Madras High Court
M/S.Sakthi Emu Farms vs State Rep. By on 13 June, 2022
Crl.A.Nos.490 & 492 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 13.06.2022
CORAM :
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
Crl.A.No.490 of 2022 and Crl.M.P.No.6394 of 2022
&
Crl.A.No.492 of 2022 and Crl.M.P.No.6397 of 2022
1.M/s.Sakthi Emu Farms, Rep. By A2,
100, Amu Complex,
Kunnathur Road,
Perundurai, Erode District.
2.S.Ramasamy
3.R.Samiyathal
4.S.Thangavel @ Chenniappan
5.T.Devi @ Devika
6.P.Chandran @ Sampath ... Petitioners
(in Crl.A.No.490 of 2022)
S.Palanisamy,
S/o. Subban @ Subramani ... Petitioner
(in Crl.A.No.492 of 2022)
Versus
State rep. by
Inspector of Police,
Economic Offences Wing II,
Erode. ... Respondent
(in both Appeals)
https://www.mhc.tn.gov.in/judis
Crl.A.Nos.490 & 492 of 2022
Common Prayer: Criminal Appeals are filed under Section 374(2) of the
Code of Criminal Procedure, to release the petitioners on bail by
suspending the sentence appealed against in C.C.No.15 of 2012 on
05.04.2022 on the file of the learned Special Judge, Special Court under
The Tamil Nadu Protection of Interests of Depositors Act Cases,
Coimbatore, pending the disposal of the above appeals.
For Petitioners : Mr.G.Murugendran
(in both appeals)
For Respondent : Mr.S.Vinoth Kumar
(in both appeals) Government Advocate (Crl. Side)
COMMON JUDGMENT
These Criminal Appeals are filed against the conviction and
sentence imposed by the learned Special Judge, Special Court under
TNPID Act, Cases, Coimbatore, by Judgment dated 05.04.2022 in
C.C.No.15 of 2022.
2.Since both the Criminal Appeals have arisen out of the common
order the appeals are taken up for disposal by this Common Judgment.
https://www.mhc.tn.gov.in/judis
Crl.A.Nos.490 & 492 of 2022
3.On conclusion of the trial, the Trial Court found the appellants/A2
to A7 guilty for the offence under Section Section 120 B r/w Section 420
of IPC, Section 420 and Section 5 of TNPID Act, and convicted them as
under:-
(i) for the offense under Section 120B r/w Section 420 of I.P.C., to
undergo One day Simple Imprisonment with fine of Rs.50,000/- each, in
default of payment of fine to undergo further one and half years Simple
Imprisonment ;
(ii) for the offense under Section 420 of I.P.C., to undergo One day
Simple Imprisonment with fine of Rs.50,000/- each, in default of payment
of fine to undergo further one and half years Simple Imprisonment ;
(iii) for the offense under Section 5 of TNPID Act, to undergo One
day Simple Imprisonment with fine of Rs.50,000/- each, in default of
payment of fine to undergo further period of two years Simple
Imprisonment.
(iv) However, all the sentences were ordered to run concurrently and
the period already if any, undergone by them was ordered to be given set
off as per Section 428 of Cr.P.C.
4.Aggrieved by the said Judgment of conviction and sentence
imposed on the accused/A2 to A7, the Criminal Appeal in Crl.A.No.490 of
https://www.mhc.tn.gov.in/judis
Crl.A.Nos.490 & 492 of 2022
2022 is filed by the accused A1 to A5 and A7, and the Criminal Appeal in
Crl.A.No.492 of 2022 is filed by the accused A6, before this Court.
5.The primary contention of the learned counsel for the appellant is
that there are a total of 62 depositors out of which 26 depositors have
admitted during the cross-examination that they have been fully settled. In
respect of the remaining 36 depositors, earlier, Crl. O.P.No.15052 of 2020
was filed before this Court and the factum of settlement to the remaining
36 depositors was also recorded. As a matter of fact, the Trial Court
recorded the entire proceedings relating to the settlement and
compounding in paragraph No.42 in the Judgment, which is extracted
hereunder for reads reference:-
“42.The accused alleged that they have settled
26 depositors, which has been admitted during cross
examination and settled remaining depositors also.
