XL FINANCE Vs. STATE

JUDGEMENT

(1.) This is an appeal made by A-1 and A-2 in a case, wherein they along with three others stood charged under Ss 120(B), 420 and 403 of I.P.C. and Ss 4, 5 and 6 of the Tamil Nadu Prize Chits and Money Circulation Scheme (Banning) Act, and S.5 of the T.N.P.I.D. Act, and A-1 and A-2 were found guilty under S.5 of the TNPID Act and under Ss 4 and 5 of the Tamil Nadu Prize Chits and Money Circulation Scheme (Banning) Act, and A-1 was sentenced to pay a fine of Rs.70,000/- under S.5 of the TNPID Act and to pay a fine of Rs.1,000/- each under Ss 4 and 5 of the Tamil Nadu Prize Chits and Money Circulation Scheme (Banning) Act, while A-2 was sentenced to undergo 5 years R.I. under S.5 of the TNPID Act and to pay a fine of Rs.70,000/-, in default, to undergo 8 months S.I. and also to undergo 1 year R.I. under Ss 4 and 5 of the Tamil Nadu Prize Chits and Money Circulation Scheme (Banning) Act and to pay a fine of Rs.1,000/- each, in default to undergo 1 month S.I., and A-3 to A-5 were acquitted of the charges against them.

