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IN THE HIGH COURT OF KERALA AT ERNAKULAM
P.V. KUNHIKRISHNAN, J.
Rekhamol K.C. W/o Suresh K.G. - Appellant
Versus
State of Kerala - Respondent
W.P. (Crl.) No. 1113 of 2024
Decided On : 27-05-2025
(A) Banning of Unregulated Deposit Schemes Act, 2019 - Sections 29 and 30 - Writ petition seeking directions for compliance with provisions of the BUDS Act regarding investigation of offences - Petitioners contended that the case should be referred to the CBI based on the provisions of the Act - Court held that the competent authority must determine if conditions for referral are met before involving the CBI. (Paras 2-5)
(B) Writ of Mandamus - Scope - The court emphasized that it cannot compel the competent authority to refer the matter to the CBI unless the statutory conditions are satisfied. (Paras 4-5)
Facts of the case:
The petitioners sought a writ of mandamus to direct the respondents to comply with Sections 29 and 30 of the BUDS Act, arguing that the case should be referred to the CBI due to the nature of the offences involved.
Findings of Court:
The court concluded that the competent authority must assess whether the conditions for referral to the CBI are satisfied before any action can be taken.
Issues: The primary issue was whether the competent authority had a duty to refer the case to the CBI under the BUDS Act.
Ratio Decidendi: The court ruled that the competent authority must evaluate the statutory conditions outlined in Sections 30(1)(a) and (b) of the BUDS Act before making a referral to the CBI.
Result: Writ petition disposed of.
JUDGMENT :
1. The above writ petition (Crl) is filed with following prayers :
“I. Issue a Writ of Mandamus by directing the Respondents 1-6 and 12th Respondent to forthwith comply with Section 29 and 30 of the Banning of Unregulated Deposit Schemes Act of 2019 (BUDS Act), whereby handing over the investigation to the 13th Respondent.
II. Issue a Writ of Mandamus by directing the Respondents 1-6 to accept all and any complaints/representations made against Respondents 7-11 and upon those complaints/representations containing allegations of financial transactions to forthwith transmit them to 12th Respondent.
III. Issue a Writ of Mandamus by directing the 13th Respondent to submit the investigation details including the proceedings of investigation before this Honorable Court on every fortnight so as to enable this Honorable Court to monitor the said investigation.
IV. Issue a Writ of Mandamus by directing the Respondents 1 and 2 to ensure that officers under them strictly comply with the section 29 of the Banning of Unregulated Deposit Schemes Act of 2019 (BUDS Act).
V. Issue such other Writ, direction or order as this Honorable Court may deem fit in the facts and circumstances of the case.” [sic]
2. The main prayer in this writ petition is to issue a direction to respondent Nos. 3 to 6 to comply Sec. 29 of the Banning of Unregulated Deposit Schemes Act of 2019 (BUDS Act) and thereby directing the 13th respondent to comply with Sec.30 of the BUDS Act.
3. Heard the learned counsel for the petitioners, Senior Public Prosecutor and also the Standing Counsel appearing for the CBI.
4. The short point raised by the petitioners is that in the light of Secs.29 and 30 of the BUDS Act, the case is to be referred to the CBI. It will be better to extract Secs.29 and 30 of the BUDS Act.
“29. Competent Authority to be informed of offences — The police officer shall, on recording information about the commission of an offence under this Act, inform the same to the Competent Authority.
30. Investigation of offences by Central Bureau of Investigation:
(1) On receipt of information under section 29 or otherwise, if the Competent Authority has reason to believe that the offence relates to a deposit scheme or deposit schemes in which—
(a) the depositors, deposit takers or properties involved are located in more than one State or Union territory in India or outside India;
(b) the total value of the amount involved is of such magnitude as to significantly affect the public interest, the Competent Authority shall refer the matter to the Central Government for investigation by the Central Bureau of Investigation.
(2) The reference made by the Competent Authority under sub-section (1) shall be deemed to be with the consent of the State Government under section 6 of the Delhi Special Police Establishment Act, 1946 (25 of 1946).
(3) On the receipt of the reference under sub-section (1), the Central Government may transfer the investigation of the offence to the Central Bureau of Investigation under section 5 of the Delhi Special Police Establishment Act, 1946 (25 of 1946).”
5. Sec.29 of the BUDS Act says that the police officer shall, on recording information about the commission of an offence under this Act, inform the same to the Competent Authority. According to the Prosecutor, the same is already informed to the competent authority. Then comes Sec. 30 of the BUDS Act. As per Sec. 30 of the BUDS Act, on receipt of information under section 29 or otherwise, if the Competent Authority has reason to believe that the offence relates to a deposit scheme or deposit schemes in which the depositors, deposit takers or properties involved are located in more than one State or Union territory in India or outside India and the total value of the amount involved is of such magnitude as to significantly affect the public interest, the Competent Authority shall refer the matter to the Central Government for investigation by the Central Bureau of Investigation. Therefore, the twin co
The competent authority must determine if statutory conditions for referral to the CBI under the BUDS Act are satisfied before proceeding with the investigation.
The court mandated timely action on representations under the BUDS Act, emphasizing the importance of administrative efficiency.
Judicial interference in police investigations should be minimal, allowing the CBI to conduct investigations without imposed modalities unless there is clear failure in the investigation process.
Section 35A of the Banking Regulation Act does not empower banks to request the transfer of investigations to the CBI, as this would violate the provisions of the DSPE Act.
The court emphasizes the necessity of timely action on representations under the BUDS Act for addressing fraud in deposit schemes.
The court found a procedural violation in not issuing statutory notices for asset attachment but allowed re-evaluation of the case, emphasizing the principles of natural justice while establishing th....
The Reserve Bank of India's guidelines do not confer jurisdiction upon the CBI to investigate bank fraud without prior state consent as mandated by the Delhi Special Police Establishment Act.
Point of law : Every prosecution which results in the discharge or acquittal of the accused must be reviewed by a lawyer on the panel and, on the basis of the opinion given, responsibility should be ....
The main legal point established in the judgment is the maintainability of the petition under Section 482 of Cr.P.C. and the court's jurisdiction to issue specific directions to the Competent Authori....
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