Bangalore District Court
State By Basaveshwara Nagar vs Channakrishna on 28 November, 2022
IN THE COURT OF THE XXXII ADDL. CITY CIVIL &
SESSIONS JUDGE AND SPL. JUDGE FOR CBI CASES
AT BENGALURU (CCH34)
Dated 28th November, 2022
: PRESENT :
Sri.H.A.Mohan, B.A.L., LL.B.
XXXII Addl. City Civil & Sessions Judge
and Spl. Judge for CBI Cases, Bengaluru
Spl.C.C.No.118/2019
COMPLAINANT : State by Basaveshwara Nagar
Police Station, Bengaluru
(By Public Prosecutor)
vs
RESPONDENT : 1. Channakrishna
(Accused No.1 and 2) S/o Channappa
Aged about 54 years
2. Smt.Leelavathi
W/o Channakrishna
Aged about 46 years
Both are R/at No.686
5th Cross, 2nd Main,
Kamalanagar
Bengaluru560 079.
(By Sri.K.K.B., Advocate)
2 Spl.C.C.118/2019
Date of commission of the 21.01.2015
offence/s : (date of complaint)
Offences charged : U/S 120B, 406 and 420 of
IPC, Section 3 and 4 Prize
Chits and Money Circulation
Schemes (Banning) Act, 1978
and Section 9 of Karnataka
Protection of Interest of
Depositors in Financial
Establishments Act, 2004 r/w
Section 34 of IPC.
Name of the Complainant : Basaveshwara Nagar Police
Station
Date of commencement of
the evidence : 04.01.2022
Evidence of prosecution
closed on : 31.10.2022
Statement of accused u/S
313 of Cr.P.C. : 07.11.2022
Final Verdict Accused No.1 and 2
acquitted
(H.A.Mohan)
XXXII Addl.C.C. & S.J. and
Special Judge for CBI Cases, Bengaluru.
3 Spl.C.C.118/2019
JUDGMENT
Initially this case was filed before Hon'ble Prl. City Civil and Sessions Judge, Bengaluru. As per the notification No.ADM(1A)/310/2020 dated 23.06.2020 this case was made over to this court for proceeding in accordance with law.
2. This case emanates from the charge sheet filed by Basaveshwaranagar Police for the offence punishable under Section 120B, 406 and 420 of IPC, Section 3 and 4 Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and Section 9 of Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 r/w Section 34 of IPC.
3. The sum and substance of the case involved is that, Accused No.1 and 2 being the husband and wife 4 Spl.C.C.118/2019 residing at H.No.686, 5th Main, 2nd Cross, Kamala Nagar, within the jurisdiction of Basaveshwaranagar Police Station, have established chit fund firm in the name and style 'Chandrakala Chits' during the year 2002 and started doing illegal chit transactions having criminal conspiracy together and in furtherance of their criminal conspiracy, they started collecting chit funds of Rs.4 lakhs and Rs.3.3 lakhs and collected Rs.4 lakhs in 25 months at Rs.16,000/ p.m. from the complainant and others and also collected total sum of Rs.34,27,000/ from CW4 to CW8 in different chit funds for their personal benefits and with dishonest interest they committed criminal breach of trust by not returning the said chit amounts even after completion of the terms of chits and also were running the chit funds without obtaining valid license from the government and in contravention of Section 3 and punishable under Section 4 of Prize Chits and 5 Spl.C.C.118/2019 Money Circulation Schemes (Banning) Act, 1978 and also in contravention of Section 9 of KPIDFE Act, 2004 by not returning principal, interest or profit as promised by them to the investors and thereby committed the aforesaid offences.
4. After having taken cognizance of the offences, the case was made over to this court and thereafter Accused No.1 and 2 were appeared and released on bail. Thereafter, charge for the aforesaid offences were framed and read over to the Accused No.1 and 2 in Kannada language known to them. Accused No.1 and 2 pleaded not guilty and claim to be tried, trial was fixed.
5. In order to prove the alleged guilt of the accused, the prosecution has examined CW1 as PW1 and got marked Ex.P.1 to P.6, CW4 as PW2, CW5 as PW3 and got marked Ex.P.7 and P.8, CW7 as PW4 and got marked Ex.P.9 and 6 Spl.C.C.118/2019 P.10, CW8 as PW5 and got marked Ex.P.11 and P.12, CW9 as PW6 and got marked Ex.P.13 to P.17, CW11 as PW7, CW13 as PW8, CW12 as PW9 and got marked Ex.P.18, CW2 as PW10 and closed their side evidence. During the course of crossexamination of PW4, one document confronted to her and the same has been marked as Ex.D.1.
