Telangana High Court
Vijay Easwaran vs State Of Ap., Rep.By Its P.P. And 3 ... on 5 July, 2022
Bench: A.Santhosh Reddy
HON'BLE SRI JUSTICE A.SANTHOSH REDDY
CRL.P.No.13874 of 2011
ORDER:
This petition is filed under Section 482 Cr.P.C for quashing the
proceedings against the petitioner/A-2 in Cr.No.37 of 2008 of
P.S.Dornakal, Warangal District registered for the offences
punishable under Sections 420, 385 read with Section 34 IPC and
Sections 4, 5 and 6 read with Section 2(c) and 3 of the Prize Chits and
Money Circulation Schemes (Banning) Act, 1978.
2. Heard learned counsel for the petitioner and learned Assistant
Public Prosecutor. None represented respondent Nos.2 to 4 inspite of
serving notice on them. Perused the material on record.
3. The prosecution case, in brief is that the petitioner herein is
A-2. Respondent No.2 is the Secretary of Corporate Frauds Watch
Society, Vijayawada which is a non-profit and non-political
organization with the object of bringing awareness among public
about the nefarious activities of multinational and indigenous
companies indulging in promoting illegal money circulation schemes
in the guise of multi level marketing, direct marketing etc., in the
Country. While respondent No.2 after knowing the grievance of
respondent No.3 and 4 approached them and learnt about fraud
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committed by A-1 to A-21 in the complaint and how they cheated and
extorted them by making false inducements gave complaint before
the police. It is alleged that A-2 to A-5 are the representative
promoters of Goldquest International Limited (A-1) registered in
India with the registered office at Chennai, A-6 to A-21 are the
member promoters of the scheme at different levels of the scheme
and they used to attend conferences inducting new persons to join the
scheme all over the State of Andhra Pradesh. Respondent Nos. 3 and
4 were invited to attend such a meeting and they were induced by A-6
to A-21 and others to pay a sum of Rs.33,000/- each for the gold and
silver coin which according to accused to fetch them a sizeable
amount in future. Respondent No.3 placed an order on 03.01.2008
and respondent No.4 placed an order on 05.10.2007. They have
received only one gold coin and a silver coin which costs only
Rs.8,000/- approximately. Respondent No.3 and 4 did not receive
any money. They were asked to enroll more members to earn
commissions. It is alleged that the object of scheme of accused is to
attract and induce more members to invest and get benefit from the
entrance fee of such members and in that way, they have collected
crores of rupees from people. Basing on the said allegations of the
complaint, the Station House Officer registered a case in Crime No.37
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of 2008 under Sections 420, 385 read with Section 34 IPC and
Sections 4, 5 and 6 read with Sections 2(c) and 3 of the Prize Chits
and Money Circulation Schemes (Banning) Act, 1978 and took up the
investigation. Aggrieved by the same, the present Criminal Petition is
filed.
4. Learned counsel for the petitioner/A-2 contended that the
allegations do not make out any cognizable offence. He would
further submit that the petitioner was Director in the company for a
period from 26.03.2002 when he was appointed as an Additional
Director until 19.08.2003 and he resigned from the post of
Directorship and in proof of same, copy of Form No.32 filed before
the Registrar of Companies, Chennai is filed. As such, the petitioner
is nothing to do with the Indian operations of the Gold Quest
International Limited.
5. Learned Assistant Public Prosecutor submitted that there are
specific allegations against the petitioner and other accused and
therefore, the allegations would need to be investigated.
6. In the case of State of Haryana v.Bhajan Lal1, the Hon'ble
Supreme Court held as under:-
1 1992 supp(1) SCC 335
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"In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of the
principles of law enunciated by this Court in a series of decisions
relating to the exercise of the extraordinary power under Article
226 or the inherent powers under Section 482 of the code which
we have extracted and reproduced above, we give the following
categories of cases by way of illustration wherein such power
could be exercised either to prevent abuse of the process of any
Court or otherwise to secure the ends of justice, though it may not
be possible to lay down any precise, clearly defined and
sufficiently channelised and inflexible guidelines or rigid formulae
and to give an exhaustive list of myriad kinds of cases wherein
such power should be exercised.
(1) Where the allegations made in the first information
report or the complaint, even if they are taken at their
face value and accepted in their entirety do not prima
facie constitute any offence or make out a case against
the accused.
(2) Where the allegations in the first information report and
other materials, if any, accompanying the FIR do not
disclose a cognizable offence, justifying an
investigation by police officers under Section 156 (1) of
the Code except under an order of a Magistrate within
the purview of Section 155 (2) of the Code.
(3) Where the uncontraverted allegations made in the FIR
or complaint and the evidence collected in support of
the same do not disclose the commission of any offence
and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated under
Section 155 (2) of the Code.
