Madras High Court
M/S. Viswapriya (India) Ltd vs State Represented By on 9 September, 2022
Author: D.Bharatha Chakravarthy
Bench: D.Bharatha Chakravarthy
Crl.R.C.Nos.1237, 1242 and 1278 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Orders in Crl.R.C.No.1237 of 2022 Reserved on : 30.08.2022
Orders in Crl.R.C.No.1242 of 2022 Reserved on : 01.09.2022
Orders in Crl.R.C.No.1278 of 2022 Reserved on : 02.09.2022
Orders Pronounced on : 09.09.2022
CORAM :
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
Crl.R.C.Nos.1237, 1242 and 1278 of 2022
M/s. Viswapriya (India) Ltd.,
formerly Viswapriya Financial Services & Securities Ltd.,
2, First Cross Road, Kasturba Nagar, Adyar, No.75C,
Chennai - 600 020.
Rep. by its Director R. Subramanian .. Petitioner/Accused No.1
(in Crl.R.C.No.1237 of 2022)
1. M/s. Analog Financial Services P Ltd.
Rep by its Director R.Ganesh
2. M/s. Cash & Carry Wholesale Traders Private Limited
Rep by its Director A.Srimathi
3. M/s.City Capital Foundation Limited
Rep by its Director R.Venkataramanan
4. M/s.Custodial Services India Private Limited
Rep by its Director A.Srimathi
5. M/s.Pentagon Trading Services P Ltd
Rep by its Director P.Augustine
https://www.mhc.tn.gov.in/judis
1/22
Crl.R.C.Nos.1237, 1242 and 1278 of 2022
6. M/s.Thamiraparani Investments P Ltd.
Rep by its Director P.Augustine
7. M/s.Viswapriya Realty Services P Ltd.
Rep by its Director P.Augustine .. Petitioners/Accused
Nos.18, 19, 20, 21, 26, 28 and 31
(in Crl.R.C.No.1242 of 2022)
R.Venkataramanan .. Petitioner/Accused No.10
(in Crl.R.C.No.1278 of 2022)
Versus
State Represented by
Deputy Superintendent of Police
Economic Offences Wing-II,
Guindy, Chennai - 32. .. Respondent
(in all the Crl.R.Cs)
Prayer in Crl.R.C.No.1237 of 2022: Criminal Revision Case is filed under
Section 397 r/w 401 of Cr.P.C., to set aside the order, dated 16.02.2022
framing charges for offences under 406, 420, 120B, 458, 471, 409 r/w 109
IPC and Section 5 of the TNPID Act in C.C.No.6 of 2020 on the file of the
Special Court for TNPID Act Offences, Chennai.
Prayer in Crl.R.C.No.1242 of 2022: Criminal Revision Case is filed under
Section 397 r/w 401 of Cr.P.C., to set aside the order, dated 16.02.2022
framed charges for offences under Sections 406, 420, 120B, 468, 471, 409
r/w 109 IPC and Section 5 of the TNPID Act, under order, dated 16.02.2022
https://www.mhc.tn.gov.in/judis
2/22
Crl.R.C.Nos.1237, 1242 and 1278 of 2022
in C.C.No.6 of 2020 on the file of the Special Court under TNPID Act
offences, Chennai insofar as the petitioners are concerned.
Prayer in Crl.R.C.No.1278 of 2022: Criminal Revision Case is filed under
Section 397 r/w 401 of Cr.P.C., to revise and set aside the order, dated
16.02.2022 of the Special Court in the case C.C.No.6 of 2020 on its file
framing charges for offences under Sections 406, 420, 120B, 468, 471, 409
r/w 109 IPC and Section 5 of the TNPID Act insofar as the petitioner is
concerned.
