Madras High Court
S.P.Muthuvel vs The Inspector Of Police on 16 September, 2025
Author: M.Nirmal Kumar
Bench: M.Nirmal Kumar
Crl.A.Nos.12 & 117 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 25.04.2025
PRONOUNCED ON : 16.09.2025
CORAM
THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR
Crl.A.Nos.12 & 117 of 2022
Crl.A.No.12 of 2022:
S.P.Muthuvel ... Appellant/A3
Vs.
The Inspector of Police,
Economic Offences Wing-II (EOW II),
Coimbatore.
(Crime No.1 of 2015) ... Respondent
PRAYER: Criminal Appeal is filed under Section 374(2) of Code of Criminal
Procedure, to set aside the judgment dated 28.12.2021 made in C.C.No.1 of
2016 on the file of the Special Judge, Special Court under TNPID Act,
Coimbatore convicting the appellant and sentencing the appellant to undergo
rigorous imprisonment for 7 years along with fine of Rs.10,000/- for each
count for the offence under Section 420 of IPC and in default to undergo
rigorous imprisonment for 1 ½ years and to undergo rigorous imprisonment for
7 years along with fine of Rs.10,000/- for each count for the offence under
Section 5 of TNPID Act and in default to undergo rigorous imprisonment for 2
years.
Page No.1 of 26
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Crl.A.Nos.12 & 117 of 2022
For Appellant : Mr.K.S.Karthik Raja
For Respondent : Mr.L.Baskaran,
Government Advocate (Crl. Side)
Crl.A.No.117 of 2022:
1.S.T.Saminathan
2.K.Manivel ... Appellants/A2 & A4
Vs.
State Rep by,
Inspector of Police,
Economic Offences Wing-II,
Coimbatore.
(Crime No.1 of 2015). ... Respondent
PRAYER: Criminal Appeal is filed under Section 374(2) of Code of Criminal
Procedure, to set aside the conviction of 7 years Imprisonment for the offence
under Section 420 and 7 years imprisonment for the offence under Section 5 of
the TNPID Act and the fine of Rs.4,00,000/- (Rupees Four Lakhs Only) under
Section 420 of IPC in default to undergo further one and half years rigorous
imprisonment for each count, and a fine of Rs.4,00,000/- under Section 5 of
TNPID Act in default to undergo further 2 years rigorous imprisonment
imposed in C.C.No.1 of 2016 by the Special Judge, Special Court under
TNPID Act, Coimbatore dated 28/21/2021 acquit the appellant.
For Appellants : Mr.C.Prakasam for Mr.S.Shankar
For Respondent : Mr.L.Baskaran,
Government Advocate (Crl. Side)
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Crl.A.Nos.12 & 117 of 2022
COMMON JUDGMENT
Challenging the impugned judgment, dated 20.12.2021 passed by the
learned Special Judge, Special Court under TNPID Act, Coimbatore (trial
Court) in C.C.No.1 of 2016, these criminal appeals are filed.
2.The conviction and sentence of the trial Court is as follows:
Rank of the Offence Conviction and Sentence
Accused
A1 For offence under Section A1 to pay a fine of Rs.10,000/- for
420 IPC and Section 5 of each counts (Fine of Rs.10,000/-
Tamil Nadu Protection of X 20 counts X 2 offences), in total
Interests of Depositors (in Rs.4,00,000/-. A2 to A4 shall pay
Financial Establishments) the fine amount on behalf of A1,
Act, 1997. in default of payment of fine to
undergo further one and half years
Rigorous Imprisonment.
A2 to A4 For offence under Section A2 to A4 to undergo Seven Years
420 IPC Rigorous Imprisonment and each
to pay a fine of Rs.10,000/- for
each counts (Fine of Rs.10,000/-
X 20 counts X 3 accused), in total
Rs.6,00,000/- in default of
payment of fine to undergo further
one and half years Rigorous
Imprisonment.
A2 to A4 For offence under Section A2 to A4 to undergo Seven Years
5 of Tamil Nadu Rigorous Imprisonment and each
Protection of Interests of to pay a fine of Rs.10,000/- for
Depositors (in Financial each counts (Fine of Rs.10,000/-
Establishments) Act, 1997. X 20 counts X 3 accused), in total
Rs.6,00,000/- in default of
payment of fine to undergo further
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Crl.A.Nos.12 & 117 of 2022
Rank of the Offence Conviction and Sentence
Accused
two years Rigorous Imprisonment.
