[Cites 10, Cited by 0]
Madras High Court
S.Thangaraj vs The State Rep. By on 7 January, 2026
Author: M.Nirmal Kumar
Bench: M.Nirmal Kumar
Crl.A.Nos.368, 378, 386 & 403 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 25.11.2025
PRONOUNCED ON : 07.01.2026
CORAM
THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR
Crl.A.Nos.368, 378, 386 & 403 of 2021
Crl.A.No.368 of 2021
S.Thangaraj ... Appellant
Vs.
The State rep. by
The Inspector of Police,
E.W.O.II, Erode,
Coimbatore District.
Crime No.9 of 2004 ... Respondent
Prayer: Criminal Appeal filed under Section 374(2) of Cr.P.C., to call for the
records relating to the judgment dated 22.07.2021 made in C.C.No.48 of
2008 on the file of the learned Special Judge, Special Court under TNPID
Act, Coimbatore (Transferred C.C.No.24 of 2005 - Special Court, TNPID
Cases, Chennai) and set aside the same.
For Appellant : Mr.N.Manoharan
For Respondent : Mr.Leonard Arul Joseph Selvam
Additional Public Prosecutor
Page No.1 of 24
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
Crl.A.No.378 of 2021
1.Sri Kandiamman Finance,
No.1680/16, Ramanis Regency,
Ramanathapuram,
Coimbatore
Represented by A2 to A5.
2.K.Veerasamy
3.K.Padmavathy ... Appellants
Vs.
The State rep. by
The Inspector of Police,
E.W.O.II,
Coimbatore.
Crime No.9 of 2004 ... Respondent
Prayer: Criminal Appeal filed under Section 374(2) of Cr.P.C., to call for the
records relating to the judgment dated 22.07.2021 made in C.C.No.48 of
2008 on the file of the learned Special Judge, Special Court under TNPID
Act, Coimbatore (Transferred C.C.No.24 of 2005 – Special Court, TNPID
Cases, Chennai) and set aside the same.
For Appellants : Mr.N.Manoharan
For Respondent : Mr.Leonard Arul Joseph Selvam
Additional Public Prosecutor
Crl.A.No.386 of 2021
P.Kanagaraj ... Appellant
Vs.
Page No.2 of 24
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
The State rep. by
The Inspector of Police,
Economic Offences Wing - II
Coimbatore.
Crime No.9 of 2004 ... Respondent
Prayer: Criminal Appeal filed under Section 374(2) of Cr.P.C., to set aside
the judgment passed in C.C.No.48 of 2008 by the Special Court under
TNPID Act, Coimbatore dated 22.07.2021.
For Appellant : Mr.R.Sankarasubbu
for Mr.D.Mario Johnson
For Respondent : Mr.Leonard Arul Joseph Selvam
Additional Public Prosecutor
Crl.A.No.403 of 2021
1.B.Indirani
2.K.Palanisamy
3.M.S.Thilakavathi
4.V.Krishnan
5.V.Rajashanmugam
6.K.Sethupathy ... Appellants
Vs.
The State rep. by
The Inspector of Police,
Economic Offences Wing-Ii
Coimbatore District.
EOW Crime No.9 of 2004 ... Respondent
Prayer: Criminal Appeal filed under Section 374(2) of Cr.P.C., to call for the
records in the order and judgment of conviction and sentence dated
Page No.3 of 24
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
22.07.2021 by the learned Special Judge, Special Court under TNPID Act,
Coimbatore in C.C.No.48 of 2008, award adequate compensation to the
appellants herein.
For Appellants : Mr.R.Baskar
For Respondent : Mr.Leonard Arul Joseph Selvam
Additional Public Prosecutor
COMMON JUDGMENT
Crl.A.No.368 of 2021 filed by A4, Crl.A.No.378 of 2021 filed by A1
to A3 and Crl.A.No.386 of 2021 filed by A5. Simultaneously, the defacto
complainant and victims PW1 to PW7 preferred an appeal in Crl.A.No.403
of 2021 seeking to award adequate compensation.
