Sunitha Gandham

APEG010039832016

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS

ACT–CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST

GODAVARI AT RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026

CALENDER CASE NO.07/2016

Complainant::State-Represented by The Inspector of Police, Amalapuram Town Police Station.

Represented by::Sri R.Prasad and Sri K.Radhakrishnam Raju, Public Prosecutors, East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

2 C.C.No.7/2016 PDJC, Rjvm 6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 10.11.2015

Date of First Information Report:: 10.11.2015

Date of Charge sheet:: 27.07.2016

Date of framing of charges:: 15.02.2019

Date of commencement of evidence :: 06.03.2024

Date of which judgment is reserved:: 02.03.2026

Date of Judgment:: 16.03.2026

Date of sentencing order, if any:: 16.03.2026 3 C.C.No.7/2016 PDJC, Rjvm

ACCUSED DETAILS

Rank of the accused::Accused No.1

Name of the accused::Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.2

Name of the accused::Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its Md. Busim Venkata Nagavenu @ Venu.

Rank of the accused::Accused No.3

Name of the accused::BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.4

Name of the accused::Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

Rank of the accused::Accused No.5

Name of the accused::BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

Rank of the accused::Accused No.6

Name of the accused::Busim Gowthami, D/o.Venkata Nagavenu @ Venu,23years,SCMala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.7

Name of the accused::Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

4 C.C.No.7/2016 PDJC, Rjvm Rank of the accused::Accused No.8

Name of the accused::Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused::Accused No.9

Name of the accused::Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused::Accused No.10

Name of the accused::Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Date of arrest::Accused No.1 on 11.12.2015 Accused No.2 is Firm Accused No.3 on 1.12.2015 Accused No.4 on 27.11.2015 Accused No.5 on 27.11.2015 Accused No.6 on 23.12.2015 Accused No.7 on 21.12.2015 Accused No.8 on 27.11.2015 Accused No.9 on 23.12.2015 Accused No.10 (died)

Date of release on bail::Accused No.1 on 3.3.2016 Accused No.2 is Firm Accused No.3 on 02.03.2016 Accused No.4 on 21.12.2015 Accused No.5 on 15.12.2015 Accused No.6 on 02.03.2016 Accused No.7 on 21.12.2015 Accused No.8 on 21.12.2015 Accused No.9 on 29.03.2017 Accused No.10 (died)

Offences charged with::Under Sections 120-B, 417, 420, 201, 411 r/w 34 of Indian Penal Code and under Section 5 of Andhra Pradesh Protection of 5 C.C.No.7/2016 PDJC, Rjvm Depositors of Financial Establishment Act, 1999.

Whether acquitted or ::Accused Nos.1, 2, 3 and 6 are convicted convicted Accused Nos.4, 5, 7 and 9 are acquitted.

Sentence imposed::

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offence punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of Criminal Procedure.

Period of detention::Accused No.1 from 11.12.2015 to 3.3.2016 undergone during trial Accused No.3 from 1.12.2015 to 2.3.2016 for purpose of Section Accused No.6 from 23.12.2015 to 2.3.2016 428 Cr.P.C.

This case has come on 2.3.2026 for final hearing before me in the presence of Sri R.Prasad and Sri K.Radhakrishnamraju, Public Prosecutors for prosecution and of Sri Ch.Venkateswararao, counsel

for accused Nos.1 to 6, Sri S.S.Prakasarao, counsel for accused No.7

and Sri I.Rambabu, counsel for accused No.9 and the matter having stood over for consideration to this day, this court delivered the following:- 6 C.C.No.7/2016 PDJC, Rjvm

J U D G M E N T

1.The Sub Divisional Police Officer, Amalapuram laid Charge sheet in

Crime No.413/2015 of Amalapuram Town Police Station of the offences under Sections 120-B, 411, 417, 420, 201 r/w.34 of and 411 of Indian

Penal Code (herein after referred to as ‘the Code’) r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and Section 5 of the

Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 (herein after referred to as ‘the Act, 1999), against the accused

Nos.1 to 10.

2.Case of the prosecution, in brief, is thus:

a)Accused No.1 is resident of Sivakodupalem, accused No.3 is wife of accused No.1, accused No.4 is resident of Nagarampalem, accused

No.5 is younger sister-in-law of accused No.1, accused No.6 is daughter of accused Nos.1 and 3, accused Nos.7 and 8 are distant relatives of accused No.1. Accused Nos.1 to 8 are directors of company and accused No.9 is henchmen and accused No.10 is close associate of accused No.1.

b)Defacto complainants/PWs.1 to 6, 9 and 10 have given report alleging that they are residents of Amalapuram, Ambajipeta, I.Polavaram and Ainavilli villages and they joined as agents in accused No.2 company.

Accused No.1 approached them and represented himself as man power 7 C.C.No.7/2016 PDJC, Rjvm agent of Suvarna India Infra Project Limited (real estate), his company has got approval of Reserve Bank of India, has many branches in and around the state of Andhra Pradesh, they are developing the financial status of poor and would give 20% interest to the investors and accordingly, induced them to collect money and deliver money by way of recurring deposit and fixed deposit and thereafter, they came to know that the said company is closed without making any payments. When they questioned Managing Director, he stated that he has several immovable properties in Andhra Pradesh and Telangana and he would return the amounts to all the depositors.

c)Accused No.1 established a registered company under the name and style of Suvarna Real Estate Firm and opened branch office at shop bearing D.No.1-98, Amalapuram. Accused No.1 also established other companies in the names of Suvarna Infra Projects India Limited, Suvarna

Iron & Steel Manufacture Private Limited, Survarna India T.V. Channel

Private Limited, Prakash India Power Project Private Limited, Suvarna

India Vidhyut plant private limited, and accused No.3 to 8 are directors of suvarna real estate firm and subsequently, the name of Suvarna Infra

Project India Limited changed into Suvarna India Project Limited.

Accused Nos.1 to 8 with a deceitful, dishonest and fraudulent intention jointly conspired together, hatched plan to cheat the innocent public by 8 C.C.No.7/2016 PDJC, Rjvm way of investments, induced the victims to deliver lakhs of rupees, committed criminal breach of trust and thereby, cheated the victims to that effect. They also committed the offence under the companies Act.

Accused Nos.1 to 8 committed misappropriation and cheating to a tune of

Rs.99,42,980/- at various places of Andhra Pradesh and Telangana.

d)Basing on the report of defacto complainants, a case in crime

No.413/2015 of Amalapuram Town Police Station of the offences under

Sections 120-B, 406, 409, 417, 420, 411, 201 r/w.34 of Indian Penal Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under Section 5 of the A.P. Protection of Depositors of Financial

Establishment Act, 1999 was registered against the accused.

e)During the course of investigation, LW.1084/PW.47 examined witnesses, recorded their statements and came to conclusion that accused No.1 to 8 made believe several general public that they established several companies, collected deposits, investments, failed to repay the same. Accused Nos.9 and 10 who are henchmen and close associate of accused No.1 also participated in the crime.

f) On 20.4.2013, the company directors conducted general body meeting at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram for changing the name of the company and accused violated the provisions of Companies Act also, conspired with each other and has committed the 9 C.C.No.7/2016 PDJC, Rjvm offences under the Provisions of Indian Penal Code and A.P. Protection of

Depositors of Financial Establishment Act, 1999. Hence, the charge.

3.The case was taken on to file of the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and Section 5 of the Act, 1999.

4.On appearance of accused, copies of the documents were furnished.

5.When the accused Nos.1 to 10 were examined under Section 239

Cr.P.C., they pleaded not guilty. Learned Public Prosecutor and the learned counsel for the accused were heard regarding the charge. Upon considering the material on record, charge under Section 5 of the A.P.

Protection of Depositors of Financial Establishment Act, 1999 and under

Sections 120-B, 417, 420, 201, 411 r/w.34 of Indian Penal Code were framed against the accused, read over and explained to them in Telugu and they pleaded not guilty and claimed to be tried.

6. In support of its case, prosecution examined in all P.Ws.1 to 48 out of 1058 listed witnesses, and filed Exs.P.1 to P.74 documents and Ex.D1 is marked on behalf of the accused.

7. On the strength of the prosecution evidence, the accused Nos.

1 to 9 were examined under Section 313 Code of Criminal Procedure regarding the incriminating circumstances appearing against them in the 10 C.C.No.7/2016 PDJC, Rjvm evidence. They denied the same and reported no defence evidence.

Case against Accused No.10 is abated as he died on 18.10.2025.

8.Heard both sides and learned Public Prosecutor and defence counsel filed written arguments.

9.Now, the point that would arises for determination is:

“Whether the prosecution proved the guilt of accused beyond

reasonable doubt and if so, whether they are liable for the

offences with which they are charged”?

10. Case of the prosecution is thus:

Accused No.1 is Managing Director and accused Nos.3 to 8 are directors of accused No.2 company. Pws.1 to 6, 9 and 10 joined as agents in accused No.2 company. Accused No.1 approached the victims representing himself as a manpower agent of Suvarna India Infra Project

Limited, the company had Reserve Bank of India approval, it has several branches across the state of Andhra Pradesh, thy would improve the financial status of poor people by paying 20% interest on the investments.

Believing the deceitful words of accused Nos.1 to 8, thousands of victims invested money in accused No.2 company. Subsequently, the victims came to know that the said company is closed without making any payments and when questioned, Accused No.1, being the Managing

Director, assured that he owned several immovable properties in Andhra 11 C.C.No.7/2016 PDJC, Rjvm Pradesh and Telangana and promised to repay the deposit amounts.

Accused No.1 also established other companies in the names of

Survarna real estate firm, Suvarna Infra Projects India Limited, Suvarna

Iron & Steel Manufacture Private Limited, Survarna India T.V. Channel

Private Limited, Prakash India Power Project Private Limited and Suvarna

India Vidhyut plant private limited. Subsequently, the name of Suvarna

Infra Project India Limited is changed as Suvarna India Project Limited.

Accused Nos.1 to 8, with dishonest, fraudulent and deceitful intention, conspired together, induced innocent public to invest huge amounts and misappropriated Rs.99,42,980/-. Accused No.9 also participated in the crime. Pws.1 to 6, 8 and 10 who acted as agents set the criminal law into motion by giving Ex.P5 report.

11. Evidence:

During trial, out of 1058 witnesses, prosecution examined PWs.1 to

48. The witnesses may be categorized into six types and they are,

(i) Victims, (ii) Agents, (iii) Employees, (iv) Independent, (v) Mediators, and (vi) Official. Documentary evidence is also of two types i.e., one set is relating to victims and second one is official.

12 C.C.No.7/2016 PDJC, Rjvm

Description of witnesses

__________________________________________________

VictimsAgents/EmployeesIndependentMediatorsOfficial complaina nts

Pws.16 toPws.1 to 6,Pws.12, 14,Pws,7, 8, 11PWs.41 to Pws.40, 47 29, 31 to 33,9, 10, 13,1546and 48 35 to 3830,34,,39

Category of documents

______________________________

VictimsOfficial

Exs.P1 to P4, P6 to P49/Passbooks,Exs.P50 to P66/correspondence, cash receipts, fixed deposit receiptscopies of documents obtained from issued by the accused No.2 firm in theMinistry of Corporate Affairs, Office of name of victims/depositorsthe Registrar of Companies, Andhra Ex.P5/Complaint given to the police byPradesh relating to establishment of the victims. companies by the accused. Exs.P67 to P72/Relevant admissible portion of the mediators report. Exs.P73 and P74/First information report and rough sketch.

13 C.C.No.7/2016 PDJC, Rjvm

12. Arguments:

a) Prosecution:

i)Accused No.1 established accused No.2 company in the name and style of Suvarna Infra Projects India Limited at Amalapurm, wherein accused Nos.3, 4, 6 and 7 are Directors. Accused No.1 also established four other private limited companies, and all the five companies were functioning from the same premises bearing D.No.3-1-98, Ganapathi

Plaza, Main Road, Amalapuram. Accused No.2 appointed employees and agents to collect deposits from the general public and induced them with a false promise of 20% interest.

ii)Accused Nos.1 to 8 collected an amount of about Rs.14 crores from thousands of investors, issued bonds in the names of Suvarna Real

Estate and receipts in the name of Suvarna India, and thereafter closed the company in the year 2014 without repaying any amount to the victims.

iii)Accused Nos.5, 8, 9 and 10 who are legal advisers and close associates of Accused No.1 also participated in the offence and in pursuance of their criminal conspiracy, accused misappropriated the amounts collected from the public, purchased immovable properties in the

States of Andhra Pradesh and Telangana.

iv)Earlier, Accused No.1 worked as a Marketing Manager in Sahara

India and having gained experience in mobilizing public funds, he 14 C.C.No.7/2016 PDJC, Rjvm conspired with other accused made false representations, dishonestly induced the victims to part with money and thereby, cheated them.

v)Oral evidence adduced by the prosecution coupled with the documentary evidence clearly establishes the conspiracy, inducement, collection of huge amount from thousands of people and misappropriation.

vi)Having worked in other financial institutions like Sahara India and having gained knowledge to escape from the liability intentionally issued receipts and bonds with other company names with a criminal conspiracy to cheat the general public.

vii)Though some of the accused are resigned from the post, they are also liable as they were present at the time of collection of deposit.

viii)Accused failed to adduce any evidence to show animosity between them and the prosecution witnesses.

b) Defence:

Having mentioned the material portion of evidence of all the witnesses, learned counsel for the accused argued through the written arguments as follows:-

i)Prosecution failed to secure certificate of registration of accused

No.2 company, registered a false case, and after lapse of nine years, filed certified copy of certificate of registration.

15 C.C.No.7/2016 PDJC, Rjvm ii)Prosecution failed to furnish all the documents as required under

Section 207 of Code of Criminal Procedure.

iii)Without any competency, Inspector of police/PW.47 registered seven crimes and without verifying the same on correct lines,

PW.48/Deputy Superintendent of Police conducted further investigation, filed charge sheets and both the officers are not competent persons to conduct investigation and file charge sheets.

iv)Investigating Officers prepared 161 Code of Criminal Procedure statements of all the witnesses in a copy and paste method.

v)The bonds and receipts which are relied upon by the prosecution do not contain the signatures of any of the accused.

vi)There are several inconsistencies in the evidence of prosecution witnesses. Most of the witnesses are not identified accused Nos.3 to 9.

vii)There is neither oral nor documentary evidence to show that the accused committed any offence of the offences with which they are charged.

viii)Accused Nos.3 to 9 are also no way concerned with the commission of offence. With the help of stock mediators and some other persons, prosecution prepared documents in Amalapuram Town Police

Station.

16 C.C.No.7/2016 PDJC, Rjvm xi)Prosecution utterly failed to produce documents showing assets of the accused and finally, relied upon following judgments:

1. Yousuf Bin Awad @ Yousauf Vs. State through Inspector of Police 1

2. Arnol Samadhan Nikam Vs. The state of Maharashtra 2

3. J.P.S. Enterprises and another Vs. State 3

13.Point:

a)Admitted facts are that basing on the reports of different persons seven crimes are registered for the same offences. Defacto complainants and victims in all the cases are different. Transactions are also different.

In all seven crimes vide C.C.Nos.1/2016 to 6/2016 and this case, PW.48 laid charge sheets of the same offences. Cognizance is taken for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and Section 5 of the Act, 1999 and along with this case, five other cases vide C.C.Nos.2/2016 to 6/2016 are pending and one more case vide

C.C.No.1/2016 is ended in acquittal as there was no material evidence in that case to prove the guilt of the accused. Generally, all the cases have to be tried and disposed of together, to avoid multiplicity of verdicts. But, one of the case in C.C.No.1/2016 was disposed in the year 2019 itself.

So, all the remaining six cases including this case are taken up together

1. 2015 (3) ALT (CRL.) 171 (AP)

2. Crl. Petition No.1091/2025 of Hon’ble High Court of Judicature at Bombay bench at Aurangabad.

3. C.A.No.1048/2000, dt.27.7.2005 of Hon’ble High Court of Madras.

17 C.C.No.7/2016 PDJC, Rjvm for examination of witnesses, arguments etc. C.C.Nos.2/2016 to 6/2016 are also posted today for judgments.

b)Having considered the material placed by the prosecution, Charge under Section 5 of the the Act, 1999 and under Sections 120-B, 417, 420, 201, 411 r/w.34 of the code is framed. Now, it is to be seen that whether prosecution proved all the ingredients of the offences with which accused Nos.1 to 9 are charged. Since charge is framed under several sections, it is apposite to consider the following ancillary points, for better appreciation, to avoid repetition and clear findings.

14.Ancillary points:

i). Establishment of accused No.2 company and its directors.

ii). Whether miscarriage of justice is done to the accused for

conducting investigation by PWs.47 and 48 and launch

prosecution by PW.48?

iii). Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

iv). Wether charge under Section 120B, 201, 417 and 420 of Indian

Penal Code is sustainable in addition to the charge under

Section 5 of the Act?

v). Any laches on the part of the investigating officers i.e., Pws.47

and 48, if so, would they affect total case to disbelieve the

version of prosecution as well as oral and documentary

evidence?

vi). Final out come of the case?

i)Ancillary point No.(i): Establishment of accused No.2 18 C.C.No.7/2016 PDJC, Rjvm company and its directors.

a)To prove the origin of crime i.e., establishment of accused No.2 company and other companies, prosecution relied upon the evidence of

Pws.40, 47 and 48 coupled with Exs.P50 to 66. Prosecution case reveals that accused Nos.1, 3 to 8 established accused No.2 company, accused

No.1 is Managing Director and others are directors of the said company and further, accused Nos.1 and 3 established four other companies and under the guise of establishment of several companies, all the directors lured general public, collected investments, misappropriated that amounts, cheated the general public and failed to repay any amounts to the victims. Before appreciating ocular evidence, it is appropriate to mention the details of companies and directors, and they are as follows:-

Sl. Exhibit Name of Issued by Date of Directors Whether

No. numbe the incorporatio any

r document n & other director

details. resigned

1.Ex.P51Company Ministry of 09.11.20111.Busim information Corporate Venkata CIN.No.U454-- relating to AffairsNaga Venu 00AP2011PL Suvarna (A1) C077328 India 2.Rajya Projects Registered lakshmi Limited Address: Busim (A3) D.No.3-1-98,

3. Busim Ganapati Gowthami Plaza, Main (A6) Road, Amalapuram- 19 C.C.No.7/2016 PDJC, Rjvm 533201.

2Ex.P52Certificate Registrar of09.11.2011 of Companies, CIN.No.U454-- IncorporatioAndhra 00AP2011PL n relating toPradesh C077328 Survarna India Infra Registered Projects Address: India Limited. D.No.3-1-98, Ganapati Plaza, Main Road, Amalapuram- 533201.

3Ex.P53Fresh Registrar of23.04.2013 certificate ofCompanies, -- incorporatioAndhra n, Pradesh CIN.No.U454 consequent 00AP2011PL upon C077328 change of name Registered relating to Address: Survarna D.No.3-1-98, Infra Ganapati Projects Plaza, Main India Road, Limited Amalapuram- 533201.

4Ex.P54List of Registrar --1.Busim directors of Companies,Venkata M/s.SurvarnAndhra Naga Venu a India Pradesh(A1), ProjectsManaging Director, 20 C.C.No.7/2016 PDJC, Rjvm

2. Rajya Lakshmi Busim (A3), Director 3.Phanendr Yes, On a Desai 15.5.2014 Kaneti (A4), Director 4.Vinod Yes, On Battu (A7), 30.11.12 Director 5.Busim Gowthami (A6), Director

5.Ex.P55Company Ministry of 31.10.20121.Busim Information Corporate Venkata CIN.No.U271-- relating to affairsNaga Venu 00AP2012PT Survarna (A1) C083909 India Iron 2.Rajya and Steel Registered lakshmi Manufacturi Address: Busim (A3) ng Private Limited D.No.3-1-98, Ganapati Plaza, Main Road, Amalapuram- 533201.

6Ex.P56Certificate Registrar of31.10.2012 of Companies, CIN.No.U271-- incorporatioAndhra 00AP2012PT n relating toPradesh C083909 Survarna India Iron Registered and Steel Address:

21 C.C.No.7/2016 PDJC, Rjvm ManufacturiD.No.3-1-98, ng Private Ganapati Limited Plaza, Main Road, Amalapuram- 533201.

7Ex.P57List of Registrar of1.Busim directors of Companies,Venkata -- Survarna Andhra Naga Venu India Iron Pradesh(A1), and Steel Director. Manufacturi 2.Rajyalaks ng Private hmi Busim Limited (A2), Director.

8.Ex.P58Company Ministry of 22.1.20131.Busim information Corporate Venkata CIN.No.U403-- relating to affairsNaga Venu 00AP2013PT Prakash (A1), C085447 India PowerDirector. Projects Registered 2.Rajyalaks Private Address: hmi Busim Limited (A2), D.No.1-98, Director. Near Hanuman Theater, Edarapalli Guntur, Amalapuram- 533201.

9.Ex.P59Certificate Registrar of22.1.2013 of Companies, CIN.No.U403-- IncorporatioAndhra 00AP2013PT n relating toPradesh C085447 Prakash India Power 22 C.C.No.7/2016 PDJC, Rjvm Projects Registered Private Address:D.N Limitedo.1-98, Near Hanuman Theater, Edarapalli, Amalapuram- 533201.

10. Ex.P60List of Registrar of1.Busim Directors Companies,Venkata -- relating to Andhra Naga Venu Prakash Pradesh(A1) India Power 2.Rajyalaks Projects hmi Busim Private (A3), Limited Director 11Ex.P61Company Ministry of 15.11.20121.Busim information Corporate Venkata CIN.No.U923-- relating to affairsNaga Venu 00AP2012PT Supreme (A1) C084161 India TV

2. Rajya channel Registered Lakshmi Private Address: Busim (A3) Limited D.No.3-1-98, Ganapathi Plaza, Main Road,Amalap uram- 533201.