6. Thereafter, statements as contemplated under Section 313 Cr.P.C. have been recorded by putting the incriminating evidence available against Accused No.1 and
2. The Accused No.1 and 2 have answered the questions as per the mentions made in the statements. Accused No.1 and 2 did not choose to lead any evidence on their side.
7. Heard the arguments of learned Public Prosecutor and Sri.K.K.B. the learned counsel for the Accused No.1 and 2.
7 Spl.C.C.118/2019
8. The points that would arise for my consideration are:
1. Whether the prosecution proves beyond all reasonable doubt that that Accused No.1 and 2 being husband and wife got registered chit in the name 'Chandrakala Chits' having common intention to cheat the public and in that regard had a criminal conspiracy and collected money from public by way of chits and thereby committed the offence punishable under Section 120(b) r/w Section 34 of IPC?
2. Whether the prosecution proves beyond all reasonable doubt that the Accused No.1 and 2 in their house bearing No.686, 5th Main, 2nd Cross, Kamala Nagar, Bengaluru, on different dates have collected chit amount of Rs.4,00,000/, 8 Spl.C.C.118/2019 Rs.3,30,000/ and also collected Rs.4,00,000/ at the rate of Rs.16,000/ p.m. for a period of 25 months and also from CW4 to CW8 in total Rs.34,27,000/ and did not return the same to the witnesses and made use of the said money for themselves and thereby committed criminal breach of trust?
3. Whether the prosecution proves beyond all reasonable doubt that by collecting the above said chit amounts from CW1 to CW8 by dishonest intention and by inducing them to invest on chit and later by not returning the said amount, committed the offence punishable under Section 420 r/w Section 120 IPC?
4. Whether the prosecution proves beyond all reasonable doubt that by
9 Spl.C.C.118/2019 collecting the said amounts from the witnesses, the Accused No.1 and 2 have violated the license obtained for conducting chit and in contravention of Section 3 and punishable under Section 4 of Prize Chits and Money Circulation Scheme (Banning) Act, 1978 r/w Section 120B IPC?
5. Whether the prosecution proves beyond all reasonable doubt that the Accused No.1 and 2 by inducing CW1 to CW8 and other public to invest on chit by assuring to pay more interest, which is not practicable and later by not returning the amount, they committed the offence punishable under Section 9 of KPIDFE Act r/w Section 120B IPC?
6. What order?
10 Spl.C.C.118/2019
9. My findings on the above points are as under:
Point No.1 to 5: In the negative Point No.6 : 'As per final order' for the following:
REASONS
10. POINT NOs.1 TO 5: Since these points are interlinked to each other, to avoid repetition, they are taken up together for discussion.
11. The learned SPP Sri.B.S.Patil has argued that in order to prove the charges leveled against the Accused No.1 and 2, the prosecution has examined all the witnesses shown in the charge sheet except CW3 and got marked Ex.P.1 to P.18. It is argued that all the witnesses have supported the case of the prosecution. Therefore, it is sufficient to prove the charges. It is argued that the 11 Spl.C.C.118/2019 evidence of witnesses clearly establish that the Accused No.1 and 2 were running chit in the name 'Chandrakala Chits' and collected money from PW1 to PW5 and others and issued pass books and they are marked in the case. The evidence of PW6 and documents Ex.P.14 to P.17 clearly establishes that the Accused No.1 and 2 had obtained license to run chit in the name 'Chandrakala chits'. The evidence of PW8 and PW9 clearly establishes about registration of FIR, conducting investigation in accordance with law and submission of final report.
12. It is further argued that since the witnesses are not interested and their evidence is based upon the documentary evidence and since the accused have failed to establish that there was illwill between them and the witnesses and on account of that false case has been registered, case of the prosecution is to be believed and 12 Spl.C.C.118/2019 accepted. Accordingly, prayed to answer charges in the affirmative.
