IMPORTANT POINT
IMPORTANT POINT
The Chit Funds Act, 1982 prevails over general laws, and allegations of cheating under IPC must demonstrate fraudulent intent from inception.

ORDER :

The lis involved in these two petitions being one and the same, both the criminal petitions are heard together and are being decided by way of this common order.

2. These Criminal Petitions are filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short ‘BNSS’). Criminal Petition No.10494 of 2024 is filed to quash the proceedings initiated against the petitioner/accused No.3 in FIR.No.230 of 2024 dated 13.07.2024 before the Manuguru Police Station, Bhadradri Kothagudem District, for the offence punishable under Section 420 of Indian Penal Code, 1860 (for short ‘IPC’) and Section 5 of the Telangana Protection of Depositors of Financial Establishment Act, 1999 (for short ‘TSPDFEA’) and Criminal Petition No.10597 of 2024 is filed to quash the proceedings initiated against the petitioner/accused No.2 in FIR.No.236 of 2024 before the Manuguru Police Station, Bhadradri Kothagudem District, for the offence punishable under Section 420 of IPC and Section 5 of the TSPDFEA.

Crl.P.No.10494 of 2024

3. The brief facts of this case are that the respondent No.2/de facto complainant lodged a complaint stating that the petitioner, along with two other, has cheated him stating that they work in Akshara Chit Funds (hereinafter referred to as ‘Company’) and pursued them to join in the chits promising to give extra commission and other bonus in the chit. It is alleged that the respondent No.2 believed in the deceitful words of petitioner and joined in the chit as subscriber in two different chits for an amount of Rs.15,00,000/- each and made monthly installment payments for 50 months using chit numbers ABCT0IP-23 and ABCT01P-06. However, when the respondent No.2 lifted the chit two years ago and asked the petitioner and other accused persons for returns of his share, no amounts were given to him.

4. On receipt of the said complaint, the Police registered FIR.No.230 of 2024 dated 13.07.2024, whereunder, the petitioner was arrayed as accused No.3 for the offences punishable under Section 420 of IPC and Section 5 of TSPDFEA. Aggrieved thereby, this Crl.P.No.10494 of 2024 is filed.

Crl.P.No.10597 of 2024

5. The facts of this case are on similar lines with that of Crl.P.No.10494 of 2024. The respondent No.2/de facto complainant in this case lodged complaint stating that believing in the words of petitioner and other accused persons, he joined in two chits for an amount of Rs.10,00,000/- each and made monthly installment payments using chit reference numbers ABCT04M-19, ABCT11J-40 and ABCT11J-28. However, when he lifted his chits, he found that he was been cheated in the hands of petitioner and other accused persons.

6. On receipt of the said complaint, the Police registered FIR.No.236 of 2024 dated 17.07.2024, whereunder, the petitioner was arrayed as accused No.2 for the offences punishable under Section 420 of IPC and Section 5 of TSPDFEA. Aggrieved thereby, this Crl.P.No.10597 of 2024 is filed.

7. Heard Sri B.Mayur Reddy, learned senior counsel representing Sri Aravind Saini, learned counsel for petitioner in both the matters and Sri D.Arun Kumar, learned Additional Public Prosecutor, appearing for respondent No.1 – State in both the matters. No representation on behalf of respondent No.2/de facto complainant, respectively, in both the matters.

8. Learned senior counsel appearing for the petitioner submitted that there are no set of specific allegations leveled against the petitioner in the contents of both the FIRs. He contended that the Company comes under actively operating category and is committed to making payments to all the subscribers, but due to widespread economic impact of COVID-19 pandemic, large number of subscribers defaulted in payments of installments which resulted in creating significant backlog to the Company and though the Company had been striving to overcome the same, the process being time consuming, there are procedural delays. He lamented that initiation of criminal proceedings is against the provisions