12Ex.P62Certificate Registrar of15.11.2012 of Companies, CIN.No.U923-- IncorporatioAndhra 00AP2012PT n relating toPradesh C084161 Supreme India TV Registered 23 C.C.No.7/2016 PDJC, Rjvm channel Address: Private D.No.3-1-98, Limited Ganapathi Plaza, Main Road,Amalap uram- 533201.

13Ex.P63List of Registrar of1.Busim Directors Companies,Venkata -- relating Andhra Naga Venu Supreme Pradesh(A1) India TV 2.Rajya channel Lakshmi Private Busim (A3) Limited 14Ex.P64Company Ministry of 28.1.20131.Busim information Corporate Venkata CIN.No.U401-- relating to affairsNaga Venu 02AP2013PT Survarna (A1) C085476 India Vidyut

2. Rajya Plant Registered Lakshmi Private Address: Busim (A3) Limited D.No.1-98, NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

15Ex.P65Certificate Registrar of28.1.2013 of Companies, CIN.No.U401-- IncorporatioAndhra 02AP2013PT n relating toPradesh C085476 Survarna 24 C.C.No.7/2016 PDJC, Rjvm India VidyutRegistered Plant Address: Private D.No.1-98, Limited NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

16Ex.P66List of Registrar of1.Busim Directors Companies,Venkata -- relating Andhra Naga Venu Survarna Pradesh(A1) India Vidyut 2.Rajya Plant Lakshmi Private Busim (A3) Limited

b)Admittedly, during the course of investigation, neither PW.47 nor

PW.48 collected single piece of document regarding establishment of accused No.2 company and laches on the part of the investigating officers would be discussed at a little later in ancillary point No.V. And, to show the establishment of accused No.2 company and other companies, during trial, prosecution took steps and after securing the documents vide

Exs.P50 to 66, filed the same through PW.40. In this regard, it is to be noted that it is not disputed by the accused about establishment of accused No.2 company and no where it is suggested that it was not 25 C.C.No.7/2016 PDJC, Rjvm established. Exs.P51, 55, 58, 61 and 64 are the proceedings issued by the Ministry of Corporate affairs and as per Ex.P51, initially accused No.2 company is established under the name and style of Survana India

Projects Limited/accused No.2 on 9.11.2011 and Ex.P52 is its certificate of incorporation with Corporation Identity Number (CIN)-U45400AP 2011PLC077328 and its paid up capital is Rs.5,00,000/-. As per Ex.P53, name of accused No.2 company is slightly changed as Suvarna India

Infra Projects Limited with same CIN number and accordingly, Ministry of

Corporate Affairs, Registrar of Companies, Andhra Pradesh issued proceedings vide Ex.P53 dated 23.4.2013 and when accused No.2 company was established, the directors were accused Nos.3, 4, 6 and 7 besides Managing Director i.e., Accused No.1 vide Ex.P54, whereas, accused No.7 resigned as director on 30.11.2012 and accused No.4 resigned as director on 15.5.2014. In this regard, learned counsel for the accused argued that having taken advantage of relationship of accused

No.7 with accused No.1, name of accused No.7 is shown in the list of directors and immediately after coming to know about the same, he resigned as director on 30.11.2012 and the same is recorded vide

Ex.P54. The same argument is advanced on behalf of accused No.4 also. Ex.P54 reveals that accused No.4 also resigned as director on 15.5.02014 i.e., almost prior to one year of giving complaint in this case and in the connected matters. So, record clearly reveals that though the 26 C.C.No.7/2016 PDJC, Rjvm names of accused Nos.4 and 7 are shown in the list of directors, they resigned even very long prior to giving reports and registration of first information report vide Ex.P73. As per Ex.P54, accused Nos.1, 3 and 6 continued as directors, out of which, accused No.1 is Managing Director of accused No.2 company. Accused Nos.3 and 6 are wife and daughter of accused No.1. Neither in the certificate of incorporation nor in the list of directors, names and other details of accused Nos.5 and 8 are find place and PW.40 also admitted the same. PW.40 who secured Exs.P50 to P66 also categorically stated that initially accused No.1 was Managing

Director and accused Nos.3, 4, 6 and 7 were the directors of accused

No.2 company and accused No.7 and 4 resigned as directors on 30.11.2012 and 15.5.2014 respectively, and all the five companies registered office is at H.No.3-1-98, Ganapathi Plaza, Main Road,

Amalapuram. So, it can safely be concluded that accused No.5 and 8 are no way concerned with the company. It is not the case of prosecution that accused No.9 either director or induced the general public and absolutely no evidence to that affect also. With regard to the liability of the resigned directors, discussion would be made in the forth coming ancillary point No.iii.

27 C.C.No.7/2016 PDJC, Rjvm

c)In addition to the accused No.2 company, accused Nos.1 and 3 also established four other nominal companies with nominal paid up capital under the names and styles of Survarna india Iron and Steel

Manufacturing Private Limited, Prakash India Power Projects Private

Limited, Supreme India TV Channel Private Limited and Survarna India

Vidyut Plant private Limited on 31.10.2012, 22.1.2013, 15.11.2012 and 28.1.2013 respectively. To that effect, certificates of incorporation also obtained vide Exs.P56, 59, 62 and 65 and further, Exs.P57, 60, 63 and 66 reveal that the accused Nos.1 and 3 are directors of the said companies.

d)For the foregoing reasons, this court came to conclusion that on 9.11.2011, initially accused No.2 company was established in the name and style of Suvarna India Projects Limited vide Ex.P51 and subsequently, name of the said company is changed as Suvarna India

Infra Projects India Limited vide Ex.P53 and originally, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were the directors of accused No.2 company and subsequently, accused Nos.4 and 7 resigned as directors and the same is accepted by the Registrar of Companies vide Ex.P54 and further, accused Nos.5, 8 and 9 are no way concerned with the accused No.2 company. Hence, this ancillary point is answered accordingly.

28 C.C.No.7/2016 PDJC, Rjvm ii) Ancillary point No.(ii): Whether miscarriage of justice is done to the accused for conducting investigation by PWs.47 and 48 and launch prosecution by PW.48?

a)Admittedly, Ex.P5 report is registered by PW.47/Inspector of Police for the offences under Sections 120-B, 411, 417, 420, 201 r/w.34 and 411 of Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies

Act, 2013 and Section 5 of the Act, 1999 vide Ex.P73. The same investigating officer i.e., PW.47 conducted investigation including examination of witnesses and collection of documents. PW.48/Deputy

Superintendent of Police conducted further investigation and laid charge sheet. Learned defence counsel argued that PWs.47 and 48 violated the mandatory requirement under Rule 5 (2) of Andhra Pradesh Depositors of

Financial Establishment Rules and they are not competent persons to conduct investigation and launch prosecution and further, all the documents relating to the case are not furnished to the accused as required under Section 207 of Code of Criminal Procedure and as such, investigation done by PWs.47 and 48 is illegal and to substantiate their version relied upon judgment of Hon’ble High Court of Andhra Pradesh in

Yousuf Bin Award @ Yousauf (supra). For better understanding

Section 4 of the Act, 1999 and Rule 5 are set out below:-

Section 4: Competent Authority: (1) The Government may, by notification, appoint an authority hereinafter called "the competent authority" to exercise control over the properties attached by the 29 C.C.No.7/2016 PDJC, Rjvm

Government under section 3. (2) The Competent authority shall have such other powers and discharge such other functions as may be prescribed, in addition to the powers and functions specified under this Act. (3) Upon receipt of the orders of the Government under section 3, the Competent authority shall apply within fifteen days to the Special Court constituted under this Act for making the ad-interim order of attachment absolute. (4) An application under sub-section (3) shall be accompanied by one or more affidavits, stating the grounds on which the belief that the financial establishment has committed any default or is likely to defraud, is founded, the amount of money or value of other property believed to have been procured by means of the deposits, and the details, if any, of persons in whose names such property is believed to have been invested or purchased out of the deposits or any other property attached under section 3

Rule 5 (2):-Where the competent authority satisfied or has reason to believe that the financial establishment has committed a default punishable under Section 5 of the Act, the Competent Authority shall be competent to launch prosecution before the Special Court against the Financial Establishment and any person responsible for the management of the affairs of the Financial Establishment including the promoter, manager or member of the Financial Establishment for levy of penalty under Section 5 of the Act.

b)Having considered G.O.Ms.No.346, Home (Gen.B), dated 14.11.2000, sub Rule 2 is added to Rule 5 and as per this rule, competent authority has to launch prosecution before the Special Court, against the financial establishment or the persons responsible for the management of its affairs. In this regard, Additional Director General of police, C.I.D. is appointed as competent authority vide G.O.Ms.No.193,

Home (Gen.B), dated 23.8.2001 issued under Section 4 of the Act, 1999.

In the judgment relied upon by the learned defence counsel in Yousuf 30 C.C.No.7/2016 PDJC, Rjvm Bin Award @ Yousauf (supra), having considered both the government orders dated 14.11.2000 and 23.8.2001 and also having considered the facts and circumstances of that case, Hon’ble High Court of Andhra

Pradesh set aside the conviction and sentence passed by the trial court for the offence under Section 5 of the Act, 1999. Facts of the said case are, originally first information report was not registered of the offence under Section 5 of the Act, 1999 and charge sheet was also not laid for the said offence and subsequently, that too, after framing charge, the

Inspector of Police, WCO Team-III, Hyderabad had filed memo requesting the court to add Section 5 of the Act, 1999.

c)As it is stated above, in the present case at hand, first information report was registered for the offence under Section 5 of the Act, 1999 along with the provisions under Indian Penal Code and other offences and charge sheet also laid for the same offences. It is not in dispute that neither PW.47 nor PW.48 nor the police officer in the cadre of Inspector of

Police or Deputy Superintendent of Police are appointed as competent authority to conduct investigation or launch prosecution. In the aforementioned case relied upon by the accused, prosecution suddenly introduced Section 5 of the Act, 1999 and in that case, it seems, accused not admitted establishment of company and as such, absolutely, it was surprise to them and since miscarriage of justice is caused, Hon’ble High 31 C.C.No.7/2016 PDJC, Rjvm Court set aside the conviction. But, in this case, it is the admitted case of accused that accused No.2 company is established by accused No.1 and others. Charge sheet also laid for the offence under Section 201 of

Indian Penal Code on the allegation that the accused caused disappearance of documentary evidence including the certificate of incorporation, list of directors, account books etc., from the place where the accused No.2 company is established vide Ex.P52. So, the argument of the learned counsel for the accused that for non supply of relevant documents regarding establishment of company vitiates the trial cannot be taken into consideration. Added to it, during trial when Exs.P51 to 66 filed and admitted in the evidence, accused did not dispute the said documents and moreover, categorically admitted the same in the evidence of investigating officers and other witnesses.

d)To consider the core point that whether total case is vitiate for conducting investigation and launching prosecution by a person who is not competent, it is appropriate to refer to that before bifurcation of both the states of Andhra Pradesh and Telangana, the aforementioned

Government Orders dated 14.11.2000 and 23.8.2001 are issued in respect of competent authority and appointing Additional Director General of Police, C.I.D. as competent authority. After bifurcation, Government of

Telangana issued G.O.Ms.No.99 dated 5.9.2018 amending Rule 5(2) of 32 C.C.No.7/2016 PDJC, Rjvm the Telangana Protection of Depositors of Financial Establishment Act, 1999 to the effect empowering any police officer not below the rank of

Inspector of Police to launch prosecution under the Act 17/1999 and the

Rules framed thereunder with retrospective affect. When the said

G.O.Ms.No.99 is challenged, Hon’ble Division Bench of Hon’ble

Telangana High Court while deciding the writ petition in Mr.Syed Yousuf

Abbas Vs. State of Telangana 4 held that:- “The intention of the legislature by amending Rules with retrospective effect no way intends to regularize any flaw in respect of the trial. The Special Courts keeping in view the statutory provisions under the Act No.17 of 1999 and the Rules framed thereunder are proceeding ahead with the trial on the basis of the material brought before the Special Courts by the competent authority or by any police officer and merely because investigation has been carried by any police officer not below the rank of Inspector of Police prior to 05.09.2018, it does not mean that all the misdeeds of the petitioners can be wiped out as prayed by the petitioners. The petitioners' contention is that the amendment and the Rules has been done only with a view to object to nullify the Judgment delivered by this Court in Criminal Appeal No.1576 of 2005 and batch decided on 01.04.2015. In the considered opinion of this Court, the plea canvassed by the petitioners is ill-founded.

It does not nullify any Judgment. The act of the petitioners was certainly an offence earlier also and it is an offence under the amendment also and it is nobody's case that the act committed by the petitioners has been made an offence by amending the Act retrospectively”.

e)The said Government order is challenged before the common High

Court by duly issuing notice to the State Government. Admittedly, either after bifurcation of both the states of Andhra Pradesh and Telangana or

4. Writ petition No.40775 & 40962/2018 33 C.C.No.7/2016 PDJC, Rjvm after establishment of our Hon’ble High Court of Andhra Pradesh, State

Government of Andhra Pradesh has not issued similar Government order authorizing the Inspector of Police to launch prosecution. In this regard, it is to be noted that in R.A.H. Siguran vs. Shankare Gowda @ Shankara & Anr 5in which,Hon’ble Apex Court categorically held that unless accused proves that miscarriage of justice is done to him, the trial should not be vitiated. Though the said case relates to the Immoral Traffic Act, by referring several precedents from 1955, Hon’ble Apex Court held the said principle.

f)In H.N. Rishbud and Anr. Vs. State of Delhi 6 the question considered by the Hon’ble Apex Court was whether after the court takes cognizance, trial can be held to be vitiated merely on the ground that investigation was invalid and answering in the negative, it was held that if the plea of invalidity of investigation is raised at sufficiently early stage, the court, instead of taking cognizance direct reinvestigation by competent investigating officer. But, after cognizance is taken the trial cannot be quashed for invalidity of investigation.

The observations in the said judgment are as follows:- “9. The question then requires to be considered whether and to what extent the trial which follows such investigation is vitiated. Now, trial follows cognizance and cognizance is preceded by investigation. This is undoubtedly the basic scheme of the Code in respect of cognizable 5. (2017) 16 SCC 126 6 AIR 1955 SC 196 34 C.C.No.7/2016 PDJC, Rjvm cases. But it does not necessarily follow that an invalid investigation nullifies the cognizance or trial based thereon. Here we are not concerned with the effect of the breach of a mandatory provision regulating the competence or procedure of the Court as regards cognizance or trial. It is only with reference to such a breach that the question as to whether it constitutes an illegality vitiating the proceedings or a mere irregularity arises. A defect or illegality in investigation, however serious, has no direct bearing on the competence or the procedure relating to cognizance or trial. No doubt a police report which results from an investigation is provided in Section 190 of the Code of Criminal Procedure as the material on which cognizance is taken. But it cannot be maintained that a valid and legal police report is the foundation of the jurisdiction of the Court to take cognizance.

While no doubt, in one sense, clauses (a), (b) and (c) of Section 190(1) are conditions requisite for taking of cognizance, it is not possible to say that cognizance on an invalid police report is prohibited and is therefore a nullity. Such an invalid report may still fall either under clause (a) or (b) of Section 190(1), (whether it is the one or the other we need not pause to consider) and in any case cognizance so taken is only in the nature of error in a proceeding antecedent to the trial. To such a situation Section 537 of the Code of Criminal Procedure which is in the following terms is attracted:

“Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered on appeal or revision on account of any error, omission or irregularity in the complaint, summons, warrant, charge, proclamation, order, judgment or other proceedings before or during trial or in any enquiry or other proceedings under this Code, unless such error, omission or irregularity, has in fact occasioned a failure of justice.” “If, therefore, cognizance is in fact taken, on a police report vitiated by the breach of a mandatory provision relating to investigation, there can be no doubt that the result of the trial which follows it cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice. That an illegality committed in the course of investigation does not affect the competence and the jurisdiction of the Court for trial is well settled as appears from the cases in Prabhu v.

35 C.C.No.7/2016 PDJC, Rjvm Emperor (AIR 1944 PC 73) and Lumbhardar Zutshi v. King (AIR 1950 PC 26). These no doubt relate to the illegality of arrest in the course of investigation while we are concerned in the present cases with the illegality with reference to the machinery for the collection of the evidence. This distinction may have a bearing on the question of prejudice or miscarriage of justice, but both the cases clearly show that invalidity of the investigation has no relation to the competence of the Court. We are, therefore, clearly, also, of the opinion that where the cognizance of the case has in fact been taken and the case has proceeded to termination, the invalidity of the precedent investigation does not vitiate the result, unless miscarriage of justice has been caused thereby”.

g)Further, in State of Haryana v. Bhajan Lal 7, Hon’ble Apex Court held as under:

“119. It has been ruled by this Court in several decisions that Section 5-A of the Act is mandatory and not directory and the investigation conducted in violation thereof bears the stamp of illegality but that illegality committed in the course of an investigation does not affect the competence and the jurisdiction of the court for trial and where the cognizance of the case has in fact been taken and the case is proceeded to termination, the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. See (1) H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], (2) Major E.G. Barsay v. State of Bombay [AIR 1961 SC 1762], (3) Munnalal v. State of U.P [AIR 1964 SC 28], (4) Sailendranath Bose v. State of Bihar [AIR 1968 SC 1292], (5) Muni Lal v. Delhi Admn. [(1971) 2 SCC 48] and (6) Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. However, in Rishbud case [AIR 1955 SC 196] and Muni Lal case [(1971) 2 SCC 48], it has been ruled that if any breach of the said mandatory proviso relating to investigation is brought to the notice of the court at an early stage of the trial, the court will have to consider the nature and extent of the violation and pass appropriate orders as may be called for to rectify the illegality and cure the defects in the investigation.

7. [1992 Supp (1) SCC 335] 36 C.C.No.7/2016 PDJC, Rjvm

h)And, in A.C. Sharma v. Delhi Admn 8, provision of Section 5-A again considered and held as under:

“15. As the foregoing discussion shows the investigation in the present case by the Deputy Superintendent of Police cannot be considered to be in any way unauthorised or contrary to law. In this connection it may not be out of place also to point out that the function of investigation is merely to collect evidence and any irregularity or even illegality in the course of collection of evidence can scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated. In H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], it was held that an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. When any breach of the mandatory provisions relating to investigation is brought to the notice of the court at an early stage of the trial the Court will have to consider the nature and extent of the violation and pass appropriate orders for such reinvestigation as may be called for, wholly or partly, and by such officer as it considers appropriate with reference to the requirements of Section 5-A of the Prevention of Corruption Act, 1947. This decision was followed in Munnalal v. State of U.P. [AIR 1964 SC 28] where the decision in State of M.P. v. Mubarak Ali [AIR 1959 SC 707], was distinguished. The same view was taken in State of A.P. v. N. Venugopal [AIR 1964 SC 33] and more recently in Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. The decisions of the Calcutta, Punjab and Saurashtra High Courts relied upon by Mr Anthony deal with different points: in any event to the extent they contain any observations against the view expressed by this Court in the decisions just cited those observations cannot be considered good law.

i)Added to it, this case comes under the purview of Section 460 (c) of

Code of Criminal Procedure, but not under Section 461 of Code of

Criminal Procedure. Further, except posing questions in respect of Rule

8. (1973) 1 SCC 726 37 C.C.No.7/2016 PDJC, Rjvm 5(2) to PWs.47 and 48 that they have to obtain permission from the

Superintendent of Police to register first information report and investigate the case and launch prosecution by following G.O.Ms.No.346, that too, by recalling them, accused did not raise any objection after registration of first information report, during investigation, before or after taking cognizance, before framing charge or during trial at the time of initial examination of PWs.47 and 48. Added to it, for the same offences, State

Government of Telangana which is bifurcated from the state of Andhra

Pradesh had issued G.O.Ms.No.99 authorizing the Inspector of Police to launch prosecution with retrospective affect. So, even other wise it can be inferred that the same cadre police official have competecy to launch prosecution and moreover, in this case, Deputy Superintendent of Police filed charge sheet.

j)To sum up, having given thoughtful consideration to the aforementioned propositions, an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby and further, function of investigation is merely to collect evidence and any irregularity or even illegality in the course of 38 C.C.No.7/2016 PDJC, Rjvm collection of evidence can be scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated.

[k)For the foregoing reasons, this court came to conclusion absolutely miscarriage of justice is not done to the accused for conducting investigation by PWs.47 and 48 and launching prosecution by PW.48 who is none other than Deputy Superintendent of Police.

iii) Ancillary point No.(iii): Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

a)It is already stated above that there is no dispute about the establishment of accused No.2 company and it is also not in dispute that accused No.1 was Managing Director and accused Nos.3, 4, 6 and 7 were directors at the time of establishment of accused No.2 company.

Further, Exs.P51, 52 and 54 reveal the same and further, name of accused No.2 is changed as Suverna India Projects Limited vide Ex.P53.

Before taking up appreciation in respect of this point, it is pertinent to refer

to the relevant provisions under the Act, 1999, which are extracted hereunder:

Section 2(b) and (c) of the Act reads as follows: “2-Definition:- In this Act, unless the context otherwise remains:

(a) xxxxxx

(b)‘Deposit’ means the deposit of a sum of money either in lumpsum or instalments made with a financial establishment for a fixed period, for interest or return in any kind; 39 C.C.No.7/2016 PDJC, Rjvm

(c)"Financial Establishment" means any person or group of individuals accepting deposit under any scheme or arrangement or in any other manner but does not include a corporation or a co-operative society owned or controlled by any State Government or the Central Government or a banking company as defined under clause (c) of section 5 of the Banking Regulation Act, 1949 (Central Act 10 of 1949).

