THE HON’BLE SRI JUSTICE K.G. SHANKAR Crl.R.C.No.125 of 2006 Date: 18.03.2011 Between: Enugula Madhusudhan Reddy … Petitioner/ De facto complainant AND 1. The State of A.P. rep.by P.P., High Court of A.P., Hyderabad. … Respondent/ Complainant 2. Balasankula Satyanarayana 3. Balasankula Ravindar Rao … Respondents/ Accused THE HON’BLE SRI JUSTICE K.G. SHANKAR Crl.R.C.No.125 of 2006 ORDER: The de facto complainant, who was examined as PW.1 before the trial Court, laid this revision assailing the judgment of the learned Additional Judicial Magistrate of First Class, Karimangar in C.C.No.48 of 2003. The accused in C.C.No.48 of 2003 are respondents 2 and 3 in the present revision. I shall refer to them as accused 1 and 2 in this judgment. 2. A.1 and A.2 allegedly cheated PW.1 and committed criminal breach of trust. They also allegedly committed the offence under Section 4 read with Section 76 of the Chit Funds Act, 1982 (‘the Act’ for short). On the complaint of PW.1 under Ex.P.1, police registered a case against the accused. The prosecution examined as many as 7 witnesses. The learned trial Judge held that the prosecution failed to establish the offences under Sections 420 and 406 of the Indian Penal Code (‘IPC’ for short) as well as under Section 4 r/w 76 of the Act. The State did not prefer any appeal against the acquittal. The de facto complainant (PW.1) consequently preferred this revision. 3. The point for consideration is whether the prosecution has brought home the guilt of the accused beyond reasonable doubt. 4. The case of the prosecution is that the accused have been running unauthorized chits and that the de facto complainant was a member of one of such chits while his daughter was the member of another of those chits. The de facto complainant became successful bidder in the chit for Rs.50,000/- agreeing to forego Rs.18,000/- and to take prize money at Rs.32,000/-. The accused did not pay the prize money to the de facto complainant. The de facto complainant also became the successful bidder in the other chit for Rs.10,000/- agreeing to forego Rs.2,000/- and to take prize money of Rs.8,000/-. The accused did not pay the prize money concerning the second chit also. It is the case of the de facto complainant that the accused thus cheated him and committed criminal breach of trust. 5. The prosecution examined as many as 7 witnesses. PW.1 is the de facto complainant. PW.2 is the brother-in-law of the de facto complainant. PW.3 is the wife of PW.1. PW.4 is the younger brother of PWs.2 and 3. PW.5 and PW.6 are said to be subscribers of chits run by the accused. PWs.5 and 6 deposed that they did not have any complaint against the accused and that the accused honoured their undertaking and repaid the monies due to PWs.5 and 6 when the monies became due. 6. PWs.1 to 4 are interested witnesses in the sense they are close relatives of each other. Indeed, the evidence of PWs.1 to 4 cannot be rejected in limini on the other hand that they are interested witnesses. The evidence of PWs.1 to 4 deserves to be examined cautiously where they are relatives of each other. PW.3 is no other than the wife of PW.1. PWs.2 and 4 are the brothers of PW.3. 7. PW.2 deposed that he became a member of the chit for Rs.50,000/- along with PW.1 and that he participated in the auction along with PW.1. He claimed that the accused did not pay the prize money to PW.1 and that they asked the accused many times for payment of prize money, but in vain. He explained that the chit of Rs.50,000/- was commenced in March, 1998 and that PW.1 participated in the auction in October, 1998. He further deposed that the payment of the subscription by PW.1 was recorded in a small book by the accused. PW.2 admitted that A.2 is one of his brothers-in-law as the wife of A.2 was the sister of PW.2 (it is not clear whether the recording of this piece of evidence by the trial Court was correct. At any rate, the evidence is that the wife of PW.2 is the sister of PW.2). PW.2 also referred to the suit laid by A.2 against PW.3 for Rs.75,000/-. Thus, there are some differences of opinion between A.2 and PW.2. 8. PW.3 claimed that she never executed any pro-note in favour of the accused and that she, however, signed on a revenue stamp in a note book. Curiously, she denied that the accused laid a suit against her for Rs.75,000/-. It is curious because PW.1 himself admitted about the suit by the accused. 