Madras High Court
M/S.R.K.Emu Farms vs State Represented By on 15 September, 2022
Author: M. Nirmal Kumar
Bench: M. Nirmal Kumar
Crl.A.No.1321 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 21.12.2023
DELIVERED ON : 04.06.2024
CORAM:
THE HON'BLE MR.JUSTICE M. NIRMAL KUMAR
Crl.A.No.1321 of 2022
1.M/s.R.K.Emu Farms,
No.2/216, Pattakaranpalayam,
Perundurai Taluk,
Erode District.
Represented by A2 and A3
2.R.Kannusamy
3.P.Mohanasundaram ... Appellants/Accused
Vs.
State Represented by
The Inspector of Police,
Economic Offences Wing-II, Erode.
Crime No.1005 of 2012 ... Respondent
PRAYER: Criminal Appeal filed under Sections 374(2) of Cr.P.C to call for
the records relating to judgment in C.C.No.7 of 2014 dated 15.09.2022 on the
file of the learned Special Judge, Special Court under the Tamil Nadu
Protection of Interests of Depositors Act Cases, Coimbatore and set aside the
same and acquit the appellants from all charges framed against them.
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Crl.A.No.1321 of 2022
For appellants : Mr.G.Murugendran &
Ms.R.Ravitha
For Respondent : Mr.A.Damodaran
Additional Public Prosecutor
JUDGMENT
This Criminal Appeal has been filed to set aside the order passed in C.C.No.7 of 2014 dated 15.09.2022 by the learned Special Judge, Special Court under the Tamil Nadu Protection of Interests of Depositors Act Cases, Coimbatore and acquit the appellants from all charges framed against them.
2. The appellant/accused in C.C.No.7 of 2014 were convicted by the Trial Court for offences under Sections 420, 406, 120B r/w 420 of IPC and Section 5 of Tamil Nadu Protection of Interests of Depositors Act ('TNPID' Act). A1, namely, M/s.R.K.Emu Farms was directed to pay a fine of Rs.66,00,000/- (Rs.20,000/- for each offences and each counts under Section 420 and 406 of IPC and Section 5 of TNPID Act (20,000 x 3 offences x 110 counts)). A2 and A3 were directed to pay the fine amount equally 2/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 imposed on the A1 Firm, A2 and A3 each sentenced to undergo two years simple imprisonment and to pay a fine of Rs.44,00,000/- (Rs.20,000/- for each counts (20,000 x 110 counts x 2 accused)) for the offence under Section 120B r/w 420 of IPC, in default to undergo one year simple imprisonment, A2 and A3 each to undergo three years simple imprisonment and to pay a fine of Rs.44,00,000/- (Rs.20,000/- for each counts (20,000 x 110 counts x 2 accused)) for the offence under Section 420 of IPC, in default to undergo one year simple imprisonment, A2 and A3 each to undergo three years simple imprisonment and to pay a fine of Rs.44,00,000/- (Rs.20,000/- for each counts (20,000 x 110 counts x 2 accused)) for the offence under Section 406 of IPC, in default to undergo one year simple imprisonment, A2 and A3 each to undergo ten years simple imprisonment and to pay a fine of Rs.44,00,000/- (Rs.20,000/- for each counts (20,000 x 110 counts x 2 accused)) for the offence under Section 5 of TNPID Act, in default to undergo one year simple imprisonment. The sentences are directed to run concurrently. 3/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022
