Dismissed

P.Ramesh Babu, v. The State of A.P.

Telangana HC29 Sept 2011CRLP/4035/2009

Case brief

AI extract

What is this about?

Accused petitioner sought quashing of criminal proceedings alleging cheating by a company for high-interest deposit loans. Querying liquidation as a bar to trial, the Single Judge rejected it, noting criminal courts try IPC offences while Company Courts handle statutory violations. Proceedings sustained.

What did the court decide?

Criminal Petition was dismissed, rejecting the prayer to quash the charge sheet.

P.Ramesh Babu, Vs The State of A.P. — Contract and Commercial Disputes | Telangana HC (2011)

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HON’BLE SRI JUSTICE B.CHANDRA KUMAR

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CRIMINAL PETITION No.4035 OF 2009

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ORDER:

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The petitioners herein are the accused in C.C.No.182 of 2005 on the file of XII Additional Chief Metropolitan Magistrate, Nampally, Hyderabad.

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2. The petitioners have filed this petition to quash the charge sheet filed against them in the above referred case. The complainant Ch.Kanaka Durga Bhavani, W/o. Shankar, lodged a complaint on 18.11.2000 alleging inter alia that Rachuri Sri Madhava Rao (A.4), who was working as Manager of M/s. Anantha Madhava Agro Tech, Ameerpet Branch, made her to deposit in their scheme promising that their Company would pay interest at the rate of 24% per annum. Believing his version, she had deposited an amount of Rs.1,25,000/- in 125 units each Rs.1,000/- vide No.45105, Unit No.4818/VJA/PV/4818, on 22.06.1999 and with maturity date 21.06.2000. The Company paid interest for four months only, subsequently, they closed their branch. After maturity of the said deposit, the company failed to repay such deposit amount and interest.

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3. Another complaint was lodged by S.Ramesh, S/o. Mallesh, who deposited Rs.6,00,000/- in 600 Units, each unit of Rs.1,000/- on different dates i.e., on 30.10.1998, he deposited Rs.1,00,000/- for 100 units each Rs.1,000/- vide No.HYD/P7/4386, the maturity date was 29.10.1999. The accused executed an agreement of guarantee returncum-maintenance, an extent of Ac.0.58 undivided share of land in Sy.No.147/2 of Tunki village, Parvathipuram Mandal, Vijayanagram District, kept under lien of the complainant. On 17.08.1998 he deposited Rs.3,00,000/- in 300 Units each Rs.1,000/- vide

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No.HYD/P7/4428, with maturity date 16.11.1999, an Acs.4.20 undivided share of land in Sy.No.70/2 of Tunki village, Parvathipuram Mandla of Vijayanagaram District kept lien of the complainant. On 20.02.1999 he deposited Rs.2,00,000/- in 200 Units each Rs.1000/vide No.HYD/P7/4631 with maturity date 19.02.2000 an Acs.2.90 undivided share of land in Sy.No.65/2 of Mandava village, Maliyaputti Mandal of Srikakulam District kept under lien of the complainant. All the three deposits were kept in Ameerpet Branch, Hyderabad of the said Company. After maturity of the deposits, the Company failed to repay the deposit amount of Rs.6,00,000/- and interest of Rs.1,40,000/with dishonest intention and diverted the funds to the Real Estate Business with partnership of Mr. G.Babu Rao, who is Managing Director of Dolphin Chit Fund (P) Ltd., and requested for necessary action.

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He lodged a complaint on 24.05.2001 alleging that even after maturity of the deposits, the company failed to repay the deposit amount of Rs.6,00,000/- with interest of Rs.1,40,000/- with dishonest intention and upheld the funds to the Real Estate Business with the partnership of G.Baburao, who is the Managing Director of Dolphin Chit Fund (P) Ltd.

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4. Similar complaint was lodged by S.Beerappa, S/o. Mallesh, stating that he has deposited Rs.2,00,000/- in 200 units each unit Rs.1,000/- on 21.11.1998 vide No.37817, Unit No.4450/Hyd/P7 and the maturity date was 20.11.1999, for which, the accused executed an agreement of guarantee return-cum-maintenance, an Ac.4.82 undivided share of land in Sy.No.63/1 of Tunki village, Parvathipuram Mandal, Vijayanagaram District kept under lien of the complainant. After maturity of the deposits, the Company failed to repay the deposit amount of Rs.2,00,000/- and interest of Rs.48,000/- with dishonest intention and diverted the funds to the Real Eastate Business with

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partnership of M.G.Babu Rao, who is Managing Director of Dolphin Chit Fund (P) Ltd., and requested for necessary action. Basing on the above complaint, a case in Cr.No.301 of 2000, under Section 420 of the Indian Penal Code (for short, ‘IPC’), and Cr.No.245 of 2001 and 246 of 2001, under Section 420 IPC & Sec.5 of A.P.P.D.F.E. Act respectively were registered and they were clubbed together and investigated and after completing the investigation, charge sheet was filed. However, Section 5 of A.P.P.D.F.E. Act in Cr.Nos.245 & 246 of 2001 have been deleted while filing charge sheet.

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5. The prosecution has cited 12 witnesses. The only contention of the learned counsel for the petitioners is that the Company has been liquidated by the Company Court in the year, 2003 and the liquidation proceedings are still pending in C.P.No.130 of 2000 on the file of this Court. The main submission is that whatever claims have to be made with regard to the due amount to be paid by the Company such claims have to be made before the Company Court and the liquidator and that initiation or continuation of criminal proceedings would amount of abuse of process.

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6. Sri Nandigam Krishna Rao, learned counsel for the complainants i.e., respondents Nos.2 to 4 herein submitted that at the time of receiving money from the complainants itself the accused had no intention to pay the money and that as far as criminal proceedings are concerned, the Company Court cannot try the offences under Indian Penal Code and that there are only some statutory violations under the Companies Act and those cases alone will be dealt by the Company Court and not the other offences under Indian Penal Code. The learned Public Prosecutor has also submitted that since the trial Court has to decide the matter on merits, there is nothing to quash the proceedings and that the material on record proves that the petitioners have committed the alleged offences. It is not necessary to deal in

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detail. The settled legal principle unless it is shown that the very initiation of the proceedings or continuation of the proceedings would amount to abuse of process or that 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, no interference is required (State of Haryana and others Vs. Ch.Bhajan Lal and others )^[1] . It is for the trial Court to give finding on the facts, there is no necessity to examine the record critically to find out whether the case ends in conviction for acquittal. Therefore, prima facie it appears that there are no grounds to quash the proceedings.

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Accordingly, Criminal Petition is dismissed.

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___________________________ JUSTICE B.CHANDRA KUMAR

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Date:29.09.2011 INL

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[1] 1992 Suppl.1 SCC 335

P.Ramesh Babu, v. The State of A.P.

Case brief

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P.Ramesh Babu, v. The State of A.P.

Case brief

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