A5 to A7 Found Not Guilty Found Not Guilty
Challenging the above conviction and sentence, the appellant/A3 filed
Crl.A.No.12 of 2022 and the appellants/A2 & A4 filed Crl.A.No.117 of 2022.
The appellants/A2 to A4 are Partners of A1 M/s.Kubera Auto Finance. Since
no appeal is filed for A1 Partnership Firm, in any event the appellants/A2 to
A4 are jointly and severally liable for A1 Partnership Firm.
3.Case of the prosecution is that A2 to A7 were running registered
financial establishment in the name of Al Kubera Auto Finance at 7/79, Main
Road, Lakkumanaickenpatti, Kankeyam Taluk, Tiruppár District registered
before the Registrar of Firms, Erode in Registration No.261/2008. A2
S.T.Saminathan, A3 S.P.Muthuvel, A4 K.Manivel, A5 S.P.Rajendrakumar, A6
Loganayaki and A7 Selvi are registered Partners and close relatives to each
others and responsible for the management and day to day affairs of Al
financial establishment. A2 to A7 planned and worked together in a
calculative manner and collected deposits from the public fraudulently and
dishonestly with intention to cheat the depositors and defraud their deposit
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Crl.A.Nos.12 & 117 of 2022
amounts and its interests. During the period between 2008 and 2010, they
collected deposits from the general public by assuring interests up to 24%
interest. A2 to A7 paid interests to the depositors up to specific period and
later abruptly stopped paying interest to the depositors. A3 signed and issued
deposit receipts to the depositors against the collected deposit amounts, but
failed to return the assured returns as well as the principal deposit amount,
which was dishonestly collected in the name of Al, and defaulted to repay the
deposit amount of Rs.12,66,000/- to the 20 depositors. Thus, A1 to A7 are
individually and collectively liable to be punishable under Sections 420 of IPC
and Section 5 of TNPID Act 1997.
4.On conclusion of investigation, the Investigating Officer filed charge
sheet before the trial Court which was taken on file as C.C.No.1 of 2016.
During trial, on the side of the prosecution, PW1 to PW24 examined and
Exs.P1 to P45 marked. On the side of the defence, one witness examined as
DW1 and Exs.D1 to D19 marked. On conclusion of trial, the trial Court
convicted A1 to A4 as stated above.
5.This Court on 20.03.2025 had passed the following order:
“This Court, on 27.02.2025, had passed the following
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Crl.A.Nos.12 & 117 of 2022
order:
“Crl.A.No.12 of 2022 is filed by Accused
No.3 and Crl.A.No.117 of 2022 is filed by Accused
Nos.2 and 4.
2.Initially case was proceeded against
seven accused, of which A1 is the Firm and others
are private individuals. As regards the private
individuals, they were acquitted from the case.
Now the present appeals filed by A2, A3 and A4.
3.During the course of arguments, the
learned counsels for the appellants submitted that
in this case the entire amount payable to the
depositors are lying either before the Lower Court
or before the District Revenue Officer [DRO] and
the entire amount is yet to be settled to the
depositors. Though the amounts are available, the
depositors are yet to be paid which is causing
agony to the depositors. It is submitted that in
view of the amount being secured, the case itself
can be compounded in view of Section 5-A of the
Tamil Nadu Protection of Interests of Depositors
(In Financial Establishments) Act [TNPID Act] but
on the other hand the case is kept pending without
any progress and neither the respondent police nor
the DRO are taking steps to disburse the amount to
the depositors, due to which, the appellants are put
to untold sufferings and they are still facing the
prosecution. The learned counsels for the
appellants further submitted that instead of DRO,
the presence of the District Collector may be
insisted so that the grievance of the depositors can
be addressed.
4.The learned Government Advocate (Crl.
Side) strongly opposed the appellants' contentions.
He would submit that as regards the depositors,
there are 20 depositors who are yet to be paid and
the total amount to be paid is Rs.12,66,000/-.