3. The gist of the prosecution case is that the first appellant/A1- M/s.R.K.Emu Farms is a partnership firm, financial establishment registered with the Registrar of Firms, Erode on 29.04.2011 in Registration No.277/2011. The second appellant/A2 is the Managing Partner and third appellant/A3 is the other partner. Both partners are responsible for the day to day work and management of the affairs of their financial establishment. During the period from 16.02.2011 to 09.11.2012 they committed criminal conspiracy at Erode District and other places by releasing frequent advertisements through print and visual, social media, projecting two schemes, viz., Scheme-I and Scheme-II. They collected deposits by giving false promises that they (i) will give higher rate of interest to the depositors, i.e., 55% per annum. Through Scheme-I, they collected Rs.1,50,000/- as 1 unit, (ii) they will supply 6 emu birds, (iii) will erect sheds for the emu birds,
(iv) will provide feeds, (v) will provide free insurance to the emu birds, (vi) will provide free medical checkups and free medicines to maintain the emu 4/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 birds, (vii) will pay Rs.6,000/- per month for 36 months, (viii) will pay bonus of Rs.10,000/- for 3 years and (ix) will refund the deposit amount of Rs.1,50,000/- after the maturity period, which they had no intention to return and they indulged in fradulent financial operation and circulated money of the depositors for paying salaries to the employees, commission, conveyance charges and other expenses and major of the amout was diverted for their personal benefits and purchased movable and immovable properties in their names and in the name of their family members. Thus the second and third appellants/A2 and A3 collected deposit amounts from the public to the tune of Rs.2,40,06,300/- from 110 depositors and defaulted in the payment of interest as well as principal to the depositors. Thus the appellants individually and collectively committed the offences punishable under Sections 120(B), 406, 409, 420 of IPC and Section 5 of TNPID Act, 1997.
4. During trial, on the side of the prosecution P.W.1 to P.W.110 examined and Exs.Pl to P260 marked. On the side of the appellants/accused, 5/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 no witness examined and no documents marked. On conclusion of the trial, the Trial Court convicted the appellants as stated above.
5.In this case, initially the appellants were convicted by judgment dated 11.12.2020 as follows:
A1, namely, M/s.R.K.Emu Farms was directed to pay fine of Rs.33,00,000/- (Rs.10,000/- for each offences and each counts under Section 420 and 406 of IPC and Section 5 of TNPID Act (10,000 x 3 offences x 110 counts)). A2 and A3 were directed to pay the fine amount equally imposed on the A1 Firm, A2 and A3 each sentenced to undergo two years simple imprisonment and to pay a fine of Rs.22,00,000/- (Rs.10,000/- for each counts (10,000 x 110 counts x 2 accused)) for the offence under Section 120B of IPC, in default to undergo one year simple imprisonment, A2 and A3 each to undergo three years simple imprisonment and 6/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 to pay a fine of Rs.22,00,000/- (Rs.10,000/- for each counts (10,000 x 110 counts x 2 accused)) for the offence under Section 406 of IPC, in default to undergo one year simple imprisonment, A2 and A3 each to undergo three years simple imprisonment and to pay a fine of Rs.22,00,000/- (Rs.10,000/- for each counts (10,000 x 110 counts x 2 accused)) for the offence under Section 420 of IPC, in default to undergo one year simple imprisonment, A2 and A3 each to undergo ten years simple imprisonment and to pay a fine of Rs.22,00,000/- (Rs.10,000/- for each counts (10,000 x 110 counts x 2 accused)) for the offence under Section 5 of TNPID Act, 1997, in default to undergo one year simple imprisonment.
The sentences are directed to run concurrently.
Aggrieved against the conviction, the appellants preferred appeal in Crl.A.No.295 of 2021 before this Court.
