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18. Now, in deciding this Criminal Revision Case, the point that arises for consideration is as to whether the impugned order in C.C. No.11 of 2022 (Split up case from C.C. No.5 of 2017), dated 03.08.2022, by the learned Special Judge in framing the charges under Sections 406 and 420 IPC and Section 5 of the APPDFE Act suffers with any irregularity, illegality and impropriety and whether there are any grounds to set-aside the said charges?

19. POINT: Sri Posani Venkateswarlu, learned Senior Counsel, appearing for the petitioners, would contend that the then learned Special Judge informed the petitioners company to disburse the pending amounts to all the aggrieved members for compounding the case and after that the petitioners paid certain amounts and filed proof to that effect and that the Court below was pleased to record the same in the docket proceedings. The present learned AVRB,J Special Judge, in spite of the material available on record, proceeded to frame the charges on 03.08.2022 and also issued trial schedule from 10.08.2022 and even examined some of the witnesses. As the petitioners have the statutory period of limitation to file the Criminal Revision Case, they could not file the same immediately. He would further contend that there is no material to show that the petitioners committed an offence under Section 5 of the APPDFE Act. Instead of discharging the present petitioners under Section 227 Cr.P.C, the learned Special Judge erred in framing the charge under Section 5 of the APPDFE Act. Even according to the averments in the charge sheet, the amounts that were said to be paid by the prosecution witnesses are non- refundable amounts and even the accused was alleged to have issued a Certificate of Voucher labeling it as a Certificate of Purchase. So, it cannot be brought under the purview of the receipt. The prosecution alleged that the members paid certain amounts to the accused company towards the cost of gold and silver coins to a tune of Rs.32,200/-. The same cannot be brought under the purview of the „deposit', as defined under Section 2(b) of the APPDFE Act. Even the accused company cannot be brought under the purview of „financial establishment‟, as defined under Section 2(c) of the APPDFE Act. The so called registration charges AVRB,J paid by the members were non-refundable one. So, when the amounts said to be paid by the members were only towards the cost of the products allegedly canvassed by the accused, the said amounts cannot be brought under the purview of Section 2(b) of the APPDFE Act, under the caption of „deposit' and further accused company cannot be brought under the purview of Section 2(c) of the APPDFE Act, under the caption of „financial establishment‟. The very framing of charges by the Court below under Section 5 of the APPDFE Act is not at all sustainable and it is irregular and illegal. Apart from this, to constitute the allegation of cheating, the prosecution should aver that there was initial dishonest intention on the part of the accused so as to deceive the members and, in the absence of it, subsequent violation of the promise, if any, would only give rise to civil cause of action but not criminal action. The charge sheet filed by the CID, does not disclose all these things as such charge under Section 420 IPC should not have been framed. The ingredients of Section 406 IPC, criminal breach of trust, are altogether different and the allegations under Sections 420 and 406 IPC are in mutual exclusion of each other and both the charges are not liable to be framed. Even according to the scheme of the accused, as alleged by the prosecution, there was no question of return of money and AVRB,J the amounts were only non-refundable and even the prosecution claim that the accused has to give commission to its members as such the very allegations under the APPDFE Act are bad under law. There were no allegations in the charge sheet that the Directors of the Company are responsible towards running of the Company and prosecution did not place any piece of material to prove those allegations.