9. That apart, the evidence of PW.3 is very vague, confusing and contradictory to the facts. She claimed that PW.1 joined in a chit for Rs.50,000/- run by the accused from 1987 and that the chit period ran till 1997. She claimed that PW.1 joined in another chit for Rs.20,000/- in or around 1987. She further deposed initially that PW.1 was paid back the chit money. Her evidence is that the accused did not pay back the money covered by the second chit (which perhaps was for Rs.20,000/-). However, PW.3 later maintained that the accused paid the second chit money after the maturity of the chit. 10. She contended that PW.1 joined in the third chit for Rs.50,000/- in 1996 on a monthly instalment of Rs.1,600/- and that PW.1 became the member of the fourth chit for Rs.10,000/- on a monthly instalment of Rs.400/-. She further claimed that PW.1 became successful bidder for both the chits in 1997 for Rs.40,000/- and for Rs.10,000/- in the name of her daughter. Perhaps PW.3 was referring to the third and fourth chit of the accused in which PW.1 and his daughter were subscribers. The total amount of prize money at Rs.40,000/- as claimed by PW.3 also agrees with the case of PW.1 that the prize money was Rs.32,000/- and Rs.8,000/- respectively. As already pointed out, the evidence of PW.3, however, is not clear and is confusing. Most important aspect of the evidence of PW.3 is her total denial of the civil case for Rs.75,000/- by the accused against her, which has been the case of PW.1. 11. PW.4 deposed that he became a member of two chits for Rs.10,000/- and Rs.25,000/-, that the chits were initially run by A.1 and that A.2 took over the business of A.1 in 1998. Claiming on the one hand that he did not receive the amounts covered by chits, PW.4 at the same time deposed that no amounts were due from the accused to him. The prosecution considered that he was not supporting the prosecution story and put leading questions to him. Thus, although PW.4 is a brother of PWs.2 & 3 and brother-in-law of PW.1, he did not support the story of PWs.1 to 3. 12. PW.1 claimed that when he became the successful bidder, the prize money was never paid to him. However, PW.1 failed to produce any evidence to show that PW.1 became the successful bidder in the auctions of the two chits. There is no evidence whatsoever to establish the case of PW.1. 13. Sri V. Srikanth, learned counsel for the revision petitioner-de facto complainant contends that Exs.P.2 and 3 passbooks clinchingly established the case of PW.1. I shall consider the question whether Exs.P.2 and 3 at best shown that the accused ran unauthorized chits and that PW.1 and his daughter were subscribers of such chits later. Suffice it to mention that they did not show that PW.1 was the successful bidder in the auctions held and that the accused failed to pay the prize monies of the two auctions. Thus, the prosecution failed to link the accused to the offences u/s.420 and 406 IPC. 14. It is the case of PW.1 that he joined in the first chit (which was referred to as the third chit by PW.3) in 1997. He, however, was not certain whether he was paying monthly instalments at Rs.1,700/- or Rs.2,000/-. Claiming that the chit commenced in October 1997, he deposed that he became the auction purchaser being the successful bidder in the auction held in January, 1998. He further deposed that his daughter became a subscriber in the other chit from June, 1997. PW.1 claimed that his daughter became successful bidder in the auction held in January, 1998. Curiously, he claimed that PW.1 and his daughter paid the subscriptions till October, 1998 although the prize amount was never paid. I am afraid that it is for PW.1 to explain why he continued to pay the instalments even though the prize money was not paid. At any rate, there is no evidence that PW.1 participated in the auctions on his own behalf and on behalf of his daughter, that he became the successful bidder and that the monies were not paid by the accused despite PW.1 fulfilling all the formalities. The de facto complainant, consequently, failed to establish prima facie that A.1 and A.2 committed cheating and criminal breach of trust punishable u/s.420 and 406 IPC. The trial Court was perfectly justified in acquitting the accused for the offence u/s.406and 420IPC. 15. It may be recalled that the accused was also charged for the offence u/s.4 r/w 76 of the Act. The parameters for the offence under the provisions of the Act are different from the appreciation of the evidence for the offence