ORDER

Applications for regular bail.

2. B.A.No.8411 of 2021 has been filed by the accused in Crime No.1119 of Pooyappally police station registered for the offences punishable under Sec.406, 409, 420, 212 and 34 of the Indian Penal Code (for short 'IPC'), Section 21(3) of the Banning of Unregulated Deposit Schemes Act ('BUDS Act' for short), 2019 and Section 76 of the Chit Funds Act, 1982.(Chits Act).

3. The petitioners in B.A. No.8429 of 2021 are also the accused in crime No.1118 of 2021 of the very same police station registered for the offences punishable under Sec.406, 409, 420, 212 and 34 of the Indian Penal Code (for short 'IPC'), Section 21(3) of the Banning of Unregulated Deposit Schemes Act (BUDS Act), 2019 and Section

76 of the Chit Funds Act, 1982.

4. The prosecution allegation in Crime No.1118 of 2021 in brief is that the petitioners who are the partners of Karthika Finance, Oyoor in total received a sum of Rs.63 lakhs as deposit from the defacto complainant promising an attractive amount as interest and to return the amount after a certain period with profit and thus dishonestly induced him to deliver money to them and thereafter failed to pay the interest and to return the money as promised and thus cheated him and thereby committed the aforesaid offences. 5. In Crime No.1119 of 2021 the allegation is that under the very same promise the petitioners received a sum of Rs.4,404,212/- from the defacto complainant and failed to pay interest and to return the money, as promised and thereby cheated him. 6. The petitioners are in custody since 23.9.2021

7. Heard the learned counsel for the petitioners as well the learned Public Prosecutor.

8. Apart from the offences under the Indian Penal Code the FIR was registered under Section 21(3) of the BUDS Act and Section 76 of the Chit Funds Act. Section 21 deals with the punishment prescribed for the offence committed in contravention of Section 3.

Section 21 (3) reads as follows:

“Any deposit taker who accepts deposits in contravention of section 3 and fraudulently defaults in repayment of such deposits or in rendering any specified service, shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine which shall not be less than five lakh rupees but which may extend to twice the amount of aggregate funds collected from the subscribers, members or participants in the Unregulated Deposit Scheme.”

Explanation – For the purposes of this Act, (i) :- the expression 'fraudulently” shall have the same meaning as assigned to it in Section 25 of the Indian Penal Code (45 of 1860);

(ii) where the terms of the Deposit Scheme are entirely impracticable or unviable, the terms shall be relevant facts showing an intention to defraud.

Section 2(17) of the Act reads as follows:

“2(17). “Unregulated Deposit Scheme” means a Scheme or an arrangement under which deposits are accepted or solicited by any deposit taker by way of business and which is not a Regulated Deposit Scheme, as specified under column (3) of the First Schedule.”

Section 3 of the Act reads as follows:

“ 3)Banning of unregulated Deposit Schemes.- On and from the date of commencement of this Act,-

(a) the Unregulated Deposit Schemes shall be banned;

and (b) no deposit taker shall, directly or indirectly, promote, operate, issue any advertisement soliciting participation or enrolment in or accept deposits in pursuance of an Unregulated Deposit Scheme.”

9. From the records it is revealed that the petitioners have accepted deposits coming under Section 2(17) of the BUDS Act, from the defacto complainant and others, promising to pay attractive interest. Prima facie, it appears that the deposits received by them from the depositors under the guise of attractive offers were in contravention of Section 3 of the BUDS Act and they fraudulently defaulted in payment of interest as well to return the deposits and thereby committed an offence punishable under Section 21(3) of the th