23.In the result, both these Criminal Original Petitions stand dismissed.  Consequently, connected miscellaneous petition is closed. Order of stay granted by this Court by directing the Trial Court not to deliver the judgment, also stands vacated. 05.08.2022 Dua Internet : Yes To 1.Additional Superintendent of Police,    CBI/EOW/Chennai. 2.The District Revenue Officer,    Tirupur. RMT.TEEKAA RAMAN, J. For Petitioner        : Mr.B.Kumar, Senior Counsel for Mr.P.Jagadeesan                              For R1                   : Mr.K.Srinivasan Special Public Prosecutor for CBI                              For R2                   : Mr.S.Udaya Kumar Government Advocate (Crl.Side)                              For R3 to R5          : in Crl.O.P.No.10040 of 2022: No appearance Eadu.Radhakrishnan … Petitione

IN THE HIGH COURT OF JUDICATURE AT MADRAS

 

RESERVED ON       :  13.07.2022

              PRONOUNCED ON : 05.08.2022             

CORAM:

THE HONOURABLE MR.JUSTICE RMT.TEEKAA RAMAN

Crl.O.P.Nos.22187 of 2021 & 10040 of 2022 and Crl.M.P.No.12024 of 2021

in Crl.O.P.No.22187 of 2021:

Mohanraj

Vs. 1.State through

Additional Superintendent of Police,

CBI/EOW/Chennai

… Petitioner/Accused No.1
   Crime No.R.C.No.12/E/2011

2.The District Revenue Officer,    Tirupur.

3.G.Dinesh Kumar

4.P.Senthil Rajavel

…1st Respondent/Complainant
5.S.Jothi … Respondents 2 to 5

[R3 to R5 impleaded as per the order of this Court  in Crl.M.P.No.4501 of 2022 in Crl.O.P.No.22187 of 2021, dated 20.04.2022]

PRAYER: This Criminal Original Petition has been filed under Section 482 of Cr.P.C., to direct the Competent Authority, the DRO, Tiruppur, the second respondent herein to file an application before the Special Court that the property of the accused and the money in the Canara bank, Tiruppur, Account No.623110100260 of a sum of Rs.3,47,53,503/- with accrued interest available with the custody of the Competent Authority are sufficient to pay the depositors, who have deposed as witnesses and file a petition before the Special Judge for TNPID case, Coimbatore in C.C.No.9 of 2011 praying permission to compound under Section 5A of the Protection of Interests of Depositors (In financial Establishments) Act.

                             For Petitioner        : Mr.B.Kumar, Senior Counsel for Mr.P.Jagadeesan
                             For R1                   : Mr.K.Srinivasan

Special Public Prosecutor for CBI

                             For R2                   : Mr.S.Udaya Kumar

Government Advocate (Crl.Side)

                             For R3 to R5          :

in Crl.O.P.No.10040 of 2022:

No appearance
Eadu.Radhakrishnan … Petitioner/

Defacto Complainant Vs. The Additional Superintendent of Police, CBI/EOW/Chennai.

Crime No.R.C.No.12/E/2011                         … Respondent/Respondent

PRAYER: This Criminal Original Petition has been filed under Section

482 of Cr.P.C., to direct the respondent to conduct further investigation in Crime No.R.C.No.12/E/2011 in which is culminative the Charge Sheet in C.C.No.9 of 2011 pending on the file of the TANPID Court, Coimbatore.

For Petitioner                           :            Mr.J.Peer Mohammed

For Respondent                           :  Mr.K.Srinivasan

Special Public Prosecutor for CBI

COMMON ORDER

The accused No.1 in C.C.No. 9 of 2011, on the file of the learned

Special Judge for TNPID cases, Coimbatore, is the petitioner in Crl.O.P.No.22187 of 2021.

2.The defacto complainant is the petitioner in Crl.O.P.No.10040 of

2022.

3.By consent of parties, both the cases are taken up together and arguments were heard and common order is passed.

