ORDER

This Criminal Original Petition is filed by the petitioners/A1 & A2 to quash the complaint in E.O.C.C.No.343 of 2009 on the file of the Additional Chief Metropolitan Magistrate, Economic Offence-I, Egmore, Chennai.

2.The gist of the complaint is that the First Accused Company is M/s.Viswapriya Financial Services and Securities Limited, which is a Non- Banking Financial Company as defined under Section 45I(f) of the Reserve Bank of India Act, 1934 [hereinafter referred to as “the Act”]. The second accused is Mr.R.Subramanian, Director of the A1/Company and A3 to A5 are the Directors of the A1/Company, of which case against A4/G.Ramanujam was quashed by this Court. As regards the case against A3 and A5, case against them got abated since they were reported dead and now the case is pending against A1 Company and A2/the petitioners herein alone. The directions and orders issued by the Reserve Bank of India [RBI] have not been complied with, thereby they become liable for prosecution and punishment under Sections 58B(2), 58B(5)(aa) and 58B(4A) read with Section 58C of the Act. The first accused Company was incorporated on 13.05.1991 with the main object of carrying on the business of trading, leasing and hire purchasing. The first accused Company applied for Certificate of Registration [COR] with RBI to carry on business of Non- Banking Financial Company [NBFC]. The A1/Company produced a certificate from its auditors to the effect that the Board of Directors passed a resolution to the effect that they will not accept public deposits. The RBI granted COR on 20.04.1998 with specific condition that it should not accept public deposits and in case they wanted to raise any public deposits, prior permission from the RBI to be obtained after furnishing necessary credit rating. It was observed that the A1/Company was accepting/holding public deposits under the guise of various investor schemes in violation of Non- Banking Financial Companies Acceptance of Public Deposits [Reserve Bank] Directors, 1977. Hence, RBI vide its letter dated 25.04.1995 advised the A1/Company to treat the monies collected under the guise of various investor schemes in various of the Directions as regulated deposits. The accused Company filed W.P.No.8786 of 1995. This Court by order dated 07.08.2003 dismissed the writ petition upholding the orders of the RBI. Against which, the accused Company preferred a writ appeal in W.A.No.3097 of 2003 and the same is pending before this Court.

3.The RBI conducted inspection of books of accounts of the accused Company on 02.12.2003, 03.12.2003 and 05.12.2003 with reference to its financial position as on 31.03.2003. The inspection revealed that the accused Company had all along operating the investor schemes in violation of the RBI direction and its Net Owned Fund was negative due to exposure to its group Companies and therefore, the COR issued to the accused Company was cancelled vide order dated 06.08.2005. As against the cancellation of COR, the accused Company preferred an appeal before the Appellate Authority which is pending with Government of India, Ministry of Finance. The accused Company was directed to repay the entire amount of public deposits with interest, further directed to furnish various returns prescribed, such as quarterly returns on liquid assets, the half yearly returns and continuance of periodical norms and the Annual returns, as per the directions issued by the RBI, from time to time. The accused Company was further directed to repay the deposits received from the public on the due date, to submit at monthly intervals within 15 days of the expiry of the reporting period. The accused Company was directed to dispose of its financial assets within three years from the date of cancellation of COR and convert into Non-Banking Non-Financial Company or wind up the Company. The accused Company had not submitted any of the returns and not furnished any details to the Bank with regard to the payment of depos