Directors of a company can be held accountable for criminal breach of trust and cheating if they are found to have participated in fraudulent schemes affecting customers.

ORDER :

1. Present petition is filed with a prayer to quash and set aside impugned FIR being C.R. No. I-31 of 2017 registered with DCB Police Station, Ahmedabad, on 3.4.2017 for the offences punishable under Sections 406 , 420 and 34 of the INDIAN PENAL CODE . Present petitioners are accused Nos.2 and 4.

2. Brief facts of the case are that on 15.9.2013, the complainant and her husband had gone to M/s. Gitanjali Jewellers for making purchases and that in the bill given to them, M/s. Divyanirman Jewels, Shop No. 6, Isckon Centre, Shivranjani Crossroads, Satellite, Ahmedabad was written. It is alleged that the persons working in the said showroom informed them about diamond/gold monthly installment schemes and that one installment would be borne by the company. Upon the complainant finding the scheme to be good, the complainant and her husband discussed about investing Rs.5000/- per month in the gold coin scheme for 12 months. Thereupon, a person came to their residence and gave them “Tamanna” card and took Rs. 10,000/- (Rs.5,000/- x 2) towards two schemes. Thereafter, till 25.5.2014, a person used to come to the complainant's residence and take Rs.10,000 towards the installments. In July, 2014, the complainant received a telephone call from Gitanjali Jewellers informing that the franchisee has been terminated. Thereupon, the complainant and her husband went to the store and offered to deposit the remaining three installments and inquired if they could get gold coins. Thereupon, they were informed that no gold coins are available but that they can purchase diamonds. The complainant declined to purchase the diamonds and asked for gold coins or return of the installment money. Thereafter, the complainant addressed communications on different e-mail addresses of Gitanjali Group with relevant details of the amount invested by them but these communications were not replied to. Upon further inquiry, it was learnt that the showroom had closed down. It was learnt that the owner of the franchisee M/s. Divyanirman Jewels was one Digvijaysinh Jadeja, however, upon inquiring about him, the complainant did not get any satisfactory answer. It is alleged that the complainant made investment in the scheme on being told that she would get financial benefits from the same. It is alleged that by not giving gold coins and by not returning the investment, the offences of criminal breach of trust and cheating have been committed. The accused are Accused No. 1-Digvijay Jadeja (franchisee owner of M/s. Divyanirman Jewellers), Accused No. 2 Mehul Chinubhai Choksi (described as Managing Director of Gitanjali Group), Accused No. 3 Aniyath Shivraman Nair (described as Director of Gitanjali Group) and Accused No. 4 Chetna Jayantilal Zhaveri (described as Director of Gitanjali Group). The F.I.R. is essentially a recovery proceeding in the form of a criminal complaint and is filed for offences under Sections 406 , 420 and 34 of the INDIAN PENAL CODE . The contents of this paragraph are the allegations made in the F.I.R.

2.1 The petitioners State that Ahmedabad stores referred to in the FIR was run by M/s. Divyanirman Jewels (owned and managed by Accused No. 1-Digvijaysinh Jadeja), franchisee of Gitanjali Jewellery Retail Limited (GJRL) (company of Gitanjali Group that manages the franchisee business). No investment State d to have been made by the complainant has ever been passed