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6.The contention of the appellants therein is that before the trial Court when the case was posted for arguments on 08.12.2020, neither the accused nor the counsel for the accused were present and without hearing the arguments of the accused and alternatively without appointing any Amicus Curiae, the trial Court on hearing the learned Public Prosecutor, decided the issue and found the accused guilty. Since there was nobody to represent the perspectives of the accused, the conviction is erroneous. In support of their submission, the learned counsel relied on the judgments of the Hon'ble Apex Court in the case of Mohd. Sukur Ali vs. State of Assam reported in (2011) 4 SCC 729, K.S.Panduranga vs. State of Karnataka reported in (2013) 3 SCC 721 and the judgment in Subedar vs. State of Uttar Pradesh reported in (2020) 17 SCC 765. It was also contended that an application was filed under Section 311 Cr.P.C. to recall some of the witnesses, who are not cross examined originally. The trial Court allowed the said application with onerous condition to deposit a sum of Rs.50,00,000/- and the accused were 8/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 unable to deposit Rs.50,00,000/- and later, the same was dismissed, which was challenged by filing a petition under Section 482 of Cr.P.C. before this Court and this Court dismissed the said petition and a Special Leave Petition was field before the Hon'ble Apex Court. Before the SLP could be numbered, the trial Court pronounced the judgment of conviction. The trial Court, without hearing the accused and also failed to give them an opportunity to cross examine the witnesses, had convicted the appellants/accused. The accused were not heard as regards the question of sentence and they were convicted, against which, the appeal in Crl.A.No.295 of 2021 filed.
7.During the pendency of the appeal, the appellants surrendered before the trial Court on 29.11.2021. The objections of the then learned Public Prosecutor was that the appellants/accused were given several opportunities from the month of March 2020 onwards but they were continuously absent. Neither they appeared for physical hearing nor through video conference and failed to even submit any written submissions through 9/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 e-mail and other modes and the trial Court after giving sufficient opportunity rendered the judgment of conviction on 11.12.2020, finally. The learned Public Prosecutor relied upon the judgment of the Hon'ble Apex Court in K.S.Panduranga vs. State of Karnataka, wherein it is held that when the accused make some deliberate attempt, the course adopted by the trial Court cannot be found fault with. This Court after considering the rival submissions, by judgment dated 05.07.2022, set aside the trial Court judgment of conviction dated 11.12.2020, giving the appellants/accused an opportunity of hearing and remanded the matter back to the trial Court to continue from the stage of arguments by both side counsel. It had also fixed the time limit to complete the exercise of hearing and rendering a judgment on or before 15.09.2022. Further, liberty was granted to the accused to settle the claims of the depositors before the said period and compound the issue, it they are ready to do so. Thereafter, the accused appeared before the trial Court on 01.08.2022 and the case was periodically adjourned on the request 10/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 of the appellants on 10.08.2022, 16.08.2022, 24.08.2022, 09.09.2022 and finally the impugned judgment was rendered on 15.09.2022 convicting the appellants. Thereafter the present appeal has been filed before this Court. In this appeal, the appellants submitted that they are intent to settle the depositors P.W.2 to P.W.105 to the satisfaction of the depositors and the case can be referred to the Mediation Centre. This Court, by order dated 12.06.2023, referred the case to the Coimbatore District Court Mediation Centre for mediation and directed the appellants to appear before the Mediation Centre for settlement on 26.06.2023. Since all the depositors and the accused could not be present on that day, mediation could not be taken up. This Court, on 01.08.2023, directed the appellants/accused to appear before the Mediation Centre on 29.08.2023 and thereafter, the mediation had taken place and the issue got resolved between the appellants with its depositors. The respondent police were also part of the mediation proceedings, who filed a status report confirming the mediation report and the 11/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 depositors have been settled fully and finally to their satisfaction and they had no objection to compound the offence.