4.The prayer in the Crl.O.P.No.22187 of 2021, in short is that the petitioner/A1 seeks a direction to the second respondent herein/DRO to file an application to compound the offence under Section 5(A) of the Tamil Nadu Protection of Interests of Depositors (In financial Establishments) Act, on the ground that the property of the accused and the money in the Canara bank, Tiruppur, in account No.623110100260 for a sum of Rs.3,47,53,503/- with accrued interest available with the custody of the Competent Authority, are sufficient to pay the depositors, who have deposed as a witnesses.  While, the prayer in Crl.O.P.No.10040 of 2022 is for further investigation, at the instance of the defacto complainant, who is the president of the above said Paazee Nidhi Niruvanathal Bathikkapattore Nala Sangam, which was formed by the victims of Paazee Group of Companies.

5.Brief facts of the cases that are necessary for determination of both these Criminal Original Petitions are as under:

(i).(a).On 24.09.2009, the Inspector of Police, CCB, Tiruppur, has registered a case in Crime No.26 of 2009, which was subsequently reregistered by EOW-II, Coimbatore, as Crime No.2/2010.  The petitioner/A1 as well as others, who were figuring as accused, were running the business by name Paazee Group of Companies.  The allegation in brief is that the petitioner/A1 and others collected deposits from the public under various schemes, on the promise of very high return in very short time and neither repaid the promised amount nor deposited the amount.

(b).Aggrieved by the non-arrest of accused even after dismissal of SLP for anticipatory Bail and non-return of the deposit amount, one of the depositors by name Shri K.Loganathan had filed Crl.O.P.No.2691 of 2011 before this Court seeking transfer of the case to CBI.

(c).The victims of Paazee Group of Companies formed an association by name Paazee Nidhi Niruvanathal Bathikkapattore Nala Sangam, and also filed a similar petition in Crl.O.P.No.5356/2011 seeking transfer of investigation to CBI.

(d).This Court vide common order dated 19.01.2011 in the petitions mentioned supra, transferred investigation of the above said Crime No.2/2010 along with another case to CBI for further investigation.

(ii).(a).In compliance of the order of this Court, Crime No.26/2009, CCB, Tirupur (Crime No.3/2010 of EOW-II, Coimbatore) was reregistered by CBI, EOB, Chennai, on 15.06.2011 as RC.12/E/2011.  The petitioner/A1 as well as other accused in these cases, who were absconding when the case was transferred to CBI, were located at Guwahati/Chirapunji and arrested by CBI on 11.08.2011.

(b).Investigation established that the petitioner/A1 and others floated various schemes by name Promotional Offer, Scheme-II, Anniversary, Aadi Dhamaka and Festival Offer with a promise of very high return in a very short time, had lured the public and collected huge deposits.  They neither had any licence to collect the deposit from public nor to indulge in the promised activity but only indulged in money circulation.  In the process, petitioner/A1 and others collected deposits from 52,893 persons, on a promise to repay Rs.12,10,26,05,501/-, but repaid only Rs.3,40,15,19,623/- and cheated the depositors to the tune of Rs.870,10,85,878/-.

(c).Accordingly, on 17.10.2011, charge sheet was filed before the

TNPID Court, Coimbatore, for the offences punishable under Section 120B r/w.420 of IPC and Section 4 of the Prize Chits & Money Circulation Scheme (Banning) Act, 1978 and Section 5 of the Tamil Nadu Protection of Interest of Depositors (In Financial Etablishments) Act, and the same was taken cognizance as C.C.No.9 of 2011.

(d).Subsequently, supplementary charge sheet was also filed on

27.02.2013, in which 5,678 additional investors were identified to have been cheated to the tune of Rs.60,60,44,005/- in respect of deposits collected towards insurance scheme and conversion of non-insurance scheme to insurance scheme.