For Petitioner : Mr.R.Subramanian
(in all the Crl.R.Cs) (Party-in-person in
Crl.R.C.No.1237 of 2022 and
learned Counsel in
Crl.R.C.Nos.1242 and 1278 of
2022)
: Mr.C.Arun Kumar, Intervenor
For Respondent : Mr.S.Vinoth Kumar
(in all the Crl.R.Cs) Government Advocate (Crl. Side)
COMMON ORDER
These three Revision Cases arise out of the same case in C.C.No.6 of 2020 and are filed against the order of framing of charges and as such are taken up and disposed off by this common order. Crl.R.C.No.1237 of 2022 is filed by the accused No.1, while, Crl.R.C.No.1242 of 2022 is filed by the https://www.mhc.tn.gov.in/judis 3/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 accused Nos.18, 19, 20, 21, 26, 28 and 31. Crl.R.C.No.1278 of 2022 is filed by the accused No.10.
2. Though Crl.R.C.No.1237 of 2022 was filed through a learned Counsel, R.Subramanian, Director, appeared in person and submitted that he has already revoked Vakalath and argued in person, the same Mr. R.Subramanian argued as learned Counsel in respect of the other two revisions. Heard Mr.S.Vinoth Kumar, learned Government Advocate (Crl. Side) for the respondent in both the Revision Cases and Mr.C.Arun Kumar seeking to intervene in the matter on behalf of the victim depositors.
3. Mr.R.Subramanian, party-in-person appearing in Crl.R.C.No.1237 of 2022, would submit that in this case, copies were furnished to him on 16.02.2022, but, however, charges were also framed on the very same date and therefore, he could not make any submissions at the time of framing of charges. He would submit that the defence is entitled to make such submissions before the Trial Court for the purpose of framing of charges and no fair and proper opportunity was given in respect thereof. Be that as it may, taking this Court through each and every individual charge which is https://www.mhc.tn.gov.in/judis 4/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 framed, the learned Counsel would submit that in this case, firstly, the Trial Court has framed charges under Sections 468 and 471 of the Indian Penal Code. Relying upon the judgment of the Hon'ble Supreme Court of India in Mohammed Ibrahim and Ors. Vs. State of Bihar and Anr.1, he would submit that unless it is proved by the prosecution that any false document is made or created, the accused cannot be prosecuted for the offence under Sections 468 and 471 of the Indian Penal Code.
4. He would submit that unless any person is alleged to have been the maker of the false document within the definition of Section 464 of the Indian Penal Code, he cannot be prosecuted for the offence of forgery and relied upon the judgment in Sheila Sebastian Vs. R.Jawaharaj and Anr.2.
5. He would thereupon submit that the charges are framed in this case for the same set of allegations for the offences under Sections 406 and 409 of the Indian Penal Code and also under Section 420 of the Indian Penal Code. Relying upon the judgment of the Delhi High Court in Wolfgang Reim and Ors. Vs. State and Anr.3, more particularly paragraph No.34, he 1 (2009) 8 SCC 751 2 (2018) 7 SCC 581 3 2012 SCC OnLine Del 3341 https://www.mhc.tn.gov.in/judis 5/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 would submit that both the offenses cannot be charged on the same breadth as in one offense, the dishonest intention is to be there at the inception while in the other, it comes later. Relying upon the judgment in Mahindra and Mahindra Financial Services Ltd. and Anr. Vs. Delta Classic (P.) Ltd.4, he would submit that there is a distinction which exists between the criminal breach of trust and offense of cheating and if a person is accused of committing criminal breach of trust, he cannot be accused of of cheating too. For the same proposition, he relied upon the judgment of the Punjab and Haryana High Court in the case of Jalpa Parshad Aggarwal Vs. State of Haryana and Anr.5. By further relying upon the Punjab and Haryana High Court in Shilpa Ajwani and Ors. Vs. U.T.Chandigarh and Ors.6, the petitioner in person would point out that there is a fundamental inconsistency between the offense under Sections 406 and 420 of the Indian Penal Code and on the same set of facts, the offenses cannot stand together being the antithesis of each other. He would submit that in this case, the prosecution, being not clear of what it is alleging, has no legs to maintain both the charges of criminal breach of trust and cheating. 4 (2011) 6 Gauhati Law Reports 604 5 1987 SCC OnLine P&H 580 6 C.W.P.No.19354 of 2015 (O&M) https://www.mhc.tn.gov.in/judis 6/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022
6. In respect of the offense under Section 5 of T.N.P.I.D Act, he would submit that in this case, what is being issued to the so-called victims is 'debentures by private placement'. Therefore, if the victims purchase debentures, a learned Judge of this Court had, in the judgment in Crl.O.P.No.3730 of 2021 & batch in Ravi Parthasarathy and Ors. Vs. State and Ors., has held that the said investment in debentures will not come within the meaning of 'deposit' and therefore, the offence under Section 5 of the T.N.P.I.D Act is not made out. If all the primary offences are not made out, the offence under Section 120B as well as Section 109 of the Indian Penal Code would also fall.