2.The gist of the case is that PW1/defacto complainant lodged a
complaint against A1/Sri Kandiamman Finance and its partners/A2 to A5
complaining that A1 Finance Company canvassed and advertised seeking
deposits to be made with the finance Company and assured 24% interest.
Lured by the same, PW1 made several deposits. In her name, PW1
deposited Rs.1,00,000/- on 15.11.2000, Rs.3,50,000/- on 27.06.2001,
Rs.2,00,000/- on 01.04.2002 and Rs.1,00,000/- on 01.08.2002. Further she
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
deposited Rs.3,00,000/- on 27.06.2001 and Rs.1,50,000/- on 18.08.2003 in
the name of her husband Baskarasethupathi and Rs.4,00,000/- on 27.06.2001
in the name of her daughter Divyakanakabala, in total, she deposited
Rs.16,00,000/-. A2, a partner received the amount and issued seven fixed
deposit receipt, at that time, the other partners, A3 to A5 along with him. Till
August 2002, interest was paid on the deposits and thereafter, no payments
made. The defacto complainant asked for return of the deposit amounts and
the matured amount. Despite several requests, the accused failed to pay,
hence the principal amount of Rs.16,00,000/- and the interest amount of
Rs.8,64,000, totaling Rs.24,64,000 were cheated and not paid. The defacto
complainant lodged a complaint with the respondent, who on receipt of the
complaint, registered a case in Crime No.9 of 200 under the TNPID Act. Yet
another depositor, Rajashanmugam on 06.11.2004 sought for the maturity
amount of Rs.3,44,000 for his deposit. On registration of the FIR, it was
found that PW1 to PW7 deposited amounts based on the representation and
promise of 24% interest. The appellants though paid interest for few months,
thereafter failed to pay. On conclusion of investigation, it was found that the
appellants/accused defaulted to pay the deposit of Rs.25,30,000/- and
defaulted interest payment of Rs.13,27,700/- totaling Rs.38,57,700/- to
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
seven depositors. On conclusion of investigation, charge sheet filed against
the accused for the offence under Sections 120(b), 406, 420 IPC and Section
5 of TNPID Act. During trial, PW1 to PW9 examined and Ex.P1 to Ex.P16
marked on the side of the prosecution. On the side of the defence, A5
examined as DW1 and A2 examined as DW2 and marked four documents,
Ex.D1 to Ex.D4. On conclusion of trial, the Trial Court finding that the
appellants/accused deposited the principal amount only in the year 2021,
found them guilty and sentenced A1 to pay a fine of Rs.1,000/- under
Section 5 of the TNPID Act and A2 to A5 to pay a fine of Rs.1,000/- each
under Section 5 of TNPID Act, in default, to undergo one year simple
imprisonment. Against which, the present appeals filed.
3.The defacto complainant and victims filed an appeal for the reason
that the deposits in this case were made during the period from 15.11.2000
to 18.08.2003 and it is not fair on the part of the accused to have deposited
the principal amount alone and not paid any compensation.