(e).During investigation, letter of request [LR] was issued by the Trial Court, addressed to the Republic of Singapore, identified 4 bank accounts in the name of the petitioner/A1 and others, where deposits collected from the public was suspected to have been stashed.

(f).In response to the LR and continuous efforts made with the Singapore authorities, Rs.3,76,21,353/- lying in 4 bank accounts of the petitioner/A1 and others, was repatriated from Singapore to India and the said amount is with DRO, Tirupur.

(g).In addition to the LR, 30 insurance polices identified during investigation were attached by the Government of Tamil Nadu under TNPID Act and the ad-interim order was made absolute by the order of the Trial Court.

(h).The petitioner/A1 and others, knowing fully well that the entire proceeds of the 30 insurance policies have been attached in favour of the

DRO, received the proceeds of some of the policies and converted to their own use.

(i).The balance out of the insurance policies amounting to

Rs.66,93,549/- was realised by DRO, Tirupur directly.

6.After filing of the above Criminal Original Petitions pursuant to various orders passed by this Court, as could be seen from the records, I find that

(a).Seven immovable properties in the name of the petitioner/A1 and others were attached by the Government of Tamil Nadu under TNPID Act and this ad-interim order was made absolute by the Trial Court.  Out of them, 6 properties were auctioned by DRO, Tirupur for a sum of Rs.3,01,10,000/-.  This Court has directed DRO, Tirupur, to auction the 7th property and also directed to implead the highest bidders as party respondents and also the parties, who have offered more price than the auctioned amount in respect of certain properties.

(b).When the trial was in progress, the petitioner/A1, on his own volition filed a memo dated 07.02.2018, seeking permission to make settlement to the depositors through mediation centre, which was allowed. In pursuance of the same, during the period from 14.12.2018 to 15.02.2019, the petitioner/A1 has made payment to 44 depositors to the tune of Rs.38,96,500/- (PW483 to PW526).  Though in all more then 100 depositors have been examined during trial, the petitioner/A1, on their own volition, stopped making payment to the depositors, subsequent to February, 2019.

7.After hearing the submissions of Mr.B.Kumar, learned Senior

Counsel for the petitioner/A1, Mr.K.Srinivasan, learned Special Public Prosecutor for CBI and Mr.J.Peer Mohammed, learned counsel for the petitioner/defacto complainant and on perusal of the typed set of papers, additional typed set of papers, affidavit and counter affidavit filed by the parties, the amount realised from Bank accounts of the accused in Singapore reparteed to India as stated by the learned Special Public Prosecutor for CBI, are not in dispute.  So also attachment, movable properties, immovable properties belongs to the petitioner/A1 under G.O.Ms.No.13, Home (Police XIX) Department, dated 03.01.2014,

G.O.Ms.No.324, Home (Police XIX) Department, dated 20.05.2013 and

G.O.Ms.No.1012, Home (Police XIX) Department, dated 26.11.2013, are also not disputed.

8.On the factual position, Mr.B.Kumar, learned Senior Advocate for the petitioner/accused, would contend that the amount payable as per the memo submitted by the petitioner is as follows:

1. Cash deposit, which is obtained from the

Singapore authorities to the DRO, Tiruppur from the year 2016.  Six years have lapsed and interest @ 7% on

Rs.3,76,21,353/- will be

Rs.5,34,22,321/-
2. As per direction of this Court, auction for 6 properties conducted on 03.03.2022 and 09.03.2022 Rs.3,01,10,00/-
3. The petitioner offered a higher price in 3 properties out of 6 properties.  Therefore, petitioner filed an impleading petition against the purchasers of the three properties through auction in

Crl.M.P.No.4501 of 2022.  The Crl.M.P.

was allowed on 20.04.2022

Rs.1,32,50,000/-
4. Auction for property at Coimbatore Rs.2,20,00,000/-
1. Cash deposit, which is obtained from the

Singapore authorities to the DRO, Tiruppur from the year 2016.  Six years have lapsed and interest @ 7% on

Rs.3,76,21,353/- will be

Rs.5,34,22,321/-
  District, Vilangkurichi village was not conducted.  This Court by an order dated 28.03.2022, the auction should be completed on or before 22.4.2022.  The order of this Court has not been complied with till date.  The petitioner is willing to officer the sale price.  
5. Total Rs.12,17,82,321/-

As per the prosecution, outstanding amount is Rs.20,47,00,000/-; Total amount available is Rs.12,17,82,321/-; Balance amount to be paid is Rs.8,29,17,679/-.