(5) Where the allegations made in the FIR or complaint are
so absurd and inherently improbable on the basis of
which no prudent person can ever reach a just
conclusion that there is sufficient ground for
proceedings against the accused.
(6) Where there is an express legal bar engrafted in any of
the provisions of the Code or the concerned Act (under
which a criminal proceeding is instituted) to the
institution and continuance of the proceedings and/or
where there is a specific provision in the Code or the
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concerned Act, providing efficacious redress for the
grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended
with mala fide and/or where the proceeding is
maliciously instituted with an ulterior motive for
wreaking vengeance on the accused and with a view to
spite him due to private and personal grudge."
7. The Hon'ble Supreme Court in catena of judgments, while
dealing with powers of the High Courts under Section 482 Cr.P.C.,
held that powers are very wide and very plentitude of the power
requires great caution in its exercise. The Court must be careful to
see that its decision in exercise of its power based on sound
principles.
8. A perusal of the allegations of the complaint would reveal that
A-2 to 5 are the representative promoters of Goldquest International
Limited having registered office at Chennai. A-6 to A-21 are the
member promoters of the scheme at different levels of the scheme. It
would further reveal that they are inducing people to invest money
and in turn they will give gold and silver coins and it would fetch a
sizeable amount in future. On such inducement, respondent Nos.3
and 4 alleged to have purchased gold coins. But they did not get any
sizeable amount or benefit. The main object of the promoters of the
scheme to enroll more members and from the entrance fee of
members by selling a product is only a camouflaging activity.
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Respondent No.2 who is the Secretary of non-profit organization as
stated above on knowing fraud committed by A-1 to 21 lodged the
present complaint.
9. A perusal of the allegations of the F.I.R. would go to show that
A-2 to A-5 are the representative promoters of A-1 company.
Learned counsel for the petitioner submitted that the petitioner was
Director of the company only for a period from 26.03.2022 when he
was appointed as an Additional Director on 19.08.2003 when he
resigned from the post of Directorship. The alleged complaint was
lodged on 21.06.2008.
10. It is contended by the petitioner that Form-32 would reveal that
there exist Goldquest International Company Limited. It is the case
of respondent Nos.3 and 4 that they have placed an order for purchase
of gold and silver coins and they have received only one gold and
silver coin which approximately costs Rs.8000/- only and they have
paid Rs.33,000/- each for the gold and silver coin. They were
induced by A-6 to A-21 to purchase gold and silver coins by paying
Rs.33,000/- would fetch sizeable amount and believing the same, they
invested money. Apart from this, the promoters of the scheme have
to enroll more members and get more profit from entrance fee of such
members for selling away the product. As alleged, the object of said
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scheme appears and would prima facie satisfy the ingredients of the
offences alleged under the Prize Chits and Money Circulation
Schemes (Banning) Act, 1978.
11. It is seen from the above allegations, the modus operandi of the
accused was to induce not only the complainant and others to become
subscribers of the scheme to become rich, for which they have to pay
Rs.13,000/- for gold and silver coins, whereas they receive the same
with approximate costs around only Rs.8,000/-. It is also alleged that
they make false promise and take huge commissions from the
amounts collected from the members. The allegation that the accused
make false promises and induce the people to become members,
subscribers of the scheme itself attracts the ingredients of alleged
offence.
12. Having regard to the above, this Court is of the view that the
allegations made in the F.I.R., prima facie, satisfy the ingredients of
the alleged offences which constitute the cognizable offences. The
contention of learned counsel for the petitioner with regard to
resignation of the petitioner from the Directorship of the Company
from 19.08.2003 would need to be certainly investigated by the police
and if he was not the Director at the time of alleged commission of
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offence, no prosecution would lie against him. This Court is not
justified in embarking upon the enquiry as to whether the petitioner
was Director of the Company as on the date of offence or not and
genuineness of Form-32, as these are the factual aspects need to be
investigated by the Investigating Officer during the course of
investigation to bring the case to its logical end.
13. Therefore, the allegations made in the complaint/F.I.R. clearly
constitute the cognizable offences justifying the registration of the
case and investigation. As such, this Court is of the view that this is
not a fit case to exercise extraordinary or inherent powers of this
Court under Section 482 Cr.P.C. to quash the F.I.R.
14. Accordingly, the Criminal Petition is dismissed. Miscellaneous
Petitions, if any, pending shall stand closed. Miscellaneous petitions,
if any, pending shall stand closed.
_______________________
A.SANTHOSH REDDY, J
05.07.2022
Nvl
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HON'BLE SRI JUSTICE A.SANTHOSH REDDY
CRL.P.No.8809 of 2015
.06.2022
Nvl
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