4.The learned counsel for A1 to A3 submitted that the admitted case
of the prosecution is that the appellants collected deposit of Rs.25,30,000/-
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
from PW1 to PW7 and defaulted the interest on such deposits to the tune of
Rs.13,27,700/-. A2 deposited the entire due amount of Rs.25,30,000/- is not
in dispute. A3/mother of A2 retired from the partnership on 25.02.1997 and
A4, another partner retired on 25.07.1997, requisite Form A/Ex.D3 dated
16.04.2004 produced to prove that even prior to the complaint dated
04.11.2004, A3 and A4 retired from the partnership firm. Further,
PW1/defacto complainant issued a legal notice on 15.03.2004, marked as
exhibit D1, demanding money from A1, for which A1 sent a reply notice
dated 12.04.2004 informing entire interest amount had been paid till August
2002 and a criminal colour given to the business transaction. Further, taking
advantage of the police complaint, the borrowers of A1 firm stopped making
payment to A1 and hence the amount due could not be collected. Ex.D2 is
the reply notice sent by A2 on 12.04.2004. In fact, A2 tried his level best to
settle the dues and he sold all the jewels of his mother/A3 and raised the
principal amount of Rs.25,30,000/- and deposited the same by way of
demand draft dated 02.03.2021 before the competent authority DRO,
Tiruppur. In this case, PW1 and PW3 admitted the receipt of interest from
A1 firm. FIR. was registered by PW9 on 04.11.2004 and there are vital
contradiction in the evidence of PW1 and PW9, which falsify the
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
prosecution case. The FIR was sent to the Court with a delay. Though it has
been projected that A2 to A5 canvassed for deposits between 1992 and 2002
and promised to pay interest at 24% per annum, there is no iota of evidence
to prove the allegation and further, all the seven depositors are from one
family, known persons and it is not a deposit collected from the public. The
initial understanding was that the amounts would be invested by PW1 to
PW7 in A1 Firm and it would be collected in the name of deposit and fixed
deposit receipts/Ex.P1 to Ex.P7, Ex.P9, Ex.P10 and Ex.P12 to Ex.P14 issued
and further this investment would be further used to give loan to others and
earn interest from this deposits and thereafter interest would be paid and
later the principal amount which was the business module and
understanding. But this fact completely suppressed by PW1 to PW7 and
projected a case as though the appellants collected deposits from the public.
Hence the appellants cannot be charged for the offense under Section 5 of
the TNPID Act.
5.The learned counsel further submitted that A3 and A4 were partners
only for few years i.e., from 1996 to 1997 and thereafter they retired, the
deposits admittedly made in the year 2000 onwards after retirement of A3
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
and A4 from A1 Firm. Hence, for the subsequent act of this partnership firm,
A3 and A4 cannot be held liable. The prosecution failed to prove that A3 to
A5 were responsible for the affairs and management of A1 Firm in any
manner. In Ex.D2, the retirement of A3 and A4 clearly informed with details.
Receipt of Ex.D2 not denied by the defacto complainant/PW1. The
Investigating Officer not considered these aspects and conducted no proper
investigation to find out the truth whether at all A3 and A4 were partners
during the relevant point of time. As per Section 32(2) of the Partnershipt
Act, a retired partner is not liable to third party who deals with the Firm,
without knowing that the particular person is a partner. PW1 to PW7 admit
that they neither seen the partnership deed nor verified who are the partners
in the Firm, to get over the anamoly they claim that A3 to A5 were present
when the deposits were made and further A2 informed them that A3 to A5
are partners of A1 Firm, which is without any materials. In fact, Ex.D3 and
Ex.D4 proves A3 to A5 retired from the Firm and relevant documents filed
before the Registrar of Firms and the same is recorded in the Register of
Firms. He further submitted that the deposit documents, namely, Fixed
Deposit Receipts will not come under the definition of 'deposit' under
Section 2(2) of the TNPID Act, 1997, wheres the contents of the documents
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
would ipso facto prove that they are only 'Loan Document'. Now, PW1 to
PW7 having received the principal amount and subsequently the interest for
the relevant period, are now hunting for the blood of the appellant.
6.The learned counsel for the appellant/A4 in Crl.A.No.368 of 2021
concurring with the submissions of the learned counsel for A1 to A3,
submitted that A4 retired from the partnership firm on 25.02.1997.
Admittedly in this case all the deposits are during the year 2000, several
years after the retirement of A4 from A1 Firm. A4 hails from Udumalpet
Taluk and he is not at all involved in the day-to-day affairs and business of
A1 Firm, which was functioning in Coimbatore. A4, hailing from
Udumalpet Taluk, is admitted by the depositors PW1 to PW7 in this case and
there is a bald allegation made by PW1 to PW7 claiming that they seen A4
in A1 Firm but without any details such as when, where and at what time
they had seen or met A4, a blanket and sweeping allegation against A4
cannot be put against A4 and convict him in a criminal case, the prosecution
failed to prove the case beyond all reasonable doubt against A4.