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Crl.A.Nos.12 & 117 of 2022
Further the amount deposited in the TNPID Court
by A2, A3 and A4 is to the tune of Rs.10,33,334/-,
apart from which, a sum of Rs.8,71,996/- is
available in the account of DRO. Hence, there
are sufficient amounts which can be paid to the
depositors with interest. But despite the earnest
effort taken by the Deputy Superintendent of
Police, EOW, Tiruppur, the DRO, Coimbatore is
not responding to the requests and have been
delaying the process due to which the depositors
are greatly affected and displeasure has been
turned against the Police. The letter sent by the
Inspector of Police, EOW, Tiruppur District to the
District Revenue Officer, Coimbatore on
05.12.2024 was produced which is self
explanatory. The list of the depositors, their dues,
the amount deposited by the accused and the
amount lying in the account of DRO are extracted
hereunder:
The Deposit amount made by the 20
depositors are as follows:
Sl.No. Pw's Names Receipt Date of Deposit Amount due to
No. Receipt Amount the depositors
1 PW1 M.Muthusamy 90 05.08.2008 Rs.75,000/- Rs.75,000/-
2 PW2 K.S.Palanisamy 93 23.08.2008 Rs.85,000/- Rs.85,000/-
3 PW3 C.Balasubramani 162 05.10.2009 Rs.75,000/- Rs.75,000/-
4 PW4 P.Boopathi 170 05.01.2010 Rs.70,000/- Rs.70,000/-
5 PW5 J.Kanagaraj 178 27.02.2010 Rs.85,000/- Rs.85,000/-
6 PW6 C.Ramasamy 98 25.08.2008 Rs.65,000/- Rs.65,000/-
7 PW7 E.Srikanth 176 20.02.2010 Rs.60,000/- Rs.60,000/-
8 PW8 D.Mohankumar 179 04.03.2010 Rs.90,000/- Rs.90,000/-
9 PW9 P.Ganesan 120 04.12.2008 Rs.50,000/- Rs.50,000/-
10 PW10 R.Prakasam 77 22.06.2008 Rs.60,000/- Rs.60,000/-
11 PW11 K.Andivelnadar 150 25.08.2008 Rs.25,000/- Rs.25,000/-
12 PW12 S.Periyasamy 80 01.07.2008 Rs.35,000/- Rs.35,000/-
13 PW13 A.Palanisamy 129 15.02.2009 Rs.65,000/- Rs.65,000/-
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Crl.A.Nos.12 & 117 of 2022
Sl.No. Pw's Names Receipt Date of Deposit Amount due to
No. Receipt Amount the depositors
14 PW14 P.Ganesan 143 17.07.2009 Rs.20,000/- Rs.20,000/-
15 PW15 P.Palanisamy 186 03.04.2010 Rs.56,000/- Rs.56,000/-
16 PW16 K.Semalai 148 19.08.2009 Rs.50,000/- Rs.50,000/-
17 PW17 C.Deivanai 97 25.08.2008 Rs.70,000/- Rs.70,000/-
18 PW18 K.Sellamuthu 115 05.11.2008 Rs.85,000/- Rs.85,000/-
19 PW19 M.Thangavel 85 14.07.2008 Rs.70,000/- Rs.70,000/-
20 E.Vasanthi 177 20.02.2010 Rs.75,000/- Rs.75,000/-
Total Amount Rs.12,66,000/- Rs.12,66,000/-
Available amount in TNPID Court
S.No. Name of the Court Orders No. Date of Deposit
Accused Deposit Amount
1. A3-S.P.Muthuvel Crl.A.No.12/2022 30.12.2021 5,33,334/-
dated 04.04.2022
2. A-2 S.T.Saminathan Crl.A.No.117/2022 24.03.2022 2,50,000/-
dated 21.03.2022
3. A-4 K.Manivel Crl.A.No.117/2022 24.03.2022 2,50,000/-
dated 21.03.2022
Total Amount 10,33,334/-
Available Amount in DRO Account in Coimbatore:
S. Name Court Orders No. Date of Deposit Remarks
No. Deposit Amount
1. Babu C.M.A.No.1146/2022 28.06.202 2,33,000/- As per order Babu
(purchaser) in C.M.P.No.8346/2022 2 deposited
2. Babu C.M.A.No.1146/2022 08.08.202 6,38,996/- Rs.2,33,000/- and
(purchaser) in C.M.P.No.8346/2022 3 Rs.6,38,996/- Total
Rs.8,71,996/- at
TNPID Court same it
was sent to DRO
account Coimbatore
through TNPID Court
Total Amount 8,71,996/-
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Crl.A.Nos.12 & 117 of 2022
5.Further, a scanned reproduction of the
letter submitted by the Inspector of Police, EOW
dated 05.12.2024 is as follows:
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Crl.A.Nos.12 & 117 of 2022
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Crl.A.Nos.12 & 117 of 2022
6.The learned Government Advocate (Crl.