13. On the other hand, the learned counsel for the Accused No.1 and 2 Sri.K.K.B. has argued that there are contradictions with regard to chit amounts. No seizure mahazar was drawn to collect the pass books. No statements with regard to receipt of the alleged pass books. All the witnesses are relatives and friends and hence they have got personal interest to prove the alleged case against the accused. The complaint is dated 20.01.2015, but, the FIR was registered on 22.01.2022. According to PW1, the Accused No.1 was arrested after 15 days of registration of the complaint. But, as per evidence of Investigating Officer, the Accused No.1 was arrested only on 23.05.2015. Therefore, the evidence of PW1 to that effect is absolutely false. It is further argued that there are clear contradictions 13 Spl.C.C.118/2019 in the alleged passbooks since they are not properly filled. If really the pass books were seized from the accused, the IO should have send the same for signature verification to ascertain as to whether the passbooks were issued by the accused or not. According to PW1, the total income that was getting by him per month was Rs.19,000/, but, he has deposed that he used to pay Rs.16,000/ p.m. to the chit. How it is possible to invest so much money in chits, when his income was not much. As per mentions made in the alleged pass books, the last payments were made in the month of December 2013. But, the alleged complaints were filed after lapse of two years that too without giving any explanation.
14. It is further argued that the ledger books have not been seized, account extracts from the banks have not been seized by the IO and there is no explanation to that 14 Spl.C.C.118/2019 effect. PW3 was working as DGM i.e. high ranking officer, but he failed to explain as to how he could invest money in the chit stated to have been conducted by D Group employee. Why he did not give complaint to the concerned authority about the illegal chit transactions, why he did not give complaint to the police immediately after the alleged fraud came to his knowledge, no explanation in that regard.
15. It is further argued that according to PW4, she was collecting money from several persons and used to pay in chits in the name of Poonacha and Shivamma, but they have not been examined, no explanation to that effect. One C.Krishnappa has not been examined to prove the alleged fact that the Accused No.1 had issued cheque drawn in the name of C.Krishnappa. She has admitted Ex.D.1 i.e. cheque issued by her in favour of Accused No.2. She admitted that case in that regard has been registered. She has not proved 15 Spl.C.C.118/2019 as to how so much money was collected by her. She herself cheated the accused as per Ex.D.1. Further, PW5, admittedly was not getting any income. According to her, her husband was working in Vidhana Soudha, she used to save money out of the money paid towards domestic expenses. The alleged persons from whom the amounts were collected by her in order to pay the chit amounts, have not been examined by the IO. According to her, when she requested the accused to pay back her money, they had issued cheque drawn in the name of Ramachandra, but the said Ramachandra has not been examined and there is no explanation with regard to that aspect. Therefore, the evidence of these witnesses cannot be believed and accepted.
16. In the light of the said arguments, I have carefully perused the records. As per Ex.P.1 typed 16 Spl.C.C.118/2019 complaint dated 22.01.2015 was filed by PW1 Sri.S.E.Kumar. The same was received at 18.45 p.m. and registered the FIR, which discloses that, according to the complainant, he knew the Accused No.1 and 2 for the past 15 to 20 years as on that date i.e. in the year 2015 and he was investing money in chit since 5 years prior to that date. He also stated that since the Accused No.1 and 2 by showing the registered documents bearing No.019/0203 that they had obtained license to run the chit and they would not cheat any public and assuring to pay interest along with principal amount induced them to invest in the chit. Accordingly, he was investing in 3 chits for face value of Rs.4,00,000/ each by paying Rs.10,000/ and Rs.16,000/ and paid the amounts for a period of 25 months. But, after completion of the chit period, when he himself and others requested the accused to pay the amount 17 Spl.C.C.118/2019 with interest, they did not return the same and they had refused to pay the same. It is also stated that out of the chit amounts collected, the accused had acquired properties in the names of his relatives. Ex.P.2 is the mahazar drawn on 23.01.2015 and there is no serious dispute with regard to the mahazar.
17. Ex.P.3 is the pass book in the name of Sri.S.E.Kumar, but admittedly full address is not mentioned in this book. Ex.P.4 is another one pass book and mentioned the name as Kumar Nanjamma by pasting the whitener. In this document also full address is not mentioned. Ex.P.5 is another pass book in the name of Smt.Pankajakshi (Kumar). She is the wife of PW1, but she has not been cited as witness nor examined. Ex.P.6 is another pass book in the name of Sri.S.E.Kumar, but photo of some woman has been pasted. Therefore, it does not 18 Spl.C.C.118/2019 tally with name of the person mentioned in the pass book. Ex.P.7 and P.8 are pertaining to PW3 K.Ramaiah. In these documents also full address are not mentioned. In Ex.P.7 auction date is mentioned as 05.01.2007. In Ex.P.8 auction date is mentioned as 05.12.2011.