7.The learned counsel for the appellant/A5 in Crl.A.No.386 of 2021
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
concurring with the submission of the learned counsel for A1 to A3 in this
case, submitted that the man behind A1 partnership Firm is A2/Veerasamy
the entire amount of Rs.25,30,000/- collected from PW1 to PW7 deposited
on 23.03.2021 to the competent authority, DRO, Tiruppur. In fact, A2 admit
he was the responsible person of A1 Firm and the appellant/A5 retired from
A1 Firm on 10.12.2003 and Form V for retirement has been filed before the
Registrar of Firms. The Retirement Deed is marked as Ex.P15. He further
submitted that though he retired on 10.12.2003, Form V has been filed only
on 14.4.2004. Section 63(1) of Partnership Act does not prescribe any
limitation as to within which period notice should be filed with the Registrar
of Firms. He further submitted that the primary responsibility is on the
prosecution to prove that there are necessary averments and evidence to
fasten any person vicariously liable for the act of the Firm or Company. In
this case, there is no such averment or evidence against the appellant/A5. In
support of his contention, the learned counsel for the appellant relied upon
the following decisions:
(1)K.P.G.Nair vs. M/s.Jindal Menthol India Ltd reported in
AIR 2004 SC 4274
(2)M.M.Sabharwal vs. R.P.Billimoria reported in 2007 (1)
LW(Cri.) 179
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
(3)S.Thamayanthi vs. State of Tamil Nadu reported in 2013
SCC (Mad) 1199
(4)Prasannadevi vs. State of Tamil Nadu reported in 2010 (1)
MLJ(Cri.) 742.
8.The learned counsel for the appellants further submitted that in this
case, A3/K.Padmavathy died on 04.06.2024 and her death certificate
produced. Hence, the case against appellant/A3 stands to abate. Further,
they filed additional type of papers showing that the submission of
Ex.P15/Form V in which retirement of A3 to A5 recorded. Further, referred
to G.O.Ms.1469 Home (Police-XIX) Department dated 17.10.2007, wherein
interim order attaching the properties issued. Referring to W.P.No.1273 of
2023, the learned counsel submitted that PW1/defacto complaintant filed a
writ petition before this Court seeking disbursement of the sale proceeds
including the available amount on the depositors claim for the period 2008
to 2023 as per the order dated 07.02.2023 passed in O.A.No.27 of 2012 by
the TNPID court. In the said writ petition, this Court directed the competent
authority/DRO to disburse the amount available on hand within a period of
one month from the date of receipt of a copy of the order and further interest
amount from year 2008 to 2023 to be calculated within a period of three
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
months. Following the order of this Court, notice was issued to PW1 to PW7
on 23.05.2023 by the competent authority for their appearance to collect the
deposit amount on 30.05.2023 in Na.Ka.No.10686/E4 dated 23.05.2023.
Pursuant to the notice, the depositors appeared before the competent
authority and on 30.05.2023, the principal amount of Rs.25,30,000/- which
already deposited, disbursed proportionately to PW1 to PW7, the same is
recorded in the proceedings dated 09.10.2023. For not paying the interest
amount, contempt petition in Cont.P.No.125 of 2024 was filed, wherein a
status report filed confirming accrued interest amount has been arrived at
Rs.1,05,36,900/- as per the order of the TNPID Court in O.A.No.27 of 2012.
On 16.02.2024, it was recorded that A4 in this case is taking steps to deposit
this amount and sought some time. Thereafter on 05.03.2014 sought a
direction from this Court to deposit it within a period of one week and with a
direction to the competent authority to receive the amount. Following the
same, the appellant/A4 deposited the amount of Rs.1,05,36,900/- on
09.03.2024. Earlier the principal deposit amount disbursed to the depositors
and later the interest. The competent authority/DRO, in the compliance
report dated 18.03.2024, given details of payment of the interest amount.