9.Per contra, the learned Standing Counsel for the CBI would contend that what was projected by the accused is, only 1021 depositors have been examined as prosecution witnesses viz., PW12 to PW1032, before the Special Court for TNPID Act cases and as per their deposition

28.95 crores was the total amount deposited by them, out of which 8.48 crores have been returned, while 20.47 crores is outstanding amount.

10.It remains to be stated that as per the charge sheet and supplementary charge sheet, as narrated supra, there are totally 52,893 depositors and only a handful of depositors were examined and the entire list of depositors along with deposited amount has been filed before this Court as annexures to the charge sheet and it has been marked through the Investigating Officer/PW1031 as Ex.P1101 series.  Therefore, I find that the contention raised by the learned Senior Advocate for the

petitioner/accused, that he can mobilize some amount by re-auctioning the property and also utilizing the amount repatriated  by the Singapore to the satisfaction of 1021 depositors, cannot be accepted since the total number of depositors are not 1021 but they are numbering 52,893 depositors, assumes significance.

11.As per the summary of the charge sheet, I find that as follows:

  No.of Depositors Amount
Number of depositors and amount defrauded, as per the charge sheet A 52,893 870,10,85,878
  No.of Depositors Amount
Number of depositors and amount defrauded, as per the supplementary charge sheet B 5,678 60,60,44,005
Total number of depositors and amount defrauded by the accused

C

58,571 930,71,29,883
Number of depositors and amount defrauded as per the depositors who were examined during trial D 1,021 20,47,00,000
Number of depositors who were returned the amount during trial, through the mediation centre E 44 38,96,500
Number of depositors and amount to be returned to the depositors, among the witnesses who deposed before the Court F 977 20,08,03,500
Number of depositors and amount to be returned to the depositors, other than those who deposed before the court but whose name figure in the list of depositors file along with charge sheet G 57,550 910,24,29,883
Total to be returned (F + G) = H 58,527 930,32,33,383
Amount realised out of 30 insurance policies 66,93,549
Minimum amount likely to be

realised out of 6 properties

301,10,000

Hence, I am unable to affix the seal of approval in the contention of the learned senior counsel appearing for the petitioner/A1 that by reauctioning the attached property and the amount repatriated from the Singapore  and other nations, could be sufficient to settle the amount, cannot be countenanced since there are 51,000 depositors, over and above the persons, who have been examined and hence, on the above factual background, the request made on that observation is not legally sustainable.

12(a).Yet another point is that the highest bidders in the auction have been added as a party, pursuant to the order passed by this Court in Crl.M.P.No.4501 of 2022, dated 20.04.2022.  I am not expressing any opinion on the genuineness or bona fide in purchasing property at an higher price than the price that has been shown in the public auction by the second respondent/DRO. No affidavit has been filed by the alleged prospective purchaser as projected by the petitioner to show their bonafide to purchase the property at a higher price as contended in the petition and hence, I find that it is only an after thought to drag on the proceedings.

12(b).Furthermore, Crl.O.P.No.22187 of 2021, has been filed for directing the second respondent/DRO to file petition for compounding offence, it is relevant to extract Section 5(A) of the TNPID Act, which reads as under:

“5A. 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.”

13.An offence punishable under Section 5 of TNPID Act may be compounded with the permission of the Special Court.  The petitioner/A1 never filed any petition before the trial Court seeking such compounding. Had any such petition is filed before the Trial Court, it would have disposed of such petition in accordance with law.