18. I have carefully perused the evidence of witnesses. PW1 in his examinationinchief itself has given contradictory versions with regard to face value of the chits. According to him, chit in respect of face value for Rs.3,00,000/, the amount of Rs.6,000/ p.m. for a period of 25 months was paid. According to him in respect of 4 chits, he has paid amount up to 25 months in total Rs.4,00,000/. In the crossexamination, he stated that he was doing tailoring work and his mother i.e. PW2 was working as phone mechanic in BSNL. Accused No.1 was also lineman working in BSNL. According to PW1, his wife is typist in 19 Spl.C.C.118/2019 Government PU College at Rajajinagar. He stated that he got his complaint typed at Typing Center on 20.01.2015 and gave the same to Basaveshwara Nagar Police. After lapse of one week again, he went to police station and enquired about accused and police informed him that they were trying to trace them. He stated that after tracing the accused, the police took his signature as per Ex.P.2(a) i.e. after about 1015 days of his complaint. As rightly pointed out by Sri.K.K.B., the Accused No.1 was arrested only on 23.05.2015 i.e. after lapse of 4 months from the date of registration of the complaint. But, Ex.P.2(a) signature of PW1 obtained on spot mahazar, which was drawn on 23.01.2015. So, there is a ambiguity with regard to when exactly his signature was obtained.
19. It is to be noted that this witness was not able to give proper answers with regard to mentioning of the names 20 Spl.C.C.118/2019 in the pass books and with regard to not mentioning the full address of the applicants. He has denied the suggestion that in his further statement before the police, he stated that in respect of 3 chits, he has paid Rs.5,00,000/. But, the further statement dated 23.01.2015 recorded by the IO is available in the record and as per the said statement, it is mentioned as Rs.5,00,000/. He stated that he does not know as to how many members were there in chit amounts of Rs.4,00,000/. But, in the chit amount of Rs.1,20,000/, there were 40 members. He admitted that in chit business, bid amount will be auctioned in the particular date in the month and the amount will be paid to the successful bidder. He stated that he himself and other two persons in the family did not get an opportunity to become successful bidder at any point of time. He stated that he did not invest in any other chit business. He stated that earlier to this 21 Spl.C.C.118/2019 incident, they did not invest in the chit pertaining to the accused. Even though he denied the suggestion that in his complaint, he has stated that there were earlier transactions with the accused, but in fact in Ex.P.1, he has whispered the same stating that for some years, the accused were running the chits properly. So, this is a clear contradiction on the part of this witness. He does not know as to who were highest bidders and in whose favour the bids were accepted and for what amount. He admitted that as per the entries made in the pass books, the last payment was made in the month of December, 2013. He admitted that complaint was filed in the month of January 2015. Of course, he has denied the suggestion that he himself and other witnesses colluded together and manipulated the alleged pass books and filed the false complaint in order to trouble the accused.
22 Spl.C.C.118/2019
20. PW2 Nanjamma is mother of PW1. Admittedly, she was working in BSNL. She stated that Ex.P.6 is pertaining to her, but, on perusal of Ex.P.6, it shows that it is in the name of Sri.S.E.Kumar. According to her, she was investing in chit amount for face value of Rs.1,20,000/ and she has paid 25 installments and 5 installments were due. When she stated that 5 installments were due, how and in what manner, she has asked the accused to pay her money back has not been properly explained. During the course of crossexamination, she admitted that PW3 K.Ramaiah, who was working as DGM in BSNL was a Senior Officer. She also admitted that full address is not mentioned in the pass books. She does not knows as to how many members were there in the chit. When a suggestion was made that the accused have not put their signatures in pass books, she stated that the daughters of accused have put their initials.
23 Spl.C.C.118/2019 In her 161 statement, she stated that for the period of 40 months in respect of chit for the face value of Rs.1,20,000/ from 05.12.2011, she made 25 installments in total Rs.75,000/. But in the evidence, she stated that the duration was for 30 months. In the said statement, she has not stated that her pass book was issued in the name of her son. There is no whisper as to why full address is not mentioned in the pass book.
