SATHYAVATHI PATTABIRAMAN. M.A. CAIIB, W/O. SRI. A.S. PATTABIRAMAN AND OTHERS Vs. S.N. FINANCE LIMITED, REP. BY ITS DIRECTOR P.S. MURALI

JUDGEMENT

(1.) THE Petitioners have challenged the order passed by the Court below taking cognizance against them for the offence punishable under Sections 403 and 420 IPC.

(2.) THE facts relevant for the purpose of this petition are as under: I will refer to the parties as per their rank in the Court below for the purpose of convenience. The Petitioners herein are Accused Nos. 2 to 7, whereas Respondent herein is the complainant. The complainant is a non -banking finance company registered with the Reserve Bank of India and it accepts the deposits from the public in turn giving them a good rate of interest on the said deposits, The money so deposited is being generated for further finance for industries, hire purchasing and leasing and the Company is receiving attractive Interest and thereby the complainant is conducting the business. Accused No. 1 was appointed as an Executive Director in the year 1995 after he took voluntary retirement from the State Bank of India, wherein he was working as Deputy General Manager. The promoters of the complainant company thought that Accused Nol. was having sufficient financial background and would serve a good purpose on the Board and accordingly, he was inducted into the Board as an Executive Director. The complainant was unaware that the first accused wanted to enter into this company only to build subterfuge and to siphon off the Company's money by misappropriation and cheating. The first accused adopted the modus operandi and was illegally encasing the monies of the Company through various accounts held by his direct relatives in the said company. It is stated that the height of his criminality was achieved in the year 1999 when he became the Managing Director of the Company. In furtherance of his intention, he is said to have misappropriated the amount to the tune of Rs. 5,94,21,914 -36. He also purchased property in his name and in the name of his wife Accused No. 2 by withdrawing the amount from the complainant company by fraudulent means and induced a depositor to file a company petition for winding up of the complainant company. He is said to have siphoned off huge amount from the complaint company. He dropped three directors and in their place took Sri. R.N. Kamath and G.H. Patel who are blissfully unaware of the fraudulent games being enacted by Accused No. 1 and everyone had the belief on Accused No. 1 that he is an able person. The complainant states that Accused No 1 used to withdraw the amount and deposit it in the names of his relatives and the amount of deposit misappropriated by Accused No. 1 in connection with other accused has been enumerated in para 14 of the complaint. The amount of deposits in the names of the respective persons has been given in detail and totally a sum of Rs. 5,94,21,914 -36 is said to have been misappropriated. The depositors are none else than the wife of Accused No. 1 i.e., Accused No. 2 the daughter Accused No. 3, the sister of Accused No 2 who is Accused No. 4, the brother in law of Accused No. 1 who is Accused No. 5 and the Indian Institute of Entrepreneur Development, wherein Accused No. 1 is the President of the said institute and Accused No. 7 Smt. Geetha who is also said to be a relative of Accused No. 1, The complainant alleges that the properties worth Rs. 2,65,92,848/ - were purchased by Accused No. 1 in his name and the name of his relatives and the properties have been valued by an expert. So it is the case of the complainant that Accused No. 1 in connivance with Accused Nos. 2 to 7 misappropriated huge amount of money of the complainant company. The complainant has also given the particulars of the properties by way of Annexures A to H to the complaint. In addition, the complainant has produced many documents in support of his claim and also submitted the list of witnesses to prove the case against the accused. The Trial Court after registering the complaint, recorded sworn statement and under the impugned order has taken cognizance against Accused Nos. 2 to 7 and aggrieved by the said order, Accused Nos. 2 to 7 have filed this petition challenging the validity of the order.

(3.) IT is the contention of the learned Counsel for the Petitioners that the deposits in the name of the Petitioners are their own deposits and the company has no nexus with the amount deposited by them. So also, he submits that Dr. K.R. Padmavathi who is Petitioner No. 3 (Accused No. 4) has tiled a complaint to the Karnataka State Consumer Disputes Redressal Commission for taking action against the company for not refunding the deposit amount. It is his submission that the matter is purely of civil nature wherein the company has even instituted the suit against the Petitioners and Accused No. 1 and in the circumstances, the order taking cognizance is illegal and perverse.