However, no evidence has been placed before the
court in respect of 36 depositors or the accused have
not deposited money in respect of the remaining 36
depositors the accused has not taken any steps to
produce the remaining 36 depositors before the
competent authority, thereby proving the said
settlement of 36 depositors and request him to file an
application under Sec.5A of TNPID Act. The order of
the Hon'ble High Court, Madras in Crl.O.P.No.15052
of 2021, dated 17.03.2020 reveals that the accused
settled 55 depositors and remaining six depositors
https://www.mhc.tn.gov.in/judis
Crl.A.Nos.490 & 492 of 2022
alone have to be settled; and Rs.8,68,500/- is
available with the Competent Authority, who was
given direction to disburse the said amount to the 6
depositors. Further, the accussed deposited
Rs.2,88,000/-, before the Competent Authority, Erode
on and filed a memo to that effect before this court on
31.03.2022. The said settlement recorded by the
Hon'ble High Court and direction issued to the
Competent Authority have also been taken care of,
while convicting the accused. Having regard to
totality of circumstances of the present case, this court
fees that ends of justice will be served, if the accused
are punished. A1 Sakthi Emu Farms, an unregistered
firm, is not a legal person. Hence, A1 cannot be
punished, but A2 to A7 liable to be convicted. ”
6.In this view of the matter, it is useful to extract the Section 5A of
the Tamil Nadu Protection of Interest of Depositors (In Financial
Establishments) Act, 1997, which reads as follows:-
“[5 A. Compounding of offence.--(1) An offence
punishable under Section 5 may, before the institution
of the prosecution, be compounded by the Competent
authority or after the institution of the prosecution, be
compounded by the Competent Authority with the
permission of the Special Court, on payment of the
entire amount due to the depositors with or without
interest.
(2) Where an offence has been compounded
under sub-section (1), no proceeding or further
proceeding, as the case may be, shall be taken or
continued against the offender, in respect of the
offence so compounded and the offender, if in
custody, shall be discharged forthwith]”
https://www.mhc.tn.gov.in/judis
Crl.A.Nos.490 & 492 of 2022
Thus, it may be seen that the offence is compoundable with the leave of
the Court. However, the Trial Court, after considering the entire issue,
without giving any reasons and without even expressly refusing leave,
proceed to convict. While so, in the proceeding of the court below, except
to state that to serve the ends of justice, no other detailed reasons have
been given for refusal to accept the plea of compounding.
7.When the Act specifically makes the offense as compoundable and
when the entire amount with interest has been paid to all the depositors,
there was no special reason to reject the plea to compound and proceed to
convict the petitioners, and that too by levying a huge amount of fine of
Rs.9 Lakhs on the appellants. In that view of the matter, I am of the view
that the appellants in these Criminal Appeals are entitled to succeed on the
following terms:-
(i) The factum as to the settlement of the entire amount to all the 62
depositors involved in this case is recorded and the offenses are
compounded under Section 5A of the TNPID Act;
(ii) The conviction and sentence including the fine imposed by the
learned Special Judge, Special Court under the TNPID Act, Coimbatore,
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Crl.A.Nos.490 & 492 of 2022
by Judgment dated 05.04.2022 in C.C.No.15 of 2012 is set aside;
(iii) Criminal Appeals are allowed accordingly. Consequently, the
connected miscellaneous petitions are closed.
(iv) The amounts which were already paid and pending with the
Competent Authority is directed to be disbursed to the depositors in
accordance with law and at no point of time the appellants will be entitled
to make any claim of the amounts deposited by them in any manner.
13.06.2022
Index : yes/no
Speaking order/Non-speaking order
klt
To
1.The Inspector of Police, Economic Offences Wing II, Erode.
2.The Special Judge, Special Court under The Tamil Nadu Protection of
Interests of Depositors Act Cases, Coimbatore.
3.The Public Prosecutor, High Court of Madras.
https://www.mhc.tn.gov.in/judis
Crl.A.Nos.490 & 492 of 2022
D.BHARATHA CHAKRAVARTHY. J.,
klt
Crl.A.No.490 of 2022 and Crl.M.P.No.6394 of 2022
&
Crl.A.No.492 of 2022 and Crl.M.P.No.6397 of 2022
13.06.2022
https://www.mhc.tn.gov.in/judis