Section 5 of the Act reads as follows:- Penalty for default - Where any financial establishment defaults in the return of the deposit either in cash or kind or defaults in the payment of interest on the deposit as agreed upon, every person responsible for the management of the affairs of the financial establishment including the promoter, Manager or Member of the financial establishment shall be punished with imprisonment for a term which may extend to ten years and with fine which may extend to rupees one lakh and such financial establishment shall also be liable for fine which may extend to rupees five lakh.

b)Now, coming to the facts and evidence of the case, it is already stated above that there are six categories of witnesses and two categories of documents. Out of which, first category of witnesses are victims and they are PWs.16 to 29, 31 to 33 and 35 to 38 and second category of witnesses are agents. Before appreciating the evidence of victims, it is apposite to appreciate the evidence of agents and agents- cum-victims who set the criminal law into motion vide Ex.P5 to follow sequence.

c) Evidence of Agents: (PWs.1 to 6, 9, 10, 13, 30, 34 and 39)

i)PWs.1 to 6, 9 and 10 stated in one voice that accused No.1 who is none other than Managing Director of Suvarna India Infra Projects

Limited/accused No.2 company which is situated at Ganapathi Plaza,

Cinema Road, Amalapuram informed to them that they established 40 C.C.No.7/2016 PDJC, Rjvm accused No.2 company with an intention to collect recurring deposits from the general public to pay interest at 20% on the deposit amount and also to pay 4% of commission to the agents and further, their company has license and also obtained permission from the Reserve Bank of India and made believe the witnesses that accused No.2 is well established company and accordingly, they joined as agents, collected amounts from the general public and further, they also deposited amounts in the accused No.2 company and as per the version of some of the witnesses, they directly paid amounts to the accused No.1 and some others paid the same to the employees of accused No.2 company, in the presence of accused No.1 and further they know all the directors.

ii)PW.10 further stated that while he was working in Sahara India

Limited, he has got acquaintance with accused No.1. PW.13 also stated that upon coming to know about the establishment of accused No.2 company, he approached the said company to provide employment as he was unemployee by then and as per the advise of office boy, he met accused No.1 and came to know that they have established accused

No.2 company and collected investments to pay 20% of interest on the said amounts and to pay 10% commission to the agents and accordingly, he joined as agent, collected amounts from the general public and handed over the same to the accused No.1. PW.30 stated that in the 41 C.C.No.7/2016 PDJC, Rjvm year 2013, accused No.1 appointed him as agent of accused No.2 company, he worked for two years and after collecting amounts from the general public, he used to deposit the same in the company and in turn, accused No.2 company used to issue bonds in the name of customers.

As per the version of PW.34, he joined in the accused No.2 company, collected amounts from LW.560/Tadi Rajeswari, and PW.39 testified that he also joined as agent in the accused No.2 company, collected amounts from 22 members and deposited the same in the accused No.2 company.

For better clarification, the details of amounts collected by Pws.1 to 9, 10, 13, 30, 34 and 39 and their personal deposits are mentioned hereunder:

S.NNumber ofCollected amountPersonal depositRelevant o.witness(Rupees)document/s 1PW.118,35,120/-14,500/- Exs.P1 to P4 2PW.25,43,600/-28,000/-Exs.P6 to 11 3PW.34,08,600/-30,000/-Exs.P12 to 18 4PW.424,10,900/-5,000/-Ex.P19 5PW.527,58,984/-1,20,000/-Ex.P20 6PW.66,85,160/-10,000/-Ex.P21 7PW.92,65,000/-20,000/-Exs.P22 and 23 8PW.103,39,868/----- 9PW.132,81,300/----- 10PW.3015,82,000/----- from 52 perons including the amount of LW.475/ Balaji vide Ex.P39 11PW.341,70,000/-3,00,000/-Ex.P43 12PW.3922,42,750/----- 42 C.C.No.7/2016 PDJC, Rjvm iii)So, as per the version of PWs.1 to 6, 9, 10, 13, 30, 34 and 39, they collected an amount of Rs.1,35,23,282/- and also made personal deposits of Rs.5,27,500/-. All the witnesses/agents have categorically stated that they were appointed by the accused No.1 as agents so as to collect amounts from the general public and deposit the same in the accused

No.2 company and further, they all know the directors and Managing

Director, they promised to pay 20% interest to the customers and accordingly, bonds/receipts/pass books are issued to them, to some of the agents as well as victims. Further, Pws.1 to 6, 9, 10 and 13 are none other than defacto complainants who set the criminal law into motion by giving Ex.P5 report.

iv)Learned counsel for the accused would argue that there is no proof to show that Pws.1 to 6, 9, 10, 13, 30, 34 and 39 were appointed as agents, collected amounts on behalf of accused No.2 company and deposited the same and further, neither accused No.1 nor accused No.2 appointed them as agents and as such, accused No.2 company is not committed any offence. Admittedly, except Ex.D1, there is no document to show that Pws.1 to 6, 9, 10, 13, 30, 34 and 39 are appointed as agents by accused No.1, however, they have consistently in one voice stated that they were appointed as agents by accused No.1, collected amounts to a tune of Rs.1,35,23,282/- and also deposited Rs.5,27,500/- and in this 43 C.C.No.7/2016 PDJC, Rjvm regard, it is to be noted that a charge under Section 120-B of Indian Penal

Code is also framed against the accused alleging that they conspired together, established accused No.2 company, collected amounts directly and through the agents.

v)Further, it is already stated above that along with accused No.2 company, accused Nos.1 and 3 who are none other than husband and wife also established four other nominal companies which are referred above. So, it shows that from the inception of establishment of accused

No.2 company and other companies, they violated the provisions of the

Act, 1999 and further, another charge under Section 201 of Indian Penal

Code is also framed for screening the evidence for removal of all the documents in respect of accused No.2 company and as per the version of prosecution, they could not secure single piece of document in the office of accused No.2 company. In the cross examination of all the witnesses, learned counsel for the accused elicited that Exs.P1 to 23 do not contain signature of accused No.1, seal in the name of Survarna Real estate is there on all the documents, some of the agents have not categorically stated before the investigating officer that they have given amounts either to the clerks or to the accused No.1. It is nowhere suggested that accused No.2 company is not at all established and their defence is that they never collected any amounts from any of the person and all the 44 C.C.No.7/2016 PDJC, Rjvm documents are fabricated. Learned counsel for the accused also elicited some formal inconsistencies in the evidence of PWs.1 to 6, 9, 10, 13, 30, 34 and 39 which do not thrown out the version of the prosecution and dislodge their testimonies.

d) Evidence of Victims: (PWs.16 to 29, 31, 33, 35 to 38)

i)All the witnesses testified consistently that upon believing the words of accused Nos.1 and 3 or accused No.1 or accused Nos.1, 3 and others about establishment of accused No.2 company at Gapanapthi Plaza,

Cinema road, Amalapuram and if they deposit amounts in their company, accused No.2 company would pay interest at 20% and accordingly, they all deposited amounts in their names and in the names of their family members vide Exs.P24 to 49, and in the cross examination of all the witnesses, all the suggestions posed by the learned defence counsel are denied, however, learned defence counsel elicited formal inconsistencies and omissions in respect of the statements which are not specifically given before the investigating officer with regard to the presence of either of the accused at the time of making payments, names of agents and further, all the witnesses are also admitted that that none of the bonds/receipts contain the name of accused No.2 company, however, they contain the name of Suvarna Real Estate company and the details of the witnesses, deposit amounts, documents etc., are stated as follows:

45 C.C.No.7/2016 PDJC, Rjvm WitnessDepositRelevantThrough whom amount is deposited or (rupees)documentany other reference. PW.168,500/-Ex.P24PW.1/agent PW.1710,000/-Ex.P25 Rambabu/agent PW.1812,000/-Ex.P26He know directors PW.191,10,000/-Exs.P27, 28Directly paid to the accused No.1 PW.201,00,000/-Ex.P29B.Sridharababu/agent. In the presence of accused Nos.1, 3, 5, one Manoj and others PW.2112,000/-Ex.P30PW.1. He know accused Nos.1, 3, 5 to 8 PW.2260,000/-Ex.P31PW.1/agent PW.234,00,000/Ex.P32He know accused Nos.1 and 2 PW.241,56,000/-Ex.P33His nephew and accused No.1 worked in Sahara India and accused No.1 asked him to furnish information to establish company for collecting deposits and he replied in the negative. PW.253,12,000/-Ex.P34He know the accused Nos.1 and 2 PW.261,20,000/-Ex.P35PW.5, he know accused Nos.1 to 3, 5 and 6 PW.271,01,000/-Ex.P36PW.5. for Rs.50,000/-He know the accused Nos.1 and 2. PW.281,10,000/-Ex.P37PW.5. for Rs.60,000/-He know the accused Nos.1 and 2. PW.292,50,000/-Ex.P38PW.6. He know the accused Nos.1 and 2 PW.3150,000/-Ex.P40PW.30. He know the accused Nos.1 to 3, 5 to 7 PW.3250,000/-Ex.P41PW.30. He know the accused Nos.1 and 2 PW.338,00,000/-Ex.P42Agent of Accused No.2 company Sanjeevarao came to his house along with accused No.1. PW.351,70,000/-Ex.P44PW.34 46 C.C.No.7/2016 PDJC, Rjvm PW.362,70,000/-Exs.P45 PW.34. and 46He know the accused Nos.1, 2 and 7 PW.371,35,000/-Ex.P47Nalli Ramarao. He know the accused Nos.1 and 2 PW.382,35,000/-Exs.P48, 49Nalli Ramarao. He know the accused Nos.1 and 2 ii)So, as per the version of the victims, they deposited an amount of

Rs.34,71,500/- by believing the words of accused No.1 and others, either through agents or directly. Some of the witnesses stated that they know accused Nos.1 and 2, some stated that they know accused Nos.3, 5 and 7 and some other witnesses stated that they know accused Nos.1 to 3, 5 to 7. Further, some of the victims stated that accused No.1 went to their houses along with agents and some of the victims testified that they approached accused No.2 company situated at Ganapathi Plaza along with agents and deposited amounts and except eliciting the material that the name of Suvarna real estate company is mentioned on the bonds and receipts, nothing more useful is elicited to disbelieve the version of victims. Learned counsel for the accused also elicited some formal inconsistencies in the evidence of PWs.16 to 29, 31, 33, 35 to 38 which do not thrown away the version of the prosecution.

e) Evidence of employees of accused No.2 (PWs.12, 14 and 15):

47 C.C.No.7/2016 PDJC, Rjvm

i) It came in the evidence of PW.12 that he know all the accused, accused No.1 is managing director of Suvarna India Infra Project Limited,

Ganapathi Plaza, Amalapuram, accused Nos.3 to 8 are directors of the said company, he came to know through some others about the establishment of the said company and accordingly, he went to the company and then, accused No.1 appointed him as accountant and along with him some other persons also joined as Branch Managers and agents in the said company. Further, the Branch Manager and agents used to collect deposits from the general public and used to deposit the same in the company and at the end of every day, himself and others used to hand over total deposit amounts to the accused No.1, company used to issue bonds and receipts and whenever any customer approached the company to withdraw the deposit amount, accused No.1 used to postpone the payment by saying that they invested the said amounts in the Reserve Bank of India and if they wait for another six months, he would pay additional interest and finally, company is closed without leaving any evidence and by removing total records and furniture from

Ganapathi Plaza and finally, victims gave report to the police.

ii)In the cross examination, he had admitted that he stated in the connected matters in C.C.Nos.1/2016 and 2/2016 that he gave seven similar statements in all the connected matters and since the learned 48 C.C.No.7/2016 PDJC, Rjvm defence counsel questioned about the documentary proof regarding his appointment, witness produced photo copy of order dated 1.3.2012 vide

Ex.D1. He has further stated that, as per Ex.D1, he was appointed as operational manager, but not accountant, and in Ex.D1, name of the company is mentioned as Suvarna India, Suvarna Infra Projects India

Limited and he denied other suggestions posed by the learned defence counsel stating that he fabricated Ex.D1 and he further admitted that in

C.C.No.2/2016, he stated that he does not have any documentary proof to show his appointment and for which, he gave explanation that thereafter, he searched for the appointment order, and could trace out it and some other formal material which is not useful to disbelieve the version of PW.12 is elicited in his cross examination.

iii)PW.14 testified that on 1.4.2012, he joined as accountant in

Suvarna India Infra Project Limited and initially, he worked for some period at P.Gannvaram and Muramalla and thereafter, he worked in the head office situated at Amalapuram, several branch managers and agents are appointed by the company and they used to collect deposits from the general public to run real estate business and Suvarna India

Infra Project Limited, accused No.1 is the Managing Director and accused

Nos.3 to 8 are directors of the said company, objectives of the company are to collect deposits from poor public, invest the same in the real estate 49 C.C.No.7/2016 PDJC, Rjvm business and pay deposit amount with 20% interest and further, general public used to come to the office to deposit amounts through agents and branch managers and they used to issue deposit bonds and receipts to the depositors and at the end of every day, they used to hand over total amount to the accused No.1. Further, after completion of maturity period also, accused No.1 failed to repay the amount, postponed the same on the ground that he invested the said amounts in other business and he would repay the same with additional interest and finally, the company is closed by removing all the records and furniture where accused No.2 is established and some of the victims gave report to the police. He also admitted in his cross examination that he gave evidence in the connected matters in C.C.Nos.1/2016 and 2/2016 that he gave similar statement in all the connected matters and denied the suggestions that he never worked in accused No.2 company and he had no acquaintance with accused No.1 and other accused and further, he pleaded ignorance about

DIN number of accused Nos.3 to 8.

iv)As per the version of PW.15, in the year 2013, he joined as accountant in accused No.2 company at Rajamahendravaram Branch, accused No.1 is managing director, accused Nos.3 to 9 are directors of the said company, its main office is situated at Ganapathi Plaza,

Amalapuram, objectives of the company are to run other business like 50 C.C.No.7/2016 PDJC, Rjvm real estate etc., and collect deposits from the general public and pay deposit amount with 20% interest, general public used to come to the branch office, Rajamahendravaram to deposit amounts through agents and branch managers, they used to issue deposit bonds and receipts to the depositors, at the end of every day, they used to hand over total amount to the accused No.1. Further, directors used to postpone the payment and on one day, when he went to the branch office,

Rajamahendravaram to attend work, it is found locked by removing total records and furniture and finally, some of the victims gave report to the police, and in the cross examination, he also stated that he gave evidence in the connected matters in C.C.Nos.1/2016 and 2/2016 that he joined in the company on 10.4.2012, accused No.9 took back his appointment letter when a meeting was conducted at Sivakodu. Further, he has stated he gave similar statement in all the connected matters and denied other suggestions posed by the learned defence counsel.

f) Evidence of independent witnesses (PWs.7, 8 and 11):

i)It came in the evidence of PW.7 that since 2011, he has been working as lodge boy in Ganapathi Plaza, Amalapuram, in the year 2013,

Suvarna India Infra Private Limited was established in the first floor by accused Nos.1, accused Nos.3, 5, 6 and others served as directors, he know all the said persons, public used to come to the said company to 51 C.C.No.7/2016 PDJC, Rjvm deposit amounts and after receiving amounts, company used to issue receipts and in the year 2015, company is closed, general public deposited amounts to receive excessive interest, company failed to repay the amounts, company people also taken away total records and furniture from the said building and in the cross examination, he has stated that in

C.C.No.1/2016, he pleaded ignorance about the affairs of the company, and further, he has stated that he has no evidence to show that he has been working as lodge boy in Ganapathi Plaza and denied other suggestions.

ii)PW.8/other independent witness testified that he has been working as lodge boy in Ganapathi Plaza for the last 20 years, in the year 2011,

Suvarna India Infra Private Limited was established in the first floor of

Ganapathi Plaza by accused No.1, he know one Madhavi and accused

No.3 who served as directors, public used to come to the said company to deposit amounts and after receiving amounts, company used to issue receipts, in the year 2014, company is closed, general public deposited amounts to receive excessive interest, company failed to repay the amounts, company people also taken away total records and furniture from the said building, and in the cross examination, he has stated that in

C.C.No.1/2016, he pleaded ignorance about the affairs of the company, and he has further stated that he has no evidence to show that he has 52 C.C.No.7/2016 PDJC, Rjvm been working lodge boy in Ganapathi Plaza and denied other suggestions.

iii)As per the version of PW.11, he is running a shop for sale of disposable items in the ground floor of Ganapathi Plaza, main road,

Amalapuram and in the year 2011, Suvarna India Infra Private Limited was established in the first floor of Ganapathi Plaza by accused Nos.1, 3, 6 and others, public used to come to the said company to deposit amounts and after receiving amounts, the said company functioned for four years, they failed to repay the amounts, company people also taken way total records and furniture, several persons came to the Ganapathi

Plaza and demand for repayment of amounts and then, company failed to pay the same, and in the cross examination, he had admitted that there is no document to show that he is running a shop in Ganapathi Plaza, he has not obtained any license from the municipality and other suggestions posed by the learned defence counsel are denied.

iv)PWs.7, 8 and 11 are independent witnesses and are cannot except document from them to prove their business and avocation. There is no reason to disbelieve the version of these witnesses. No animosity also attributed between them and the accused. It is not in dispute about establishment of accused No.2 company at D.No.3-1-98, Ganapathi

Plaza, main road, Amalapuram in the year 2011. Nothing useful material 53 C.C.No.7/2016 PDJC, Rjvm is elicited in their evidence. To sum their evidence, accused No.2 company is established in Ganapathi Plaza, main road, Amalapuram, several persons came there, deposited amounts and when they demanded for repayment, accused No.2 company failed to pay the same, closed the company, removed all documentary evidence and furniture.

g) Evidence of mediators (PWs.41 to 46):

As per the version of Pws.41 to 46, PW.48 called them and other mediators, to act as mediators and in their presence, PW.48 arrested accused Nos.1, 8, 9, 5, 6 and 4 vide Exs.P67 to 72 on the respective dates and places and there is no dispute about the arrest of all these accused. Admittedly, nothing is seized from either of the accused. So, in view of the provisions under the Evidence Act, admissible and relevant portions in respect of name and other details of the accused and their arrests are only marked. PW.48 also stated on the same lines of evidence of Pws.41 to 46. Formal suggestions are posed by the learned defence counsel regarding preparation of documents in the police station and they are denied by PWs.41 to 46.

h) Evidence of official witnesses (PWs.40, 47 and 48):

i)It is already stated above that the present station house officer i.e.,

PW.40 took steps, during trial, secured documents vide Exs.P50 to 66 regarding establishment of the accused No.2 company and other 54 C.C.No.7/2016 PDJC, Rjvm companies at bearing D.No.3-1-98, Ganapathi Plaza, main road,

Amalapuram. PW.47 is very crucial witness who registered Ex.P5 report of Pws.1 to 6 vide Ex.P73 for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of Indian Penal Code and under Section 5 of the A.P.

Protection of Depositors of Financial Establishment Act, 1999 and in his chief examination, he stated supporting the case of prosecution and in the cross examination, he has categorically admitted that he has not collected any document showing registration of accused No.2 company, he tried to get registered document of accused No.2 company, basing on the statements of victims, he came to conclusion that accused Nos.1, 3 to 8 are directors of accused No.2 company and that he has not produced any document to show that he tried to secure documents showing registration of accused No.2 company and part-I case dairy shows that none of the victim have handed over documents to show that the accused are directors of accused No.2 company. He has further admitted that he has not shown other companies as accused in this case, though several bonds are issued in that name, he has not done investigation relating to

Survarna Real estate, none of the victims have handed over documents issued in the name of accused No.2 company, he has not verified whether the bonds contain the signature of any of the accused, he has not collected any documents from the accused, after submitting resignation by accused No.1 to Sahara India private Limited, accused 55 C.C.No.7/2016 PDJC, Rjvm Nos.1, 3 and 6 established accused No.2 company. Further, in the part-I case diary there is no specification that accused No.9 is legal advisor and friend of accused No.1, accused No.4 is advocate from Visakhapatnam, accused No.8 is resident of Samisrigudem of Nidadavolu and accused

No.10 is resident of Sivakodu village of Razole Mandal. Further, he has not produced any document to show movable and immovable properties transferred in the name of accused No.10 and except the case diary file, he has not handed over any document showing registration of accused

No.2 company and that PW.1 has not stated about involvement of accused No.9 in settling the matter. Further, he has secured any document to show the agents and managers of accused No.2 company and after going through the provisions of Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999, he registered the report of defacto complainants.

ii)It is already stated above, being participated in the investigation including the registration of reports of PWs.1 to 6 vide Ex.P73 for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of Indian Penal

Code and under Section 5 of the A.P. Protection of Depositors of

Financial Establishment Act, 1999, PW.47 failed to secure single piece of document in respect of accused No.2 company and deposit amounts made by the victims. After registration of Ex.P73/first information report, 56 C.C.No.7/2016 PDJC, Rjvm he simply recorded the statements of the witnesses in this case and in the connected cases. Even as per his categorical admissions, he has not even take steps to obtain the documents relating to accused No.2 company.

iii)Learned counsel for the accused argued that none of the documents i.e., deposit/bond/pass book contain the name or seal of accused No.2 company and as such accused are no way concerned with

Exs.P1 to P49. Admittedly, neither the directors nor any concerned person of accused No.2 company signed Exs.P1 to P4, P6 to P49 and seal of Suvarna Real Estate is mentioned on the documents. In this regard, it is to be noted that name of accused No.2 company is Suvarna

India Projects Limited and accused Nos.1 and 3 are also established two other companies in the same name of Suvarna i.e., Suvarna India Iron and steel Manufacturing Private Limited and Suvarna India Vidyut Plant

Private Limited besides two other companies i.e., Prakash India Power

Projects Private Limited and Supreme India TV Channel Private Limited.

Further, several victims could not even say full name of the accused No.2 company and they simply stated as Suvarna Company, Suvarna India

Limited Company etc., Most of the victims studied 10th class or below 10th class, some are illiterates and some victims have completed graduation.

