Legitimate investment agreements and subsequent transactions negate allegations of cheating, justifying quashing of proceedings under inherent powers due to lack of sufficient legal basis for the charges.

ORDER :

1. This Criminal Petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) by the petitioners/accused Nos.1, 3 and 4 seeking to quash the proceedings in Crime No.236 of 2023 of Central Crime Station (CCS), D.D., Hyderabad, registered for the offences punishable under Sections 406 and 420 of the Indian Penal Code, 1860 (for short ‘IPC’) and Section 5 of the Telangana Protection of Depositors of Financial Establishments Act, 1999 (for short ‘the Act’).

2. Brief facts of the case:

2.1. Respondent No.2 lodged a complaint on 09.08.2023 stating that on 12.10.2022, accused Nos.1 to 4 approached him and his brother namely R.Vijay Kumar, Non-Resident Indian (for short ‘NRI’) and victim with an investment proposal in real estate by offering alluring returns on Rs.10 Crores deposit, as they aimed to establish a real estate company targeting land acquisition near Hyderabad, and on the following day, the de-facto complainant was taken to the site and under pressure and misleading promises, the complainant’s brother invested an initial amount of Rs.5 Crores, which was received through both bank transactions and cash during the period from October 2022 to December 2022. Despite a commitment agreement executed by accused No.1, Managing Director of the unregistered company, attempts to the promoters/other accused through phone proved unsuccessful, as such cheated to the tune of Rs.6.1 Crores.

3. When this matter is taken up for consideration on 10.09.2025, Mr.V.V.Narasimha Rao, learned counsel for respondent No.2 submitted that during the pendency of this criminal petition, respondent No.2/de-facto complainant died and he seeks short adjournment for getting instructions and therefore, the matter was posted to 23.09.2025. Thereafter, the matter was listed on 24.09.2025 and at the request of learned counsel appearing on behalf of respondent No.2, the matter was posted to 13.10.2025. On 13.10.2025 and 28.10.2025, there was no representation on behalf of Mr.V.V.Narasimha Rao, learned counsel for respondent No.2. The record discloses that the legal heir of respondent No.2/de-facto complainant did not file any application seeking impleadment. Hence, this Court is not having any option except to proceed with the matter on merits.

4. Heard Mr.Vinod Kumar Deshpande, learned Senior Counsel appearing for petitioner No.1, Mr.M.P.Chandramouli, learned Senior Counsel appearing for petitioner Nos.2 and 3, representing Mr.Raghu Gurram, learned counsel for the petitioners and Mr.M.Vivekananda Reddy, learned Assistant Public Prosecutor, appearing on behalf of respondent No.1-State.

5. Submissions of learned Senior Counsel appearing on behalf of the petitioners:

5.1 Learned Senior Counsel submitted that the petitioners have not committed any offence and they were falsely implicated in the present case. Even according to the allegations made in the complaint, respondent No.2 invested the amount in purchasing the land. The said allegation does not come within the ambit of deposit as envisaged under Section 2(b) of the Act. Hence, the offence under Section 5 of the Act is not attracted.

5.2 They further submitted that there is no allegation against the petitioners that there is a dishonest intention on the part of the petitioners from the date of entering into the contract. Hence, the ingredients of Sections 406 and 420 of IPC are not attracted against the petitioners.

5.3 They also submitted that petitioner No.1 and Neevedhik Estates LLP had entered into Memorandum of Understanding (MOU) on 22.08.2021. As per the MOU, respondent No.2 has agreed to refund the amount of Rs.4,50,00,000/-. In the event if the petitioner No.1/ accused No.1 failed to refund the said amo