1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 13.07.2011 CORAM: THE HONOURABLE MR.JUSTICE S.PALANIVELU CRL.R.C.(MD)No.433 Of 2011 and M.P.(MD)No.1 of 2011 1. Balakrishnan 2. Lakshmi .. Petitioners Vs. State represented by The Inspector of Police, Economic Offences Wing No.II, Madurai. (Cr.No.6 of 2007) .. Respondents PRAYER: Revision filed under Section 397 r/w 401 of the Code of Criminal Procedure, to call for the records relating to the judgment dated Special Court for the Tamilnadu Protection of Interests of Depositors (in Financial Establishments) Act 1997 at Madurai and set aside the same and allow the revision. For Petitioners : Mr.R.Venkateswaran For Respondent : Mr.P.Kandasamy Additional Public Prosecutor J U D G M E N T The petitioners are accused in C.C.No.113 of 2008, on the file of the Special Court for the Tamilnadu Protection of Interests of Depositors case, Madurai. They were charged under Section 5 of the TNPID Act. They are alleged to have run a chit containing 12 members from whom they collected the chit installments from 10.07.2004 to 10.02.2006 and subsequently, they defrauded the witness Nos.2 to 12 to the tune of Rs.5,57,193/-. 2. The petitioners filed an application before the Sub-Court under Section 239 of Criminal Procedure Code praying to discharge them from the charge. It is their contention that the chit run by them could not be brought within the purview of the provisions of TNPID Act, 1997 and that the remedy available to the alleged affected persons is elsewhere. 3. Mr.R.Venkateswaran, learned Counsel for the petitioners would contend that the chit run by the petitioners is an unregistered one and that the subscription collected by them from the members is not to be construed to be "deposit and that the chit run by them is not a financial establishment", as defined under the TNPID Act and hence, the petitioners are not punishable under the provisions of the Act. 4. Mr.Mr.P.Kandasamy, Additional Public Prosecutor, would submit that the petitioners wrongly propagated that their chit was registered and they collected money and defrauded the subscribers and the offences would attract the provisions of TNPID Act, 1997. https://hcservices.ecourts.gov.in/hcservices/ 2 5. Sub-Sections 2 and 3 of Section 2 of TNPID Act, 1997 read as follows: Section 2(2):"deposit" means the deposit of money either in one lump sum or by installments made with the Financial Establishment for a fixed period, for interest or for return in any kind or for any service; Section 2(3):"Financial Establishment" means an individual, an association of individuals, a firm or a company registered under the Companies Act, 1956 (Central Act 1 of 1956) carrying on the business of receiving deposits under any scheme or arrangement or in any other manner but does not include a corporation or a co-operative society owned or controlled by any State Government or the Central Government or a banking company as defined in Section 5(c) of the Banking Regulation Act, 1949(Central Act X of 1949). 6. Section 5 of the Act provides penalty for the offences. Under Section 5 also, terms "financial establishment of any employee" are found. 7. Considering the chit run by the petitioners has not been registered neither with the Registrar of Chit funds nor with the Registrar of Companies, it cannot be decided that the provisions of the Act could be made forcible against the petitioners. The authorities concerned may initiate proceedings against the accused under appropriate statute. 8. In view of the above said observations, this Court is of the opinion that framing of charges under Section 5 of the TNPID Act is not sustainable and hence, the petitioners have to be discharged and the order passed by the Court below is liable to be set aside and it is accordingly set aside. 9. In the result, this Criminal Revision Petition is allowed. Consequently, the connected Miscellaneous Petition is closed. Sd/- Assistant Registrar (T&P) /True copy/ Sub Assistant Registrar To The Special Court, The Tamilnadu Protection of Interests of Depositors, (in Financial Establishments) Act 1997, Madurai. +1CC TO MR.R.VENKATESWARAN, ADVOCATE, SR.22988 Ssl SR : 28.07.2011 : 2p/3c CRL.R.C.(MD)No.433 Of 2011 and M.P.(MD)No.1 of 2011 13.07.2011 https://hcservices.ecourts.gov.in/hcservices/