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2025 Supreme(Online)(KER) 10519
HIGH COURT OF KERALA
Kauser Edappagath, J
STATE OF KERALA – Appellant
Versus
SAMEERKUMAR MODI AND OTHERS – Respondent
Crl.Rev.Pet 1344/2011
SRI.GRASHIOUS KURIAKOSE - ADGP, SRI.MADHU RADHAKRISHNAN
A company cannot be prosecuted for the same offence after a discharge order has been issued, reaffirming the principle of double jeopardy.
Headnote:(A) Prize Chits and Money Circulation Schemes (Banning) Act, 1978 - Sections 2(c), 4, 5, and 6 - Allegations against a company for engaging in money circulation schemes - The trial court found no prima facie case against the accused, leading to discharge - Subsequent FIR registered against the same company was quashed as it involved the same allegations. (Paras 2, 5, 7)
(B) Criminal Procedure Code, 1973 - Section 239 - Discharge of accused - The trial court's detailed examination concluded that the accused were not involved in any money circulation scheme, thus no charges were warranted. (Paras 2, 5)
Facts of the case:
The petitioner company was accused of violating the Banning Act through its business practices. The trial court discharged the accused, finding no evidence of a money circulation scheme. A subsequent FIR was filed against the company, which was challenged in court.
Findings of Court:
The court confirmed the trial court's discharge order, stating that the allegations in the FIR were identical to those previously dismissed. The court also noted the establishment of a monitoring committee for direct selling entities.
Issues: The main issues were whether the petitioner company could be prosecuted for the same offence after a discharge order was issued and the implications of the monitoring committee's powers.
Ratio Decidendi: The court ruled that the petitioner could not be prosecuted for the same offence after the discharge order, emphasizing the principle of double jeopardy. The monitoring committee's powers to refer violations were acknowledged but did not affect the current case.
Result: W.P.
(C) No. 859/2013 is allowed; Crl.R.P.No.1344/2011 is dismissed.
JUDGMENT
Both the W.P.(C) and Crl.R.P. are connected.
2. The petitioner in W.P.(C) No. 859 of 2013 is a company registered under the Companies Act, 1956 engaged in the business of manufacturing and sale of cosmetics and other household products through direct/network marketing. In the year 2008, the Sub Inspector of Police, Vakathanam, Kottayam registered a crime against the petitioner company and its officials alleging offence under Sections 2 (c) and 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (for short, 'the Banning Act'). The allegation is that the company was involved in doing business falling under the Banning Act. After investigation, the police filed Ext.P1 final report against the company's managing director and its employees. The case was taken on file by the Chief Judicial Magistrate Court, Kottayam (for short, 'the trial court') as C.C.No.49 of 2008. All the accused in C.C.No.49 of 2008 filed discharge petition before the trial court for discharge under Section 239 of Cr.P.C . contending that no prima-facie case has been made against them. The trial court, after a detailed consideration of the business plan of the company and after evaluating the materials, allowed the discharge application as per Ext.P3 order in W.P.(C) No. 859 of 2013. The State has filed a revision petition challenging Ext.P3 order in W.P.(C) No. 859 of 2013 as Crl.R.P.No.1344 of 2011.
3. After Ext.P3 order was passed, the Kannur Town Police registered another crime against the petitioner company as FIR No.6 of 2013 (Ext.P5) alleging that the business carried out by the petitioner company is in violation of Sections 4 , 5 and 6 of the Banning Act. It is alleged that after the registration of the FIR, the 2nd respondent in WP(C) No.859/2013 carried out search at the premises of the petitioner company at Cochin and sealed the business premises. Ext.P5 in W.P.(C) No. 859 of 2013 is the FIR. W.P. (C) No. 859 of 2013 has been filed to quash Ext.P5 FIR. There is a further prayer to unseal the business premises of the petitioner.
4. I have heard Sri.Madhu Radhakrishnan, the learned counsel for the petitioner in W.P.(C) No.859 of 2013 (respondent No.1 in Crl.R.P.No.1344 of 2011) and Sri.Grashious Kuriakose, the learned ADGP.
5. A perusal of Ext.P3 order in W.P.(C) No.859 of 2013 passed by the trial court would show that the trial court had examined in detail the entire materials on record and found that the accused in C.C.No.49 of 2008 were not engaged in any money circulation scheme by making any quick or easy money, which is the main ingredient of Section 2 (c) of the Banning Act and hence there are no sufficient grounds to frame charge against the accused. It is evident from Ext.P3 order in W.P.(C) No.859 of 2013 that the entire plan of the petitioner company was examined by the trial court and found that the scheme was not violating the Banning Act. On going through the materials on record and the impugned order, I see no reason to take a different view. While registering Ext.P5 FIR in W.P.(C) No.859 of 2013, the Kannur Town Police was well aware of Ext.P3 order of discharge. The offence involved in both crimes is essentially under Section 4 of the Banning Act. The allegation in both the crimes are more or less similar. In Ext.P3 discharge order in W.P.(C) No.859 of 2013, the trial court found that the accused are not engaged in any money circulation scheme by making any quick or easy money, which is the main ingredient of (c) of the Banning Act. The specific allegation in Ext.P1 final report in W.P.(C) No.859 of 2013 is that the petitioner company through its employees and agents is engaged in the money circulation scheme, violating the provisions of the Banning Act. Thus, the allegation and the offence involved in Ext.P5 FIR in W.P.(C) No.859 of 2013 are one and the same as that of the allegations in Ext.P1 final report. Since I have confirmed Ext.P3 discharge order, the petitioner company cannot be prosecuted pursuant
