HONOURABLE SRI JUSTICE P. DURGA PRASAD CRIMINAL PETITION Nos.3158, 3213, 3214, 3249, 3250, 3286, 3460, 6405, 3465 AND 6398 OF 2008 Dated 24-03-2011 CRIMINAL PETITION No.3158 of 2008 Between: Spandana Sphoorty Innovative Financial Services Limited, Avanigadda Branch, rep. by its M.d., Guntur and 5 others. ……..Petitioners. And: State, rep. by PP, High Court of A.P., Hyderabad. ………Respondent HONOURABLE SRI JUSTICE P. DURGA PRASAD CRIMINAL PETITION Nos.3158, 3213, 3214, 3249, 3250, 3286, 3460, 6405, 3465 AND 6398 OF 2008 COMMON ORDER: Criminal Petition No.3158 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in C.C.No.157 of 2007 on the file of the Judicial Magistrate of the First Class, Avanigadda for the offences under Sections 420, 506 read with 34 IPC in Crime No.30 of 2006 of Avanigadda Police Station. Criminal Petition No.3213 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in Crime No.157 of 2006 for the offences under Sections 384 and 420 of IPC of Patamata (Law & Order) Police Station. Criminal Petition No.3214 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in C.C.No.192 of 2007 on the file of Chief Metropolitan Magistrate, Vijayawada for the offences under Sections 420 and 384 of IPC in Crime No.132 of 2006 of I Town Police Station, Vijayawada. Criminal Petition No.3249 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in C.C.No.80 of 2007 on the file of the Chief Metropolitan Magistrate, Vijayawada for the offences under Sections 420 and 384 of IPC in Crime No.71 of 2006 of Ibrahimpatnam Police Station. Criminal Petition No.3250 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in C.C.No.193 of 2007 on the file of the Chief Metropolitan Magistrate, Vijayawada for the offences under Sections 420 and 384 of IPC in Crime No.133 of 2006 of I Town Police Station, Vijayawada. Criminal Petition No.3286 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in Crime No.162 of 2006 for Satyanarayanapuram Police Station for the offences under Sections 384 and 420 of IPC. Criminal Petition No.3460 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in Crime No.131 of 2006 for the offence under Section 420 of IPC of Machavaram Police Station. Criminal Petition No.6405 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in Crime No.131 of 2006 for the offence under Section 420 of IPC of Machavaram Police Station. Criminal Petition No.3465 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in Crime No.158 of 2006 for the offences under Sections 420 and 384 of IPC of Satyanarayanapuram Police Station. Criminal Petition No.6398 of 2008 is filed under Section 482 of Cr.P.C for quashing the proceedings in Crime No.158 of 2006 for the offences under Sections 420 and 384 of IPC of Satyanarayanapuram Police Station. The petitioners in all the above Criminal Petitions are the accused in the respective crimes and they are representatives of Spandana Sphoorty Innovative Financial Services Limited, Guntur. The allegations made against all the petitioners are similar and for similar offences and as such all the petitions are being disposed by this common order. The allegations made against the petitioners are that some of the petitioners are the Managers and some of the petitioners are the Managing Directors and Directors of Spandana Sphoorty Innovative Financial Services Limited, Guntur and the said Spandana Sphoorty Innovative Financial Services Limited is a registered organization doing business by giving loans to the public and collecting them as per their rules and regulations. They approached the victims promising to grant loans at a lesser rate of interest and obtain their signatures on the promissory notes and surety bonds and deducted Rs.500/- to Rs.700/- from out of the loan amount sanctioned towards service charges and paid the balance amount and the loan amount is recoverable in weekly installments and the accused are harassed the borrowers while recovering the installments and also carrying away the house-hold articles and selling them away and indulging in malpractices in recovering the money from the public. Hence, they were charged under Sections 420, 384 IPC and Sections 15, 18 and 24 of Andhra Pradesh Money Lenders Act (for short, the Act). The main contention of the learned counsel for the petitioners is that the alleged Spandana Sphoorty Innovative Financial Services Limited, Guntur as admitted by the prosecution is a registered company and they have obtained permission from the Reserve Bank of India (for short, RBI) for carrying of business of non-banking financial institutions without accepting the public deposits subject to the conditions. Therefore, the said Spandana Sphoorty Innovative Financial Services Limited, Guntur is registered under the Companies Act and carrying of its business of non-banking financial institutions without accepting public deposits. Therefore, the provisions of the Money Landers Act are not applicable to the said company. The other allegations made against the petitioners who are the employers of the said company are that they induced the poor people promising to pay the loans at a lesser rate of interest and paid the amount by deducting Rs.500/- to Rs.700/- towards service charges and subsequently started collecting huge amount by way of interest and when they are unable to pay the weekly installments, they were threatened and forcibly taking away the household articles and harassed them. As per the said allegations, it is evident that the said company has paid the loans to the public after deducting some amount towards service charges and there is no inducement on the part of any of the petitioner to forego any thing by obtaining loans from the said company. As per the said averments also, it is evident that when the said loanees are unable to make the payment as agreed, they are trying to recover the said amount by using force. Now the point that arises for consideration is whether the said allegations will attract the provisions of Sections 420 and 384 IPC are to be examined? The learned counsel for the petitioners has pleaded that in a similar situation earlier, this Court has quashed the proceedings in Criminal Petition No.3332 of 2007 filed by M/s. Share Micro Finance Limited and another and in the said Criminal Petition, the facts are that the petitioners were doing money lending business without licence and collecting higher rate of interest and alleged to have been committed an offence punishable under Sections 420 and 384 IPC and Sections 15 and 18 of the Act and the learned single Judge of this Court has observed that as per the contents of F.I.R, loanees borrowed certain amounts from the petitioners. The only allegation leveled against the petitioners is that he is charging higher rate of interest. The petitioner never induced the complainant nor any one of the witnesses to take loan at a higher rate of interest than the agreed one and the witnesses have voluntarily taken loans from the petitioner. So also, no complaints have been lodged by the borrowers against the petitioner and the RBI has already given permission for conducting of non-banking financial transactions, it cannot be said that the petitioner is doing business without any licence and the allegations in the complaint are taken as true and correct and no offence is made out against the petitioner and thereby the proceedings against the petitioner were quashed. In the present case also except in Criminal Petition Nos.3158 of 2008 and 3249 of 2008, the Mandal Revenue Officer, Vijayawada has lodged the complaint against the petitioners and in those two petitions, the borrowers have lodged the complaint. As already observed above, since the Spandana Sphoorty Innovative Financial Services Limited, Guntur is a company registered under the Companies Act and doing non-banking financial service as per the permission of the RBI, it cannot be said that they are doing business without any license. More over, the borrowers were not induced by any of the petitioners to obtain loans from them. They only offered to give loans on a lesser rate of interest. Thus, the allegations made in the charge sheets or the complaints are taking as true, no offences punishable under Sections 420 and 384 IPC are made out against the present petitioners. Therefore, the petitioners are entitled for quashing of the proceedings lodged against them. Hence, all the Criminal Petitions are allowed. ______________________ P.DURGA PRASAD,J. Date:24.03.2011. Gk. HONOURABLE SRI JUSTICE P. DURGA PRASAD CRIMINAL PETITION Nos.3158, 3213, 3214, 3249, 3250, 3286, 3460, 6405, 3465 AND 6398 OF 2008 Dated 24-03-2011 Gk.