In this regard, it is to be noted that had the victims really had that much of knowledge and wisdom, they should not have believed the words of the 57 C.C.No.7/2016 PDJC, Rjvm accused who agreed to give very high rate of interest at 20% which is not at all believable. So, it shows that the accused No.2 company lured all the victims in such a way to believe their words. Assuming for the sake of arguments that the accused No.2 company not at all issued any bonds/receipts/pass books to the victims also, their oral testimonies cannot be ruled out, without any proper defence. Having admitted establishment of accused No.2 company, accused simply denied collection of amounts from the victims. Had they really had good intention of running company, they should have been filed documents showing their business. Added to it, there is no explanation from the accused why they established accused No.2 company and other companies, if they had no intention of collecting investments.

h)Learned defence counsel relied upon the following judgments:

a)J.P.S.Enterprises and another Vs. State 9 , hon’ble High Court of

Madras has held that:

“A careful reading of the judgment of the learned Special Judge would also indicate his finding that even though none of the documents produced by the prosecution bear either the name of the second accused or his signature, yet the other circumstances would indicate that both the accused are guilty of the offence. A careful scrutiny of the entire evidence let in by the prosecution would in my opinion indicate that such finding has no basis at all for the reason that in none of the documents, the second accused has subscribed his signature”

9. C.A.NO.1048/2000, dt.27.7.2005 of Hon’le High Court of Judicature at Madras 58 C.C.No.7/2016 PDJC, Rjvm The facts of the said case are entirely different. In view of the establishment of three companies in the same name i.e., Suvarna, there is every possibility of getting confused and moreover facts and circumstances of this case clearly indicate that from the inception of establishment of accused No.2 company, Managing Director and directors of the said company inducing general public.

b)Arnol Samadhan Nikam Vs. The State of Maharashtra 10 in which is held that:- “….we have noticed that even in serious offence, the investigating officer who had recorded the statements of the witnesses under Section 161 of the Code of Criminal Procedure, has literally made copy-paste of the statements. Even the paragraphs start with the same words and end with the same words. The culture of copy-paste statements is dangerous and may, in certain cases unnecessarily, give advantage to the accused persons. In such circumstances, the seriousness of the genuine case may get vanished….”.

In this case, charge sheet laid for the offences under Sections 306, 352, 504, 506 r/w.Section 34 of Indian Penal Code, whereas, in the present case at hand, there are more than 1000 witnesses and out of which, prosecution examined Pws.1 to 48 and as per the version of all the victims, agents, employees and independent witnesses either accused

No.1 or other accused or all the accused lured the victims to invest amount in accused No.2 company and promised to pay interest at 20% and further, they also made believe all the victims that the accused have

10.Criminal Application No.1091/2025, dated.29.4.2025 59 C.C.No.7/2016 PDJC, Rjvm several other companies, made investments in the Reserve Bank of India and as such, similar statements are given by all the victims before the police and also stated before this court. So, it cannot be said that they are copy paste statements and there is no substance in the evidence of prosecution witnesses.

i)So far as default committed by the accused No.2 company, evidence of Pws.1 to 39 clearly reveals that having collected amounts by way of deposits/investments, accused No.2 company committed default in return of deposits either in cash or kind and also committed default in payment of interest on the deposit as agreed upon and as such, Section 5 of the Act, 1999 applies to the present case at hand. So, it can safely be held that prosecution proved its case for the offence under Section 5 of the Act.

j)So far as liability of accused Nos.1, 3 to 8 is concerned, no doubt a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an 60 C.C.No.7/2016 PDJC, Rjvm individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision. In this regard, it is to be noted that as per Section 5 of the Act, 1999 every person responsible for the management of the affairs of the financial establishment including the promoter, manager or member of the financial establishment shall be punished with imprisonment.

k)It is already stated above that initially at the time of establishment of company, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were directors and subsequently, accused Nos.4 and 7 resigned as directors on 15.5.2014 and 30.11.2012 respectively. It is also not in dispute that accused No.4 submitted resignation within one year of establishment of accused No.2 company and accused No.7 submitted his resignation long prior to registration of Ex.P73/first information report. In this regard, learned defence counsel argued that having taken advantage of relationship with accused No.7 and friendship with accused No.4, accused No.1 included their names in the list of directors and immediately after coming know the said fact, they submitted resignation and the same 61 C.C.No.7/2016 PDJC, Rjvm is acknowledged by the Registrar of Companies vide Ex.P54. Added to it, none of the witnesses have specifically stated about the inducement made by accused No.4 and 7 and their involvement in collection of amounts from them. It shows that though their names are initially shown in the list of directors vide Ex.P54, they resigned very long prior to the registration of Ex.P73. PWs.40 and 47 also admitted that accused Nos.1, 3 and 6 are responsible as they continued as directors. Added to it, accused Nos.3 and 6 are wife and daughters of accused No.1. And, absolutely there is no material to show that accused Nos.5 and 8 are directors of accused No.2 company and PW.40 also categorically admitted the same and it is not the case of prosecution that accused No.9 is either director or induced the victims.

l)For the foregoing reasons, this court came to conclusion that the prosecution proved its case to direct punishment under Section 5 of the

Act, 1999 against accused Nos.1, 2, 3 and 6 as the accused No.2 company committed default in return of investments made by the victims and that accused Nos.4 and 7 are not at all participated in the affairs of accused No.2 company. Further, without there being any material, accused Nos.5 and 8 shown as directors of accused No.2 company.

iv) Ancillary point No.(iv) Wether charge under Section 120-B, 201, 417 and 420 of Indian Penal Code is sustainable in addition to the charge under 62 C.C.No.7/2016 PDJC, Rjvm

Section 5 of the Act?

a)Absolutely charge under Section 120-B, 201 and 420 of Indian

Penal Code is sustainable in addition to the charge under Section 5 of the

Act, 1999. Section 5 of the Act, 1999 specifically deals with the situation when there is failure of financial establishment to return or pay interest and Section 420 of the Code deals with broader initial fraudulent inducement to make the victim to part with their money.

b)It is settled law by catena of decisions that for establishing the offence of cheating, prosecution is required to show that the accused had fraudulent or dishonest intention at the time of making promise of representation. From his making failure to keep up promise subsequently, such a culpable intention right at the beginning i.e., at the time when the promise was made cannot be presumed. If there was absence of dishonest and fraudulent intention, the question of punishment under

Section 420 of the Code does not arise. Further, a bare perusal of

Section 415 r/w Section 420 of the Code would clearly lead to the conclusion that fraudulent or dishonest inducement on the part of the accused must be at the inception and not at a subsequent stage. Section 415 of the Code defines ‘cheating’ that whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do 63 C.C.No.7/2016 PDJC, Rjvm or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. So, as per

Section 415 of the Code, cheating can be by deception inducing any person fraudulently or dishonestly to do things or by inducing a person intentionally to do or omit to do things mentioned in Section 415 of the

Act. Deception has in it the element of misleading, of a making a person believe something which is not real. It implies causing a person to believe as true something that is false. According to the Webster’s New international dictionary the word ‘deceive’ indicates ‘inculcating of one so that he takes the false as true, the unreal as existent, the spurious as genuine’. It is immaterial whether the deception has the capability of imposing upon ordinary minds. What is required is that it must impose upon the mind of the person deceived. To hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfill the promise.

c)It is already stated above that charge under Section 417 and 420 of the Code is framed, on the ground of cheating. It is needless to say that

Section 420 of the Code is aggravated form of Section 417. Section 120A 64 C.C.No.7/2016 PDJC, Rjvm of the Code defines the offence of criminal conspiracy and punishment is provided under Section 120B of the Code. Criminal conspiracy under the

Code is an agreement between two or more persons to commit an illegal act or to commit a lawful act by illegal means and in other words, it is a criminal offence where two or more individuals agree to plan and execute a criminal act. It is needless to say that all conspirators share common liability for the offence, regardless of their individual roles in the execution of crime. Further, seriousness of the intended offence, the degree of planing involved, the role of each conspirator, and any mitigating circumstances such as the conspirator’s age or mental health have also to be taken into consideration. Section 201 of the Code deals with causing the disappearance of evidence.

d)To avoid repetition, evidence of Pws.1 to 39 who are victims, agents, employees and independent witnesses is not mentioning as it is already discussed in the aforementioned ancillary point and upon over all scrutinization of oral evidence coupled with Exs.P1 to P49, accused No.1 directly or through agents or friends and relatives made believe all the victims and agents that they established accused No.2 company with an objective to collect investments/deposits with a promise to pay interest at 20%, they have business affairs, established other companies, made investments in the Reserve Bank of India and accordingly, Pws.1 to 6, 9, 65 C.C.No.7/2016 PDJC, Rjvm 10, 30, 34 and 39 joined as agents, some of them also made investments to a tune of Rs.5,27,500/- and they collected amounts to a tune of

Rs.1,35,23,282/- and further, PWs.16 to 29, 31, 33, 35 to 38 invested/deposited an amount of Rs. 37,71,500/- directly or through agents or through relatives and without paying any amount, accused No.2 company is closed.

e)Further, employees/PWs. 12, 14 and 15 and independent witnesses/PWs.7, 8 and 11 also categorically stated about the inducement made by the accused Nos.1, accused No.2 company, accused Nos.3 and 6. The evidence clearly established the fraudulent and dishonest intention of the said accused before investing/deposting amounts by the victims. Facts and circumstances coupled with the evidence of witnesses clearly reveal that accused Nos.1, 3 and 6 who are none other than same family members conspired together, established accused No.2 company with an intention to cheat general public by collecting investments to get wrongful gain. Added to it, with the same conspiration, accused Nos.1 and 3 also established nominal companies vide Exs.P55 to P66, so as to easily induce the general public.

f)So far as liability of accused Nos.4, 5, 7 and 8 is concerned, it is already stated that there is absolutely no positive material against the accused Nos.5 and 8 and a finding is already given in the first and third 66 C.C.No.7/2016 PDJC, Rjvm ancillary points that accused Nos.5 and 8 are neither directors nor participated in the affairs of accused Nos.2 company. With regard to the role of accused Nos.4 and 7 also, a finding is given that without their knowledge, their names are included in the list of directors and immediately after coming to know the same, they resigned and the same is acknowledged by the Registrar of companies vide Ex.P54. Further, evidence of agents, employees and independent witnesses clearly reveal that suddenly accused No.2 company is closed and they also caused disappearance of evidence by removing total documents, furniture etc.,

g)So far as material against accused No.9 for the offences under

Sections 420, 120B and 201 of the Code, nowhere it is mentioned that

before collecting deposits also, accused No.9 joined hands with other

accused, induced the victims, shared conspiracy and helped to cause disappearance of evidence. It is the specific case of prosecution that accused No.9 convened a meeting at Sivakodu village, so as to settle the financial issues and he is none other than close friend of other accused.

During trial, it came in the evidence of Pws.1, 9, 14, 18 and 19 that accused No.9 convened a meeting at Sivakodu village and Pws.3, 13 and 17 testified that in the presence of accused No.9, accused No.1 convened a meeting and Pws.15 and 20 stated that accused No.9 informed that a meeting is convened and Pws.11 and 12 stated that they 67 C.C.No.7/2016 PDJC, Rjvm came to know through the customers that accused No.9 convened meeting at Sivakodu village. Except that no other material is available on record to come to conclusion with regard to the active participation and role played by the accused No.9 either to induce the victim to collect deposits or commit default.

h)It is already stated above that it is incumbent on the part of prosecution to show that the accused had fraudulent intention at the time of making promise or representation and if the accused had no fraudulent or dishonest intention to induce the victims, the question of punishment under Section 420 of Code does not arise. Added to it, except stating that accused No.9 is friend and legal advisor of accused Nos.1, PW.47 also stated nothing about participation and involvement of accused No.9 and further, PW.48 stated nothing against accused No.9. Further, in the cross examination, PW.47 had categorically stated hat PW.1 has not stated

before him that accused No.9 came to Ganapathi Plaza and he also

convened a meeting at Sivakodu village and in that meting accused No.9 assured on behalf of the accused Nos.1 and 2 to repay the deposit amount.

i)So, record clearly reveals that accused No.9 is no way concerned with the offence under Section 120B, 201, 417 and 420 of the Code and 68 C.C.No.7/2016 PDJC, Rjvm absolutely ingredients of the said provisions are not attracted against the accused No.9. Assuming for the sake of arguments, accused No.9 either convened meeting or conducted meeting also, even as per the version of the aforementioned witnesses, accused No.9 tried to settle the financial issues and absolutely it does not come under the purview of the punishable offences with which he is charged. So far as charge under

Section 411 of the Code is concerned, it is already stated that the case against accused No.10 is abated, as he died. Even otherwise also, prosecution has not produced any material to attract the ingredients of

Section 411 of the Code. In this regard, it is to be noted that there is no possibility to recover any amount from the accused as the prosecution failed to take steps in respect of the properties of accused Nos.1 to 3 and 6. Having obtained ad-interim order in respect of the properties of accused No.2 company, failed to take steps on judicial side to made absolute the attachment order.

j)For the foregoing reasons, this court without any doubt came to conclusion that prosecution has successfully established its case of the offences under Section 120B, 201, 420 of Indian Penal Code, against accused Nos.1, 2, 3 and 6 and failed to establish its case against accused Nos.4, 5, 7 to 9. Hence, this ancillary point is answered accordingly.

69 C.C.No.7/2016 PDJC, Rjvm

v)Ancillary point No.(v): Any laches on the part of the investigating officers i.e., Pws.47 and 48? If so, would they affect total case to disbelieve the version of prosecution as well as oral and documentary evidence?

i)At the cost of repetition, it is to be mentioned here that either at the time of registration of Ex.P73/first information report or during investigation or at the time of filing charge sheet or atleast before framing charge, either PW.47 or PW.48 secured documents showing establishment of accused No.2 company and deposits made by the victims as well as appointment orders issued to Pws.12, 14 and 15/employees and for which, during trial, learned Public Prosecutors took much strain to secure the said documents through the present investigating officer/PW.40 with great difficulty and faced challenges to file the said documents before this court and admit the same in the evidence of prosecution witnesses. The Investigation Officers i.e.,

Pws.47 and 48 have not acted diligently. Having stated that he had gone through the provisions of the Act, 1999, PW.47 gathered nothing and even as per his admission that except case diary file, he had not handed over any document to the Deputy Superintendent of Police/PW.48 and

PW.48 also being senior police officer, did not properly verify the investigation conducted by PW.47 and simply filed charge sheet, without appending any supportive documents. It is nothing but absolute dereliction of duties and negligence on the part of PWs.47 and 48.

70 C.C.No.7/2016 PDJC, Rjvm ii)To attract the offence under Section 5 of the Act, 1999, the ingredients of the said provision have to be fulfilled and having knowledge about the ingredients, without any documentary proof regarding establishment of accused No.2 company, simply relied upon very informal material and showed accused Nos.5 and 8 as directors of accused No.2 company. PWs. 40 and 47 have categorically admitted in their cross examination that at the time of establishment of accused No.2 company, only accused Nos.1, 3, 4 and 7 were directors, but not accused Nos.5 and 8. Before relying upon the statements of some of the witnesses, who have stated the names of accused Nos.5 and 8 that they are directors of accused No.2 company, PW.47 should have been cross checked the same by obtaining relevant documents from the Registrar of Companies.

If he had no knowledge about the same, he should have been obtained legal opinion from the learned Public Prosecutor. Without there being any documentary proof, especially certificate of incorporation and list of directors, Pws.47 and 48 roped accused Nos.5 and 8 in this case for the offence under Section 5 of the Act, 1999.

iii)At the cost of repetition, it is mentioned that in the cross examination, PW.47 had categorically admitted that he has not collected any of documents showing registration of accused No.2 company and basing on the statements of victims, he came to conclusion that accused 71 C.C.No.7/2016 PDJC, Rjvm No.1 is Managing Director and accused Nos.3 to 8 are directors of accused No.2 company, he has not tried to secure document showing registration of accused No.2 company, none of the victims have handed over documents to show that accused are directors of accused No.2 company. The aforementioned aspects clearly reveal the laches on the part of both the investigating officers/Pws.47 and 48 and while doing investigation, they should have been very cautious enough as criminal jurisprudence gives more stress over avoiding of false implication of an innocent to the extent where hundred guilty may go scot-free, and the spirit behind the same is very pious and even otherwise, by one case of false implication of an innocent, rule of law loses one exponent (supporter) and a rebel with defiance towards rule of law is ready and further, poor investigation with tainted prosecution is perfect recipe for such eventuality, as held in Nandu @ Nandakishore Vs. State of

Madha Pradesh 11 .

iv)Further, though there is no material against accused No.9 and though he is no way concerned with the affairs of the company, PW.48 filed charge sheet for the offence under Section 5 of the Act, 1999 against accused No.9 also, which is nothing but abuse the process of law. Had really both the Investigating Officers had that much of concern towards

11. C.A.NO.812/2008 & 866/2008, Dt.6.7.2018 OF Hon’ble Madya Pradesh High Court at Gwalior.

72 C.C.No.7/2016 PDJC, Rjvm the crime and victims, they should have been taken every care at each and every stage of investigation. The interest shown by Pws.47 and 48 in registering the case and filing charge sheet is not there in conducting qualitative investigation. They have also not collected original bonds/receipts/passbooks from the victims. During trial, by showing sufficient cause, the learned Public Prosecutor filed the same by summoning the same through the present Station House Officer i.e.,

PW.40. Because of the negligent attitude of Pws.47 and 48, this court also took much strain to unearth the truth regarding competency of officer to launch prosecution, receiving documents and giving detailed findings on all aspects. Record reveals that neither PW.47 nor PW.48 were not at all concern about the provisions and Rules of the Act, 1999 and Rules 2000. Though there are laches on the part of investigating officers in not collecting the relevant documents at the appropriate time, not obtaining any written permission for conducting investigation and launching prosecution, in view of the reasons assigned in ancillary point

No.2 and in this point, those laches do not affect the case of the prosecution.

73 C.C.No.7/2016 PDJC, Rjvm vi) Ancillary point No.(vi): Final out come of the case?

a)It is to be noted that in catena of Judgments, Hon’ble Apex Court held that justice is nothing but a manifestation of the truth and the primary duty of a Court is to make a single-minded endeavour to unearth the truth hidden beneath the facts and thus, the Court is a search engine of truth, with procedural and substantive laws as its tools. Further, when procedural law stands in the way of the truth, the Court must find a way to circumvent it and similarly, when substantive law, as it appears, does not facilitate the emergence of the truth, it is the paramount duty of the Court to interpret the law in light of its teleos and such an exercise is warranted in a higher degree, particularly while considering a social welfare legislation. Further, in its journey, the Court must discern the truth, primarily from the material available on record in the form of pleadings, and arguments duly supported by documents and it must be kept in mind that the entire judicial system is meant for the discovery of the truth, it being the soul of a decision and for doing so, a Presiding Officer is expected to play an active role, rather than a passive one.

b)Further, in Maria Margarida Sequeria Fernandes v. Erasmo Jack

De Sequeira. 12 , hon’ble Apex Court has that:

“The truth should be the guiding star in the entire judicial process. Truth alone has to be the foundation of justice. The entire judicial system has been created only to discern and find out the real truth. Judges at all 12(2012) 5 SCC 370 74 C.C.No.7/2016 PDJC, Rjvm levels have to seriously engage themselves in the journey of discovering the truth. That is their mandate, obligation and bounden duty. Justice system will acquire credibility only when people will be convinced that justice is based on the foundation of the truth’.

c)And, In Munna Pandey v. State of Bihar 13 , Hon’ble Apex Court has held that:

“The role of a judge in dispensation of justice after ascertaining the true facts no doubt is very difficult one. In the pious process of unravelling the truth so as to achieve the ultimate goal of dispensing justice between the parties the judge cannot keep himself unconcerned and oblivious to the various happenings taking place during the progress of trial of any case. No doubt he has to remain very vigilant, cautious, fair and impartial, and not to give even a slightest of impression that he is biased or prejudiced either due to his own personal convictions or views in favour of one or the other party. This, however, would not mean that the Judge will simply shut his own eyes and be a mute spectator, acting like a robot or a recording machine to just deliver what stands feeded by the parties.

d)In this regard, it is to be noted that the incharge Additional Public

Prosecutor Sri K.Radhakrishnam Raju, who conducted trial in all the connected matters took every care of getting all relevant documents to connect all missing links to unearth the truth by this court. So, without any doubt, it can be said that only because of his efforts, prosecution could place substantive material to attract the ingredients of the punishable Sections with which accused Nos.1, 2, 3 and 6 are charged.

e)On over all consideration of the material available on record and in view of the findings in ancillary point Nos(i) to (v), this court came to

13. 2023 SCC online sc 1103 75 C.C.No.7/2016 PDJC, Rjvm conclusion that prosecution successfully proved guilt of accused Nos.1, 2, 3 and 6 beyond reasonable doubt and as such, they are liable for punishment for the offences under Sections 120B, 201 and 420 of the

Code and under Section 5 of the Act, 1999 and they are not liable for punishment under Section 417 of the Code as they are liable for punishment which is aggravated form of cheating. Further, prosecution failed to prove guilt of accused Nos.4, 5, 7 to 9 and as such, they are not liable for punishment for the offences with which they are charged. This point is answered accordingly.

Result:

15.(a) In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

(b)Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted 76 C.C.No.7/2016 PDJC, Rjvm under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of

Criminal Procedure.

Partly dictated to the stenographer, transcribed by him and and partly typed to my dictation corrected and pronounced by me in open court on this 16 th day of March, 2026.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 16:38:12 +0530

PRINCIPAL SESSIONS JUDGE

RAJHAMAHENDRAVARAM

(i)Heard accused Nos.1, 3 and 6 under Section 248 (2) of Code of

Criminal Procedure on the quantum of sentence, to be imposed against accused Nos.1, 2, 3 and 6, for the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian

Penal Code and. Accused No.1 submitted that he has three children, presently he is not doing any job, attending private works, he has to perform marriage of his son pand he has not committed any offence.