21. PW3 K.Ramaiah is retired DGM, BSNL and that shows that he was a high ranking officer in the department. He stated in his evidence that PW1 Sri.S.E.Kumar is his cousin and Accused No.1 was working as Lineman in the same department. According to him, he was a member in two chits and one chit was for Rs.6,000/ p.m. and another chit was for Rs.3,000/ p.m. and in respect of both the 24 Spl.C.C.118/2019 chits, he made payments upto 25 installments and for receipt of the said amounts, the accused had issued pass books as per Ex.P.7 and P.8. He stated that after payment of 25 installments, he asked the accused to return chit amount, but they did not agree for that. He stated that he went to their house and asked them to pay the amount, but they threatened with dire consequences through their gundas instead of payment of money. He stated that he started investing in the chit from the year 2014. This is contrary to his statement given before the police and entries made in Ex.P.7 and P.8. As per his statement before the police, in respect of chit amount for the face value of Rs.1,50,000/, he was paying Rs.6,000/ p.m. and paid upto 25 installments and in respect of chit for the face value of Rs.1,20,000/, he was paying Rs.3,000/ p.m. from 05.12.2011 and paid upto 25 installments. According to 25 Spl.C.C.118/2019 him in respect of both the chits, he made a total payment of Rs.2,25,000/.
22. In the crossexamination, he admitted that he has not produced any copy of the license that was obtained by the accused to run the chit. He is a graduate in diploma engineering and AMIETE. He admitted that since he was well educated, he knew that the amounts will be paid to the person in whose name the license was in force. He stated that he cannot say as to who has put the signatures in Ex.P.7 and P.8. He stated that now he remember from which year, he started paying the chit amount. Of course, he gave an explanation to the effect that since he was admitted to hospital for Covid19 and he was in coma for 10 days, he has forgotten many things. But, the way in which, he gave answers shows that he has given that answer in an ingenious way to avoid some answers to be given. The 26 Spl.C.C.118/2019 suggestion was also made in that regard. He admitted that he has not produced any document to show that the accused were running 810 chits. He does not know as to what has been done by the police, but himself and Sri.Kumar gave the complaint. He admitted that it may be true that before the police he might have stated that the accused have cheated other public. He admitted that except Ex.P.7 and P.8, there is no other document to show the payment of money.
23. PW4 Smt.Sujatha is another one witness and stated that in the same chit, she has invested total sum of Rs.12,48,000/ in the names of Ramaiah, Poonacha and Shivamma. According to her, she was paying amounts in respect of 12 chits. She gave an explanation that after some time, the accused took back the original pass books, but she has retained xerox copies. She has lodged the complaint as 27 Spl.C.C.118/2019 per Ex.P.9. She has identified one xerox copy of pass book and the same is marked subject to objection as per Ex.P.10.
24. In the crossexamination, she admitted that CW1 to CW5 are her friends and relatives. She was working in Driving School and house wife. She was getting Rs.10,000/ to Rs.12,000/ p.m. when she was working. She stated that the accused have taken back the original pass books and given the cheque, but the said version has not been given in the examinationinchief with regard to issuance of cheque. She admitted Ex.D.1, when the same was confronted to her, she admitted that a case with regard to said cheque is pending before the CMM Court in CC.No.1888/2016. She denied the suggestion that she was a member of chit amount for Rs.1,00,000/, which was run by the accused. But, this suggestion would show that the accused were running the chit, but she has denied the 28 Spl.C.C.118/2019 suggestion that she was the highest bidder in the said chit and after receipt of the chit amount, she had issued the said Ex.D.1 cheque for the balance chit amount. She has also denied the suggestion that she did not make the remaining installments. She has also denied the suggestion that when accused were demanding to pay the balance installments, she has lodged false complaint.
25. According to PW4, she was paying chit amount of Rs.23,000/ p.m. pertaining to herself and also used to make payment in the name of others. But, admittedly no document is produced to show that chit amounts were being paid in the name of other persons in total Rs.12,48,000/. Of course, in her complaint as per Ex.P.9, she stated that the accused had taken back the original pass books and given only xerox documents. She also stated that the accused have purchased properties in benami names.