Following the same Cont.P.No.125 of 2024 order dated 25.03.2024 directed
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
the competent authority/DRO to take steps to raise the attachment of
properties in the manner known to law. One Palanikumar, who is the
petitioner in O.A.No.15 of 2013 against the dismissal order dated
07.02.2023 filed C.M.A.No.3092 of 2023, wherein this Court dealt in detail
the proceedings in O.A.No.27 of 2012 order passed therein and recording
the deposit of payment of principal amount as well as the interest amount
and finally directed the Special Court under TNPID Act to raise the
attachment. The appellant/A4 filed C.M.A.No.2895 of 2023 challenging the
order passed in O.A.No.27 of 2012 dated 07.02.2023. This Court referring to
the earlier order passed in C.M.A.No.3092 of 2024 reiterated the raising of
attachment. Hence, the principal amount and the interest fully paid and PW1
to PW7/appellants in Crl.A.No.403 of 2021 fully compensated and the same
recorded by this Court. Hence, the appeals are to be allowed and the
appellants are to be discharged from all charges.
9.The learned Additional Public Prosecutor submitted that in this case
PW1 is the defacto complainant who deposited amounts in her name and her
relatives' names on the promise made by the appellants/accused in
this case. A1 is a partnership Finance Company received deposits from the
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
public on the promise that the deposit would fetch 24% interest to lure the
depositors' confidence. Initially, for some period interest paid, but the real
intention was to cheat the depositors from the inception of the scheme,
thereafter no amount was paid. PW1 to PW7 are the victims who made
deposits with the A1 Firm and they have been cheated to the tune of
Rs.25,30,000/-. On the complaint of PW1, case registered. A1 is the Firm
and A2 to A5 are the partners of the Firm. For the deposit received fixed
deposit receipts issued signed by A2, but when the deposits made, A3 to A5
were present in the A1 Firm and confirmed they are partners of A1 Firm and
assured deposit amount will be invested and multiplied and the depositors
will be paid the principal as well as the interest. At the time of forming of the
partnership firm, A1 and A2 to A5 were partners and it was registered with
the Registrar of Firms in the year 1996. The amount deposited is not in
dispute and delay in payment is also not seriously disputed, but the appellant
takes the stand that after registration of the case in the year 2004, A1 Firm
could not collect the amounts lend to others, hence interest as well as the
principal amount could not be paid which is a lame excuse. Right from the
initial period, the appellants were certain not to pay the deposit amount back
to the depositors. Hence, cheating at the inception was very much present.
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
Further, collecting the deposit from public would attract Section 5 of TNPID
Act whatever may be the scheme. It is projected as fixed deposit and is a
business transaction. The sum and substance of collection of money from
PW1 to PW7 is in name of deposit. PW8 on receipt of the complaint,
registered a case. Thereafter, PW9 took up investigation, collected
documents, recorded the statements of witnesses and filed the charge sheet
before the Trial Court. Though the case has been filed in C.C.No.24 of 2005
and the trial was pending, subsequently, the Special Court under TNPID Act
came to be formed and the case was transferred to the Special Court,
Coimbatore and renumbered as C.C.No.48 of 2008. From the year 2004 until
the date of the judgment in the year 2021, the case has been protracted by
filing one petition or another before the Trial Court and the High Court.
Finally, before the judgment A2 in this case deposited the principal amount
alone. On conclusion of trial, the Trial Court finding that the principal
amount deposited convicted the appellants but not sentenced them with jail
sentence and imposed only fine sentence. Simultaneously the Competent
Authority initiated attachment proceedings in G.O.Ms.No.1469 Home
(Police-XIX) Department dated 17.10.2007 wherein order of interim
attachment of properties passed and thereafter, petition filed in O.A.No.27 of
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
2013 before the Special Court. Thereafter, W.P.No.11273 of 2023 and
Cont.P.No.125 of 2024 filed before this Court by the defacto complainant.
The petitioner in O.A.No.15 of 2013 filed C.M.A.No.3092 of 2023 and
A4/Thangaraj filed C.M.A.No.2895 of 2023 and this Court passed an order
ensuring that the principal and accrued interest to be paid. Finding that the
principal amount and interest have been paid, this Court ordered raising of
the attachment. The appellants though they might have paid the principal
and interest, would not be entitled to acquittal. Hence prayed for dismissal.
