To establish criminal fraud, the intention to defraud must exist from the transaction's inception; mere breach of contract does not amount to criminal charges.

JUDGMENT

This Criminal Appeal has been filed challenging the Judgment dated 16.11.2022 passed in C.C.No.37 of 2013 by the learned Special Judge, Special Court under TNPID Act, Coimbatore, thereby convicting the appellants for the offences punishable under Sections 420, 406 of IPC, Section 5 of TNPID Act and Section 120-B r/w 420 of IPC.

2. The case of the prosecution is that the first accused is a registered partnership firm as M/s.G.S. Poultry Farms, in which the second and third appellants are the Directors. The fourth and fifth accused were employees of the said firm and were actively involved in its day to day affairs. It is alleged that all the accused, with a dishonest intention, had collected huge amounts as deposits from the general public under various schemes, which are as follows :

In Scheme I :- If the depositor deposits, 1 unit amount of Rs.50,000/- they would supply 100 to 200 number of chicks with maintenance charges of Rs.3,000/- per month for a period of 24 months besides providing free medical facilities and feed ; yearly bonus of Rs.3,000/- aso would be borne by the firm; the grown up chicks would be taken back by the firm after refunding of principal amount of Rs.50,000/- to the depositors on maturity of the scheme ;

In Scheme II :- If the depositor deposits, 1 unit amount of Rs.1,00,000/- they would rear 250 to 350 number of chicks at A1 firm; they would pay Rs.6,000/- per month for a period of 38 months beside providing yearly bonus of Rs.6,000/- and the deposit amount of Rs.1,00,000/- would be returned to the depositors on maturity of the scheme ; In Scheme III :- If the depositor deposits, 1 unit amount of Rs.1,50,000/-, they would read 400 to 500 number of chicks at A1 firm; they would pay Rs.9,000/- per month for a period of 36 months besides providing yearly bonus of Rs.9,000/- and the deposit amount of Rs.1,50,000/- would be returned to the depositors on maturity of the scheme ; In Scheme IV :- If the depositor deposits, 1 unit of Rs.2,00,000/-, they would rear 500 to 650 number of chicks at A1 firm ; they would pay Rs.12,000/- per month for a period of 36 months besides providing yearly bonus of Rs.12,000/- and the deposit amount of Rs.2,00,000/- would be returned to the depositors on maturity of the scheme ;

and In Scheme V called VIP Scheme :- If the depositor deposits under VIP Plan, in which the chicks will not be provided to the depositors and the firm itself will look after the chicks and months charges for a period of 36 months would be given by A1 firm and yearly bonus would be paid to the depositors by the firm and the principal deposit amount would be returned to the depositors on maturity of the scheme.

3. The accused 2 and 3 had jointly collected deposits in the name of the first accused and executed agreements in favour of the depositors. The fourth and fifth accused had issued receipts in the name of the first accused for the deposits collected from the general public. The accused A2 to A6 conspired together in a calculative manner and collected deposits from the public during the period between 21.03.2012 and 15.08.2012, with the intention to cheat the depositors and misappropriated their funds. The general public were induced by the accused with the false promise of unrealizable returns, which works between 100% to 150% of interest per annum and also assured to return the principal amount at the end of three years. Believing such false representation, several depositors invested their money and the accused collectively collected a total sum of Rs.1,71,18,900/- from 89 depositors. Thereafter, the accused failed to repay the deposit amounts on maturity and misappropriated the same for th