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IN THE HIGH COURT OF JUDICATURE AT MADRAS
V. SIVAGNANAM, J.
S. Srividya & Another – Appellants
Versus
State Represented by Deputy Superintendent of Police, Chennai – Respondent
Crl. O.P. No. 12149 of 2021 & Crl. M.P. Nos. 6853 & 6854 of 2021
Decided On : 14-09-2023
TNPID Act - Criminal Proceedings - Sections 406, 420, 120(B) IPC and Section 5 of TNPID Act 1997 - The judgment discusses the criminal proceedings against the accused under the TNPID Act and IPC sections for fraudulent collection of deposits from the public, diversion of funds, and default in repayment. The court analyzes the evidence, witness examination, and trial proceedings before dismissing the petition to quash the criminal proceedings.
Fact of the Case:
The case involves criminal proceedings against the accused for fraudulent collection of deposits from the public, diversion of funds, and default in repayment. The accused are prosecuted under Sections 406, 420, 120(B) IPC and Section 5 of TNPID Act 1997. The trial court examined 89 witnesses and the case was posted for oral argument and judgment.
Finding of the Court:
The court found that it was not proper to quash the criminal proceedings at the stage when all prosecution witnesses had been examined, and the case was posted for oral argument and judgment. The court dismissed the petition with liberty for the petitioners to submit their oral argument and written submission before the trial court.
Issues: The main issue was whether the criminal proceedings should be quashed at the stage when all prosecution witnesses had been examined, and the case was posted for oral argument and judgment.
Ratio Decidendi: The court held that it was not proper to quash the criminal proceedings at the stage when all prosecution witnesses had been examined, and the case was posted for oral argument and judgment. The trial court had given time to the petitioners to submit their oral argument or written submission before the judgment.
Final Decision: The criminal original petition was dismissed with liberty for the petitioners to submit their oral argument and written submission before the trial court on or before 25.09.2023. The trial court was directed to hear the oral argument and receive the written submission, thereafter, dispose the matter on merits.
JUDGMENT
(Prayer: Criminal Original Petition has been filed under Section 482 Cr.P.C. to quash the proceedings in C.C.No.6 of 2020 on file of the Special Court for TNPID Act offences, Chennai.)
1. Challenging the criminal proceedings in C.C.No.6 of 2020 on file of the Special Court for TNPID Act offences, Chennai, the present criminal original petition has been filed.
2. The prosecution case is that based on the complaint dated 21.10.2013 given by Mr.G.Ramadoss, Velachery- 42 against M/s.Viswapriya Financial Services and Securities Ltd., @ M/s.Viswapriya (India) Ltd., and six others, the case is registered in Crime No.5 of 2013 by the respondent police. The allegations in the FIR are that the complainant Mr.G.Ramadoss had invested a total sum of Rs.6,60,000/- in M/s.Viswapriya Financial Services and Securities Ltd., @ M/s.Viswapriya (India) Ltd.,(A1 Company) in seven deposits in the names of his family members and the said company has defaulted to repay the deposits and the interest accrued thereon.
3. The investigation has revealed that the company (A1) M/s.Viswapriya Financial Services and Securities Private Ltd., was started in the year 1991 in ROC No.18-20796 of 1991 and started its non-banking activities from the date of incorporation i.e. on 13.05.1991. The Company within four months from the date of incorporation removed the word “Private” from its name and became a Limited liability Company on 03.09.1991 in the name of M/s.Viswapriya Financial Services and Securities Ltd. (A1). The company was recognized as a Non-Banking Financial company (NBFC) by Reserve Bank of India (RBI) and issued NBFC license on 20.04.1998. Against prudential norms of NBFC, the company collected deposits from the public and invested in Real Estate Businesses. It received deposits under various schemes from the public for an assured interest rate of 10 to 12% for a fixed period of time. RBI which conducted inspection at the Company cancelled the NBFC license on 06.08.2005.
4. Thereafter, on 02.06.2011, the Company changed its name to M/s.Viswapriya (India) Ltd., in CIN No.U65991TN1991PLC020796 and continued collecting deposits under various schemes and diverted the money to other companies formed by them. Between the years 2009 and 2015, the accused A4 R.Subramanian and his above said confederates entered in criminal conspiracy for the purpose of siphoning the deposits collected from the public in deceitful manner. They promoted about 76 companies. The accused A4 R.Subramanian, along with A1 to A3 and A5 to A34 had continued collecting deposits under the four schemes promoted by A1 M/s.Viswapriya (India) Ltd., viz. (1) Prime Invest (2) Asset Backed Security Bond (3) Liquid Plus and (4) Safety Plus.
5. The Company A1 M/s.Viswapriya (India) Ltd., which was collecting deposits from the public, against the RBI norms even after the cancellation of NBFC license for about 6 years i.e. from 2005 and was issuing Fixed Deposits Receipts (FDR) in their name, had cunningly for ulterior motive started issuing FDRs in the name of A2 M/s.Akshayaboomi Investments Private Ltd., & A3 M/s. Quadrangle Trading Services Ltd., promoted and managed by accused A4 R.Subramanian, along with A1 to A3 and A5 to A34. The amount received as deposits through the abovesaid companies were deposited in the account of A1 M/s.Viswapriya (India) Ltd., Between November 2009 and October 2013 nearly about 1100 depositors from across India & abroad have invested their money in the four schemes viz., Prime investment, (2) Assets Backed Security, (3) Liquid Plus (4) Safety Plus, which became defaulted for repayment.
6. In respect of the same, EOW-II HQrs has received 587 complaints from the depositors with 3804 deposit certificates and the total investment amount of Rs.47,68,92,011/- and the accused (A1 to A34) defaulted to pay the amount of Rs.51,47.29,861/- to the depositors. During the course of investigation, movable properties worth Rs.36,85,000/- have been attached and Ad-Interim Order has
The main legal point established in the judgment is that the court has the discretion to interdict a proceeding at an intermediate stage of the trial if it is bound to become lame or a sham, but in t....
The main legal point established in the judgment is that in cases predominantly civil in nature, where the accused have settled the dues with the bank, and there is no evidence of forgery or cheating....
The court emphasized the importance of ongoing investigation and examination of witnesses in determining the outcome of the case.
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