7. Therefore, when there is absolutely no prima facie case which is there and when after the F.I.R, this Court, by way of proceedings in the Company jurisdiction, has approved a scheme for repayment, the original First Information Report, which was registered prior to the Order, does not have even legs to survive and therefore, the investigation, on the basis of the said First Information Report, has to fall automatically and therefore, he would submit that there is absolutely nothing in this case to frame charges https://www.mhc.tn.gov.in/judis 7/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 and in view of the patent illegality, would pray that this Court should interfere.
8. As far as the Crl.R.C.No.1242 of 2022 is concerned, he would submit that the petitioner companies are real entities. There is no material against the said companies for being prosecuted. Therefore, he would submit that the prosecution itself is not clear as to the role played by these petitioners/accused and in the absence of any material, the charges ought not to have framed as against these accused are concerned.
9. As far as Crl.R.C.No.1278 of 2022 is concerned, it is filed by the accused No.10, namely Venkataramanan. The contention is that there is absolutely no specific case whatsoever set out in the Final Report in respect of his role in the case.
10. Per contra, the learned Government Advocate (Crl. Side) would submit that in this case, almost on the self-same grounds, with a prayer for declaring the registration of F.I.R as without jurisdiction a Writ petition is filed and the said Writ Petition came to be dismissed by the detailed order, dated 06.08.2015. This apart, he would submit that in a connected Special https://www.mhc.tn.gov.in/judis 8/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 Leave Petition filed by the petitioner-in-person himself, who is also the fourth accused in this case, in his individual capacity, by an order dated 04.01.2021 in S.L.P.(C).No.14808 of 2020, the Hon'ble Supreme Court of India, had passed the following order:-
"In the facts and circumstances of the present case, we are not inclined to entertain the Special Leave Petition. We are clearly of the view that the order of status quo passed by the High Court on 4 December 2013 in its Company jurisdiction, would have no bearing on the criminal trial which must proceed expeditiously in accordance with law. The trial judge shall proceed with and conclude the criminal trial expeditiously."
(emphasis supplied)
11. Thereafter, by an order, dated 11.03.2022, in Miscellaneous Application Diary No.30938 of 2021, the Hon'ble Supreme Court of India passed an order which reads as follows:-
"2 A miscellaneous application has been filed seeking directions for expeditious conclusion of the trial.
3 Mr Parag P Tripathi, senior counsel appearing in support of the application submits that since the order of this Court, 83 hearings have taken place but, every effort is being made to obstruct the conclusion of the trial. Senior counsel states that as many as 82 petitions filed in 2022 https://www.mhc.tn.gov.in/judis 9/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 have been dismissed by the trial court and 35 were filed after 25 February 2022.
4 One of the applicants is stated to be 93 years of age.
5. We have heard Mr R Subramanian, in-person, who is A-4 at the trial of the criminal case.
6. CC No 6 of 2020 and the connected matters pending before the Special Judge (TNPID) Chennai shall be disposed of on a day to day basis, no later than within a period of six months from the date of receipt of a copy of this order. The trial Judge shall not allow any frivolous applications or petitions to impede the progress of the trial and if any party is doing so, we grant liberty to the trial Judge to move this Court with a report. All the parties are directed to cooperate in the disposal of the trial and any impediment in implementing the above directions is liable to invite action for breach of the order of this Court.