8.The learned counsel for the appellants submitted that in view of the issue being resolved and the depositors having received the amount and agreed to compound the same, they appeared for the Mediation and produced the receipt for receiving the money and an affidavit confirming the receipt of money and showing willingness to compound the offence. The appellants produced the originals of the affidavit and receipts, which were compared with the photocopy produced by the depositors and thereafter, the mediation concluded confirming the settlement of the issues between the appellants and the depositors. He further submitted that the respondent police participated in the mediation, enquired the depositors independently, confirmed the settlement arrived between them and reported the same to the mediator. He further submitted that even before the trial Court, the list of depositors, P.W.1 to P.W.105 were given and the amount refunded have been recorded and 12/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 admitted by the witnesses, the balance amount, which has to be paid, now paid. He further submitted that the trial Court judgments dated 11.12.2020 and 15.09.2022, are nothing materially different except for the recordings of the happenings, after 01.08.2022. In the Docket order dated 24.08.2022, it was recorded that the attachment made in O.A.Nos.33, 34 and 35 of 2016, it is further recorded that the appellants did not take any steps under Section 5A of TNPID Act to sell the properties and settle the dues to the depositors. Further recorded that the appellants failed to file an application under Section 5A of TNPID Act through the Competent Authority/D.R.O. The Hon'ble High Court already had directed the trial Court to complete the exercise on or before 15.09.2022 and the accused till then failed to settle the claim and compound the case. Further it recorded that application under Section 5A of TNPID Act cannot be filed by the accused in view of the judgment in Sree Bargav Finance and Investment vs. The Inspector of Police, EOW-I, Chennai and another reported in 2009 (2) L.W. (Cri) 1074. Despite the 13/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 appellants making a request for one month's time to settle the defaulted amount to the depositors, the trial Court not considered and convicted the appellants in haste without considering the inclination and verifying the settlement arrived. He further submitted that during the pendency of this appeal, for settlement, the matter was referred to mediation and the appellants appeared for the mediation on various dates from 26.06.2023 to 07.10.2023 and finally the mediation concluded successfully and the mediator by his report dated 09.10.2023 recorded the mediation proceedings and sent a mediation report along with settlement agreement. Hence, the learned counsel prayed this Court to record the mediation report, compound the offence, allow the appeal and discharge the appellants/accused from the above case.
9.The learned Additional Public Prosecutor submitted that the appellants/accused had given frequent advertisements about their Scheme-I and Scheme-II through daily news papers, television, channels, pamphlets 14/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 etc., canvassed, lured innocent depositors through the advertisements and thereby collected a sum of Rs.2,40,06,300/- from 110 depositors with false promise that they would return the money with 55% interest and will refund the deposited amount after the maturity period, which they had no intention to return, they have indulged in fraudulent financial operation and converted major portion of the collected deposit amounts for their personal benefits and defaulted in the payment of interest as well as principal deposit amount. Thus the accused individually and collectively liable to be punishable under Sections 120(B), 406, 409, 420 of IPC and Section 5 of TNPID Act, 1997. He further submitted that the Special Sub Inspector of Police, Perundurai Police Station received several complaints and lodged F.I.R./Ex.P255 in Crime No.1005 of 2012 under Section 420 of I.P.C. and the same was placed before the Inspector of Police/P.W.108, who took up investigation, examined Karthikeyan/de-facto complainant and recorded his statement. Since the accused were absconding, search was made for them. On 16.11.2022, he 15/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 examined the witnesses and recorded their statements and collected the agreements for the Emu Farms and on the same day, arrested both the accused near Perundurai bus stand. The accused on their arrest gave confession admitting the offence and the same was recorded in the presence of the witnesses. On the confession, recovered the partnership deed, Firm Registration Certificate, motor cycle and Bolero car through mahazar and the accused were produced before the Magistrate and remanded to judicial custody. Further, the Manager, State Bank of India and Karur Vysya Bank, Perundurai were examined, collected statement of accounts and bank details. Later, F.I.R. was forwarded to E.O.W., Erode and sections altered, including offence under TNPID Act.
