THE HONOURABLE SMT JUSTICE K. SUJANA CRIMINAL PETITION No.5175 of 2025

ORDER:

This Criminal Petition is filed seeking to quash the proceedings against the petitioners/accused Nos.1 and 2 in FIR.No.114 of 2025 before the Siddipet I-Town Police Station, registered for the offences punishable under Section 318(4) of BNS, Section 5 of TSCFA and Section 5 of TSPDFEA.

2. The brief facts of the case are that the respondent No.2 - complainant, Mr. Ragishetti Pentaiah, had subscribed to seven chits with M/s Kanakadurga Chit Fund Pvt. Ltd.'s Siddipet branch. After paying the entire chit amount for two chits and continuously paying subscriptions for the remaining chits, the petitioners/accused persons - Ragidi Thirupathi Reddy and Kondam Kamalakar Reddy, settled all the chits for a total amount of Rs.33,95,660/-. They issued seven cheques with different dates and amounts from Kotak Mahindra Bank in favor of the complainant. However, when the complainant attempted to present these cheques for realization in his HDFC bank account, they were returned as invalid without any process, endorsement, or memo. The bank authorities informed the complainant that the cheques were invalid, and that though the petitioners were notified about the issue, they delayed the matter. Upon verification, it was revealed that the Siddipet branch office of the chit fund company had been closed without any prior intimation to the subscribers, which led to a separate criminal case being registered at PS Gajwel under relevant sections of the law. The complainant alleges that the accused persons issued the cheques with malicious intent and ill motive, knowing they were invalid, and thereby committed offenses.

3. On receipt of the said complaint, a case was registered against the petitioners for the offences as alleged. Aggrieved thereby, this Criminal Petition is filed.

4. Heard Sri N.Amarnath, learned counsel for the petitioners, Sri Rudresh Deshpande, learned Assistant Public Prosecutor appearing for respondent No.1 – State, and Sri Palle Sriharinath, learned senior counsel appearing for respondent No.2.

5. Learned counsel for petitioners submitted that the complaint filed by the respondent No. 2 is false, fabricated, and baseless. He contended that the petitioners are running a chit funded business in the name and style of M/s Kanakadurga Chit Fund Pvt. Ltd., and the respondent No. 2 had subscribed to seven different chits, but the respondent No. 2 has not provided any material documents to show that he paid the number of chit installments and the quantum of amount in respect of the said seven chits. He asserted that the allegations against the petitioners are false and fabricated, and the registration of the case under Section 5 of TSPDFEA, is not maintainable. He averred that the petitioners are carrying on chit fund business as per the provisions of the Chit Fund Act, 1982, and not accepting deposits on interest. He pointed out that the petitioner No.1 was in judicial custody from 07.06.2024 to 19.08.2024, and the question of issuing cheques on 20.07.2024 as alleged is totally false and a created story. Therefore, while advocating that the respondent No. 2 has falsely implicated the petitioners in the crime, and the continuation of the investigation would result in abuse of process of law, he prayed this Court to allow the criminal petition, quashing the proceedings initiated against the petitioners.

6. On the other hand, the learned Assistant Public Prosecutor, vehemently, opposed the submissions made by learned counsel for petitioners, and contended that basing on the averments of the complaint lodged by respondent No.2, the petitioners were implicated in the case. He averred that there are serious set of allegations against the petitioners which require investigation. Therefore, prayed this Court to dismiss the criminal petition, stating that the same lacks merits.

7. Learned senior counsel appearing for respondent No.2 submitted that basing on the private compla