Side) submitted that there is no response from the
DRO and hence he is unable to make any
submission as to what had happened after
05.12.2024.
7.In view of the above, this Court finds the
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Crl.A.Nos.12 & 117 of 2022
presence of the DRO, Coimbatore would be
necessary. Accordingly, the District Revenue
Officer, Coimbatore to be present before this Court
on the next hearing date and to inform as to what
steps are taken to address the grievance of the
depositors and the steps taken under TNPID Act in
attaching the properties and steps taken thereof.
The District Collector, Coimbatore to ensure the
presence of DRO along with a detailed report and
the presence of the District Collector is not
required for the present.
8.Post the matter on 20.03.2025.”
2.In continuation to the earlier order passed by this Court
on 27.02.2025, Dr.M.Sharmila, Competent Authority/District
Revenue Officer (DRO), Coimbatore District appeared before
this Court and filed a status report. From the status report it is
seen that except for the properties pertaining to O.A.No.4 of
2019 situated in Coimbatore, all other transactions in this case
took place within the jurisdiction of Tiruppur District. Now
Tiruppur District has been bifurcated and the Competent
Authority/DRO, Tiruppur has been nominated. Further
submitted that the file pertaining to the above case along with
Fixed Deposit amount, including interest, totalling Rs.9,61,120/-
(Rupees Nine lakhs Sixty One thousand One hundred and Twenty
only) had been transferred to the Competent Authority/DRO,
Tiruppur vide office Reference No.25806/2021/11 dated
14.03.2025 and the same was also received by the Competent
Authority/DRO, Tiruppur on 17.03.2025.
3.The learned Government Advocate appearing for the
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Crl.A.Nos.12 & 117 of 2022
respondent submitted that the amount to be paid to the depositors
is Rs.12,66,000/- (Rupees Twelve lakhs Sixty Six thousand only).
As on date, the appellants herein had deposited Rs.10,33,334/-
(Rupees Ten lakhs Thirty Three thousand Three hundred and
Thirty Four only) before the trial Court and Rs.9,61,120/- has
been transferred to the Competent Authority/DRO, Tiruppur. This
amount would be sufficient to pay the depositors. Hence, sought
appropriate direction.
4.It is seen that appellants in these cases deposited a sum
of Rs.10,33,334/-, which is lying in the credit of C.C.No.1 of 2016
on the file of the Special Judge, Special Court under TNPID Act,
Coimbatore. The trial Court is directed to transfer this amount to
the Competent Authority/DRO, Tiruppur without any delay,
preferably within a period of one week from the date of receipt of
a copy of this order. The District Revenue Officer (DRO),
Tiruppur, who is a Competent Authority, on receipt of
Rs.10,33,334/- along with Rs.9,61,120/-, issue summons to the
depositors and disburse both the amounts to the depositors
proportionately as directed by the trial Court.
5.The learned Government Advocate (Crl. Side) on getting
confirmation about the amount being ready with the Competent
Authority/DRO, Tiruppur, ensure the presence of the depositors
before the Competent Authority/DRO, Tiruppur through the
jurisdictional police and the depositors receive the due amount
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Crl.A.Nos.12 & 117 of 2022
without any delay. The said exercise to be completed within a
period of two weeks, i.e., on or before 16.04.2025 and the same
to be reported before this Court on 17.04.2025.
6.In the event of depositors being satisfied, the competent
authority can file a petition under Section 5-A of the Tamil Nadu
Protection of Interests of Depositors (In Financial
Establishments) Act without delay and report before this Court.
7.Post on 17.04.2025.”
6.In continuation and conjunction to the above orders, this Court is
passing the following order.
