IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HONOURABLE SMT. JUSTICE K. SUJANA CRIMINAL REVISION CASE No.322 of 2022 DATE: 10.02.2026 BETWEEN:

Acthutuni Balaji and two others …..Petitioners/A.1 to A.3 And The Station House Officer, WCO Team – II City Crime Station Police Station, D.D. Hyderabad, Rep. by Public Prosecutor and another …..Respondents : ORDER :

This Criminal Revision case is filed by the petitioners aggrieved by the order dated 25.03.2022 passed in Crl.M.P.No.203 of 2019 in C.C.No.12 of 2018 by the learned Metropolitan Sessions Judge, Hyderabad.

2. The brief facts of the case are that the prosecution alleged that the petitioners, who were directors and management of Deepika Chit Fund Private Limited, had collected huge amounts from the de facto complainant and several other subscribers by way of chits and fixed deposits, but failed to repay the same. It was stated that the petitioners had lured innocent subscribers, collected money, and dishonestly misappropriated it, thereby committed offences punishable under Sections 406 and 420 read with 34 IPC and Section 5 of the Telangana Protection of Depositors and Financial Establishment Act, 1999 (for short ‘Depositors Act’). Accordingly, C.C. No.12 of 2018 was taken on file against them.

3. The petitioners filed a petition under Section 227 Cr.P.C seeking discharge, contending that the allegations are false and that a scheme of arrangement approved by the High Court in Company Petition Nos.196 and 197 of 2003 in the year 2008 provided for settlement of dues and withdrawal of all pending cases. They asserted that, in view of the said scheme, the present criminal case is not maintainable and that they are ready to disburse amounts if any claim is made. The Public Prosecutor opposed the petition, stating that the present case was taken cognizance in 2018, much after the scheme of arrangement, that no amounts were paid to the de facto complainant, and that the statements of several victims clearly disclosed cheating and misappropriation by the petitioners.

4. After hearing both sides, the trial Court vide order dated 25.03.2022 dismissed the petition holding that there is sufficient material on record to proceed against the petitioners. It observed that the scheme of arrangement of 2008 could not apply to the present case, as the case was instituted in 2018 and was not a pending case at the time of the said scheme. The trial Court further found that the statements of LWs.1 to 42 and the documents filed along with the charge sheet disclosed prima facie offences against the petitioners. Aggrieved thereby, the petitioners filed the present Criminal Revision Case.

5. Heard Sri M. R. S. Srinivas, learned counsel appearing on behalf of the petitioners as well as Sri D. Arun Kumar, learned Additional Public Prosecutor appearing on behalf of the respondent – State.

6. Learned counsel for the petitioners submitted that the trial Court had failed to appreciate the true scope of Section 227 Cr.P.C and erred in refusing to discharge the petitioners. He further submitted that the dispute was essentially civil in nature, arising out of financial transactions, and that there is no dishonest intention or criminal breach of trust from the inception so as to attract Sections 406 and 420 IPC. He relied upon the scheme of arrangement approved by the High Court in Company Petitions Nos.196 and 197 of 2003, dated 25.11.2008, under which all civil and criminal proceedings were required to be withdrawn and claims were to be settled through the Committee appointed by the Court. He contended that the present case, though taken on file in 2018, had originated from Crime No.776 of 2000 and was pending even prior to the scheme, and therefore the said orders are binding. He further contended that most of the subscribers had already received their dues, the de facto complainant had not approached the Committee. He further contended that charge sheet is filed after lapse of 17 years which is