14.Under the circumstances, the petitioner/A1 cannot seek orders of this Court to direct the second respondent/DRO, Tiruppur to compound the offence, by invoking its inherent powers. However, on the factual position as could be seen from the above tabular column, it has to be stated that the petitioner/A1 should first comply with the condition of repaying the entire amount due to the depositors, with or without interest. But, the petitioner/A1 repaid the amount to only 44 depositors out of more than 1,300 witnesses examined during the investigation and more than 58,571 total depositors are till standing in the queue. The money has been returned, without any interest, only a negligible minuscule percentage of 44 depositors out of total 58,571 depositors cited in the charge sheet and supplementary charge sheet. Hence, the petitioner/A1 has not discharged his liability contained in one part of Section 5A of TNPID Act in order to make him eligible to claim the benefit or remedy contained in the other part of the same Section of TNPID Act.

15.Yet another point is that the provisions of Section 5A of TNPID Act would be applicable when the offence alleged is under Section 5 alone of the Act.  In the charge sheet filed, the petitioner/accused as well as the other accused are facing charges punishable under Section 120-B r/w 420 of IPC, Section 5 of the Prize Chits & Money Circulation Banning Act, 1978 and Section 5 of the TNPID Act. Besides, there is no provision for compounding of offence under Prize Chits and Money Circulation

Banning Act, 1978.

16.From the above factual position, as demonstrated in the tabular column, I find that the petitioner/A1 failed to demonstrate that the amount deposited by all the 58,571 depositors, whose details have been filed along with the charge sheet, can be repaid with the deposited amount.  The petitioner/A1 has not even whispered about repayment to all the depositors, which is the essential pre-requirement while seeking to invoke section 5A of TNPID Act.  Hence, the petitioners are not entitled to invoke the provision, seeking the exercise of inherent powers of this Court.

17.Further more, it is for the competent authority to go through the records and arrive at the total amount to be returned to the depositors visa-vis the total amount available in his possession for the same and to find out whether it would be sufficient to pay to all the depositors.  Section 5A of the TNPID Act, is not a mandatory provision which ought to be invoked in all circumstances.  It is a discretionary  provision available to the competent authority, when all conditions mandated therein are complied.

18.Thus, I find that the entire gamut of the case of the petitioner/A1 before this Court is that the amount repatriated from the Singapore and to expect the sale value of the attached properties together, would be sufficient to pay all the depositors is found to be incorrect and the offence under TNPID Act, deemed to have been compounded, could not be

countenanced since this Court is of the considered view that

(a).The total number of depositors who have been cheated and not repaid the deposit amount are far more than the 50,000 in number, who were examined during investigation, while deposition has been recorded during the trial are handily 1,000 depositors.

(b).There are number of depositors who were examined during investigation but could not be examined during trial due to their subsequent death.  The legal heir of  such depositors would be entitled to receive such money.  Such claims cannot be negated on the ground that the depositors are no more and did not depose before the Trial Court.

(c).The bank deposit and the expected sale of immovable properties attached can, at the best, fetch minuscule percentage of the total deposit and would be insufficient to make payment to all the depositors, as envisaged in Section 5A of TNPID Act.

(d).In addition to Section 5 TNPID Act, the petitioner/A1 and others are facing trial for offence punishable under Section 120-B r/w 420 of IPC and Section 4 of the Prize Chit and Money Circulation Baning Act, Hence, benefit of compounding under Section 5A of TNPID Act, even if

available, is limited to the offence under Section 5 of TNPID Act only and not with respect of other sections of law, for which the petitioner/A1 and others are to face trial.

(e).There is no provision for compounding of any of the offence under Prize Chit and Money Circulation Banning Act.

(f).Though the petitioner claimed he is a prospective purchaser to purchase the secured debt offered as collateral security and those persons are not filed any affidavit to show their bona fide or willingness as projected by the petitioner, is also assumes significance.