7.The learned counsel for the appellant/A3 submits that in this case A3
retired from A1 firm by issuing notice of dissolution and he is not liable for the
offence committed by A1. The contention of A3 is that as per Clause 11 of the
Partnership Deed, it is a partnership at Will and he was retired from A1 firm by
issuing legal notice Ex.D7 dated 16.05.2014 which was acknowledged by A4.
Further, A3 had also issued public notice dated 21.05.2014 in “Daily Thanthi”
and the District Registrar sent letter informing the partners who had issued
notice. Considering the partners issued notice and the partnership firm can be
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Crl.A.Nos.12 & 117 of 2022
dissolved by filing dissolution deed and Form 5, these documents have been
filed and the partnership firm dissolved. Though these documents are
submitted to the respondent Police/EOW, no action was taken. The trial Court
accepted the retirement of A5 from A1 firm but on the similar documents
failed to extend the same benefit to the appellants herein.
8.The primary contention of the appellants/A2 & A4 is that the receipts
in the name of A1 were issued by A3 and they have got nothing to do with the
transaction of A1. He further contended that PW1 to PW9, the depositors
deposed that they have seen the advertisement and invested the money in A1
firm. Though A1 firm agreed to repay the amount with 24% interest, they
failed to repay the same.
9.Be that as it may. Now the appellants/A2, A3 & A4 came forward and
settled the entire dues to all the depositors.
10.In this case, PW1 to PW19 and one E.Vasanthi are the depositors, in
total, there are 20 depositors. After conducting enquiry with all the depositors,
the total principal amount arrives at Rs.12,66,000/-, calculating 6% interest, it
works out to Rs.9,50,154/-, adding up the same, the total amount arrives at
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Crl.A.Nos.12 & 117 of 2022
Rs.22,16,154/-. The details of the deposit amount along with interest
calculated (status report, dated 15.04.2025) is tabulated as follows:
Sl.No. Name of the Principal Interest Total Amount
Depositor Amount (Rs.) Amount (Rs.)
(6%) (Rs.)
PW1 M.Muthusamy Rs.75,000/- Rs.60,750/- Rs.1,35,750/-
PW2 K.S.Palanisamy Rs.85,000/- Rs.68,340/- Rs.1,53,340/-
PW3 C.Balasubramani Rs.75,000/- Rs.55,350/- Rs.1,30,350/-
PW4 P.Boopathi Rs.70,000/- Rs.50,400/- Rs.1,20,400/-
PW5 J.Kanagaraj Rs.85,000/- Rs.56,610/- Rs.1,41,610/-
PW6 C.Ramasamy Rs.65,000/- Rs.52,260/- Rs.1,17,260/-
PW7 E.Srikanth Rs.60,000/- Rs.39,960/- Rs.99,960/-
PW8 D.Mohan Kumar Rs.90,000/- Rs.59,940/- Rs.1,49,940/-
PW9 P.Ganesan Rs.50,000/- Rs.39,300/- Rs.89,300/-
PW10 R.Pirakasam Rs.60,000/- Rs.48,960/- Rs.1,08,960/-
PW11 K.Andivelnadar Rs.25,000/- Rs.20,100/- Rs.45,100/-
PW12 S.Periyasamy Rs.35,000/- Rs.28,560 Rs.63,560/-
PW13 A.Palanisamy Rs.65,000//- Rs.47,190/- Rs.1,12,190/-
PW14 P.Ganesan Rs.20,000/- Rs.15,000/- Rs.35,000/-
PW15 P.Palanisamy Rs.56,000/- Rs.39,984/- Rs.95,984/-
PW16 K.Semalai Rs.50,000/- Rs.37,200/- Rs.87,200/-
PW17 C.Deivanai Rs.70,000/- Rs.56,280/- Rs.1,26,280/-
PW18 K.Sellamuthu Rs.85,000/- Rs.67,320/- Rs.1,52,320/-
PW19 M.Thangavel Rs.70,000/- Rs.56,700/- Rs.1,26,700/-
20 E.Vasanthi Rs.75,000/- Rs.49,950/- Rs.1,24,950/-
Total Rs.12,66,000/- Rs.9,50,154/- Rs.22,16,154/-
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Crl.A.Nos.12 & 117 of 2022
11.At this juncture, the total amount received by the Competent
Authority and the Special Court for TNPID Cases, Coimbatore arrives at
Rs.20,82,618/- which results in a shortfall of Rs.1,33,536/-.