Accused No.3 who is wife of accused No.1 submitted the same.Further,

Accused No.6 who is daughter of accused No.1 submitted that she recently married, she does not know about the offence and she has not committed any offence.

(ii)Having considered the facts and circumstances, gravity of offence, nature of allegations levelled against the accused and submissions of all 77 C.C.No.7/2016 PDJC, Rjvm the accused, this court came to conclusion that this is a fit case to impose sentence of imprisonment against accused Nos.1, 2, 3 and 6 as follows:-

Accused No.1 issentenced to suffer rigorous imprisonment of

Seven (7) years of the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months.

Being Managing Director of Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 on behalf of company, and in default of payment of fine, accused No.1 who is Managing Director of accused No.2 company shall suffer simple imprisonment for a period of Six (6) months.

Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

Accused No.6 issentenced to suffer rigorous imprisonment of

Three years (3) yearsof the offence under Section 5 of Andhra Pradesh 78 C.C.No.7/2016 PDJC, Rjvm Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand nly) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of

Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs,5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

(iii)Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

79 C.C.No.7/2016 PDJC, Rjvm Maharastra 14 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to recommend the matter to the District

Legal Services Authority, Rajamahendravaram to award compensation to all the victims, who have deposited amounts in accordance with law, as the amount is not sufficient to award compensation from out of the fine amount. In all the connected matters, out of Rs.8,10,000/- compensation at Rs.5,000/- is awarded to all the victims. But, in this case, Rs.8,10,000/- is not sufficient to award compensation as the victims are 1029. Further, in due course of law and after attaining the finality of the case and at that time, learned Public Prosecutor has to certify the applications of the victims.

(iv)The accused Nos.1, 3 and 6 are not entitled to the benefit of the

Probation of Offenders Act, 1958 and this is not a fit case to invoke the provisions of the Probation of Offenders Act.

(v)All the sentence of imprisonment passed against the accused

Nos.1, 3 and 6 shall run concurrently.

(vi)Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.2/2016, 3/2016, 4/2016, 5/2016 and 6/2016 shall run concurrently.

14. 2013 AIR SCW 3153 80 C.C.No.7/2016 PDJC, Rjvm

(vii)The accused are informed about the right of appeal to the Hon’ble

High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative.

(viii) The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 11.12.2015 to 3.3.2016, accused No.3 from 1.12.2015 to 2.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure.

(viii)Copy of judgment is furnished to the accused, as required under

Section 363 of Code of Criminal Procedure and Rule 72 of Criminal Rules of Practice.

(ix) Copy of judgment is marked to the District Magistrate as required under Section 364 of Code of Criminal Procedure

(x)Copy of Judgment is marked to the Director of Prosecutions,

Andhra Pradesh, Vijayawada as required under Rule 72 of Criminal Rules of Practice.

Pronounced by me in open court on this 16th day of March, 2026.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 16:38:50 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

81 C.C.No.7/2016 PDJC, Rjvm

LIST OF PROSECUTION/DEFENCE/COURT WITNESSES

1. PROSECUTION:

RankNameNature of Evidence PW.1Dasari RambabuAgent of Suvarna India Infra project Limited. Himself along with eight others lodged complaint. PW.2Kurati BhagyavathiAgent of Suvarna India Infra project Limited. Herself along with eight others lodged complaint. PW.3Illa Kanaka DurKurati Agent of Suvarna India Infra project BhagyavathigaLimited. Herself along with eight others lodged complaint. PW.4P.Vijay SekharAgent of Suvarna India Infra project Limited. Himself along with eight others lodged complaint. PW.5Gonamanda SudhakarAgent of Suvarna India Infra project Limited. Himself along with eight others lodged complaint. PW.6Janupalli Krishna MurthyAgent of Suvarna India Infra project Limited. Himself along with eight others lodged complaint. PW.7Kollu VishnuLodge boy, Ganapathi Plaza lodge, Amalapuram. Eye-witness for deposit of money by the public. PW.8Pinipe PrasadLodge boy, Ganapathi Plaza lodge, Amalapuram. Eye-witness for deposit of money by the public. PW.9Katikadala RajeshAgent of Suvarna India Infra project Limited. Himself along with eight others lodged complaint. PW.10Nathi RadhakrishnaAgent of Suvarna India Infra project Limited. Himself along with eight others lodged complaint. PW.11Thumu KrishnaRunning disposable items shop in the ground floor of Ganapthi Plaza, Amalpuram and eye-witness for deposit of money by the public. PW.12Nakka Srinivasa RaoAccountant in the accused No.2’s firm 82 C.C.No.7/2016 PDJC, Rjvm PW.13Nela WilsonAgent of accused No.2’s firm PW.14Kusuma Rajesh KumarAccountant of accused No.2’s firm PW.15Kottoju AnuradhaAccountant of accused No.2’s firm PW.16Udurthi JhansiDepositor in the accused No.2’s firm PW.17Pamu Durga BhavaniDepositor in the accused No.2’s firm

PW.18Illa RamakrishnaDepositor in the accused No.2’s firm PW.19Moka Rama SeethaDepositor in the accused No.2’s firm PW.20Adapa VaralakshmiDepositor in the accused No.2’s firm PW.21Ch.VaralakshmiDepositor in the accused No.2’s firm PW.22Dasari SeethaDepositor in the accused No.2’s firm PW.23Kathula Nageswara RaoDepositor in the accused No.2’s firm PW.24B.V.V.SatyanarayanaDepositor in the accused No.2’s firm PW.25G.Nirmala KumariDepositor in the accused No.2’s firm PW.26G.Mani PushpaDepositor in the accused No.2’s firm PW.27B.Suguna KumariDepositor in the accused No.2’s firm PW.28Dake LakshmiDepositor in the accused No.2’s firm PW.29Y.SrilathaDepositor in the accused No.2’s firm PW.30K.Surendra KumarAgent of accused No.2’s firm PW.31U.DevanandDepositor in the accused No.2’s firm PW.32G.Rama KrishnaDepositor in the accused No.2’s firm PW.33N.AnuradhaDepositor in the accused No.2’s firm PW.34Ch.Sanjeeva RaoAgent of accused No.2’s firm PW.35Tadi RajeswariDepositor in the accused No.2’s firm PW.36S.Venkateswara RaoDepositor in the accused No.2’s firm PW.37Kadali Vijay KumarDepositor in the accused No.2’s firm PW.38Kadali Suvarna RajuDepositor in the accused No.2’s firm PW.39Rangaswamy Gopala Agent of accused No.2’s firm Krishnan Mark Anthony PW.40P.Veera Babu Inspector of police, obtained certified copies documents (Exs.P50 to 66) from Registrar of Companies relating to accused No.2’s firm. PW.41Adabala Srinivasa RaoMediator for confession statement of accused No.1 and also for arrest of 83 C.C.No.7/2016 PDJC, Rjvm accused No.1 PW.42K.N.Srinivasa RaoMediator for confession statement of accused No.8 and also for arrest of accused No.8 PW.43DVVS.Durga KiranMediator for confession statement of accused No.9 and also for arrest of accused No.9 PW.44K.SatyanarayanaMediator for confession statement of accused No.5 and also for arrest of accused No.5 PW.45KVSJ.SrinivasMediator for confession statement of accused No.6 and also for arrest of accused No.6 PW.46T.PrakashMediator for confession statement of accused No.4 and also for arrest of accused No.4 PW.47Y.R.K.Srinivas Inspector of Police, registration of FIR, examination of witnesses, visiting of scene of offence, preparation of rough sketch, arrest of accused PW.48L.AnkaiahDeputy Superintendent of Police, further investigation and filing of charge sheet.

2. Defence witnesses, if any:

RankNameNature of Evidence

NIL

3. Court witnesses if any:

RankNameNature of Evidence

NIL 84 C.C.No.7/2016 PDJC, Rjvm

LIST OF PROSECUTION/DEFENCE/COURT EXHIBITS

1. Prosecution:

Sr.NoSr.No.RankDescription 1Ex.P1/PW1Passbook 2Ex.P2/PW1Cash receipt 3Ex.P3/PW1Passbook 4Ex.P4/PW1Cash receipt 5Ex.P5/PW1Complaint/report 6Ex.P6/PW2Passbook 7Ex.P7/PW2Fixed deposit receipt 8Ex.P8/PW2Passbook 9Ex.P9/PW2Cash receipts 10Ex.P10/PW2Passbook 11Ex.P11/PW2Cash receipts 12Ex.P12/PW3Passbook 13Ex.P13/PW3Bond 14Ex.P14/PW3Bond 15Ex.P15/PW3Bond 16Ex.P16/PW3Bond 17Ex.P17/PW3Passbook 18Ex.P18/PW3Bond 19Ex.P19/PW4Passbook 20Ex.P20/PW5Passbook 21Ex.P21/PW6Passbook 22Ex.P22/PW8Passbook 23Ex.P23/PW8Passbook 24Ex.P24/PW16Passbook 25Ex.P25/PW17Passbook 26Ex.P26/PW18Passbook 27Ex.P27/PW19Fixed deposit receipt 28Ex.P28/PW19Fixed deposit receipt 85 C.C.No.7/2016 PDJC, Rjvm 29Ex.P29/PW20Fixed deposit receipt 30Ex.P30/PW21Passbook 31Ex.P31/PW22Fixed deposit receipt 32Ex.P32/PW23Fixed deposit receipt 33Ex.P33/PW24Fixed deposit receipt 34Ex.P34/PW25Fixed deposit receipt 35Ex.P35/PW26Fixed deposit receipt 36Ex.P36/PW27Fixed deposit receipt 37Ex.P37/PW28Fixed deposit receipt 38Ex.P38/PW29Fixed deposit receipt 39Ex.P39/PW30Fixed deposit receipt 40Ex.P40/PW31Fixed deposit receipt 41Ex.P41/PW32Fixed deposit receipt 42Ex.P42/PW33Fixed deposit receipt 43Ex.P43/PW34Passbook 44Ex.P44/PW35Fixed deposit receipt 45Ex.P45/PW36Fixed deposit receipts 46Ex.P46/PW36Fixed deposit receipts 47Ex.P47/PW37Fixed deposit receipts 48Ex.P48/PW38Fixed deposit receipt 49Ex.P49/PW38Fixed deposit receipt 50Ex.P50/PW40CC of Covering letter 51Ex.P51/PW40CC of company information Suvarna India Projects. 52Ex.P52/PW40CC of Certificate of incorporation Suvarna Infra Projects India. 53Ex.P53/PW40CC of fresh Certificate of incorporation 54Ex.P54/PW40CC of List of Directors M/s Suvarna India Projects. 55Ex.P55/PW40CC of company info Suvarna India Iron and steel manufacturing unit. 56Ex.P56/PW40CC of Incorporation Suvarna India Iron and steel manufacturing unit. 57Ex.P57/PW40CC of List of Directors Suvarna India Iron and steel manufacturing unit. 58Ex.P58/PW40CC of company info Prakash India Power Projects 86 C.C.No.7/2016 PDJC, Rjvm 59Ex.P59/PW40CC of incorporation Prakash India Power Projects 60Ex.P60/PW40CC of List of Directors Prakash India Power Projects 61Ex.P61/PW40CC of company info Supreme India TV Channel 62Ex.P62/PW40CC of certificate of incorporation Supreme India TV Channel 63Ex.P63/PW40CC of list of directors Supreme India TV Channel 64Ex.P64/PW40CC of company info Suvarna India Vidyut plant 65Ex.P65/PW40CC of certificate of incorporation Suvarna India Vidyut plant 66Ex.P66/PW40CC of list of directors Suvarna India Vidyut plant 67Ex.P67/PW41Relevant admissible portion of CC of mediators report dt.17.10.2015 at 7.00 AM arrest of A1. 68Ex.P68/PW41Relevant admissible portion of CC of mediators report dt.6.11.2015 at 10.00 AM arrest of A8. 69Ex.P69/PW43Relevant admissible portion of CC of mediators report dt.11.12.2015 at 10.00 AM arrest of A9. 70Ex.P70/PW44Relevant admissible portion of CC of mediators report dt.30.10.2015 at 7.00 AM arrest of A5. 71Ex.P71/PW45Relevant admissible portion of CC of mediators report dt.10.12.2015 at 8.00 AM arrest of A6. 72Ex.P72/PW46Relevant admissible portion of CC of mediators report dt.14.11.2015 at 10.00 AM arrest of A4. 73Ex.P73/PW47First information report in crime No.413/2015 of Amalapuram Town Police station. 74Ex.P74/PW47Rough Sketch

2. Defence:

Sr.NoSr.No.RankDescription

1.Ex.D1/PW12Photo copy of appointment order of Suvarna India dt.01.03.2012

3. Court witnesses, if any:

Sr.NoSr.No.RankDescription

NIL 87 C.C.No.7/2016 PDJC, Rjvm

4. Material objects:

Sr.NoSr.No.RankDescription

NIL

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 16:40:39 +0530

PRINCIPAL SESSIONS JUDGE

RAJHAMAHENDRAVARAM

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS

ACT–CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST

GODAVARI AT RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026.

CALENDER CASE NO.07/2016

Complainant::State-Represented by The Inspector of Police, Amalapuram Town Police Station.

Represented by::Sri R.Prasad and Sri K.Radhakrinamraju, Public Prosecutors, East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

89 C.C.No.7/2016 PDJC, Rjvm 7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 10.11.2015

Date of First Information Report:: 10.11.2015

Date of Charge sheet:: 27.07.2016

Date of framing of charges:: 15.02.2019

Date of commencement of :: 06.03.2024 evidence

Date of which judgment is :: 02.03.2026 reserved

Date of Judgment:: 16.03.2026

Plea of accused:: Not guilty 90 C.C.No.7/2016 PDJC, Rjvm Finding of the Court:: Accused Nos.1, 2, 3 and 6 are convicted Accused Nos.4, 5, 7 and 9 are acquitted.

Explanation for delay:: Along with this case, five other cases of similar nature of offences are also pending against the accused and there are several witnesses in each of the cases. In order to dispose of all the cases together and to avoid any conflict of judgments, after completion of trial in all the cases and upon hearing the arguments of both sides, all the cases were posted for judgment today.

Date of sentencing order, if any:: 16.03.2026

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure. Accused No.1 issentenced to suffer rigorous imprisonment of Seven (7) years of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months.

Being Managing Director of Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 on behalf of the company and in default of payment of fine, accused No.1 who is Managing Director of accused No.2 company shall suffer simple imprisonment for a period of Six (6) months. Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also 91 C.C.No.7/2016 PDJC, Rjvm sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused No.6 issentenced to suffer rigorous imprisonment of Three years (3) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand nly) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs,5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 15 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to recommend the matter to the District Legal Services Authority, Rajamahendravaram to award compensation to all the victims, who have deposited amounts in accordance with law, as the amount is not sufficient to award compensation from out of the fine amount. In all the connected matters, out of Rs.8,10,000/- compensation at Rs.5,000/- is awarded to all the victims. But, in this case, Rs.8,10,000/- is not sufficient to award compensation as the victims are 1029. Further, in due course of law and after attaining the finality of the case and at that time, learned Public Prosecutor has to certify the applications of the victims. The accused Nos.1, 3 and 6 are not entitled to the benefit of the Probation of Offenders Act, 1958 and this is not a fit case to invoke the provisions of the Probation of Offenders Act.

15. 2013 AIR SCW 3153 92 C.C.No.7/2016 PDJC, Rjvm All the sentence of imprisonment passed against the accused Nos.1, 3 and 6 shall run concurrently. Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.2/2016, 3/2016, 4/2016, 5/2016 and 6/2016 shall run concurrently. The accused are informed about the right of appeal to the Hon’ble High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative. The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 11.12.2015 to 3.3.2016, accused No.3 from 1.12.2015 to 2.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 16:42:14 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

APEG010023632016

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS ACT–

CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST GODAVARI AT

RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026

CALENDER CASE NO.06/2016

Complainant::State-Represented by Sub Divisional Police Officer, Amalapuram. Represented by::Sri R.Prasad and Sri K.Radhakrishnam Raju, Public Prosecutors, East Godavari District, Rajamahendravaram. Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal. 2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its Managing Director-Busim Venkata Nagavenu @ Venu. 3.Busim Rajyalakshmi, W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal. 4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalemvillage,Madhurawada, Visakhapatnam. 5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

2 C.C.No.6/2016 PDJC, Rjvm 6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal. 7.Battu Vinod, S/o.Venkateswara Rao, D.No.3- 73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal. 8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District. 9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam. 10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died) Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 8.11.2015

Date of First Information Report:: 8.11.2015

Date of Charge sheet:: 16.07.2016

Date of framing of charges:: 15.02.2019

Date of commencement of evidence:: 06.03.2024

Date of which judgment is reserved:: 02.03.2026

Date of Judgment:: 16.03.2026

Date of sentencing order, if any:: 16.03.2026 3 C.C.No.6/2016 PDJC, Rjvm

ACCUSED DETAILS

Rank of the accused::Accused No.1

Name of the accused::Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.2

Name of the accused::Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its Md. Busim Venkata Nagavenu @ Venu.

Rank of the accused::Accused No.3

Name of the accused::BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.4

Name of the accused::Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

Rank of the accused::Accused No.5

Name of the accused::BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

Rank of the accused::Accused No.6

Name of the accused::Busim Gowthami, D/o.Venkata Nagavenu @ Venu,23years,SCMala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.7

Name of the accused::Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

4 C.C.No.6/2016 PDJC, Rjvm

Rank of the accused::Accused No.8

Name of the accused::Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused::Accused No.9

Name of the accused::Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused::Accused No.10

Name of the accused::Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Date of arrest::Accused No.1 on 11.11.2015 Accused No.2 is Firm Accused No.3 on 11.12.2015 Accused No.4 on 27.11.2015 Accused No.5 on 27.11.2015 Accused No.6 on 23.12.2015 Accused No.7 on 21.12.2015 Accused No.8 on 27.11.2015 Accused No.9 on 23.12.2015 Accused No.10 died

Date of release on bail::Accused No.1 on 03.03.2016 Accused No.2 is Firm Accused No.3 on 03.03.2016 Accused No.4 on 22.12.2015 Accused No.5 on 16.12.2015 Accused No.6 on 03.03.2016 Accused No.7 on 21.12.2015 Accused No.8 on 22.12.2015 Accused No.9 on 29.03.2017 Accused No.10 died

Offences charged with::Under Sections 120-B, 417, 420, 201, 411 r/w 34 of Indian Penal Code and Under 5 C.C.No.6/2016 PDJC, Rjvm

Section 5 of Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999.

Whether acquitted or ::Accused Nos.1, 2, 3 and 6 are convicted convicted Accused Nos.4, 5, 7 and 9 are acquitted.

Sentence imposed::

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offence punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of Criminal Procedure.

Period of detention::Accused No.1 from 11.12.2015 to 3.3.2016 undergone during trial for Accused No.3 from 11.12.2015 to 3.3.2016 purpose of Section 428 Accused No.6 from 23.12.2015 to 2.3.2016 Cr.P.C.

This case has come on 02.3.2026 for final hearing before me in the presence of Sri R.Prasad and Sri K.Radhakrishnamraju, Public

Prosecutors for prosecution and of Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6, Sri S.S.Prakasarao, counsel for accused No.7 and Sri

I.Rambabu, counsel for accused No.9 and the matter having stood over for consideration to this day, this court delivered the following:- 6 C.C.No.6/2016 PDJC, Rjvm

J U D G M E N T

1.The Sub Divisional Police Officer, Amalapuram laid Charge sheet in

Crime No.411/2015 of Amalapuram Town Police Station of the offences under Sections 120-B, 406, 409, 411, 417, 420, 201 r/w.34 of Indian

Penal Code and 411 of Indian Penal Code (herein after referred to as ‘the code’) r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 (herein after referred to as ‘the Act 1999), against the accused Nos.1 to 10.

2.Case of the prosecution, in brief, is thus:

a)Accused No.1 is resident of Sivakodupalem, accused No.3 is wife of accused No.1, accused No.4 is resident of Nagarampalem, accused

No.5 is younger sister-in-law of accused No.1, accused No.6 is daughter of accused Nos.1 and 3, accused Nos.7 and 8 are distant relatives of accused No.1. Accused Nos.1 to 8 are directors of company and accused No.9 is henchmen and accused No.10 is close associate of accused No.1.

b)Defacto complainants/Pws.1 to 3 have given report alleging that they are residents of Mummidivaram. Accused No.1 approached them and represented himself as man power agent of Suvarna India Infra 7 C.C.No.6/2016 PDJC, Rjvm Project Limited (real estate), his company has got approval of Reserve

Bank of India, has many branches in and around the state of Andhra

Pradesh, they are developing the financial status of poor and would give 20% interest to the investors and accordingly, induced them to collect money and deliver money by way of recurring deposit and fixed deposit and thereafter, they came to know that the said company is closed without making any payments. When they questioned Managing Director, he stated that he has several immovable properties in Andhra Pradesh and Telangana and he would return the amounts to all the depositors.

c)Accused No.1 established a registered company under the name and style of Suvarna Real Estate Firm and opened branch office at shop bearing D.No.1-98, Amalapuram. Accused No.1 also established other companies in the names of Suvarna Infra Projects India Limited, Suvarna

Iron & Steel Manufacture Private Limited, Survarna India T.V. Channel

Private Limited, Prakash India Power Project Private Limited, Suvarna

India Vidhyut plant private limited, and accused No.3 to 8 are directors of suvarna real estate firm and subsequently, the name of Suvarna Infra

Project India Limited changed into Suvarna India Project Limited.

