Karnataka High Court refuses to quash ₹200 crore fraud case against ed-tech app co-founder

The Karnataka High Court on Thursday refused to quash criminal proceedings against the co-founder (petitioner) of ed-tech app, the V-Care Learning App, who is among those accused of defrauding the public to the tune of ₹200 crores [R Venkatesh v State of Karnataka].

Justice M Nagaprasanna found that the allegations against the accused involved glaring acts of cheating in the garb providing education through a learning app, by which several persons were cheated.

There was no necessity to dismiss such a case against the accused, who was instrumental in setting up the ed-tech firm that allegedly committed the act of fraud, the Court held.

"The summary of the chargesheet depicts glaring acts of cheating on behalf of the petitioner who on the garb of learning app is said to have cheated several persons to the tune of Rs 200 crores. Therefore, the BUDS Act and KPIDFE Act have been invoked in the case at hand. There can be no warrant of interference, the offences being so against the petitioner and the petitioner being the accused no.6 as also the one who has established the firm with other accused," the Court said.

It, therefore, dismissed the petitioner's plea to quash the case against him.

The petitioner along with an erstwhile film producer, N Veerendra Babu and others, are said to started a company known as Aryan Infotech Pvt Ltd. They also set up an online education application called V-Care Online Learning App.

According to the prosecution, those behind the app then collected around ₹200 crore from people across Karnataka, assuring that they would provide classes for students through the online learning app. However, no such classes were taken.

Moreover, it is alleged that the accused also sought deposits from the public on the promise of tickets to fight elections for a political party, 'Rashtriya Janhita Party', formed by them and for posts in Karnataka Rakshana Pade.

A criminal case was filed against the accused in 2022.

They were booked for various offences under the Indian Penal Code including for cheating, breach of trust, and forgery, as well as under the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019 and  Karnataka Protection of Interest of Depositors in Financial Establishments (KPIDFE) Act, 2004.

The sixth accused in the case, R Venkatesh approached the High Court in 2023 seeking the quashing of the criminal case against him. The High Court, however, has rejected this plea by its order passed yesterday.