12.The Competent Authority sent a communication dated 08.04.2025 to
the Branch Manager, Canara Bank, Collector Office Branch, Tiruppur
requesting to transfer the deposit claim amount to the respective bank account
of 20 depositors through RTGS. Scanned reproduction of the communication,
dated 08.04.2025 and the statement of account showing the claim amount
transferred to the depositors are as follows:
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Crl.A.Nos.12 & 117 of 2022
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Crl.A.Nos.12 & 117 of 2022
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Crl.A.Nos.12 & 117 of 2022
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Crl.A.Nos.12 & 117 of 2022
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Crl.A.Nos.12 & 117 of 2022
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Crl.A.Nos.12 & 117 of 2022
13.This Court on 22.04.2025 had passed the following order:
“Today, the respondent filed status report giving
tabulation for the principal amount along with the interest paid
to the 20 depositors to the tune of Rs.20,73,633/-. Further it is
submitted that a sum of Rs.1,33,536/- is the short fall of interest
amount, which the appellants to deposit.
2.The learned counsel for the appellants agreed that there
are three partners and they shall proportionately divide
Rs.1,33,536/- i.e., Rs.44,512/- each and deposit the same before
the Competent Authority/District Revenue Officer, Tiruppur
either jointly or severally. He seeks time to report compliance of
deposit.
3.Post on 25.04.2025.”
14.As stated in the above order of this Court, the shortfall amount of
Rs.1,33,536/- proportionately shared by all the appellants. The Competent
Authority in the status report dated 25.04.2025 confirmed the payment of
shortfall amount deposited by the appellants. A2 handed over demand draft in
No.318700 of Rs.44,500/- dated 23.04.2025, A3 handed over demand draft in
No.410008 of Rs.44,512/- dated 24.04.2025 and A4 handed over demand draft
in No.410009 of Rs.44,512/- dated 24.04.2025 to the Competent Authority.
This is further confirmed by the Deputy Superintendent of Police, Economic
Offence Wing, Tiruppur in his status report, dated 25.04.2025.
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Crl.A.Nos.12 & 117 of 2022
15.In view of the above, it is seen that the entire amount of
Rs.22,16,154/- (Principal Rs.12,66,000/- and Interest Rs.9,50,154/-) deposited
by the appellants and disbursed to 20 depositors i.e., PW1 to PW19 and one
E.Vasanthi.
16.The object and purpose of Tamil Nadu Protection of Interests of
Depositors (in Financial Establishments) Act, 1997 is to ensure that the
depositors are paid with their amount of deposit made to the financial
institutions with or without interest. Section 5A of the Act empowers the
Competent Authority to compound the offence if it is satisfied that the
depositors are paid with their dues.
17.In the present case, from the status report filed by the Competent
Authority and the Deputy Superintendent of Police, Economic Offence Wing,
Tiruppur, it is confirmed that the entire amount due to the depositors with
interest have been transferred to the bank account of 20 depositors through
RTGS. Thus, invoking Section 5A of the Act, this Court compounds the
offence and acquits all the accused namely A1/M/s.Kubera Auto Finance,
A2/S.T.Saminathan, A3/S.P.Muthuvel and A4/K.Manivel from all charges.
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Crl.A.Nos.12 & 117 of 2022
18.In the result, these Criminal Appeals are allowed setting aside the
impugned judgment, dated 20.12.2021 passed by the learned Special Judge,
Special Court under TNPID Act, Coimbatore in C.C.No.1 of 2016.
16.09.2025
Speaking order/Non-speaking order
Index: Yes/No
Internet: Yes/No
vv2
To
1.The Special Judge,
Special Court under TNPID Act,
Coimbatore.
2.The Inspector of Police,
Economic Offences Wing-II (EOW II),
Coimbatore.
3.The Public Prosecutor,
Madras High Court.
M.NIRMAL KUMAR, J.
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https://www.mhc.tn.gov.in/judis ( Uploaded on: 17/09/2025 02:53:16 pm )
Crl.A.Nos.12 & 117 of 2022
PRE-DELIVERY COMMON JUDGMENT IN
Crl.A.Nos.12 & 117 of 2022
16.09.2025
https://www.mhc.tn.gov.in/judis ( Uploaded on: 17/09/2025 02:53:16 pm )
