THE HON’BLE SRI JUSTICE P.DURGA PRASAD CRIMINAL APPEAL NO.1384 OF 2004 ORDER: This appeal at the instance of the State is directed against the acquittal of the accused in C.C.No.325 of 1998 by the Judicial First Class Magistrate, Adilabad on 22.07.2003. The accused therein were prosecuted for the offences under Sections 420 and 120 (B) IPC alleging that the accused Nos.2 to 5 are the directors of M/s Argosy Finance and Industrial Investment (India) Limited, and accused No.1 is the Managing Director of the said company. The said Company has obtained the certificate of incorporation under the Indian companies Act and also secured the certificate of commencement of business on 31.05.1982 with registered Head Office at Calcutta. The said Company opened a branch office at Balaji Complex, Mancherial of Adilabad District prior to 30.09.1983. The said company gave impression to the General Public that it is having the following schemes. (1) Health and Age security. (2) Children education. (3) Marriage of the children scheme. (4) House building and Security of retirement by publishing the same through pamphlets and called upon the general public to invest the amounts as deposits with them promising that they would return back the amount within a minimum period of 7 years with attractive benefits and also interest. They also entitled 75% of the amount as loan. The accused appointed P.W.2 as Development Officer and he appointed Rajkumar as an agent. The said Rajkumar enrolled the members and the certificates were issued by the company. The said Rajkumar died on 10.l0.1987 in a road accident. The subscribers enrolled continuing their further payments of installments till the maturity period is completed. As and when the certificates of subscribers matured, they surrendered their certificates at Mancherial branch and obtained acknowledgement of P.W.4, who was the Assistant Manager and he assured that he would make the payment, but the payments were not made by the company. Therefore, the subscribers approached P.W.1 for return of amount since they were enrolled in the company through his son Rajkumar. Thereafter, P.W.2 has promised to repay the amount in easy installments, but he could not fulfill his promise as there was no response from the accused. Subsequently, the accused closed the branch at Mancherial to evade the payment to the subscribers. The complaint given by P.W.1 was registered by Sub-Inspector of police, Mancherial and took up the investigation. Thereafter, the matter was entrusted to C.B.C.I.D. police, and they investigated into the matter and recorded the statements of subscribers and filed the charge sheet. Originally, the case was taken on file as C.C.No.288 of 1997 against the accused Nos.1 to 5 and the case against the present accused was split up and numbered as C.C.NO.325 of 1998. The learned Magistrate has framed the charges under Sections 420 and 120 (B) IPC against the accused. Both the accused pleaded not guilty for the said charges. In order to establish the said charges, the prosecution examined P.Ws.1 to 25 and got marked Exs.P.1 to P.32. No oral and documentary evidence was adduced on behalf of the accused. The learned Magistrate by taking into consideration of the said oral and documentary evidence found both the accused not guilty for the offences under Sections 420 and 129 (B) IPC and thereby acquitted them. Aggrieved by the said acquittal, the State has filed the present appeal. Now, the point that arises for consideration is: Whether the prosecution could able to establish the offences under Sections 420 and 120 (B) IPC against the accused beyond reasonable doubt? P O I N T: The lower Court has acquitted all the accused by holding that the dispute between the subscribers and the company is of Civil nature and they have to proceed against the accused for recovery of the amounts deposited by them and also observed that there is no inducement on the part of the accused to the public at large to make deposits in their company. The learned Additional Public Prosecutor except taken me through the judgment of the lower Court could not point out how the said findings of the learned Magistrate are perverse and the evidence available on record would establish the offences under Sections 420 and 120 (B) IPC. Now, it has to be examined whether the evidence available on record would establish the offences under Sections 420 and 120 (B) IPC as alleged by the prosecution. The case of the prosecution is that accused No.1 is the Managing Director of the M/s Argosy Finance and Industrial Investment (India) Limited and accused No.2 is the Director and they announced attractive schemes through pamphlets and invited the general public to make deposits in the said scheme promising that they would return back the amount within a minimum period of 7 years with attractive benefits and also interest. Accused appointed the P.W.2 as a Development Officer, who in turn appointed Rajkumar as an agent and Rajkumar has enrolled the members into the said company and the company issued certificates to the subscribers. The said Rajkumar died on 10.10.1987 in a road accident. As and when the certificates of subscribers matured, they surrendered the said certificates at Mancherial branch, but the payments