29 Spl.C.C.118/2019 She also stated that when she asked the accused to pay the money, they had issued cheque drawn in the name of Ramachandra for Rs.12,48,000/ and same was dishonoured. This complaint was also given on 21.01.2015 i.e. after lapse of 2 years from the date of last payment as per the entries. But, there is no explanation with regard to delay in lodging the complaint. Ex.P.10 is xerox pass book and same was marked subject to objection. Since it is a xerox document and no proper explanation for production of secondary evidence is given, the same cannot be relied upon.
26. PW5 Smt.Teja in her evidence deposed that she was also a member pertaining to several chits being run by Accused No.1 and 2 and she was paying chit amounts in her name and in the names of Smt.Savitha, Sri.Srinivas, Smt.Lavanya, Sri.Raghu, Smt.Meena, Smt.Leela and others.
30 Spl.C.C.118/2019 According to her, she has paid total amount of Rs.22,74,000/ and for that the accused used to make entries in pass books. But, admittedly, she has not produced the alleged pass books even though she stated that originals were taken by the accused and she retained xerox pass books. But, such an explanation cannot be believed and accepted, since she has not properly explained that what forced her to return the original pass books to the accused. She also stated that cheque in the name of one Ramachandra for Rs.22,74,000/ was issued in her favour by accused, but the same was bounced. She further stated that she is a house wife and her husband was working in Vidhana Soudha as Assistant Registrar and she did not have any source of income. However, she used to save some money out of the money that was being paid to her by her husband towards domestic expenses. But, in the absence of 31 Spl.C.C.118/2019 some believable evidence in that regard, it cannot be believed and accepted. Even though she stated that some amounts were paid through cheque, but admittedly no document is produced in that regard. If really some amounts were paid through cheques, there was no impediment for this witness to collect the documents from the concerned bank and to produce the same. That apart in her statement before the police, she has not stated anything regarding payment of some installments through cheque. Therefore, it is an omission on the part of this witness with regard to the said aspect. Hence, the same cannot be believed and accepted.
27. On perusal of the statements of the witnesses given before the police, they disclose that the statements are like stereo typed versions and they must have been prepared through same person and print outs were taken from the 32 Spl.C.C.118/2019 same computer. Admittedly, this witness has not filed any complaint with regard to the cheque said to have been given in the name of Ramachandra. The police have not examined said Ramachandra and one Krishnappa as per the versions of PW4 and PW5. More over, there is no whisper in their statements with regard to issuance of cheques by the accused in the names of Krishnappa and Ramachandra. Therefore, it is all together a new version given during the course of their evidence.
28. PW6 is one Sri.Palandappa.P.R. His evidence is with regard to issuance of license to run the chit in the name of 'Chandrakala Chits' Of course, the learned counsel for the accused has not seriously disputed about the documents with regard to issuance of license. But, he only pointed out about mentioning the word 'foremen Chandrakala'. But, it is only a technicality and that will not 33 Spl.C.C.118/2019 enure to the benefit of the accused. From the evidence of PW6 and Ex.P.15 to P.17, it is clear that the license was obtained by the accused to run the chit in the name 'Chandraka Chits'. But, it is pertinent to note that as per the said documents, license was issued on 21.10.2010 to run the chit for Rs.1,02,000/ for 34 months only. But, the evidence of witnesses is contrary to the said conditions imposed by concerned department.
29. PW8 is Police Inspector Sri.Govindaraju and he has only submitted the charge sheet after collecting the file from PW9, who in fact conducted the investigation.
30. The evidence of PW9 discloses that he has received the complaint as per Ex.P.1 from CW1 on 22.01.2015 and registered an FIR. He also deposed with regard to conducting spot mahazar as per Ex.P.2. There is 34 Spl.C.C.118/2019 no serious dispute with regard to conducting mahazar as per Ex.P.2. He has recorded the statements of CWs4 to 8 and collected pass books as per Ex.P.6 to P.8 and P.18. He has also deposed with regard to arresting of Accused No.1 on 23.05.2015 at about 9.00 p.m. when he was brought before him by police personnel. He has also deposed with regard to writing letters to Manager, Union Bank, Rajajinagar to produce the account extract pertaining to accused and also made a request to freeze the account. He has also written letter to Manager, SBM, Basaveshwara Nagar Branch to submit the account extract pertaining to Accused No.1. By that time since he got promotion, he handed over the file to PW8 to conduct the further investigation.
