IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 17.06.2022

CORAM

THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR

ORDERS RESERVED ON

26.04.2022

ORDERS PRONOUNCED ON

17.06.2022

CRL.O.P.NO.7370 OF 2015

AND M.P.NOS.1 & 2 OF 2015

1. Viswapriya Financial Services

& Securities Ltd.,

Rep. by its Director

Mr.R.Subramanian,

No.2, First Cross Road,

Kasturiba Nagar, Adyar, Chennai – 600 020.

2. R.Subramanian

Director,

Viswapriya Financial Services &

Securities Ltd.,

No.4/309-A, Singaravelan II Street,

Chinna Neelangarai, Chennai – 600 041.

... Petitioners/

Accused 1 & 2

Vs.

The Reserve Bank of India,

Represented by Shri.Raj Kumar

Department of Non-Banking Supervision,

Chennai.

... Respondent/

Complainant

PRAYER:

Criminal Original Petition is filed under Section 482 of the

Code of Criminal Procedure, to call for the records and 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.

For Petitioners

:

Mr.R.Subramanian

Party-in Person

For Respondent

:

Mr.T.Poornam

Standing Counsel

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 in