(2.) The gist of the prosecution case is as follows: (a) The first accused was a finance Company conducted by the second accused as its Managing Director. The third accused was a partner in the said business, while the fourth and the fifth accused were Manager and Cashier respectively. The second accused was conducting the chit transactions and also recurring and fixed deposit schemes in the name of the first accused. P.W.1 Manoharan, P.W.2 Murugesan, P.W.4 Dhanasekaran, P.W.5 Prabakaran, P.W.7 Ponnurangam, P.W.8 John Durai, P.W.9 Selvaraj, P.W.11 Yogaraj, P.W.12 Soloman, P.W.13 Shanmugam, P.W.14 Sathya, P.W.15 Balasubramaniam, P.W.16 Gunasekaran, P.W.17 Munusamy, P.W.18 Janarthanam and P.W.25 Manoharan were all depositors to the fixed deposit scheme conducted by the A-2 in the name of A-1. Exs.P253, P1, P5, P7, P8, P12, P13, P15, P16, P20, P22, P24, P26, P28, P30, P33, P35, P49 and P50 were all cheques and fixed deposit receipts respectively issued by the accused in that regard. Similarly, P.W.3 Venkatesan, P.W.6 Karunakaran, P.W.10 Kalaiselvam, P.W.19 Ramu, P.W.20 Ratinam, P.W.21 John Panchavarnam, P.W.22 Sivakumar, P.W.23 Arul Manickam, P.W.24 Lakshmanan, P.W.25 Manoharan, P.W.26 Selvaraj, P.W.27 Chandrasekaran, P.W.28 Rajkumar, P.W.29 Ramakrishnan P.W.30 Krishnan Kutty, P.W.31 Mani, P.W.32 Thirunavukkarasu, P.W.33 Ponnusamy, P.W.34 Ganesh, P.W.35 Rajkumar, P.W.36 Logan, P.W.37 Balasekar, P.W.38 Balasekaran, P.W.39 Sathyanarayanan, P.W.40 Jayakumar, P.W.41 Krishnamurthy, P.W.42 Vijayakumar, P.W.43 Perumal, P.W.44 Velayutham, P.W.45 Chithirai, P.W.46 Paulraj, P.W.47 Sundar, P.W.48 Sathyanarayanan, P.W.49 Arunachalam, P.W.50 Thangavelu, P.W.51 Rajaram, P.W.52 Thiagarajan, P.W.53 Subramani. P.W.54 Ranganathan, P.W.55 Subramani, P.W.56 Rajendran, P.W.57 Sankarasubbu, P.W.58 Mohanavelu, P.W.59 Koteeswaran, P.W.60 Nandagopal, P.W.61 Ramamurthi, P.W.62 Samuvel, P.W.63 Narendrababu, P.W.64 Mani, P.W.65, Palanisamy, P.W.66 Sivagurunathan, P.W.67 Ekambaram, P.W.68 Shanmugam, P.W.69 Rajendiran, P.W.70 Narasimman, P.W.71 Jeyaraman, P.W.72 Murali, P.W.73 Prathapkumar, P.W.74 Soundararajan, P.W.75 Rathinapandian, P.W.76 Subbiah, P.W.77 Nagarajan, P.W.78 Venkatesan, P.W.79 Pandian, P.W.80 Venugopalakrishnan, P.W.81 Damodaran, P.W.82 Jaganathan, P.W.83 Murugan, P.W.84 John Premkumar, P.W.85 Krishnan, P.W.87 Narendiran, P.W.88 Viswanathan, P.W.89 Jagadeesan, P.W.90 Manoharan,P.W.91 Chandrasekaran, P.W.92 Raghupathy, P.W.93 Balapathran, P.W.94 Abdullah, P.W.95 Mohanrajan, P.W.96 Sankaran, P.W.97 Thiagarajan, P.W.98 Ramamurthi, P.W.99 Gunasekaran, P.W.100 Rameshbabu, P101 Edward Raj, P.W.102 Sundarsingh, P.W.103 Arivalagan, P.W.104 Rajaram, P.W.105 Jeyaganesh, P.W.106 Annamalai and P.W.107 Murugesan were all subscribers to the chit transactions and recurring deposit scheme conducted by A-2 in the name of A-1 Company, and the cheques, chit passbooks and receipts issued by the Company in that regard are marked as Exs.P3, P10, P18, P37, P41, P39, P43, P45, P47, P51, P52, P54, P55, P57, P59, P61, P62, P64, P66, P67, P69, P71, P73, P75, P77, P79, P81, P83, P86, P88, P89, P91, P93, P95, P97, P100, P101, P103, P105, P107, P109, P111, P113, P114 to P118, P120, P122, P123, P125, P127, P.129, P131, P133, P135, P137, P139, P.140, P142, P143, P145, P147, P.148, P150, P152, P154 to P158, P160, P162, P163, P165, P167, P169, P171, P172, P174, P176, P178, P180, P182, P183, P185, P187 to P191, P193, P195, P197, P198, P201, P203, P205, P207, P209, P210, P.212, P214, P216, P218, P220, P222, P223, P225, P227, P229, P231, P232, P234, P235, P237 to P239, P243, P245, P247, P249 and P251 respectively. (b) The second accused closed the business without returning the amounts collected from the above depositors and subscribers. The said depositors and subscribers have given complaints to the concerned police under Exs.P254, P2, P4, P6, P9, P11, P7, P17, P19, P21, P23, P25, P27, P29, P31, P34, P36, P38, P40, P42, P44, P46, P48, P53, P56, P58, P60, P63, P65, P68, P70, P72, P74, P76, P78, P80, P82, P85, P87, P90, P92, P94, P96, P98, P102, P104, P49, P106, P110, P112, P52, P121, P124, P126, P128, P130, P132, P134, P136, P138, P141, P144, P146, P149, P151, P153, P159, P161, P164, P166, P168, P170, P173, P175, P177, P179, P181, P184, P186, P192, P194, P196, P199, P202, P204, P206, P208, P211, P213, P215, P217, P219, P221, P224, P226, P228,P230, P233, P236, P242, P244, P246, P248, P250 and P252 respectively. (c) P.W.116 Dayanidhi, Inspector of Police, Economic Offences Wing, on the strength of Ex.P254 complaint given by P.W.1, registered a case in Crime No.3/2000 under Ss 409, 420 and 120(B) of I.P.C. and prepared Ex.P283 F.I.R. He examined the witnesses and recorded their statements. On the basis of the order of the Superintendent of Police, P.W.116 registered the case in Crime No.1/2000 and altered the case into Ss 409, 420 and 120(B) of IPC and Ss 3, 4 and 5 of T.N.P.I.D. Act, 1997 and prepared Ex.P274 F.I.R. The first accused Company was searched by P.W.116 in the presence of P.W.109 Raja. On 12.2.2000, he conducted search at the shops of the second accused and his wife Indhirani. He seized 29 movable properties and other documents from the XL Service Centre run by A-2 and A-3. He also seized 16 movable properties from the XL Finance. He arrested A-2 in the presence of P.W.110 Meganathan and the other witness Loganathan. He recorded the confessional statement voluntarily given by A-2. From the residence of the daughter of A-2 namely Kamala, he seized 7 gold ornaments under Ex.268 mahazar. From the residence of another daughter of A-2 he recovered 7 gold ornaments under Ex.P270 mahazar. He arrested the fourth accused on 12.2.2000. On 13.3.2000, he arrested the third accused. He sent the arrested accused for judicial custody. He seized the rental advance amount of Rs.5,000/- given by the second accused to the owner of the premises, where the said XL Finance was run by the accused, under Ex.P271 mahazar. He seized Rs.40,000/- to be given to the second accused by P.W.115 Bharath, under Ex.P272 mahazar. He also seized the rental advance of Rs.2,10,000/- given by A-2 to P.W.111 Indhumathi in the presence of witnesses Vijayakumar and Durairaj under Ex.P275 mahazar. Since P.W.116 was transferred, he handed over the investigation to P.W.117 Ebinezar. P.W.117 took up further investigation and examined the witness Kumar and recorded his statement. On completion of investigation, P.W.117 laid a charge sheet against the accused under Ss 409, 420 and 120(B) of I.P.C. and Ss 4, 5 and 6 of the Tamil Nadu Prize Chits and Money Circulation Scheme (Banning) Act and S.5 of the T.N.P.I.D. Act. He received the complaints given by the witnesses Iyyappan, Nagamani, Premanand, K.R.Devarajan and Merlin Issac and submitted the altered final report on 16.11.2000 under Ex.P117.

(3.) In order to prove its case, the prosecution has examined 117 witnesses and marked 275 exhibits. After the completion of the prosecution evidence, the accused were questioned under S.313 of Cr.P.C. as to the incriminating circumstances found in the evidence of the prosecution witnesses. One P.S.Ranganathan, Manager, Indian Bank was examined as D.W.1, while the second accused was examined as D.W.2, and 4 exhibits were marked. On hearing both sides and making scrutiny of the available materials, the trial Court found the appellants/accused guilty for the said offences and sentenced them as stated supra. Against the finding of the trial Court, the appellants/A-1 and A-2 have brought forth this appeal.