Accused Nos.1 to 8 with a deceitful, dishonest and fraudulent intention jointly conspired together, hatched plan to cheat the innocent public by way of investments, induced the victims to deliver lakhs of rupees, 8 C.C.No.6/2016 PDJC, Rjvm committed criminal breach of trust and thereby, cheated the victims to that effect. They also committed the offence under the companies Act.

Accused Nos.1 to 8 committed misappropriation and cheating to a tune of

Rs.99,42,980/- at various places of Andhra Pradesh and Telangana.

d)Basing on the report of defacto complainants/PW.1 to 3, a case in crime No.411/2015 of Amalapuram Town Police Station of the offences under Sections 120-B, 406, 409, 417, 420, 411, 201 r/w.34 of Indian

Penal Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies

Act, 2013 and under Section 5 of the A.P. Protection of Depositors of

Financial Establishment Act, 1999 was registered against the accused.

e)During the course of investigation, LW.116/PW.31 examined witnesses, recorded their statements and came to conclusion that accused No.1 to 8 made believe several general public that they established several companies, collected deposits, investments, failed to repay the same. Accused Nos.9 and 10 who are henchmen and close associate of accused No.1 also participated in the crime.

f) On 20.4.2013, the company directors conducted general body meeting at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram for changing the name of the company and accused violated the provisions of Companies Act also, conspired with each other and has committed the 9 C.C.No.6/2016 PDJC, Rjvm offences under the Provisions of Indian Penal Code and A.P. Protection of

Depositors of Financial Establishment Act, 1999. Hence, the charge.

3.The case was taken on to file of the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and under Section 5 of the Act, 1999.

4.On appearance of accused, copies of the documents were furnished.

5.When the accused Nos.1 to 10 were examined under Section 239

Cr.P.C., they pleaded not guilty. Learned Public Prosecutor and the learned counsel for the accused were heard regarding the charge. Upon considering the material on record, charge under Section 5 of the A.P.

Protection of Depositors of Financial Establishment Act, 1999 and under

Sections 120-B, 417, 420, 201, 411 r/w.34 of Indian Penal Code were framed against the accused, read over and explained to them in Telugu and they pleaded not guilty and claimed to be tried.

6. In support of its case, prosecution examined in all P.Ws.1 to 32 out of 118 witnesses, and filed Exs.P.1 to P.49 documents and Ex.D1 are marked on behalf of the accused.

7. On the strength of the prosecution evidence, the accused Nos.1 to 9 were examined under Section 313 Code of Criminal Procedure 10 C.C.No.6/2016 PDJC, Rjvm regarding the incriminating circumstances appearing against them in the evidence. They denied the same and reported no defence evidence.

Case against Accused No.10 is abated as he died on 18.10.2025.

8.Heard both sides and learned Public Prosecutor and defence counsel filed written arguments.

9.Now, the point that would arises for determination is:

“Whether the prosecution proved the guilt of accused beyond

reasonable doubt and if so, whether they are liable for the

offences with which they are charged”?

10. Case of the prosecution is thus:

Accused No.1 is Managing Director and accused Nos.3 to 8 are directors of Accused No.2 company. PWs.1 to 3, 12 to 23 deposited amounts in accused No.2 company. Accused No.1 approached the victims representing himself as a manpower agent of Suvarna India Infra

Project Limited, the company had Reserve Bank of India approval, it has several branches across the state of Andhra Pradesh, thy would improve the financial status of poor people by paying 20% interest on the investments. Believing the deceitful words of accused Nos.1 to 8, thousands of victims invested money in accused No.2 company.

Subsequently, the victims came to know that the said company is closed without making any payments and when questioned, Accused No.1, being 11 C.C.No.6/2016 PDJC, Rjvm the Managing Director, assured that he owned several immovable properties in Andhra Pradesh and Telangana and promised to repay the deposit amounts. Accused No.1 also established other companies in the names of Survarna Real Estate Limited, Suvarna Infra Projects India

Limited, Suvarna Iron & Steel Manufacture Private Limited, Survarna

India T.V. Channel Private Limited, Prakash India Power Project Private

Limited and Suvarna India Vidhyut plant private limited. Subsequently, the name of Suvarna Infra Project India Limited is changed as Suvarna India

Project Limited. Accused Nos.1 to 8, with dishonest, fraudulent and deceitful intention, conspired together, induced innocent public to invest huge amounts and misappropriated Rs.12,05,500/-. Accused No.9 also participated in the crime. PWs.1 to 3 set the criminal law into motion by giving Ex.P2 report.

11. Evidence:

During trial, out of 118 witnesses, prosecution examined Pws.1 to

32. The witnesses may be categorized into six types and they are,

(i) Victims, (ii) Agents, (iii) Employees, (iv) Independent, (v) Mediators, and (vi) Official. Documentary evidence is also of two types i.e., one set is relating to victims and second one is official.

12 C.C.No.6/2016 PDJC, Rjvm

Description of witnesses

__________________________________________________

Victims/AgentsEmployeesIndependentMediatorsOfficial complainants

Pws.6, 12 toPws.1 to 3 Pws.9 to 11Pws.4, 5 & 7Pws.25 to Pw.24, 31 2330and 32

Category of documents

______________________________

VictimsOfficial

Ex.P2/complaintExs.P25 to 47/correspondence, Exs.P1, 3 to 24/bonds, cash receipts,copies of documents obtained from pass booksMinistry of Corporate Affairs, Office of the Registrar of Companies, Andhra Pradesh relating to establishment of companies by the accused. Exs.P48 and 49/First information report and rough sketch.

13 C.C.No.6/2016 PDJC, Rjvm

12. Arguments:

a) Prosecution:

i)Accused No.1 established accused No.2 company in the name and style of Suvarna Infra Projects India Limited at Amalapurm, wherein accused Nos.3, 4, 6 and 7 are Directors. Accused No.1 also established four other private limited companies, and all the five companies were functioning from the same premises bearing D.No.3-1-98, Ganapathi

Plaza, Main Road, Amalapuram. Accused No.2 appointed employees and agents to collect deposits from the general public and induced them with a false promise of 20% interest.

ii)Accused Nos.1 to 8 collected an amount of about Rs.14 crores from thousands of investors, issued bonds in the names of Suvarna Real

Estate and receipts in the name of Suvarna India, and thereafter closed the company in the year 2014 without repaying any amount to the victims.

iii)Accused Nos.5, 8, 9 and 10 who are legal advisers and close associates of Accused No.1 also participated in the offence and in pursuance of their criminal conspiracy, accused misappropriated the amounts collected from the public, purchased immovable properties in the

States of Andhra Pradesh and Telangana.

iv)Earlier, Accused No.1 worked as a Marketing Manager in Sahara

India and having gained experience in mobilizing public funds, he 14 C.C.No.6/2016 PDJC, Rjvm conspired with other accused made false representations, dishonestly induced the victims to part with money and thereby, cheated them.

v)Oral evidence adduced by the prosecution coupled with the documentary evidence clearly establishes the conspiracy, inducement, collection of huge amount from thousands of people and misappropriation.

vi)Having worked in other financial institutions like Sahara India and having gained knowledge to escape from the liability intentionally issued receipts and bonds with other company names with a criminal conspiracy to cheat the general public.

vii)Though some of the accused are resigned from the post, they are also liable as they were present at the time of collection of deposit.

viii)Accused failed to adduce any evidence to show animosity between them and the prosecution witnesses.

b) Defence:

Having mentioned the material portion of evidence of all the witnesses, learned counsel for the accused argued through the written arguments as follows:-

i)Prosecution failed to secure certificate of registration of accused

No.2 company, registered a false case, and after lapse of nine years, filed certified copy of certificate of registration.

15 C.C.No.6/2016 PDJC, Rjvm ii)Prosecution failed to furnish all the documents as required under

Section 207 of Code of Criminal Procedure.

iii)Without any competency, Inspector of police/PW.31 registered seven crimes and without verifying the same on correct lines,

PW.32/Deputy Superintendent of Police conducted further investigation, filed charge sheets and both the officers are not competent persons to conduct investigation and file charge sheets.

iv)Investigating Officers prepared 161 Code of Criminal Procedure statements of all the witnesses in a copy and paste method.

v)The bonds and receipts which are relied upon by the prosecution do not contain the signatures of any of the accused.

vi)There are several inconsistencies in the evidence of prosecution witnesses. Most of the witnesses are not identified accused Nos.3 to 9.

vii)There is neither oral nor documentary evidence to show that the accused committed any offence of the offences with which they are charged.

viii)Accused Nos.3 to 9 are also no way concerned with the commission of offence. With the help of stock mediators and some other persons, prosecution prepared documents in Amalapuram Town Police

Station.

16 C.C.No.6/2016 PDJC, Rjvm xi)Prosecution utterly failed to produce documents showing assets of the accused and finally, relied upon following judgments:

1. Yousuf Bin Awad @ Yousauf Vs. State through Inspector of Police 1

2. Arnol Samadhan Nikam Vs. The state of Maharashtra 2

3. J.P.S. Enterprises and another Vs. State 3

13. Point:

a)Admitted facts are that basing on the reports of different persons seven crimes are registered for the same offences. Defacto complainants and victims in all the cases are different. Transactions are also different.

In all seven crimes vide C.C.Nos.1/2016 to 5/2016, 7/2016 and this case,

PW.32 laid charge sheets of the same offences. Cognizance is taken for the offences under Section 120-B, 417, 420, 201, 411 r/w.34 of the Code, and Section 5 of the Act, 1999 and along with this case, five other cases vide C.C.Nos.2/2016 to 5/2016 and 7/2016 are pending and one more case vide C.C.No.1/2016 is ended in acquittal as there was no material evidence in that case to prove the guilt of the accused. Generally, all the cases have to be tried and disposed of together, to avoid multiplicity of verdicts. But, one of the case in C.C.No.1/2016 was disposed in the year 2019 itself. So, all the remaining six cases including this case are taken

1. 2015 (3) ALT (CRL.) 171 (AP)

2. Crl. Petition No.1091/2025 of Hon’ble High Court of Judicature at Bombay bench at Aurangabad.

3. C.A.No.1048/2000, dt.27.7.2005 of Hon’ble High Court of Madras.

17 C.C.No.6/2016 PDJC, Rjvm up together for examination of witnesses, arguments etc. C.C.Nos.2/2016 to 5/2016 and 7/2016 are also posted today for judgments.

b)Having considered the material placed by the prosecution, Charge under Section 5 of the the Act, 1999 and under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code is framed. Now, it is to be seen that whether prosecution proved all the ingredients of the offences with which accused Nos.1 to 9 are charged. Since charge is framed under several sections, it is apposite to consider the following ancillary points, for better appreciation, to avoid repetition and clear findings.

14.Ancillary points:

i). Establishment of accused No.2 company and its directors?

ii). Whether miscarriage of justice is done to the accused for

conducting investigation by PWs.31 and 32 and launch

prosecution by PW.32?

iii). Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

iv). Wether charge under Section 120B, 201, 417 and 420 of Indian

Penal Code is sustainable in addition to the charge under

Section 5 of the Act?

v). Any laches on the part of the investigating officers i.e., Pws.31

and 32? if so, would they affect total case to disbelieve the

version of prosecution as well as oral and documentary

evidence?

vi). Final out come of the case?

18 C.C.No.6/2016 PDJC, Rjvm

i)Ancillary point No.(i): Establishment of accused No.2 company

and its directors.

a)To prove the origin of crime i.e., establishment of accused No.2 company and other companies, prosecution relied upon the evidence of

PWs.24 to 32 coupled with Exs.P25 to 41. Prosecution case reveals that accused Nos.1, 3 to 8 established accused No.2 company, accused No.1 is Managing Director and others are directors of the said company and further, accused Nos.1 and 3 established four other companies and under the guise of establishment of several companies. All the directors lured general public, collected investments, misappropriated that amounts, cheated the general public and failed to repay any amounts to the victims.

Before appreciating ocular evidence, it is appropriate to mention the

details of companies and directors etc, and they are as follows:-

Sl. Exhibit Name of Issued by Date of Directors Whether

No. numbe the incorporatio any

r document n & other director

details. resigned

1.Ex.P26Company Ministry of 09.11.20111.Busim -- information Corporate Venkata CIN.No.U454 relating to AffairsNaga Venu 00AP2011PL Suvarna (A1) C077328 India 2.Rajya Projects Registered lakshmi Limited Address: Busim (A3) D.No.3-1-98,

3. Busim Ganapati Gowthami Plaza, Main 19 C.C.No.6/2016 PDJC, Rjvm

Road, (A6) Amalapuram- 533201.

2Ex.P27Certificate Registrar of09.11.2011-- of Companies, CIN.No.U454 IncorporatioAndhra 00AP2011PL n relating toPradesh C077328 Survarna India Infra Registered Projects Address: India Limited. D.No.3-1-98, Ganapati Plaza, Main Road, Amalapuram- 533201.

3Ex.P28Fresh Registrar of23.04.2013-- certificate ofCompanies, incorporatioAndhra n, Pradesh CIN.No.U454 consequent 00AP2011PL upon C077328 change of name Registered relating to Address: Survarna D.No.3-1-98, Infra Ganapati Projects Plaza, Main India Road, Limited Amalapuram- 533201.

4Ex.P29List of Registrar --1.Busim directors of Companies,Venkata M/s.SurvarnAndhra Naga Venu a India Pradesh(A1), ProjectsManaging 20 C.C.No.6/2016 PDJC, Rjvm

Director,

2. Rajya Lakshmi Busim (A3), Director 3.Phanendr Yes, On a Desai 15.5.2014 Kaneti (A4), Director 4.Vinod Yes, On Battu (A7), 30.11.12 Director 5.Busim Gowthami (A6), Director

5.Ex.P30Company Ministry of 31.10.20121.Busim -- Information Corporate Venkata CIN.No.U271 relating to affairsNaga Venu 00AP2012PT Survarna (A1) C083909 India Iron 2.Rajya and Steel Registered lakshmi Manufacturi Address: Busim (A3) ng Private Limited D.No.3-1-98, Ganapati Plaza, Main Road, Amalapuram- 533201.

6Ex.P31Certificate Registrar of31.10.2012-- of Companies, CIN.No.U271 incorporatioAndhra 00AP2012PT n relating toPradesh C083909 Survarna India Iron 21 C.C.No.6/2016 PDJC, Rjvm and Steel Registered ManufacturiAddress: ng Private D.No.3-1-98, Limited Ganapati Plaza, Main Road, Amalapuram- 533201.

7Ex.P32List of Registrar of1.Busim -- directors of Companies,Venkata Survarna Andhra Naga Venu India Iron Pradesh(A1), and Steel Director. Manufacturi 2.Rajyalaks ng Private hmi Busim Limited (A2), Director.

8.Ex.P33Company Ministry of 22.1.20131.Busim -- information Corporate Venkata CIN.No.U403 relating to affairsNaga Venu 00AP2013PT Prakash (A1), C085447 India PowerDirector. Projects Registered 2.Rajyalaks Private Address: hmi Busim Limited (A2), D.No.1-98, Director. Near Hanuman Theater, Edarapalli Guntur, Amalapuram- 533201.

9.Ex.P34Certificate Registrar of22.1.2013-- of Companies, CIN.No.U403 IncorporatioAndhra 22 C.C.No.6/2016 PDJC, Rjvm n relating toPradesh00AP2013PT Prakash C085447 India Power Registered Projects Address:D.N Private o.1-98, Near Limited Hanuman Theater, Edarapalli, Amalapuram- 533201.

10. Ex.P35List of Registrar of1.Busim -- Directors Companies,Venkata relating to Andhra Naga Venu Prakash Pradesh(A1) India Power 2.Rajyalaks Projects hmi Busim Private (A3), Limited Director 11Ex.P36Company Ministry of 15.11.20121.Busim -- information Corporate Venkata CIN.No.U923 relating to affairsNaga Venu 00AP2012PT Supreme (A1) C084161 India TV

2. Rajya channel Registered Lakshmi Private Address: Busim (A3) Limited D.No.3-1-98, Ganapathi Plaza, Main Road,Amalap uram- 533201.

12Ex.P37Certificate Registrar of15.11.2012-- of Companies, CIN.No.U923 IncorporatioAndhra 00AP2012PT n relating toPradesh 23 C.C.No.6/2016 PDJC, Rjvm

Supreme C084161 India TV Registered channel Address: Private Limited D.No.3-1-98, Ganapathi Plaza, Main Road,Amalap uram- 533201.

13Ex.P38List of Registrar of1.Busim -- Directors Companies,Venkata relating Andhra Naga Venu Supreme Pradesh(A1) India TV 2.Rajya channel Lakshmi Private Busim (A3) Limited 14Ex.P39Company Ministry of 28.1.20131.Busim -- information Corporate Venkata CIN.No.U401 relating to affairsNaga Venu 02AP2013PT Survarna (A1) C085476 India Vidyut

2. Rajya Plant Registered Lakshmi Private Address: Busim (A3) Limited D.No.1-98, NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

15Ex.P40Certificate Registrar of28.1.2013-- of Companies, CIN.No.U401 24 C.C.No.6/2016 PDJC, Rjvm

IncorporatioAndhra 02AP2013PT n relating toPradeshC085476 Survarna Registered India Vidyut Address: Plant Private D.No.1-98, Limited NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

16Ex.P41List of Registrar of1.Busim -- Directors Companies,Venkata relating Andhra Naga Venu Survarna Pradesh(A1) India Vidyut 2.Rajya Plant Lakshmi Private Busim (A3) Limited

b)Admittedly, during the course of investigation, neither PW.31 nor

PW.32 collected single piece of document regarding establishment of accused No.2 company and laches on the part of the investigating officers would be discussed at a little later in ancillary point No.V. And, to show the establishment of accused No.2 company and other companies, during trial, prosecution took steps and after securing the documents vide

Exs.P25 to 41, filed the same through PW.24. In this regard, it is to be noted that it is not disputed by the accused about establishment of 25 C.C.No.6/2016 PDJC, Rjvm accused No.2 company and no where it is suggested that it was not established. Exs.P26, 30, 33, 36 and 39 are the proceedings issued by the Ministry of Corporate affairs and as per Ex.P26, initially accused No.2 company is established under the name and style of Survana India

Projects Limited/accused No.2 on 9.11.2011 and Ex.P25 is its certificate of incorporation with Corporation Identity Number (CIN)-U45400AP 2011PLC077328 and its paid up capital is Rs.5,00,000/-. As per Ex.P28, name of accused No.2 company is slightly changed as Suvarna India

Infra Projects Limited with same CIN number and accordingly, Ministry of

Corporate Affairs, Registrar of Companies, Andhra Pradesh issued proceedings vide Ex.P28 dated 23.4.2013 and when accused No.2 company was established, the directors were accused Nos.3, 4, 6 and 7 besides Managing Director i.e., Accused No.1 vide Ex.P29, whereas, accused No.7 resigned as director on 30.11.2012 and accused No.4 resigned as director on 15.5.2014. In this regard, learned counsel for the accused arguned that having taken advantage of relationship of accused

No.7 with accused No.1, name of accused No.7 is shown in the list of directors and immediately after coming to know about the same, he resigned as director on 30.11.2012 and the same is recorded vide

Ex.P29. The same argument is advanced on behalf of accused No.4 also. Ex.P29 reveals that accused No.4 also resigned as director on 26 C.C.No.6/2016 PDJC, Rjvm 15.5.02014 i.e., almost prior to one year of giving complaint in this case and in the connected matters. So, record clearly reveals that though the names of accused Nos.4 and 7 are shown in the list of directors, they resigned even very long prior to giving reports and registration of first information report vide Ex.P48. As per Ex.P29, accused Nos.1, 3 and 6 continued as directors, out of which, accused No.1 is Managing Director of accused No.2 company. Accused Nos.3 and 6 are wife and daughter of accused No.1. Neither in the certificate of incorporation nor in the list of directors, names and other details of accused Nos.5 and 8 are find place and PW.24 also admitted the same. PW.24 who secured Exs.P25 to P41 also categorically stated that initially accused No.1 was Managing

Director and accused Nos.3, 4, 6 and 7 were the directors of accused

No.2 company and accused No.7 and 4 resigned as directors on 30.11.2012 and 15.5.2014 respectively, and all the five companies registered office is at H.No.3-1-98, Ganapathi Plaza, Main Road,

Amalapuram. So, it can safely be concluded that accused No.5 and 8 are no way concerned with the company. It is not the case of prosecution that accused No.9 ether director or induced the general public and absolutely no evidence to that affect also. With regard to the liability of the resigned directors, discussion would be made in the forth coming ancillary point No.iii.

27 C.C.No.6/2016 PDJC, Rjvm

c)In addition to the accused No.2 company, accused Nos.1 and 3 also established four other nominal companies with nominal paid up capital under the names and styles of Survarna india Iron and Steel

Manufacturing Private Limited, Prakash India Power Projects Private

Limited, Supreme India TV Channel Private Limited and Survarna India

Vidyut Plant private Limited on 31.10.2012, 22.1.2013, 15.11.2012 and 28.1.2013 respectively. To that effect, certificates of incorporation also obtained vide Exs.P31, 34, 37 and 40 and further, Exs.P32, 35, 38 and 41 reveal that the accused Nos.1 and 3 are directors of the said companies.

d)For the foregoing reasons, this court came to conclusion that on 9.11.2011, initially accused No.2 company was established in the name and style of Suvarna India Projects Limited vide Ex.P26 and subsequently, the name of the said company is changed as Suvarna India

Infra Projects India Limited vide Ex.P28 and originally, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were the directors of accused No.2 company and subsequently, accused Nos.4 and 7 resigned as directors and the same is accepted by the Registrar of Companies vide Ex.P29 and further, accused Nos.5, 8 and 9 are no way concerned with the accused No.2 company. Hence, this ancillary point is answered accordingly.