7 Subject to the aforesaid direction, the Miscellaneous Application is disposed of."
(Emphasis supplied)
12. Pursuant thereto, he would submit that after framing of charges, as many as eighty five witnesses have already been examined and the trial is in progress as directed by the Hon'ble Supreme Court of India on day to day basis. While so, having nothing else to protract the proceedings, the present proceedings are filed. According to him, this is a deliberate attempt to https://www.mhc.tn.gov.in/judis 10/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 derail the trial. Taking this Court through the Final Report, he would submit that none of the contentions raised by the learned Counsel for the petitioner deserves any merit and he would submit that totally from 587 depositors, 3804 deposits have been received, amounting to Rs.47,68,92,011/- and all the depositors are left high and dry. Some of them are even dying on account of the actions of the accused not repaying their hard earned money, thus making the offense heinous one. Therefore, he would submit that the Revision Cases are liable to be dismissed.
13. Mr.C.Arun Kumar, the learned Counsel seeking to intervene in the matter submitted that he is appearing on behalf of the poor victim depositors and again by placing reliance on the above mentioned orders of the Hon'ble Supreme Court of India, would dissuade this Court from even entertaining the Revision Cases.
14. I have considered the rival submissions made on behalf of either side and perused the material records of this case. First and foremost, the contention of the petitioners that in view of the order sanctioning a scheme in C.P.No.15 of 2014, the First Information Report cannot survive is ex https://www.mhc.tn.gov.in/judis 11/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 facie erroneous. The criminal law is set in motion by filing of a First Information Report. Any order passed by the Company Court does not expressly bar the investigation and is not conclusive in respect of the criminal proceedings are concerned. This apart, even as per the scheme, all the creditors shall be paid 20% of the amount on completion of the one year date, on which, the secured debenture was originally issued, 30% on completion of 21 months and the balance 50% on completion of 33 months. The said payment, as per the scheme, is also not made. Therefore, the said contention is absolutely without any merits.
15. As far as the contention of the learned Counsel that he was unable to argue on the date of framing of charges is concerned, the party-in-person is a practicing Advocate and he is also dawning the mantle of Advocate for the other accused persons. This case arises out of protracted proceedings and the case is under investigation from the year 2013. The party-in- person/learned Counsel is thorough with each and every aspect of the case and therefore, I am unable to accept the submissions that for want of time, he could not make his submissions effectively.
https://www.mhc.tn.gov.in/judis 12/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022
16. This apart, the impugned order framing the charges was passed on 16.02.2022 and even the application for certified copy itself was made only on 31.03.2022 and in the meanwhile, the above referred orders of the Hon'ble Supreme Court of India were passed. When the earlier round of litigation in the nature of a Writ Petition was dismissed and when the Hon'ble Supreme Court of India has directed the completion of trial on day to day basis and when the petitioners failed and omitted to file any discharge application and after framing of the charge, when the trial is proceeded further, I am of the view that the Revision itself is belated and is an attempt to scuttle the trial which is in progress and in the teeth of the above referred orders of the Hon'ble Supreme Court of India, the present Revision Cases cannot be entertained at this stage and are liable to be dismissed.