were not made by the company. As the subscribers are pressurizing P.W.1, who is the father of the said Rajkumar, who enrolled them as members, for payment of the amount, he lodged the complaint with the police. After completion of investigation, charge sheet was filed by the police against the accused. The complainant P.W.1 has only stated about his son was appointed as an agent in Argosy Finance and Industrial Investment (India) Limited under appointment letter Ex.P.1 and he joined the subscribers under his agency ship. He has also subscribed Rs.14,000/- in 60 months and have to receive Rs.16,000/- at the time of maturity. In the year 1991, accused closed the finance company. Thereafter, he lodged a complaint with the police under Ex.P.2. P.W.2 is the Development Officer of the said Company. According to him, Rajkumar worked as an agent in the said company and he enrolled 22 members in the company and remitted an amount of Rs.1,50,000/- towards Welfare Endowment Certificate. Even after maturity time is over, the company has not paid the amounts and the Directors have also not attended the office. Several subscribers pressurized him for return of the amount. Their Senior Agent has paid some amount to the subscribers. P.W.9, another agent has also stated that he worked as agent in the said company and collected nearly Rs.80,000/-. Subsequently, the company was closed. P.W.10, who worked as Field Officer in the said company, has stated that he used to remit the amounts and issued the receipts signed by the concerned and the accused company used to pay the commission to him. P.W.13, who worked as Administrative Officer, has only stated that the accused are the Directors of the company and P.W.2 was appointed as Director for Telangana Area. After 3 months he resigned due to personal problems and left the company. P.W.14, who worked as Regional Officer, has also stated that the accused are the Directors of the company and they did not pay the amount to the policy holders and the company was closed. P.W.15, who worked as Chief Manager of Mancherial Branch, has stated that he has furnished the accounts of the company to the police. P.W.16, who worked as agent, has stated that he has contributed Rs.100/- for three months. He has paid in all 10 installments and also received the bond, thereafter he has not received any amount and he came to know that the company was closed. P.W.18, who also worked as agent in the said company, has stated that he has enrolled about 10 to 20 members and till 1992 the company was running properly and thereafter, it was closed and did not pay the amount to the subscribers. P.W.17 is the owner of the house, in which the branch at Mancherial was run by the accused. According to him, the accused company has not paid the monthly rents for two years and the company has suddenly vanished. P.Ws.3, 4, 5, 6, 7, 8, 11 and 12 are the subscribers in the said finance company and all of them have stated that the amount deposited by them was not repaid by the company. None of the witnesses have spoken about the accused induced them to deposit the amount in the said company. Investigating officers P.Ws.21, 22, 23 and 25 have recorded the statements of the subscribers and the agents of the company and collected certificate of commencement of business of the company, Articles of Association, Memorandum of Association, registration of resolution and agreement and annual reports of the company, but they have not produced any pamphlets published by the accused inducing the subscribers to make deposits in their company. Exs.P.3 and P.7 are the Welfare Endowment Certificate issued by the Argose Finance and Industrial Investment (India) Limited in the name of the subscribers mentioning about the installments to be paid and the maturity amount payable on completion of 4 years and 7 years. Ex.P.4 is the booklet showing the details of small installments through the Argosy Social Welfare Schemes and Ex.P.5 is the Ready Reckoner for the amount payable under the said scheme. Ex.P.6 is the letter addressed by P.W.2 and others to P.W.1 promising that they would make the payment to the subscribers, failing which P.W.1 is at liberty to proceed against their properties. Ex.P.6 is only Xerox copy. Admittedly, the said letter was not issued by P.W.2 on behalf of the company and it appears it has issued only in his individual capacity. Since none of the witnesses have spoken about the fraudulent and dishonest intention of the accused in deceiving the subscribers or inducing them to make deposits in their company, it cannot be said that the accused have committed the offence under Section 420 IPC. With regard to offence under Section 120 (B) IPC, no evidence was produced by the investigating agency to show that there was conspiracy by all the accused to cheat the public at large by floating the said company. Therefore, the learned Magistrate has rightly held that the prosecution has failed to prove the charges under Sections 420 and 120 (B) IPC against the accused beyond reasonable doubt and the said finding of the lower Court does not warrant any interference by this Court in the appeal. In the result, the criminal appeal is dismissed. _______________________ P.DURGA PRASAD, J 30th September, 2011 Ksp