28 C.C.No.6/2016 PDJC, Rjvm ii)Ancillary point No.(ii): Whether miscarriage of justice is done to the accused for conducting investigation by Pws.31 and 32 and launch prosecution by PW.32?

a)Admittedly, Ex.P2 report is registered by PW.31/Inspector of Police for the offences under Sections 120-B, 411, 417, 420, 201 r/w.34 of the

Code and 411 of the Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under Section 5 of the Act, 1999 vide

Ex.P48. The same investigating officer i.e., PW.31 conducted investigation including examination of witnesses and collection of documents. PW.32/Deputy Superintendent of Police conducted further investigation and laid charge sheet. Learned defence counsel argued that PWs.31 and 32 violated the mandatory requirement under Rule 5 (2) of Andhra Pradesh Depositors of Financial Establishment Rules and they are not competent persons to conduct investigation and launch prosecution and further, all the documents relating to the case are not furnished to the accused as required under Section 207 of Code of

Criminal Procedure and as such, investigation done by PWs.31 and 32 is illegal and to substantiate their version relied upon judgment of Hon’ble

High Court of Andhra Pradesh in Yousuf Bin Award @ Yousauf (supra).

For better understanding Section 4 of the Act, 1999 and Rule 5 are set out below:- 29 C.C.No.6/2016 PDJC, Rjvm

Section 4: Competent Authority: (1) The Government may, by notification, appoint an authority hereinafter called "the competent authority" to exercise control over the properties attached by the Government under section 3. (2) The Competent authority shall have such other powers and discharge such other functions as may be prescribed, in addition to the powers and functions specified under this Act. (3) Upon receipt of the orders of the Government under section 3, the Competent authority shall apply within fifteen days to the Special Court constituted under this Act for making the ad-interim order of attachment absolute. (4) An application under sub-section (3) shall be accompanied by one or more affidavits, stating the grounds on which the belief that the financial establishment has committed any default or is likely to defraud, is founded, the amount of money or value of other property believed to have been procured by means of the deposits, and the details, if any, of persons in whose names such property is believed to have been invested or purchased out of the deposits or any other property attached under section 3

Rule 5 (2):-Where the competent authority satisfied or has reason to believe that the financial establishment has committed a default punishable under Section 5 of the Act, the Competent Authority shall be competent to launch prosecution before the Special Court against the Financial Establishment and any person responsible for the management of the affairs of the Financial Establishment including the promoter, manager or member of the Financial Establishment for levy of penalty under Section 5 of the Act.

b)Having considered G.O.Ms.No.346, Home (Gen.B), dated 14.11.2000, sub Rule 2 is added to Rule 5 and as per this Rule, competent authority has to launch prosecution before the Special Court, against the financial establishment or the persons responsible for the management of its affairs. In this regard, Additional Director General of police, C.I.D. is appointed as competent authority vide G.O.Ms.No.193,

Home (Gen.B), dated 23.8.2001 issued under Section 4 of the Act, 1999.

30 C.C.No.6/2016 PDJC, Rjvm In the judgment relied upon by the learned defence counsel in Yousuf

Bin Award @ Yousauf (supra), having considered both the government orders dated 14.11.2000 and 23.8.2001 and also having considered the facts and circumstances of that case, Hon’ble High Court of Andhra

Pradesh set aside the conviction and sentence passed by the trial court for the offence under Section 5 of the Act, 1999. Facts of the said case are, originally first information report was not registered of the offence under Section 5 of the Act, 1999 and charge sheet was also not laid for the said offence and subsequently, that too, after framing charge, the

Inspector of Police, WCO Team-III, Hyderabad had filed memo requesting the court to add Section 5 of the Act, 1999.

c)As it is stated above, in the present case at hand, first information report was registered for the offence under Section 5 of the Act, 1999 along with the provisions under Indian Penal Code and other offences and charge sheet also laid for the same offences. It is not in dispute that neither PW.31 nor PW.32 nor the police officer in the cadre of Inspector of

Police or Deputy Superintendent of Police are appointed as competent authority to conduct investigation or launch prosecution. In the aforementioned case relied upon by the accused, prosecution suddenly introduced Section 5 of the Act, 1999 and in that case, it seems, accused not admitted about establishment of company and as such, absolutely, it 31 C.C.No.6/2016 PDJC, Rjvm was surprise to them and since miscarriage of justice is caused, Hon’ble

High Court set aside the conviction. But, in this case, it is the admitted case of accused that accused No.2 company is established by accused

No.1 and others. Charge sheet also laid for the offence under Section 201 of Indian Penal Code on the allegation that the accused caused disappearance of documentary evidence including the certificate of incorporation, list of directors, account books etc., from the place where the accused No.2 company is established vide Ex.P27. So, the argument of the learned counsel for the accused that for non supply of relevant documents regarding establishment of company vitiates the trial cannot be taken into consideration. Added to it, during trial when Exs.P26 to 41 filed and admitted in the evidence, accused did not dispute the said documents and moreover, categorically admitted the same in the evidence of investigating officers and other witnesses.

d)To consider the core point that whether total case vitiates for conducting investigation and launching prosecution by a person who is not competent, it is appropriate to refer to that before bifurcation of both the states of Andhra Pradesh and Telangana, the aforementioned

Government Orders dated 14.11.2000 and 23.8.2001 are issued in respect of competent authority and appointing Additional Director General of Police, C.I.D. as competent authority. After bifurcation, Government of 32 C.C.No.6/2016 PDJC, Rjvm Telangana issued G.O.Ms.No.99 dated 5.9.2018 amending Rule 5(2) of the Telangana Protection of Depositors of Financial Establishment Act, 1999 to the effect empowering any police officer not below the rank of

Inspector of Police to launch prosecution under the Act 17/1999 and the

Rules framed thereunder with retrospective affect. When the said

G.O.Ms.No.99 is challenged, Hon’ble Division Bench of Hon’ble

Telangana High Court while deciding the writ petition in Mr.Syed Yousuf

Abbas Vs. State of Telangana 4 held that:- “The intention of the legislature by amending Rules with retrospective effect no way intends to regularize any flaw in respect of the trial. The Special Courts keeping in view the statutory provisions under the Act No.17 of 1999 and the Rules framed thereunder are proceeding ahead with the trial on the basis of the material brought before the Special Courts by the competent authority or by any police officer and merely because investigation has been carried by any police officer not below the rank of Inspector of Police prior to 05.09.2018, it does not mean that all the misdeeds of the petitioners can be wiped out as prayed by the petitioners. The petitioners' contention is that the amendment and the Rules has been done only with a view to object to nullify the Judgment delivered by this Court in Criminal Appeal No.1576 of 2005 and batch decided on 01.04.2015. In the considered opinion of this Court, the plea canvassed by the petitioners is ill-founded.

It does not nullify any Judgment. The act of the petitioners was certainly an offence earlier also and it is an offence under the amendment also and it is nobody's case that the act committed by the petitioners has been made an offence by amending the Act retrospectively”.

e)The said Government order is challenged before the common High

Court by duly issuing notice to the State Government. Admittedly, either

4. Writ petition No.40775 & 40962/2018 33 C.C.No.6/2016 PDJC, Rjvm after bifurcation of both the states of Andhra Pradesh and Telangana or after establishment of our Hon’ble High Court of Andhra Pradesh, State

Government of Andhra Pradesh has not issued similar Government order authorizing the Inspector of Police to launch prosecution for the reasons best known to it. In this regard, it is to be noted that in R.A.H. Siguran vs. Shankare Gowda @ Shankara & Anr 5in which,Hon’ble Apex Court categorically held that unless accused proves that miscarriage of justice is done to him, the trial should not be vitiated. Though the said case relates to the Immoral Traffic Act, by referring several precedents from 1955, Hon’ble Apex Court held the said principle.

f)In H.N. Rishbud and Anr. Vs. State of Delhi 6 the question considered by the Hon’ble Apex Court was whether after the court takes cognizance, trial can be held to be vitiated merely on the ground that investigation was invalid and answering in the negative, it was held that if the plea of invalidity of investigation is raised at sufficiently early stage, the court, instead of taking cognizance direct reinvestigation by competent investigating officer. But, after cognizance is taken the trial cannot be quashed for invalidity of investigation.

The observations in the said judgment are as follows:- “9. The question then requires to be considered whether and to what extent the trial which follows such investigation is vitiated. Now, trial 5. (2017) 16 SCC 126 6 AIR 1955 SC 196 34 C.C.No.6/2016 PDJC, Rjvm follows cognizance and cognizance is preceded by investigation. This is undoubtedly the basic scheme of the Code in respect of cognizable cases. But it does not necessarily follow that an invalid investigation nullifies the cognizance or trial based thereon. Here we are not concerned with the effect of the breach of a mandatory provision regulating the competence or procedure of the Court as regards cognizance or trial. It is only with reference to such a breach that the question as to whether it constitutes an illegality vitiating the proceedings or a mere irregularity arises. A defect or illegality in investigation, however serious, has no direct bearing on the competence or the procedure relating to cognizance or trial. No doubt a police report which results from an investigation is provided in Section 190 of the Code of Criminal Procedure as the material on which cognizance is taken. But it cannot be maintained that a valid and legal police report is the foundation of the jurisdiction of the Court to take cognizance.

While no doubt, in one sense, clauses (a), (b) and (c) of Section 190(1) are conditions requisite for taking of cognizance, it is not possible to say that cognizance on an invalid police report is prohibited and is therefore a nullity. Such an invalid report may still fall either under clause (a) or (b) of Section 190(1), (whether it is the one or the other we need not pause to consider) and in any case cognizance so taken is only in the nature of error in a proceeding antecedent to the trial. To such a situation Section 537 of the Code of Criminal Procedure which is in the following terms is attracted:

“Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered on appeal or revision on account of any error, omission or irregularity in the complaint, summons, warrant, charge, proclamation, order, judgment or other proceedings before or during trial or in any enquiry or other proceedings under this Code, unless such error, omission or irregularity, has in fact occasioned a failure of justice.” “If, therefore, cognizance is in fact taken, on a police report vitiated by the breach of a mandatory provision relating to investigation, there can be no doubt that the result of the trial which follows it cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice. That an illegality committed in the course of investigation does not affect the competence and the jurisdiction of the 35 C.C.No.6/2016 PDJC, Rjvm Court for trial is well settled as appears from the cases in Prabhu v. Emperor (AIR 1944 PC 73) and Lumbhardar Zutshi v. King (AIR 1950 PC 26). These no doubt relate to the illegality of arrest in the course of investigation while we are concerned in the present cases with the illegality with reference to the machinery for the collection of the evidence. This distinction may have a bearing on the question of prejudice or miscarriage of justice, but both the cases clearly show that invalidity of the investigation has no relation to the competence of the Court. We are, therefore, clearly, also, of the opinion that where the cognizance of the case has in fact been taken and the case has proceeded to termination, the invalidity of the precedent investigation does not vitiate the result, unless miscarriage of justice has been caused thereby”.

g)Further, in State of Haryana v. Bhajan Lal 7, Hon’ble Apex Court held as under:

“119. It has been ruled by this Court in several decisions that Section 5-A of the Act is mandatory and not directory and the investigation conducted in violation thereof bears the stamp of illegality but that illegality committed in the course of an investigation does not affect the competence and the jurisdiction of the court for trial and where the cognizance of the case has in fact been taken and the case is proceeded to termination, the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. See (1) H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], (2) Major E.G. Barsay v. State of Bombay [AIR 1961 SC 1762], (3) Munnalal v. State of U.P [AIR 1964 SC 28], (4) Sailendranath Bose v. State of Bihar [AIR 1968 SC 1292], (5) Muni Lal v. Delhi Admn. [(1971) 2 SCC 48] and (6) Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. However, in Rishbud case [AIR 1955 SC 196] and Muni Lal case [(1971) 2 SCC 48], it has been ruled that if any breach of the said mandatory proviso relating to investigation is brought to the notice of the court at an early stage of the trial, the court will have to consider the nature and extent of the violation and pass appropriate orders as may be called for to rectify the illegality and cure the defects in the investigation.

7. [1992 Supp (1) SCC 335] 36 C.C.No.6/2016 PDJC, Rjvm

h)And, in A.C. Sharma v. Delhi Admn 8, provision of Section 5-A again considered and held as under:

“15. As the foregoing discussion shows the investigation in the present case by the Deputy Superintendent of Police cannot be considered to be in any way unauthorised or contrary to law. In this connection it may not be out of place also to point out that the function of investigation is merely to collect evidence and any irregularity or even illegality in the course of collection of evidence can scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated. In H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], it was held that an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. When any breach of the mandatory provisions relating to investigation is brought to the notice of the court at an early stage of the trial the Court will have to consider the nature and extent of the violation and pass appropriate orders for such reinvestigation as may be called for, wholly or partly, and by such officer as it considers appropriate with reference to the requirements of Section 5-A of the Prevention of Corruption Act, 1947. This decision was followed in Munnalal v. State of U.P. [AIR 1964 SC 28] where the decision in State of M.P. v. Mubarak Ali [AIR 1959 SC 707], was distinguished. The same view was taken in State of A.P. v. N. Venugopal [AIR 1964 SC 33] and more recently in Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. The decisions of the Calcutta, Punjab and Saurashtra High Courts relied upon by Mr Anthony deal with different points: in any event to the extent they contain any observations against the view expressed by this Court in the decisions just cited those observations cannot be considered good law.

i)Added to it, this case comes under the purview of Section 460 (c) of

Code of Criminal Procedure, but not under Section 461 of Code of

Criminal Procedure. Further, except posing questions in respect of Rule

8. (1973) 1 SCC 726 37 C.C.No.6/2016 PDJC, Rjvm 5(2) to PWs.31 and 32 that they have to obtain permission from the

Superintendent of Police to register first information report and investigate the case and launch prosecution by following G.O.Ms.No.346, that too, by recalling them, accused did not raise any objection either after registration of first information report, during investigation, before or after taking cognizance, before framing charge or during trial at the time of initial examination of PWs.31 and 32. Added to it, for the same offences, State

Government of Telangana which is bifurcated from the state of Andhra

Pradesh had issued G.O.Ms.No.99 authorizing the Inspector of Police to launch prosecution with retrospective affect. So, even other wise it can be inferred that the same cadre police officials have competency to launch prosecution and in this case, Deputy Superintendent of Police filed charge sheet.

j)To sum up, having given thoughtful consideration to the aforementioned propositions, an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby and further, function of investigation is merely to collect evidence and any irregularity or even illegality in the course of 38 C.C.No.6/2016 PDJC, Rjvm collection of evidence can be scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated.

[k)For the foregoing reasons, this court came to conclusion absolutely miscarriage of justice is not done to the accused for conducting investigation by PWs.31 and 32 and launching prosecution by PW.32 who is none other than Deputy Superintendent of Police.

iii) Ancillary point No.(iii): Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

a)It is already stated above that there is no dispute about the establishment of accused No.2 company and it is also not in dispute that accused No.1 was Managing Director and accused Nos.3, 4, 6 and 7 were directors at the time of establishment of accused No.2 company.

Further, Exs.P26, 27 and 29 reveal the same and further, name of accused No.2 is changed as Suverna India Projects Limited vide Ex.P28.

Before taking up appreciation in respect of this point, it is pertinent to refer

to the relevant provisions under the Act, 1999, which are extracted hereunder.

Section 2(b) and (c) of the Act reads as follows: “2-Definition:- In this Act, unless the context otherwise remains:

(a) xxxxxx

(b)‘Deposit’ means the deposit of a sum of money either in lumpsum or instalments made with a financial establishment for a fixed period, for interest or return in any kind; 39 C.C.No.6/2016 PDJC, Rjvm

(c)"Financial Establishment" means any person or group of individuals accepting deposit under any scheme or arrangement or in any other manner but does not include a corporation or a co-operative society owned or controlled by any State Government or the Central Government or a banking company as defined under clause (c) of section 5 of the Banking Regulation Act, 1949 (Central Act 10 of 1949).

Section 5 of the Act reads as follows:-

Penalty for default - Where any financial establishment defaults in the return of the deposit either in cash or kind or defaults in the payment of interest on the deposit as agreed upon, every person responsible for the management of the affairs of the financial establishment including the promoter, Manager or Member of the financial establishment shall be punished with imprisonment for a term which may extend to ten years and with fine which may extend to rupees one lakh and such financial establishment shall also be liable for fine which may extend to rupees five lakh.

b)Now, coming to the facts and evidence of the case, it is already stated above that there are six categories of witnesses and two categories of documents. Out of which, first category of witnesses are victims, they are PWs.1 to 3 and 12 to 23 and second category of witnesses are agents-cum-victims. Before appreciating the evidence of victims, it is apposite to appreciate the evidence of agents and agents-

Cum-victims who set the criminal law into motion vide Ex.P2 to follow sequence.

c) Evidence of Agents: ( PWs.1 to 3)

i)PWs.1 to 3 stated in one voice that accused No.1 who is none other than Managing Director of Suvarna India Infra Projects

Limited/accused No.2 company which is situated at Ganapathi Plaza, 40 C.C.No.6/2016 PDJC, Rjvm Cinema Road, Amalapuram informed to them that they established accused No.2 company with an intention to collect recurring deposits from the general public to pay interest at 20% on the deposit amount and also to pay 4% of commission to the agents and further, their company has license and also obtained permission from the Reserve Bank of India and made believe the witnesses that accused No.2 is well established company and accordingly, they joined as agents, collected amounts from the general public and further, they also deposited amounts in the accused No.2 company and as per the version of some of the witnesses, they directly paid amounts to the accused No.1 and some others paid the same to the employees of accused No.2 company, in the presence of accused No.1. PWs.1 to 3 further stated that when they demanded accused No.1 to repay the amount, after completion of maturity period, he replied that he has made investments at several places and promised to repay the same, and a meeting is conveyed at Sivakodu and finally, the company is closed and further, several victims questioned them for repayment. For better clarification, the details of amounts collected by

Pws.1 to 3 and their personal deposits are mentioned hereunder:

S.NNumber ofCollected amountPersonal depositRelevant o.witness(Rupees)document/s 1PW.111,45,000/- 50,000/- Ex.P1 from 19 persons 2PW.23,79,000/----- from 30 to 40 41 C.C.No.6/2016 PDJC, Rjvm persons. 3PW.38,24,000/-3,360/-Ex.P3 From 30 persons iii)So, as per the version of PWs.1 to 3, they collected an amount of

Rs.23,48,000/- and also made personal deposits of Rs.53,360/-. All the witnesses/agents have categorically stated that they were appointed by the accused No.1 as agents so as to collect amounts from the general public and deposit the same in the accused No.2 company and further, the Managing Director, promised to pay 20% interest to the customers and accordingly, bonds/receipts/pass books are issued to them, to some of the agents as well as victims. Further, PWs.1 to 3 are none other than defacto complainants who set the criminal law into motion by giving Ex.P2 report.

iv)Learned counsel for the accused would argue that there is no proof to show that Pws.1 to 3 were appointed as agents, collected amounts on behalf of accused No.2 company and deposited the same and further, neither accused No.1 nor accused No.2 appointed them as agents and as such, accused No.2 company is not committed any offence. But, PWs.1 to 3 have consistently in one voice stated that they were appointed as agents by accused No.1 and they collected amounts to a tune of

Rs.23,48,000/- and also deposited Rs.53,360/- and in this regard, it is to 42 C.C.No.6/2016 PDJC, Rjvm be noted that a charge under Section 120-B of Indian Penal Code is also framed against the accused alleging that they conspired together, established accused No.2 company, collected amounts directly and through the agents.

v)Further, it is already stated above that along with accused No.2 company, accused Nos.1 and 3 who are none other than husband and wife also established four other nominal companies which are referred above. So, it shows that from the inception of establishment of accused

No.2 company and other companies, they violated the provisions of the

Act, 1999 and further, another charge under Section 201 of Indian Penal

Code is also framed for causing the disappearance of evidence by removing all the documents in respect of accused No.2 company and as per the version of prosecution, they could not secure single piece of document in the office of accused No.2 company. In the cross examination of all the witnesses, learned counsel for the accused elicited that Exs.P1 and 3 do not contain signature of accused No.1, seal in the name of Survarna Real estate is there on all the documents, some of the agents have not categorically stated before the investigating officer that they have given amounts either to the managers or to the accused No.1.