10.The learned counsel for the appellants/depositors in Crl.A.No.403
of 2021 filed this appeal for awarding adequate compensation to the
appellants/victims in this case. The contention of the appellants is that Sri
Kandiamman Finance was registered on 29.0301996. Fixed deposits were
received from the victims during the period 24.05.2000 to 18.08.2003. The
defacto complainant issued notice to the partners A2 to A5 on 15.03.2004
seeking refund of the entire deposit amount with interest, which was replied
on 12.04.2004 but no amount paid. Thereafter, complaint lodged on
04.11.2004. In this case, after investigation, charge sheet filed, initially taken
on file in C.C.No.24 of 2005 by the Special Judge under TNPID Act,
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
Chennai and later, it was transferred to the file of the Special Court under
TNPID Act and re-numbered as C.C.No.48 of 2008. In this case, PW1 to
PW4 were examined before the Trial Court during the period 15.02.2010 and
16.11.2017, PW5 to PW7 on 25.02.2010 and 14.11.2017, PW8/Registrar of
Firms was examined on 31.05.2010, PW9/Investigating Officer was
examined from 23.07.2010, 09.02.2018 and 04.07.2019. DW1 was
examined on 27.08.2019 and 18.09.2019. DW2 was examined on
23.02.2021 and 23.03.2021 and finally, judgment was passed on 22.07.2021.
The Trial Court, though found the appellants A1 to A5 guilty under Section 5
of the TNPID Act not sentenced to any Jail sentenced and sentenced them to
pay a fine of Rs.1000/- alone. Though it was projected that the accused
printed, circulated and advertised their scheme of receiving deposits but the
same unable to be produced to show that there was any false assurance and
intention to cheat the depositors is the finding of the Trial Court, further the
Tiral Court finding principal amount deposited, the Trial Court imposed fine
sentence alone. The appellant/accused having filed their appeals against the
conviction, but not paid the interest amount as directed in the judgment of
the Trial Court. Thereafter, the defacto complainant filed W.P.No.11273 of
2023 seeking disbursement of the principal amount and interest. After the
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
intervention of this Court, the principal amount was disbursed and thereafter
the interest amount. He further relied upon the judgment of the Apex Court
in the case of Ankush Shivaji Gaikwad vs. State of Maharashtra reported in
(2013) 6 SCC 770, wherein it is held that the occasion to consider the
question of awarding compensation would logically arise only after the
Court records the conviction of the accused and thus the conviction of the
accused to be sustained. He further submitted that aggrieved against the
order passed by this Court in Cont.P.No.125 of 2024 dated 25.03.2024
SLP(Civil).No.15162 of 2024 filed and against the order dated 17.04.2024 in
C.M.A.No.3092 of 2023 and order dated 07.06.2024 in C.M.A.No.2895 of
2023, SLP(Civil).No.017099-017100 of 2024 have been filed before the
Apex Court. Hence prayed for sustaining conviction and for appropriate
compensation considering the period of agony, sufferings and loss sustained
by the depositors, namely, PW1 to PW7.