17. Be that as it may, even for the purpose of the prima facie case, considering the submissions made by the learned Counsel in respect of each of the offenses, still it cannot be said that the charges are framed absolutely without any material whatsoever warranting interference by this Court. As far as the offence under Section 5 of the T.N.P.I.D Act is concerned, https://www.mhc.tn.gov.in/judis 13/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 accepting of the money and non-payment thereof is admitted. It is seen that in this case, the accused have floated schemes in the name of 'Prime Invest' 'Asset Backed Security Bond', 'Liquid Plus' and 'Safety Plus' etc., and the said schemes were held out to public as if the accused company had the N.B.F.C license of the Reserve Bank of India even after the cancellation of such license. The contention is that the deposit receipts read as if they are 'debentures on private placement'. Therefore, relying upon the judgment of this Court in Ravi Subramaniam & others (cited supra), it is submitted that debentures cannot be held to be a deposit within the meaning of Section 2(2) of the T.N.P.I.D Act. But, however, on a reading of the said judgment, it can be seen that the learned Judge has arrived at the conclusion based on several facts of that case. Firstly, it has been held that it was a floated as such and the debentures were purchased by the alleged depositors. Secondly, it is held that the said Company is an IT Company and since it is not a 'financially establishment' as such, the debentures cannot be said to be a deposit. In this case, the former name of the petitioner itself is Vishwapriya Financial Services & Securities Limited. Further, the factual allegations in this case are that the depositors were lured in making deposits by way of different schemes named as stated above and certificates were https://www.mhc.tn.gov.in/judis 14/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 given to them. Therefore, it cannot be said that the charge framed is per se erroneous or without any material.
18. As far as the contention regarding Sections 409 and 420 of the Indian Penal Code is concerned, even the contention of the learned Counsel is that both the offences cannot be charged on the same breadth which means that any one of the charge is in order. Further, a reading of the judgment relied upon by the learned Counsel, it would be clear that there is no bar under any provision of law, which prohibits charging of the offences under Sections 409 and 420 of the Indian Penal Code in respect of the same transactions but is only the redundancy of the allegations which would make it incorrect. Though the same may be right in the many situations as demonstrated in the case laws referred by the petitioner in person above, however, in this case, (i) by holding out as if the accused company is having NBFC license of Reserve Bank of India and (ii) by promising higher returns, money is collected the higher return was not paid and therefore the same amounts to cheating. The sum as such is entrusted and was by law required to be used for the purposes of first accused company and by utilising for the business purposes of the other accused companies. But it https://www.mhc.tn.gov.in/judis 15/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 was not done. As a matter of fact that companies turned to be only fake and bogus companies and the amounts were siphoned/misappropriated. Thus, the offense under Section 406 or 409 as the case may be, is made out. I do not see any redundancy or incongruity in leveling both the allegations. The principle that the offenses of breach of trust and cheating cannot be made at the same breadth thus cannot be an absolute or of universal application and the gamut of allegations in this case, gives room for both the charges. In any event, these legal and factual niceties which require roving inquiry with forensic precision cannot be at the stage of framing of the charges and the allegations being prima facie made, leading to strong suspicion of commission of offence, the charges can be framed and as such, the action of the Trial Court in framing the charges under Sections 406/409 and 420 of the Indian Penal Code cannot be interfered with.
19. As far as the offences under Sections 468 and 471 of the Indian Penal Code are concerned, it is true that unless there is an allegation of making of a false document, the offence of forgery or using the forged document under Sections 468 and 471 of the Indian Penal Code can be alleged against the petitioner/accused. The allegation is that several of the https://www.mhc.tn.gov.in/judis 16/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 companies, even though are incorporated were only front companies which were created on paper with no actual existence of any kind of business or activity whatsoever. In this regard, the case of the prosecution is that if such companies actually do not exist or exists only on paper, so as to defraud the investors, any action done in their name by claiming that first accused or the other accused have an authority on behalf of the said front companies, then the accused knew that it was not made on the authority of such company and therefore, the documentation / creation of those 'letter head' companies and transactions by using the names, all amount to creation and making use of false documents. Therefore, even in respect of the offences under Sections 468 and 471 of the Indian Penal Code, it cannot be said that it is absolutely without material, though it would depend on how categorically the prosecution establishes the nature of the companies so as to claim that companies were so bogus that it cannot be possible for any person to have claimed authority of such companies in creating the documents. Therefore, even the submission made by the learned Counsel in respect of the offenses under Sections 468 and 471 of the Indian Penal Code can be answered only after the outcome of the trial and the action of the framing of the charge cannot be found fault with.
