The failure to arraign relevant companies in criminal proceedings constitutes a serious anomaly, rendering the prosecution defective.

O R D E R

The first accused in C.C No.1821/2014 on the files of the Judicial First Class Magistrate Court, Kayamkulam, has filed this petition under Section 482 Cr.P.C to quash the proceedings against him in the aforesaid case. The offences alleged against the accused are under Sections 409, 420 and 120B I.P.C r/w Section 34 I.P.C.

2. The prosecution case is that on 03.03.2006, 02.05.2006 and on 04.04.2007, the petitioner and the other accused obtained a deposit of Rs.8 Lakh from CW1 to CW3, offering high returns of interest, and failed to make payment of the promised interest to CW1 after 05.05.2007, to CW2 after 03.03.2007, and to CW3 after the month of October, 2008. It is further alleged that the petitioner and the other accused also did not return the aforesaid amount of Rs.8 Lakh obtained from CW1 to CW3, and thus cheated the above witnesses.

3. In the present petition, the petitioner would contend that he is totally innocent, and that a false case has been foisted against him. It is further stated that, consequent to the winding up of the group of companies by name M/s.Business India Group, in which the petitioner and others were functioning as Chairman and Directors, this Court has rendered a Judgment dated 21.11.2013 (Annexure-A3), as per which a scheme of arrangement/compromise was formulated in between the company and its creditors, including the aggrieved persons in this case. It is further stated that, as per the terms and conditions incorporated in the aforesaid judgment, the civil and criminal proceedings initiated by the public, who deposited amounts with the company, which the petitioner and others represented, were agreed to be terminated. On the basis of the above understanding in the scheme formulated by the aforesaid judgment, various other identical cases initiated against the petitioner and others are said to have been closed. For the above reason, the petitioner seeks to quash the proceedings against him in this case as well.

4. Heard the learned counsel for the petitioner and the learned Public Prosecutor representing the State of Kerala.

5. As rightly pointed out by the learned counsel for the petitioner, there is an inherent defect in the criminal prosecution launched against the petitioner in this case since the investigating agency did not arraign the companies, in which the petitioner had been working as Chairman and Managing Director, as accused in the final report. It is pertinent to note that, in Annexure-A9 complaint, which the de facto complainant filed before the learned Magistrate, the Companies, which the petitioner herein represented as Chairman and Managing Director, were arraigned as accused Nos.1 to 3. Even as per the allegations in the aforesaid complaint, the aforesaid companies are said to have received the deposits from the de facto complainant and the other witnesses. In spite of specific allegations in the above regard, the Investigating Officer did not choose to arraign the above Companies as accused in the final report filed in this case. Since the petitioner is said to have received deposits from the de facto complainant and the other witnesses as a representative of the Companies, in which he was functioning as Chairman and Managing Director, the failure of the investigating agency to arraign the aforesaid companies as accused in the final report, amounted to a serious anomaly.

6. In addition to that, it could be seen from Annexure-A3 judgment rendered by this Court in C.P Nos.41/2009, 42/2009, 52/2009, 42/2012 and 5/2013, that the disputes pertaining to the collection of deposits by the Companies, which the petitioner and the other Directors represented, were resolved by a scheme formulated in the aforesaid judgment. It is made clear towards the concluding po