MIDHUN DAS Vs. STATE OF KERALA

JUDGEMENT

(1.) Petitioners seek to quash FIR No.61/2024 registered with the Palakkad Town South Police Station. Petitioners are being prosecuted for the offences under Sec. 406, 420 r/w Sec. 34 of the Indian Penal Code, 1860, apart from Ss. 3 and 21 of the Banning of Unregulated Deposit Schemes Act, 2019 (for short 'BUDS Act') and Sec. 3, 4, 5 and 6 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (for short 'Prize Chits Act').

(2.) According to the defacto complainant, the accused had, without permission or authority from the Government, collected deposits after inducing the public to believe that they were the promoters of a project called 'Meta Force' and conducted various motivation classes for collecting such deposits and investments from the public. It is also alleged that misusing the friendship with the defacto complaint, the accused had, during the period 1/8/2023 to 31/12/2023, collected an investment of Rs.28,77,500.00 through the account maintained by the first accused with the Federal Bank and thereafter failed to return the amount and thereby committed criminal breach of trust and cheating.

(3.) Sri.T.H.Mohammed Youseff, learned Senior Counsel assisted by Adv. Akheela Farzana contended that the allegations in the FIR, even if it is assumed to be correct, would not make out any of the offences alleged against the petitioners and, therefore, the investigation initiated against them is an abuse of the process of court and is liable to be quashed. The learned Senior Counsel also submitted that 'Meta Force' is a blockchain cryptocurrency network mechanism, and the petitioners have not collected any amount personally. It was also pointed out that petitioners are also persons who had invested in the said project, like the defacto complainant, and therefore they cannot be prosecuted under any circumstances. It was also submitted that large amounts of money had been earned by the defacto complaint and his family members after joining as partners in the project and it is only a form of investment in cryptocurrency which provides unlimited income potential. The learned Senior Counsel further submitted that the partnership is a measure of a smart contract enabling people to network with others to build up an investment, and therefore, there cannot be any instance of criminal breach of trust or cheating. The learned Senior Counsel further submitted that the provisions of the BUDS Act or the Prize Chits Act have no application as petitioners have not indulged in any collection of deposits, nor have they conducted any money circulation schemes. It was asserted that the crime registered against the petitioners is an abuse of the process of court and is liable to be quashed at the threshold itself.