31. In the crossexamination, PW9 stated that he collected information as to how many members were there 35 Spl.C.C.118/2019 in the chit and according to him, there were 113 members, but, he has not collected information as to how many members were there in one chit. He has not specifically conducted investigation as to how many chits were being run and he has not collected the names of all the 113 members. He has only recorded the statements of few persons. He has not recorded the statements of Smt.Pankajakshi, but he has not enquired and recorded the statement of Krishnappa and Ramachandra on whose names cheques were issued in favour of PW4 and PW5. He admitted that in the statements of other witnesses, it is not mentioned that they have produced their original pass book. He has not conducted any seizure procedure for collecting pass books. He has not seized the ledger and pass book from the accused with regard to alleged chits. He has not seized any document pertaining to chit business from the 36 Spl.C.C.118/2019 accused. He has not collected bank statements. He has not conducted any investigation to know as to whether the accused was owning any properties or not. He admitted that the witnesses have not produced any other documents except some pass books to show that they had invested money in the chit. He has not conducted investigation as to on which dates the amounts were invested. He has denied the suggestion that the Accused No.1 has not given any confession statement and same was manipulated by him for the sake of this case.
32. The evidence of PW10 has not been seriously disputed. His evidence is with regard to Ex.P.2 spot mahazar.
33. The evidence of Investigation Officers would primafacie show that their approach with regard to 37 Spl.C.C.118/2019 conducting the investigation pertaining to this case is very casual and they have not shown any interest to collect relevant documents from the concerned persons/authorities. Investigation Officers have not at all made any attempt to collect the ledgers or any documents from the accused. They have failed to collect any account extract from the concerned banks pertaining to the accounts of Accused No.1 and 2, even though PW9 had written letters. PW8 has not conducted further investigation with regard to the said aspect. They have not at all tried to trace the names of other persons out of 113 members said to have been invested in chit. They have not examined any neighbouring person to know as to whether these witnesses were used to come to that place to make payment in the chit. What prevented the IO to examine Krishnappa and Ramachandra, in whose names the cheques said to have been issued in 38 Spl.C.C.118/2019 favour of PW4 and PW5 by accused persons, has not been explained at all. Even the PW4 and PW5 have failed to give proper explanation as to why they had received the cheques drawn in the names of Krishnappa and Ramachandra, when admittedly they did not collect the chit amount from them. With regard to this important aspect, the IO has not conducted any investigation by examining the said persons to know about the truthfulness of the said statements. Therefore, there is a serious lapse on the part of investigation Officer while conducting the Investigation pertaining to cheating, criminal breach of trust and offence under the KPIDFE Act, they are very serious offences. Therefore, it is for the concerned department to take initiative to sensitize the Investigating Officers to conduct the investigation in a fair manner.
39 Spl.C.C.118/2019
34. It is important to note that all the witnesses are either friends or relatives. Except the alleged pass books, they have not produced any other material. Admittedly, the pass books disclose that the last payments were made during December 2013, but till January 2015, they did not make any attempt either to lodge the complaint before the police or before the Registrar of Chits in the Department of Cooperation, which has issued license in favour of Accused No.1 and 2. What prevented all these persons to lodge the complaint at the earliest point of time has not been explained at all. There are lacunas with regard to total payments stated to have been made. The alleged installments and total payments said to have been made do not tally with each other. Why they abruptly stopped paying the chit amounts after December 2013, has not been properly explained. PW3 is high ranking Officer in BSNL 40 Spl.C.C.118/2019 and highly educated person knew about legal procedure and admittedly, he has got worldly knowledge. But, he also did not take any interest to lodge the complaint before the police. Therefore, silence on the part of PW3 with regard to not taking any action for about two years from the date of last payment said to have been made by him, leads to entertain a doubt with regard to genuineness of his claim. Admittedly, PW1 and PW2 are his close relatives.
35. Further, admittedly PW4 has issued Ex.D.1 cheque in favour of Accused No.2 and in that regard, cheque bounce case is pending. That shows that PW4 herself was liable to pay the amount of Rs.60,000/ to the Accused No.2 in the year 2012 itself. But, she has suppressed the said fact in her complaint.
