Criminal proceedings should not be quashed at the threshold under Section 528 of the BNSS if the FIR prima facie discloses cognizable offences and the investigation is still in progress, as the police have a statutory right to investigate.

ORDER

This Criminal Petition has been filed seeking to quash the proceedings in FIR No.135 of 2026 of Mahabubabad Town Police Station, Mahabubabad District, wherein the petitioner was arrayed as accused No.2, for the offences punishable under Sections 318(4), 316(2) and (5) r/w 3(5) of the Bharatiya Nyaya Sanhita, 2023 (for short ‘BNS’), Section 5 of the Telangana State Protection of Depositors of Financial Establishments Act, 1999 (for short ‘TSPDFEA’) and Section 76 of the Chit Funds Act, 1982 (for short ‘CF Act’).

2. Heard Mr.Jogram Tejavath, learned counsel representing Mr.TSV Prasad Naik, learned counsel for the petitioner and Mr.Jithender Rao Veeramalla, learned Additional Public Prosecutor, appearing for the respondent No.1.

3. Learned counsel for the petitioner submitted that the petitioner has not committed the alleged offences and has been falsely implicated in the present case solely on the ground that she is the wife of accused No.1. Even according to the allegations made in the complaint, the ingredients of the aforesaid offences are not attracted against the petitioner. He further submitted that the petitioner is no way concerned with the alleged chit transactions conducted by accused No.1. The allegations levelled against the petitioner are purely civil in nature arising out of monetary transactions relating to a chit.

3.1. He further submitted that the petitioner is neither the chairman nor involved in the day-to-day affairs of the Om Srimannarayana Chit Fund Private Limited. Respondent No.2 ought to have approached the competent civil Court and filed a suit for recovery of the alleged amount due and payable by the petitioner and other accused. He further submitted that there is no dishonest intention on the part of the petitioner, particularly on the ground that respondent No.2 has not deposited the amount as envisaged under the CF Act. Hence, the continuation of proceedings against the petitioner amounts to a clear abuse of the process of law.

3.3. In support of his contentions, learned counsel replied upon the order passed by this Court in Crl.P.No.15497 of 2024, dated 31.10.2025.

4. Per contra, the learned Additional Public Prosecutor submitted that petitioner is the Chairman of the said company and her husband is the Managing Director. He further submitted that there are specific allegations against the petitioner in the complaint that respondent No.2 paid a sum of Rs.9,20,000/- by way of monthly installments when he was declared as successful bidder on 30.01.2025; however, the petitioner and accused No.1 failed to pay the prize amount with dishonest intention and diverted the funds to their own purposes. He further submitted that the investigation is still in progress, and at this stage, the petitioner is not entitled to seek quashing of the proceedings.

5. Having considered the rival submissions made by the respective parties and after perusal of the material available on record, it reveals that respondent No.2 filed the complaint on 07.04.2026, wherein specific allegations are levelled that he is a member of the chit fund company run by the petitioner and accused No.1, and paid 39 monthly installments amounting to Rs.9,20,000/-. He was declared as successful bidder on 30.01.2025 and he is entitled to a prize amount of Rs.12,42,400/- and further stated that as per the terms and conditions of the chit agreement, the petitioner and accused No.1 were required to pay the prize amount within a period of 45 days. The