21. Smt. Y.L. Siva Kalpana Reddy, learned Standing Counsel- cum-Special Public Prosecutor for CID, appearing for the 4 (2019) 17 SCC 193 5 (2011) 3 SCC 351 6 (2015) 1 SCC 103 7 (1994) 4 SCC 142 8 1995 (2) MWN (Cr.) AVRB,J respondent-State, would contend that the allegations of the prosecution would clearly attract the essential ingredients of offences under Sections 406 and 420 IPC and further Section 5 of the APPDFE Act. She would submit that the accused lured the members from the beginning with a dishonest intention so as to induce them to become Independent Representatives by subscribing a sum of Rs.460/-. The functioning of the scheme has been narrated clearly in the charge sheet. The core allegations against the present petitioners are that the accused canvassed that they have certain products such as gold coin 6 grams + silver 30z medallion. Apart from it, they also canvassed that they have certain other products and made the members to believe that the products they have numismatic and antique value especially the gold coin 6 grams and silver 30z medallion would worth about Rs.32,200/-. They collected the amounts from the members accordingly. They have delivered products as medallion packs consisting of gold coin weighing 6 grams and silver coin of 1 oz of silver coin which could fetch only Rs.10,838/- in the open market. On verification, the members learnt that the medallion packs have no numismatic or antique value. So, the members lost the differential amount. She would further contend that the allegations of the prosecution would establish the definitions of the AVRB,J „deposit' and „financial establishment' as defined under Section 2(b) and 2(c) of the APPDFE Act. The amounts that were paid by the members need not carry any interest. The return can be in any kind. Here, the members did not receive any numismatic or antique value to the products and medallion packs and they were delivered with normal packs which could only fetch Rs.10,000/- and odd. So, the difference of the amount would be treated as return in any kind as laid in Section 2(b) of the APPDFE Act. She would further submit that the allegations would attract Section 5 of the APPDFE Act. She would rely upon a decision of the Hon‟ble Apex Court in Dr. Nallapareddy Sridhar Reddy v. State of Andhra Pradesh and others9 to contend that in the said case there were charges under Sections 406 as well as 420 IPC and the act of the trial Court in framing such charges was also upheld by the Hon‟ble Supreme Court. The basis for the charge would be the charge sheet, statement of the witnesses enclosed thereto and the relevant material enclosed. The so called subsequent payments, claimed to be made by the accused just before framing of charges and which were said to be brought to the notice of the then learned Special Judge, should not have been the basis for framing the charge. It is clearly held even in the decision cited by learned 9 (2020) 12 SCC 467 AVRB,J Counsel for the petitioners in Minakshi Bala (7th supra). She would submit that almost 95 witnesses were examined before the trial Court after framing of charges and the petitioners have participated in the trial and all of a sudden, they filed this present Criminal Revision Case, which is liable to be dismissed.

22. A look into the copy of the charges framed against the petitioners on 03.08.2022 discloses that the learned Special Judge framed charges under Sections 406 and 420 IPC and Section 5 of the APPDFE Act by looking into the allegations of the prosecution in the charge sheet filed, whose details were already referred to herein above. The substance of the charges is corresponding to the allegations in the charge sheet.

23. Firstly, this Court would like to deal with as to whether the allegations would attract Section 5 of the APPDFE Act. Section 5 of the APPDFE Act runs as follows:

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30. While holding so, the Hon‟ble Supreme Court allowed the Appeals and set-aside the judgment of the Bombay High Court holding that the impugned notifications issued under Section 4 of the MPID Act are valid.

31. Coming to the case on hand, though the definition of financial establishment either under Section 2(d) of the MPID Act or under Section 2(c) of the APPDFE Act are similar but there is a vast difference to the term deposit between the MPID Act and APPDFE Act. When compared to the scope of the deposit under Section 2(b) of the APPDFE Act, the word „deposit' in MPID Act is wide enough. Even otherwise, as this Court already pointed out the return in kind which was expected to be made from the accused after accepting the payment of Rs.32,200/- by the depositors would be to give the product which should have numismatic and antique value. In my considered view, the factual aspects in the present case are much better than the factual aspects in 63 Moons Technologies Limited (1st supra) because NSEL is only an intermediary facilitator to certain acts between the seller and the buyer. Even then looking into the broad definition deposit, it was held to be a financial establishment and the allegations therein would attract the deposit. Here the AVRB,J allegations are directly against the accused as if they made the members to believe that they have certain products which would fetch numismatic and antique value. In my considered view, the decision of the Hon‟ble Apex Court in 63 Moons Technologies Limited (1st supra) would negative the contention of the revision petitioners.