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36. In view of the above contradictions, non production of legally acceptable oral and documentary evidence with regard to payments of alleged chits and since the Investigation Officers have not properly conducted the investigation and not collected the relevant ledger books, account extract from the banks and not examined all the persons stated to have been invested in the chits and no efforts were made to secure the ledger extracts, in a criminal trial, it goes to the root of the case. The benefit of any doubt or any ambiguity will have to be extended in favour of the accused. Further, the delay in filing the complaint for more than 2 years has also not been explained at all. Considering all these facts and circumstances and the above said evidence, I am of the opinion that the prosecution does not inspire the confidence of the court to accept the case, by placing cogent, convincing and 42 Spl.C.C.118/2019 satisfactory evidence. Therefore, I am not inclined to accept the arguments of learned SPP. There is a force in the arguments of Sri.K.K.B. the learned counsel for the accused. Accordingly, I hold that the prosecution has miserably failed to prove each of the charges leveled against the accused by placing cogent, convincing and satisfactory evidence. Hence, I answer the above point No.1 to 5 in the negative.
37. POINT NO.6: In the result, I proceed to pass the following:
ORDER Acting under Section 248(1) of Cr.P.C., I hereby acquit the Accused No.1 and 2 of the offence punishable under Section 120B, 406 and 420 of IPC, Section 3 and 4 Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and Section 9 of Karnataka 43 Spl.C.C.118/2019 Protection of Interest of Depositors in Financial Establishments Act, 2004 r/w Section 34 of IPC.
The bail bonds of the Accused No.1 and 2 and that of their sureties shall stand canceled.
(Dictated to the Judgmentwriter, transcribed and computerized by her, corrected and then signed by me on this the 28th day of November, 2022).
(H.A.Mohan) XXXII Addl.C.C. & S.J. and Special Judge for CBI Cases, Bengaluru.
44 Spl.C.C.118/2019 ANNEXURE LIST OF WITNESSESS EXAMINED ON BEHALF OF PROSECUTION PWs CWs Name of the Witness Date of examination PW1 CW1 S.E.Kumar 04.01.2022 PW2 CW4 Smt.Nanjamma 18.02.2022 PW3 CW5 K.Ramaiah 11.03.2022 PW4 CW7 Smt.Sujatha 29.04.2022 PW5 CW8 Smt.Teja 29.04.2022 PW6 CW9 P.R.Palandappa 08.08.2022 PW7 CW11 Ramesh S.M. 12.09.2022 PW8 CW13 Govindaraju 17.10.2022 PW9 CW12 Siddalingaiah 31.10.2022 PW10 CW2 Vijay Kumar 31.10.2022 LIST OF DOCUMENTS EXHIBITED ON BEHALF OF PROSECUTION Exhibit Description Number Ex.P.1 Complaint Ex.P.1(a) Signature of PW1 Ex.P.2 Spot Mahazar Ex.P.2(a) Signature of PW1 Ex.P.2(b) Signature of PW9 Ex.P.2(c) Signature of PW10 45 Spl.C.C.118/2019 Ex.P.3 & 4 Two passbooks standing in the name of PW1 Ex.P.5 One passbook standing in the name of wife of PW1 Ex.P.6 One passbook standing in the name of mother of PW1 Ex.P.7 & 8 Two passbooks standing in the name of PW3 Ex.P.9 Complaint given by PW4 Ex.P.9(a) Signature of PW4 Ex.P.10 Xerox copy of passbook standing in the name of PW4 Ex.P.11 Complaint given by PW5 Ex.P.11(a) Signature of PW5 Ex.P.12 Xerox copy of pass book of PW5 Ex.P.13 Letter dated 04.12.2015 issued by IO Ex.P.14 Information furnished by PW6 as per letter dated 08.12.2015 Ex.P.14(a) Signature of PW6 Ex.P.15 Copy of permission letter dated 21.10.2010 Ex.P.16 Order dated 06.11.2022 Ex.P.17 Order dated 05.10.2010 Ex.P.18 Pass book relating to Akkamma LIST OF WITNESSES EXAMINED ON BEHALF OF DEFENCE DWs Name of the witness Date of examination NIL 46 Spl.C.C.118/2019 LIST OF DOCUMENTS MARKED ON BEHALF OF DEFENCE Exhibit Particulars No. Ex.D.1 Cheque No.173983 for Rs.60,000/ issued by accused Ex.D.1(a) Signature of PW4 (H.A.Mohan) XXXII Addl.C.C. & S.J. and Special Judge for CBI Cases, Bengaluru.