IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE FIFTEENTH DAY OF SEPTEMBER TWO THOUSAND AND NINE PRESENT HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL No.1216 OF 2009 Between: The Sate of A.P., Rep. by the Public Prosecutor, High Court of A.P., Hyderabad. ..... Appellant/Petitioner AND Sri Sai Chit Fund Promoters & 6 others ..... Accused/Respondents The Court made the following: JUDGMENT: The criminal appeal, under Section 378 (3) & (1) of the Code of Criminal Procedure, 1973, is directed by the State against the Judgment, dated 04.01.2008, in C.C.No.18 of 2004, on the file of the learned Special Court of the Andhra Pradesh Protection of Depositors Finance Establishment Act, Hyderabad, whereunder and whereby, the respondents-A1 to A7 were found not guilty and acquitted for the offences punishable under Sections 420 and 406 IPC and also under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishments Act (for short, ‘the Act’). 2. Brief facts that are necessary for disposal of the present criminal appeal may be stated as follows: It is the case of the prosecution that A5 to A7 are brothers. It is alleged that A5 to A7 collected deposits from several public and also received the chit amounts from several subscribers in the names of A1 to A4 chit fund companies and subsequently closed their offices and failed to repay the amounts collected and thus, cheated the gullible public and criminally misappropriated and defaulted in respect of the amounts collected as deposits and chit fund subscriptions. Therefore, on the complaint lodged by P.W.1, the police registered a case for the offence punishable under Section 5 of the Act and also under Sections 420 and 406 IPC. 3. When the charges under Sections 420 and 406 IPC and also under Section 5 of the Act were framed, read over and explained to the accused in Telugu, they pleaded not guilty and claimed to be tried. 4. To substantiate the charges, the prosecution examined P.Ws.1 to 29 and got marked Exs.P1 to P91 besides the case properties M.Os.1 to 20. 5. After closure of the prosecution evidence, the accused were examined under Section 313 Cr.P.C. with reference to the incriminating material found against them in the evidence of prosecution witnesses. They denied the same. On behalf of the accused, no oral evidence was adduced except marking Exs.D1 and D2. 6. The trial Court, after considering the evidence on record, acquitted the accused on the ground that the prosecution failed to establish the guilt of the accused beyond all reasonable doubt. Hence, this criminal appeal is filed by the State. 7. Heard the counsel representing the learned Public Prosecutor. 8. Now the point for determination is whether the prosecution proved its case beyond all reasonable doubt against the accused of the charge under Sections 420 and 406 IPC and also under Section 5 of the Act and whether the judgment of the trial Court is correct, legal and proper? 9. There cannot be any dispute that there is a presumption under law that the accused are presumed to be innocent unless the contrary is proved by the prosecution. That presumption is further strengthened by an order of acquittal. Unless the findings are perverse or inadmissible evidence is taken into consideration, or admissible evidence is overlooked, normally this Court will not interfere with the judgment under challenge. 10. Section 406 IPC reads thus: “Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits ‘criminal breach of trust’.” Section 420 IPC reads thus: “Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.” 11. It is not in dispute that the family of A5 to A7 were running chit fund business since a long time. It is also not in dispute that P.Ws.1 to 26 are the depositors of the amounts in A1 to A4 chit fund companies. It is also not in dispute that the Income Tax officials conducted ride prior to the registration of this case against those chit fund companies. Therefore, the persons who obtained loans stopped repayments to A1 to A4 chit fund companies. That was the reason why the accused were unable to repay the deposit amounts and also similarly, A1 to A4 chit fund companies were not able to pay the priced chit amounts to the highest bidders of various chit groups. 12. There is no evidence on record to show that A5 to A7 have diverted the funds relating to A1 to A4 chit fund companies for their personal benefit or made use of that money in purchasing lands or misappropriated the amounts so collected. It is not in dispute that the accused repaid the deposit amounts due to the prosecution witnesses subsequent to the registration of the case. Under compelling circumstances, the accused did not pay the amounts to the prosecution witnesses in time. Therefore, it is not a case where the accused entertained the idea of cheating the witnesses at the time of collecting the amounts, i.e., at the inception. Therefore, the trial Court, after an elaborate consideration of evidence on record, rightly acquitted the accused. There are no compelling or substantial reasons to interfere with the order of acquittal. Hence, the criminal appeal is devoid of merit and is liable to be dismissed. 13. Accordingly, the Criminal Appeal is dismissed confirming the Judgment, dated 04.01.2008, in C.C.No.18 of 2004, on the file of the learned Special Court of the Andhra Pradesh Protection of Depositors Finance Establishment Act. _______________ (K.C. BHANU, J) Date: 15th September, 2009 KL