19.Hence, in view of the above factual position, as discussed supra, I find that the basis on which the case has been filed is found to be otherwise as demonstrated in the counter affidavit and the tabular column filed by the learned standing counsel for CBI  to the effect that the number of depositors are not 1,000 but 58,571 depositors and even on the legal side there is no provision for compounding offence under Prize Chit and Money Circulation Banning Act and besides without the entire amount being deposited, Section 5(a) of the TNPID Act cannot be invoked and thus, I find that an attempt has been made by the petitioner/A1 by projecting that his liability of returning the deposit amount would be complete, if the money to those depositors who were examined as witnesses during the course of investigation/trial are returned and on that count he may fall within the ambit of section 5A of TNPID Act.

20(a).In the decision reported in (2008) 3 SCC 542 – Divine Retreat Centre Vs. State of Kerala & Others, while limiting the exercise of jurisdiction by the Hon’ble High Court, has held that as follows:

“There are three circumstances under which the inherent jurisdiction may be exercised, namely (i) to give effect to an order under the Code, (ii) to prevent abuse of process of Court, and (iii) to otherwise secure the ends of justice.”

20(b).In the above said judgment, the learned counsel for the petitioner seeks to bring his case under Clause (iii).  As said in the above decision in order “to secure the ends of justice”, the petitioner has come forward with the specific plea that the amount now available will be sufficient to pay the investors, who are examined before the Special Judge viz., thousands in number and accordingly seek a direction to the second respondent/DRO, to file an application for compounding the offence.  In the instant case, on factual grounds as discussed supra, thousand depositors and  purchasers, were examined as the witnesses before the learned Special Sessions Judge for TNPID Act cases and there are more than 52,000 depositors and the amount mentioned therein for the settlement of those persons is Rs.9,303,233,383/-, whereas the amount that could be possibly achieved by selling the six properties now owned by the petitioner is Rs.30,110,000/- only and hence, the contention of the learned counsel for the petitioner could not be countenanced, in other words, the amount expected to be fetched for sale of the property even according to the petitioner mode of discretion will be too minuscule in the amount to be distributed to the 58,527 depositors.

21.In view of the above, I find that the petitioner/defacto complainant is not entitled to any relief as sought for, since the factual position what was projected by the petitioner/A1 is found to be factually incorrect and in the absence of any settlement to 52000 odd depositors, such a direction could not be granted and hence, I find that both on factual position and on the legal issues, the petitioner/defacto complainant, is not entitled for the any relief as sought for under Section 482 of Cr.P.C. Further more from the intimation received from the lower Court, I find that prosecution has completed his evidence on 20.11.2021; questioning of the accused under Section 313 Cr.P.C., has been completed on 30.11.2021; arguments of the parties have been completed on various dates by marathon hearing by the learned Sessions Judge and the matter is now reserved for judgment.

22.In view of the comprehensive final report filed by the CBI and the comprehensive trial has been completed by examining the prosecution witnesses viz., PW1 to PW1030 and by marking exhibits viz., Ex.P1 to P1213 and also by marking MO1 to MO71, I find that there is no deficiency in the investigation to make an order for further investigation. Hence, prayer sought for by the defacto complainant in Criminal Original Petition Crl.O.P.No.10040 of 2022, for further investigation, is devoid of merits and liable to be dismissed.

23.In the result, both these Criminal Original Petitions stand dismissed.  Consequently, connected miscellaneous petition is closed. Order of stay granted by this Court by directing the Trial Court not to deliver the judgment, also stands vacated.

05.08.2022

Dua

Internet : Yes

To

1.Additional Superintendent of Police,    CBI/EOW/Chennai.

2.The District Revenue Officer,    Tirupur.

RMT.TEEKAA RAMAN, J.

DuaÔ

Pre-delivery Judgment in

Crl.O.P.Nos.22187 of 2021 & 10040 of 2022 and Crl.M.P.No.12024 of 2021

05.08.2022

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