11.Considering the submissions made and on perusal of the materials,
the case against the appellants is that A1 Sri Kandiamman Finance, a
registered partnership firm is doing business transactions and A2 to A5 are
the partners of A1 Firm. The A1 firm was registered with the Registrar of
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
Firms in Sl.No.273/96 on 29.03.1996, at that time, all the appellants were its
partners. A3/Padmavathy, mother of A2 and A4/Thangaraj, both partners
retired from the partnership firm on 25.02.1997. A5 retired from the
partnership firm on 10.12.2003. In this case, there are totally 7 depositors,
PW1 to PW7. PW1/Indirani in her name and in the name of her husband,
and daughter deposited Rs.16,00,000/-. The admitted position is that at the
time of the receipt of deposit, all the Fixed Deposit receipts Ex.P1 to Ex.P7,
Ex.P9, Ex.P10 and Ex.P12 to Ex.P14 signed by A2/Veerasamy alone. It is
also to be seen that in this case the depositors are all family members and
known persons. In this case, though the depositors would claim that at the
time of making deposits, apart from A2, A3 to A5 present, but it is a
sweeping statement bereft of details of date, time and place without any
supporting materials. Admittedly, in this case, there is no material collected
to show that the accused printed, circulated or advertised any scheme for
receiving deposits but the Fixed Deposit receipts would disclose receipt of
the principal amount, date of issue, date of maturity and payment of
periodical interest. Thus, it is concluded that the appellants received the
amount as deposits. Though a feeble attack made to show that periodical
interest paid but after the registration of the case, they were unable to collect
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
money from other lendors and pay the victims in this case, but no evidence
or materials produced to substantiate the reason for non-payment of
periodical interest and later principal amount. Thus A1 Firm committed
default. The reply notice/Ex.D2 confirms the receipt of deposit and promise
for payment of 24% interest. In this case, it is to be seen that the defacto
complainant issued a notice on 15.03.2004 and thereafter reply notice sent
on 12.04.2004. In the said reply notice, it is stated that A3 and A4 retired
from the partnership firm and the firm was managed by A2 and A5, later A5
also retired on 10.12.2003. The deed of retirement/Ex.D4 dated 25.02.1997
produced. On perusal of Ex.D4, it is seen that it is a shield created to
safeguard A3 to A5. In this case it is seen that A3 and A4 retired on
25.02.1997 and A5 on 10.12.2003, but Form V filed before the registering
authority is only on 14.04.2004 which is after the notice Ex.D1 by the
defacto complainant and the reply/Ex.D2 dated 12.04.2004. Hence, no
credence can be given to this document. It is further seen that in this case,
now A3 is no more and the death certificate produced. Hence, the case
against A3 stands abated. As regards A4, it is seen from the letter dated
09.03.2004, he admits the deposit of Rs.1,05,36,900/- the interest amount.
Thus, it is seen that in this case the principal amount with interest till the
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
date of complaint and thereafter further interest for the period 2008 to 2023
calculated, deposited and paid to the depositors PW1 to PW7 and the same is
recorded by the competent authority/DRO.
12.The defacto complainant filed an impleading petition in O.A.No.10
of 2025 which was filed to raise the attachment order. This petition was
dismissed, against which C.R.P.No.2045 of 2025 filed before this Court and
this Court referring to the earlier orders passed in W.P.No.11273 of 2023,
C.M.A.No.2895 of 2023 and C.M.A.No.3092 of 2023, dismissed the same.
Now, one thing is certain that the principal amount and the interest all paid
to the deposits, the depositors PW1 to PW7 received the amounts. If at all,
there is any grievance with regard to the calculation of the period or rate of
interest, now it is represented by the defacto complainant that some petitions
filed before the Apex Court in this regard. It is to be seen these issues earlier
raised and decided by this Court. Hence the grievance of the defacto
complainant and the other victims can be addressed depending upon the
outcome of the petitions pending before the Apex Court, if any. As regards
the conviction of the Trial Court, this court finds no reason to interfere with
the conviction by the Trial Court and imposing of fine alone. Further, the
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
appellants/victims seeking adequate further compensation has no merits and
hence, the appeal filed by the victims dismissed.
13.Accordingly, the judgment made in C.C.No.48 of 2008 dated
22.07.2021 passed by the learned Special Judge, Special Court under TNPID
Act, Coimbatore is confirmed.
14.In the result, all the Criminal Appeals stand dismissed.
07.01.2026
Index : Yes/No
Speaking Order/Non Speaking Order
Neutral Citation: Yes/No
cse
To
1.The Inspector of Police,
E.W.O.II, Erode, Coimbatore District.
2.The Special Judge,
Special Court under TNPID Act,
Coimbatore.
3.The Public Prosecutor,
High Court, Madras.
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
Crl.A.Nos.368, 378, 386 & 403 of 2021
M.NIRMAL KUMAR, J.
cse
Pre-delivery judgment made in
Crl.A.Nos.368, 378, 386 & 403 of 2021
07.01.2026
https://www.mhc.tn.gov.in/judis ( Uploaded on: 07/01/2026 06:02:52 pm )
