property on a representation alleged to have been dishonest from the outset, a civil label cannot be used to smother a legitimate criminal investigation.

The Court also considered the broader character of the alleged conduct. What was described was not a commercial deal that simply went wrong over time. The complaint alleged a calculated targeting of a parent's aspiration for her daughter's medical career, the holding out of influence as an inducement, and the extraction of a large sum on the back of that false assurance. The combination of those elements, taken at face value, brought the case within the prima facie contours of both cheating and criminal breach of trust.

Outcome

Justice M. Nagaprasanna found no merit in either petition. Criminal Petition No. 10705 of 2026 filed by Smt. Shilpa Aravali and Criminal Petition No. 10794 of 2026 filed by Kiran Kumar P were both rejected. CR No. 220 of 2026, pending before the III Additional Chief Judicial Magistrate, Bengaluru City, remains alive. The Bagalagunte Police Station is free to continue its investigation into the offences alleged under Sections 406, 420, and 34 of the IPC.