V REVATHI Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The Appellant/A-1 was convicted by the lower Court (Principal Sessions Court, Kurnool) by judgment dated 18.01.2006 in C.C. No.6 of 2004 under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999 (in short, the 1999 Act) and was sentenced to rigorous imprisonment of one year and fine of Rs.50,000/- and in default to simple imprisonment of five months. Questioning the same, A-1 filed this appeal. In the lower Court, A-1 and A-2 who are daughter and father, faced trial for charges under Sections 420 I.P.C and Section 5 of the 1999 Act. In the same judgment, the lower Court found A-1 not guilty of the charge under Section 420 I.P.C and A-2 not guilty under both the charges.

(2.) It is prosecution case that A-1 and A-2 started unauthorised financial establishment in Kothapeta Street of Kurnool town and floated two chits of the values of Rs.1,00,000/- and Rs.50,000/- and collected amounts by way of instalments from the subscribers and failed to pay back the subscription amounts to the depositors who subscribed to those chits. Plea of the accused is one of total denial and not guilty. During trial in the lower Court, the prosecution examined the depositors/subscribers of the chit as P.Ws 1 to 18 and the police officers as P.Ws 19 and 20 and marked Exs.P-1 to P-13; and Exs.D-1 to D-3 were marked on behalf of the accused. After considering the material on record, the lower Court found A-1 alone guilty under Section 5 of the Act and passed the said conviction and sentence against her.

(3.) In this appeal, senior counsel appearing for the appellant contended that there is no proper and reliable evidence relating to the appellant running private chit fund business and that in any event, running of chit business and any failure on the part of A-1 in her commitments in that chit business do not come within the purview of the 1999 Act in as much as collection of subscriptions in chit transaction does not come under 'deposit' under Section 2(b) of the Act and will not make A-1 a 'financial establishment' as defined under Section 2(c) of the Act. It is further contended that there is specific enactment to deal with running of chits and that therefore any contravention in the chit fund business by any person is governed by only the Andhra Pradesh Chit Funds Act, 1971 and will not attract liability under Section 5 of the 1999 Act.