SAHAJI P B , S/O BALAKRISHNA PANIKER Vs. STATE OF KARNATAKA REP BY STATION HOUSE OFFICER, MALLESHWARAM POLICE STATION

JUDGEMENT

(1.) This revision petition is filed under Section 397 read with 401 Cr.P.C. The petitioners have questioned the legality of the order dated 21.4.2018 passed by the LVI Additional Chief Metropolitan Magistrate, Bengaluru, in C.C. 3503/2014 declining to discharge the petitioners in relation to offences punishable under Sections 4 and 76 of Chit Funds Act, 1982 (hereinafter for short referred to as 'the Act') and Section 420 of the Indian Penal Code.

(2.) Briefly stated the events that have culminated into filing of this revision petition are as follows : - The first petitioner is working as Manager in the branch office of Sree Gokulam Chit and Finance Company Limited ('Chit Company' for short), No.240, 16th Cross, Sampige Road, Malleswaram, Bengaluru. The second petitioner is the Chairman and Managing Director of the said chit company which has its head office at Chennai. The Malleswaram Police, Bengaluru, i.e., the respondent herein, registered an FIR against the petitioners in Crime No.112/2013 at the instance of the Deputy Registrar of Chits, North Range, Bengaluru. The said Registrar alleged that the petitioners were unauthorisedly conducting the chits bearing no. G2G/2534/15, G3G700/19, G3G/745/KDM/16-18 in the branch office of chit company at Malleswaram. The Deputy Registrar also alleged that the petitioner did not obtain prior sanction as required under Section 4 of the Act and a commencement certificate under Section 9 (2) of the Act and thereby they committed an offence punishable under Section 420 of IPC and Section 76 of the Act. The police filed charge sheet in the Court of Magistrate. At the time of framing charge the petitioners argued for their discharge, but the learned Magistrate came to conclusion that the trial needs to be held for resolving the controversy raised by the petitioners. It also referred to observation made by the Sessions Judge while granting anticipatory bail.

(3.) The learned counsel for the petitioners assails the impugned order raising the points that the petitioners are not doing chit business at Bengaluru; the chit groups in respect of which FIR was registered are being conducted at Chennai. Sanction as required under Section 4 of the Act was obtained from the concerned authority at Chennai before commencement of the chits. Chit Company has a branch office at Bengaluru, but the actual chit transaction including auction of chits is being held at Chennai only. For opening a branch office, permission as required under Section 19 is taken, a document evidencing the same was handed over to investigation officer. The same is filed with the charge sheet. He argued that since no lot or auction is held at Bengaluru; and that mere collection of subscription amount from the subscribers at Bengaluru does not constitute a chit transaction, there was no need to obtain sanction at Bengaluru separately for the chit groups in respect of which the petitioners are prosecuted. He highlighted the point that conjoint reading of Section 4 and Section 19 of the Act does not lead to an interpretation that sanction is very much necessary merely because branch office is opened without actually doing a chit transaction as defined in Section 2 (b) and (e) of the Act. Therefore, he argues that the petitioners are required to be discharged of the offences as there are no materials to frame charge against them. The trial Court has thus committed an error in not discharging the petitioners, the impugned order does not stand to legal reasoning.