Section 420 and 406 IPC. 16. Section 4 of the Act envisages that no chit should be commenced without prior sanction of the State Government and without prior registration of the chit in accordance with the provisions of the Act. Section 76 of the Act adumbrates punishments for the contravention of various provisions of the Act including the provisions u/s.4 of the Act. 17. It is the case of the prosecution that the two accused conducted private chits and that they are, therefore, punishable u/s.4 r/w 76 of the Act. As already pointed out, albeit the accused were served with notices, no one represented the accused. The learned counsel for the accused contended that the offence u/s.4 r/w 76 of the Act is made out where the witnesses established that the accused conducted chits and where evidently there is no sanction from the State Government to the accused to conduct chits. The learned counsel for the de facto complainant referred to Exs.P.2 and P.3. Exs.P.2 and P.3 are supposed to be the books maintained by the subscribers of the chits where the accused used to sign when the accused received subscriptions. The signatures of the accused on Exs.P.2 and P.3 have not been established. It is not proved by the prosecution that Exs.P.2 and P.3 were issued by the accused. I am not able to satisfy myself with the contention of the learned counsel for the revision petitioner-de facto complainant that the accused issued Exs.P.2 and P.3 and that Exs.P.2 and P.3 established that the accused had been running private chits. Unfortunately, Exs.P.2 and P.3 do not even show that they relate to the chit transactions let alone showing that Exs.P.2 and 3 were maintained at the instance of the accused and that the accused were acknowledging receipt of subscriptions from the subscribers by signing Exs.P.2 and 3 books. Thus, Exs.P.2 and P.3 do not even prima facie establish that they relate to the chits run by the accused, let alone establishing clinchingly and establishing beyond reasonable doubt that they are passbooks maintained by the accused for the private chits run by them. Thus, there is no documentary evidence to link the accused to the commission of the offence u/s.4 r/w 76 of the Act. 18. PW.6 deposed that he joined as a subscriber of the private chit run by the accused. He was considered to be hostile since he deposed that the accused paid the maturity money when the chit period concluded. So far as the offence u/s.4 r/w 76 of the Act is concerned, it is the evidence of PW.6 that he was a member of the chit run by the accused along with PW.1. PW.5 also deposed that he was a member of the chit run by A.1 and A.2. Needless to state that PWs.1 and 4 deposed that A.1 and A.2 ran private chits. The question is whether the oral evidence of PWs.1 to 6 is sufficient to hold that the accused were guilty of running private chits. The allegation of the prosecution is not like a physical attack by the accused upon the victim. It is the case of the prosecution and the case of PWs.1 to 6 that the accused were running private chits. There must necessarily be documentary evidence for the chits run by the accused. The subscribers must be in possession of various documents including the agreement of chit, receipts for payment of instalments of subscription and other material concerning the chits. None of the witnesses amongst PWs.1 to 6 produced any documentary evidence barring for Exs.P.2 and P.3. I am afraid that the pure oral evidence of PWs.1 to 6, however, strong it be would not be sufficient to hold that the prosecution brought home the guilt of the accused for the offence u/s.4 r/w 76 of the Act to conclude that the accused were running private chits. The trial Court, therefore, was perfectly justified in giving benefit of doubt to the accused that the accused have not committed the offence u/s.4 r/w 76 of the Act. I am afraid that the prosecution has not brought home the guilt of the accused beyond reasonable doubt for the offence u/s.4 r/w 76 of the Act. 19. Consequently, the prosecution has failed in establishing the guilt of the accused for any of the offences levelled against the accused. The recording of acquittal by the trial Court, therefore, is justified. The judgment of the trial Court is not erroneous and does not need any interference. There are no merits in the revision. 20. This Criminal Revision Case is found not meritorious and is accordingly dismissed. _______________ K.G. SHANKAR, J Date: 18.03.2011 Isn