10.During investigation it was found that only partial amount collected were refunded and balance amount to be paid. The details of the depositors are as follows:
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10.He further submitted that the accused though were making claim that they would pay back the depositors to their satisfaction and settle the issue, but were only buying time. The trial Court finding that the appellants/accused were dragging on the case by giving false promise and not settling the issue, convicted the appellants by judgment dated 11.12.2020, against which, they preferred Crl.A.No.295 of 2021 before this Court. This Court, set aside the conviction, giving opportunity to the appellants to make their submissions and settle the issue with a condition that the appellants 2 and 3 to deposit Rs.10,00,000/- each, which they deposited, and remanded the matter back to the trial Court to complete the process by 15.09.2022. But the accused again were dragging on the case. They neither showed interest to settle the depositors nor immediately come forward to advance their arguments. Finally, they filed written submission and arguments heard. After hearing arguments, finding that no effective steps taken to file any petition under Section 5A of TNPID Act by approaching the D.R.O. for compounding 21/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 the offence, the trial Court by judgment dated 15.09.2022, convicted the accused. Thereafter, this Court, on the submission of the appellants that they are willing to settle the depositors, suspended the sentence and directed the appellants to appear before the Coimbatore District Court Mediation Centre for mediation.
11.In pursuant to the same, the appellants had appeared, produced the receipts for payment to the depositors, and affidavit of the depositors for receipt of the amount from the appellants to their satisfaction, depositors having no objection to compound the offence. These receipt and affidavit were verified by the respondent police independently through one V.Sekar and Jambugeshwaran, who ascertained the genuineness and truthfulness of the letter of undertaking submitted by the appellants. The mediation was conducted by Mr.R.Venkatesan, Advocate, Coimbatore, who gave a report dated 07.10.2023 confirming the completion of mediation. He further submitted that now the depositors P.W.2 to P.W.105 confirmed the 22/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 settlement arrived between the appellants and the depositors. The respondent also filed a status report dated 16.11.2023.
12.Considering the submissions made and on perusal of the materials, it is seen that the depositors P.W.1 to P.W.105 have been settled to their satisfaction, which has been verified by the respondent police with the depositors P.W.1 to P.W.105. They also filed a status report confirming the same. A scanned reproduction of the same reads as follows: 23/44
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13.Before the District Mediation and Conciliation Centre, Coimbatore, the learned Mediator, Mr.R.Venkatesan, Advocate, Coimbatore 34/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 conducted mediation and recorded that mediation proceedings completed and settlement arrived between the parties. A scanned reproduction of the same reads as follows:35/44
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14.In view of the settlement arrived between the appellants and depositors and the issue being now resolved between them, the offences under Sections 406, 420 of IPC and Section 5 of TNPID Act are 41/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022 compoundable offences and the same are thus compounded. Since the offence under Section 120-B is not a simplicitor, it is 120-B r/w 420 of IPC and when the offence under Section 420 IPC now compounded, the offence under Section 120-B r/w 420 IPC is not sustainable and the same is set aside.
The corollary proceedings in O.A.Nos.33, 34 and 35 of 2016 to reach its logical end. It is for the appellants and the other affected parties, to approach the concerned Court either in the Original Application or before the Appellate Court seeking consequential reliefs.
15.In view of the above, the conviction and sentence imposed on the appellants in C.C.No.7 of 2014 dated 15.09.2022, by the learned Special Judge, Special Court under the Tamil Nadu Protection of Interests of Depositors Act Cases, Coimbatore, is hereby set aside. The appellants are acquitted from all the charges levelled against them. Fine amount or any other amount lying in the credit of C.C.No.7 of 2014 shall be refunded to the appellants, bail bond, if any, executed shall stand cancelled. 42/44 https://www.mhc.tn.gov.in/judis Crl.A.No.1321 of 2022
16.In the result, the Criminal Appeal stands allowed.
04.06.2024
Index : Yes/No
Internet : Yes/No
Speaking order/Non-speaking order
Neutral Citation : Yes/No
rsi
To
1.The Inspector of Police,
Economic Offences Wing-II,
Erode.
2.The Special Judge,
Special Court under the Tamil Nadu Protection of
Interests of Depositors Act Cases, Coimbatore.
3.The Public Prosecutor,
High Court, Madras.
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Crl.A.No.1321 of 2022
M. NIRMAL KUMAR, J.
rsi
Pre-delivery order in
Crl.A.No.1321 of 2022
04.06.2024
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