https://www.mhc.tn.gov.in/judis 17/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022
20. Now, coming to the contention in respect of the petitioner companies in Crl.R.C.No.1242 of 2022 is concerned as stated supra, while floating of the schemes and accepting the deposits, it is done as if the monies will be invested in these companies and the entire thing is done with the authorities of these companies, all these companies are being floated by the same set of persons, with a dishonest intention to defraud. The Learned Government Advocate (Criminal Side) submitted that from the materials produced by the prosecution that L.Ws.570, 572 and 573, 576, 578 to 582, 584, 585, 587 have all clearly spoken about the role played by the present accused and their Directors. As a matter of fact, the prosecution has also produced the Company Petition No.15 of 2014 filed by the M/s.Analog Financial Services Private Limited, in which, they have admitted that they held 25% equity share capital in the first accused Company and that they have undertaken to promote a scheme and settle the dues of the said company. Therefore, there are materials to proceed against the petitioners herein. In reply, by synopsis of submissions, the petitioner would submit that all the statements of these listed witnesses are identically template versions and in any event, nothing is said out in the said statements as if the https://www.mhc.tn.gov.in/judis 18/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 petitioner had committed the offence. It is submitted that the petitioner cannot be made to face the charges unless the petitioner is alleged to have committed any act to bring itself the charges set out. Therefore, in respect of each and every entity, the allegations and material are on record and the contentions made as if the allegations are incorrect cannot be considered at the stage of framing of the charges.
21. As far as the he contention as regards the Crl.R.C.No.1278 of 2022 is concerned, the Learned Government Advocate (Criminal Side) would submit that the petitioner is the Director in accused Nos.2, 20, 22, 25, 28, 29, 30 and 31 companies and has been very much part and parcel of all the transactions. As a matter of fact, the listed witnesses 569 to 578, 581 to 584, 586, 587 have specifically spoken about the role played by the petitioner and therefore, there are enough materials to proceed with.
22. By way of reply by way of additional synopsis of submissions, the petitioner would submit that all the statements of the listed witnesses merely say that the petitioner was working as Director in the sister companies and attribute no overt act to the petitioner. Therefore, the framing of charges https://www.mhc.tn.gov.in/judis 19/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 against the petitioner is perverse. I have taken a view that the phrase, 'affairs of the financial establishment' would mean the 'business affairs of the financial establishment' (order, dated 04.08.2022 in Crl.R.C.No.735 of 2022). The other corporate entities and the Directors are all involved in the business affairs of the first accused financial establishment. Therefore, it cannot be said that there is no specific role played by them in the commission of the above offences. When it is the case of the prosecution that all the accused, being closely connected to each other, and the first accused Company is the main financial establishment and the other companies are projected to be its group of companies, which were in existence only on paper and then if these accused are the Directors or officers of the said front companies which are created for the purpose of defrauding depositors, then even though the accused may not be directly a Director in the first accused Company, but, being Directors in the other companies, clearly connects them as persons responsible for the business affairs of the first accused Company and therefore, the offence under Section 5 of the T.N.P.I.D Act and also the other offences are made out on the face of it. The innocence or otherwise have to be proved only in the trial which is already on. Therefore, the contentions, in respect of the present https://www.mhc.tn.gov.in/judis 20/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 Revision Case, is also not acceptable.
23. Therefore, in view of the directions of the Hon'ble Supreme Court of India and also finding that there are no merits in the contentions of the petitioners, these Criminal Revision Cases are dismissed.
09.09.2022 Index : yes/no Speaking order/Non-speaking order grs To
1. The Special Court under TNPID Act Offences, Chennai.
2. The Public Prosecutor, High Court of Madras.
3. The Deputy Superintendent of Police Economic Offences Wing-II, Guindy, Chennai - 32.
https://www.mhc.tn.gov.in/judis 21/22 Crl.R.C.Nos.1237, 1242 and 1278 of 2022 D.BHARATHA CHAKRAVARTHY, J., grs Pre-Delivery Order in Crl.R.C.Nos.1237, 1242 and 1278 of 2022 09.09.2022 https://www.mhc.tn.gov.in/judis 22/22