It is nowhere suggested that accused No.2 company is not at all established and their defence is that they never collected any amounts 43 C.C.No.6/2016 PDJC, Rjvm from any of the person and all the documents are fabricated. Learned counsel for the accused also elicited some formal inconsistencies in the evidence of PWs.1 to 3 which do not thrown away the version of the prosecution and dislodge their testimonies.

d) Evidence of Victims: (PWs.6, 12 to 23)

i)All the witnesses testified consistently that upon believing the words of accused Nos.1 and 3 or accused No.1 or accused Nos.1, 3 and 6 about establishment of accused No.2 company at Gapanapthi Plaza,

Cinema road, Amalapuram and if they deposit amounts in their company, accused No.2 company would pay interest at 20%, they all deposited amounts in their names and in the names of their family members vide

Exs.P4 to 24, and in the cross examination of all the witnesses, all the suggestions posed by the learned defence counsel are denied, however, learned defence counsel elicited formal inconsistencies and omissions in respect of the statements which are not specifically given before the investigating officer with regard to the presence of either of the accused at the time of making payments, names of agents and further, all the witnesses are also admitted that that none of the bonds/receipts contain the name of accused No.2 company and they contain the name of

Suvarna Real Estate company and the details of the witnesses, deposit amounts, documents etc., are stated as follows:

44 C.C.No.6/2016 PDJC, Rjvm

WitnessDepositRelevantThrough whom amount is deposited or (rupees)documentany other reference. PW.62,20,000/-Exs.P4 & 6Directly paid to accused No. PW.860,000/-Ex.P6Accused No.1 directly approached. PW.121,47,000/-Ex.P7 to 9PW.1 PW.1380,000/---Father PW.141,72,500/-Exs.P11 & P12 Accused Nos.1, 3 and 6 approached PW.151,00,000/-Ex.P13Accused No.1 approached. PW.163,60,000/-Ex.P14PW.2/agent PW.1715,000/-Exs.P15 & 16PW.1/agent. Accused No.1 also approached. PW.1850,000/-Exs.P17 & 18Accused No.1 and family members approached. PW.1960,000/-Ex.P19Accused No.1 approached PW.207,500/-Ex.P20PW.1/agent PW.2121,000/-Exs.P21 & 22Accused No.1 approached PW.2250,000/-Ex.P23-- PW.231,00,000/-Ex.P24-- ii)So, as per the version of the victims, they deposited an amount of

Rs.14,43,000/- by believing the words of accused No.1 and others, either through agents or directly. Some of the witnesses stated that they know accused Nos.1 and 2, some stated that they know accused Nos.1, 3, 6 and some other witnesses stated that they know accused Nos.1 to 3, 5 to 7. Further, some of the victims stated that accused No.1 went to their houses and churches along with agents and family members. Some of the victims testified that they approached accused No.2 company situated at Ganapathi Plaza along with agents and deposited amounts and except 45 C.C.No.6/2016 PDJC, Rjvm eliciting the material that the name of Suvarna real estate company is mentioned on the bonds and receipts, nothing more useful is elicited to disbelieve the version of victims. Learned counsel for the accused also elicited some formal inconsistencies in the evidence of Pws.6, 8 to 23 which do not thrown away the version of the prosecution.

e) Evidence of employees of accused No.2 (Pws.9, 10 and 11):

i) It came in the evidence of PW.9 that accused No.1 is managing director of Suvarna India Infra Project Limited, Ganapathi Plaza,

Amalapuram, accused Nos.3 to 8 are directors of the said company, he came to know through some others about the establishment of the said company and accordingly, he went to the company and then, accused

No.1 appointed him as accountant and along with him some other persons also joined as Branch Managers and agents in the said company. Further, the Branch Manager and agents used to collect deposits from the general public and used to deposit the same in the company and at the end of every day, himself and others used to hand over total deposit amounts to the accused No.1, company used to issue bonds and receipts and whenever any customer approached the company to withdraw the deposit amount, accused No.1 used to postpone the payment by saying that they invested the said amounts in the Reserve Bank of India and if they wait for another six months, he 46 C.C.No.6/2016 PDJC, Rjvm would pay additional interest and finally, company is closed without leaving any evidence and by removing total records and furniture from

Ganapathi Plaza and finally, victims gave report to the police.

ii)In the cross examination, he had admitted that he stated in the connected matters in C.C.Nos.1/2016 and 2/2016 that he gave seven similar statements in all the connected matters and since the learned defence counsel questioned about the documentary proof regarding his appointment, witness produced photo copy of order dated 1.3.2012 vide

Ex.D1. He has further stated that, as per Ex.D1, he was appointed as operational manager, but not accountant, and in Ex.D1, name of the company is mentioned as Suvarna India, Suvarna Infra Projects India

Limited and he denied other suggestions posed by the learned defence counsel stating that he fabricated Ex.D1 and he further admitted that in

C.C.No.2/2016, he stated that he does not have any documentary proof to show his appointment and for which, he gave explanation that thereafter, he searched for the appointment order and could trace out it and some other formal material which is not useful to disbelieve the version of PW.9 is elicited in his cross examination.

iii)PW.10 testified that on 1.4.2012, he joined as accountant in

Suvarna India Infra Project Limited and initially, he worked for some period at P.Gannvaram and Muramalla and thereafter, he worked in the 47 C.C.No.6/2016 PDJC, Rjvm head office situated at Amalapuram, several branch managers and agents are appointed by the company and they used to collect deposits from the general public to run real estate business and Suvarna India

Infra Project Limited, accused No.1 is the Managing Director and accused

Nos.3 to 8 are directors of the said company, objectives of the company are to collect deposits from poor public, invest the same in the real estate business and pay deposit amount with 20% interest and further, general public used to come to the office to deposit amounts through agents and branch managers and they used to issue deposit bonds and receipts to the depositors and at the end of every day, they used to hand over total amount to the accused No.1. Further, after completion of maturity period also, accused No.1 failed to repay the amount, postponed the same on the ground that he invested the said amounts in other business and he would repay the same with additional interest and finally, the company is closed by removing all the records and furniture where accused No.2 is established and some of the victims gave report to the police. He also admitted in his cross examination that he gave evidence in the connected matters in C.C.Nos.1/2016 and 2/2016 that he gave similar statement in all the connected matters and denied the suggestions that he never worked in accused No.2 company and he had no acquaintance 48 C.C.No.6/2016 PDJC, Rjvm withaccused No.1 and other accused and further, he pleaded ignorance about DIN number of accused Nos.3 to 8.

iv)As per the version of PW.11, in the year 2013, he joined as accountant in accused No.2 company at Rajamahendravaram Branch, accused No.1 is managing director, accused Nos.3 to 9 are directors of the said company, its main office is situated at Ganapathi Plaza,

Amalapuram, objectives of the company are to run other business like real estate etc., and collect deposits from the general public and pay deposit amount with 20% interest, general public used to come to the branch office, Rajamahendravaram to deposit amounts through agents and branch managers, they used to issue deposit bonds and receipts to the depositors, at the end of every day, they used to hand over total amount to the accused No.1. Further, directors used to postpone the payment and on one day, when he went to the branch office,

Rajamahendravaram to attend work, it is found locked by removing total records and furniture and finally, some of the victims gave report to the police, and in the cross examination, he also stated that he gave evidence in the connected matters in C.C.Nos.1/2016 and 2/2016 that he joined in the company on 10.4.2012, accused No.9 took back his appointment letter when a meeting was conducted at Sivakodu. Further, 49 C.C.No.6/2016 PDJC, Rjvm he has stated he gave similar statements in all the connected matters and denied other suggestions posed by the learned defence counsel.

f) Evidence of independent witnesses (Pws.4, 5 and 7):

i)It came in the evidence of PW.4 that since 2011, he has been working as lodge boy in Ganapathi Plaza, Amalapuram, in the year 2013,

Suvarna India Infra Private Limited was established in the first floor by accused Nos.1, accused Nos.3, 5, 6 and others served as directors, he know all the said persons, public used to come to the said company to deposit amounts and after receiving amounts, company used to issue receipts and in the year 2015, company is closed, general public deposited amounts to receive excessive interest, company failed to repay the amounts, company people also taken away total records and furniture from the said building and in the cross examination, he has stated that in

C.C.No.1/2016, he pleaded ignorance about the affairs of the company, and further, he has stated that he has no evidence to show that he has been working as lodge boy in Ganapathi Plaza and denied other suggestions.

ii)PW.5/other independent witness testified that he has been working as lodge boy in Ganapathi Plaza for the last 20 years, in the year 2011,

Suvarna India Infra Private Limited was established in the first floor of

Ganapathi Plaza by accused No.1, he know one Madhavi and accused 50 C.C.No.6/2016 PDJC, Rjvm No.3 who served as directors, public used to come to the said company to deposit amounts and after receiving amounts, company used to issue receipts, in the year 2014, company is closed, general public deposited amounts to receive excessive interest, company failed to repay the amounts, company people also taken away total records and furniture from the said building, and in the cross examination, he has stated that in

C.C.No.1/2016, he pleaded ignorance about the affairs of the company, and he has further stated that he has no evidence to show that he has been working lodge boy in Ganapathi Plaza and denied other suggestions.

iii)As per the version of PW.7, he is running a shop for sale of disposable items in the ground floor of Ganapathi Plaza, main road,

Amalapuram and in the year 2011, Suvarna India Infra Private Limited was established in the first floor of Ganapathi Plaza by accused Nos.1, 3, 6 and others, public used to come to the said company to deposit amounts and after receiving amounts, the said company functioned for four years, they failed to repay the amounts, company people also taken way total records and furniture, several persons came to the Ganapathi

Plaza and demand for repayment of amounts and then, company failed to pay the same, and in the cross examination, he had admitted that there is no document to show that he is running a shop in Ganapathi Plaza, he 51 C.C.No.6/2016 PDJC, Rjvm has not obtained any license from the municipality and other suggestions posed by the learned defence counsel are denied.

iv)Pws.4, 5 and 7 are independent witnesses and one cannot except document from them to prove their business and avocation. There is no reason to disbelieve the version of these witnesses. No animosity also attributed between them and the accused. It is not in dispute about establishment of accused No.2 company at D.No.3-1-98, Ganapathi

Plaza, main road, Amalapuram in the year 2011. Nothing useful material is elicited in their evidence. To sum up their evidence, accused No.2 company is established in Ganapathi Plaza, main road, Amalapuram, several persons came there, deposited amounts and when they demanded for repayment, accused No.2 company failed to pay the same, closed the company, removed all documentary evidence and furniture.

g) Evidence of mediators (Pws.25 to 30):

As per the version of Pws.25 to 30, PW.31 called them and other mediators, to act as mediators and in their presence, PW.31 arrested accused Nos.1, 8, 9, 5, 6 and 4 vide Exs.P42 to 47 on the respective dates and places and there is no dispute about the arrests of all these accused. Admittedly, nothing is seized from either of the accused. So, in view of the provisions under the Evidence Act, only admissible and relevant portions in respect of names, other details of the accused and 52 C.C.No.6/2016 PDJC, Rjvm their arrests are only marked. PW.31 also stated on the same lines of evidence of Pws.25 to 30. Formal suggestions are posed by the learned defence counsel regarding preparation of documents in the police station and they are denied by Pws.25 to 30.

h) Evidence of official witnesses (Pws.24, 31 and 32):

i)It is already stated above that the present station house officer i.e.,

PW.24 took steps, during trial, secured documents vide Exs.P25 to 41 regarding establishment of the accused No.2 company and other companies at bearing D.No.3-1-98, Ganapathi Plaza, main road,

Amalapuram. PW.31 is very crucial witness who registered Ex.P2 report of Pws.1 to 3 vide Ex.P47 for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and under Section 5 of the Act, 1999 and in his chief examination, he stated supporting the case of prosecution and in the cross examination, he has categorically admitted that he has not collected any document showing registration of accused No.2 company, he tried to get registered document of accused No.2 company, basing on the statements of victims, he came to conclusion that accused

Nos.1, 3 to 8 are directors of accused No.2 company and that he has not produced any document to show that he tried to secure documents showing registration of accused No.2 company and part-I case dairy shows that none of the victims have handed over documents to show that 53 C.C.No.6/2016 PDJC, Rjvm the accused are directors of accused No.2 company. He has further admitted that he has not shown other companies as accused in this case, though several bonds are issued in that name, he has not done investigation relating to Survarna Real estate, none of the victims have handed over documents issued in the name of accused No.2 company, he has not verified whether the bonds contain the signature of any of the accused, he has not collected any documents from the accused, after submitting resignation by accused No.1 to Sahara India private Limited, accused Nos.1, 3 and 6 established accused No.2 company. Further, in the part-I case diary there is no specification that accused No.9 is legal advisor and friend of accused No.1, accused No.4 is advocate from

Visakhapatnam, accused No.8 is resident of Samisrigudem of Nidadavolu and accused No.10 is resident of Sivakodu village of Razole Mandal.

Further, he has not produced any document to show movable and immovable properties transferred in the name of accused No.10 and except the case diary file, he has not handed over any document showing registration of accused No.2 company and that PW.1 has not stated about involvement of accused No.9 in settling the matter. Further, he has not secured any document to show the agents and managers of accused

No.2 company and after going through the provisions of Andhra Pradesh 54 C.C.No.6/2016 PDJC, Rjvm Protection of Depositors of Financial Establishment Act, 1999, he registered the report of defacto complainants.

ii)It is already stated above, being participated in the investigation including the registration of report of PWs.1 to 3 vide Ex.P47 for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Act and under Section 5 of the Act, 1999, PW.31 failed to secure single piece of document in respect of accused No.2 company and deposit amounts made by the victims. After registration of Ex.P47/first information report, he simply recorded the statements of the witnesses in this case and in the connected cases. Even as per his categorical admissions, he has not even take steps to obtain the documents relating to accused No.2 company.

iii)Learned counsel for the accused argued that none of the documents i.e., deposit/bond/pass book contain the name or seal of accused No.2 company and as such, accused are no way concerned with

Exs.P1 to P49. Admittedly, neither the directors nor any concerned person of accused No.2 company signed Exs.P1, 3 to 24 and seal of

Suvarna Real Estate is mentioned on the documents. In this regard, it is to be noted that name of accused No.2 company is Suvarna India

Projects Limited and accused Nos.1 and 3 are also established two other companies in the same name of Suvarna i.e., Suvarna India Iron and 55 C.C.No.6/2016 PDJC, Rjvm steel Manufacturing Private Limited and Suvarna India Vidyut Plant

Private Limited besides two other companies i.e., Prakash India Power

Projects Private Limited and Supreme India TV Channel Private Limited.

Further, several victims could not even say full name of the accused No.2 company and they simply stated as Suvarna Company, Suvarna India

Limited Company etc., Most of the victims studied 10th class or below 10th class, some are illiterates and some victims have completed graduation.

In this regard, it is to be noted that had the victims really had that much of knowledge and wisdom, they should not have believed the words of the accused who agreed to give very higher rate of interest at 20% which is not at all believable. So, it shows that the accused No.2 company lured all the victims in such a way to believe their words. Assuming for the sake of arguments that the accused No.2 company not at all issued any bonds/receipts/pass books to the victims also, their oral testimonies cannot be ruled out, without any proper defence. Having admitted establishment of accused No.2 company, accused simply denied collection of amounts from the victims. Had they really had good intention of running company, they should have been filed documents showing their business. Added to it, there is no explanation from the accused why they established accused No.2 company and other companies, if they had no intention of collecting investments.

56 C.C.No.6/2016 PDJC, Rjvm

h)Learned defence counsel relied upon the following judgments:

a)J.P.S.Enterprises and another Vs. State 9 , hon’ble High Court of

Madras has held that:

“A careful reading of the judgment of the learned Special Judge would also indicate his finding that even though none of the documents produced by the prosecution bear either the name of the second accused or his signature, yet the other circumstances would indicate that both the accused are guilty of the offence. A careful scrutiny of the entire evidence let in by the prosecution would in my opinion indicate that such finding has no basis at all for the reason that in none of the documents, the second accused has subscribed his signature”

The facts of the said case are entirely different. In view of the establishment of three companies in the same name i.e., Suvarna, there is every possibility of getting confused and moreover facts and circumstances of this case clearly indicate that from the inception of establishment of accused No.2 company, Managing Director and directors of the said company inducing general public.

b)Arnol Samadhan Nikam Vs. The State of Maharashtra 10 in which is held that:- “….we have noticed that even in serious offence, the investigating officer who had recorded the statements of the witnesses under Section 161 of the Code of Criminal Procedure, has literally made copy-paste of the statements. Even the paragraphs start with the same words and end with the same words. The culture of copy-paste statements is dangerous and may, in certain cases unnecessarily, give advantage to the accused persons. In such circumstances, the seriousness of the genuine case may get vanished….”.

9. C.A.NO.1048/2000, dt.27.7.2005 of Hon’le High Court of Judicature at Madras

10.Criminal Application No.1091/2025, dated.29.4.2025 57 C.C.No.6/2016 PDJC, Rjvm In this case, charge sheet laid for the offences under Sections 306, 352, 504, 506 r/w.Section 34 of Indian Penal Code, whereas, in the present case at hand, there are 118 witnesses and out of which, prosecution examined Pws.1 to 32 and as per the version of all the victims, agents, employees and independent witnesses either accused

No.1 or accused Nos.1 and 3 or other accused lured the victims to invest amounts in accused No.2 company and promised to pay interest at 20% and further, they also made believe all the victims that the accused have several other companies, made investments in the Reserve Bank of India and as such, similar statements are given by all the victims before the police and also stated before this court. So, it cannot be said that they are copy paste statements and there is no substance in the evidence of prosecution witnesses.

i)So far as default committed by the accused No.2 company, evidence of Pws.1 to 3 clearly reveals that having collected amounts by way of deposits/investments, accused No.2 company committed default in return of deposits either in cash or kind and also committed default in payment of interest on the deposit as agreed upon and as such, Section 5 of the Act, 1999 applies to the present case at hand. So, it can safely be held that prosecution proved its case for the offence under Section 5 of the Act.

58 C.C.No.6/2016 PDJC, Rjvm

j)So far as liability of accused Nos.1, 3 to 8 is concerned, no doubt a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision. In this regard, it is to be noted that as per Section 5 of the Act, 1999 every person responsible for the management of the affairs of the financial establishment including the promoter, manager or member of the financial establishment shall be punished with imprisonment.

k)It is already stated above that initially at the time of establishment of company, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were directors and subsequently, accused Nos.4 and 7 resigned as 59 C.C.No.6/2016 PDJC, Rjvm directors on 15.5.2014 and 30.11.2012 respectively. It is also not in dispute that accused No.4 submitted resignation within one year of establishment of accused No.2 company and accused No.7 submitted his resignation long prior to registration of Ex.P48/first information report. In this regard, learned defence counsel argued that having taken advantage of relationship with accused No.7 and friendship with accused No.4, accused No.1 included their names in the list of directors and immediately after coming know the said fact, they submitted resignation and the same is acknowledged by the Registrar of Companies vide Ex.P29. Added to it, none of the witnesses have specifically stated about the inducement made by accused No.4 and 7 and their involvement in collection of amounts from them. It shows that though their names are initially shown in the list of directors vide Ex.P29, they resigned very long prior to the registration of Ex.P48. PWs.24 and 31 also admitted that accused Nos.1, 3 and 6 are responsible as they continued as directors. Added to it, accused Nos.3 and 6 are wife and daughters of accused No.1. And, absolutely there is no material to show that accused Nos.5 and 8 are directors of accused No.2 company and PW.24 also categorically admitted the same and it is not the case of prosecution that accused No.9 is either director or induced the victims.

60 C.C.No.6/2016 PDJC, Rjvm

l)For the foregoing reasons, this court came to conclusion that the prosecution proved its case to direct punishment under Section 5 of the

Act, 1999 against accused Nos.1, 2, 3 and 6 as the accused No.2 company committed default in return of investments made by the victims and that accused Nos.4 and 7 are not at all participated in the affairs of accused No.2 company. Further, without there being any material, accused Nos.5 and 8 shown as directors of accused No.2 company.

iv) Ancillary point No.(iv): Wether charge under Section 120B, 201, 417 and 420 of Indian Penal Code is sustainable in addition to the charge under

Section 5 of the Act?

a)Absolutely charge under Section 120-B, 201 and 420 of the Code is sustainable in addition to the charge under Section 5 of the Act, 1999.

Section 5 of the Act, 1999 specifically deals with the situation when there is failure of financial establishment to return or pay interest and Section 420 of the Code deals with broader initial fraudulent inducement to make the victim to part with their money.

b)It is settled law by a catena of decisions that for establishing the offence of cheating, prosecution is required to show that the accused had fraudulent or dishonest intention at the time of making promise of representation. From his making failure to keep up promise subsequently, such a culpable intention right at the beginning i.e., at the time when the promise was made cannot be presumed. If there was absence of 61 C.C.No.6/2016 PDJC, Rjvm dishonest and fraudulent intention, the question of punishment under

Section 420 of the Code does not arise. Further, a bare perusal of

Section 415 r/w Section 420 of the Code would clearly lead to the conclusion that fraudulent or dishonest inducement on the part of the accused must be at the inception and not at a subsequent stage. Section 415 of the Code defines ‘cheating’ that whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. So, as per

Section 415 of the Code, cheating can be by deception inducing any person fraudulently or dishonestly to do things or by inducing a person intentionally to do or omit to do things mentioned in Section 415 of the

Act. Deception has in it the element of misleading, of a making a person believe something which is not real. It implies causing a person to believe as true something that is false. According to the Webster’s New international dictionary the word ‘deceive’ indicates ‘inculcating of one so that he takes the false as true, the unreal as existent, the spurious as genuine’. It is immaterial whether the deception has the capability of 62 C.C.No.6/2016 PDJC, Rjvm imposing upon ordinary minds. What is required is that it must impose upon the mind of the person deceived. To hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfill the promise.

c)It is already stated above that charge under Section 417 and 420 of the Code is framed, on the ground of cheating. It is needless to say that

Section 420 of the Code is aggravated form of Section 417. Section 120A of the Code defines the offence of criminal conspiracy and punishment is provided under Section 120B of the Code. Criminal conspiracy under the

Code is an agreement between two or more persons to commit an illegal act or to commit a lawful act by illegal means and in other words, it is a criminal offence where two or more individuals agree to plan and execute a criminal act. It is needless to say that all conspirators share common liability for the offence, regardless of their individual roles in the execution of crime. Further, seriousness of the intended offence, the degree of planing involved, the role of each conspirator, and any mitigating circumstances such as the conspirator’s age or mental health have also to be taken into consideration. Section 201 of the Code deals with causing the disappearance of evidence.

63 C.C.No.6/2016 PDJC, Rjvm

d)To avoid repetition, evidence of Pws.1 to 23 who are victims, agents, employees and independent witnesses is not mentioning as it is already discussed in the aforementioned ancillary point and upon over all scrutinization of oral evidence coupled with Exs.P1 to P23, accused No.1 directly or through agents or friends and relatives made believe all the victims and agents that they established accused No.2 company with an objective to collect investments/deposits with a promise to pay interest at 20%, they have business affairs, established other companies, made investments in the Reserve Bank of India and accordingly, Pws.1 to 3 joined as agents, some of them also made investments to a tune of

Rs.53,360/- and also made personal deposits of Rs.23,48,000/- and further, Pws.6, 12 to 23 invested/deposited an amount of Rs.14,43,000/- directly or through agents or through relatives and without paying any amount, accused No.2 company is closed.

e)Further, employees/Pws.9, 10 and 11 and independent witnesses/

Pws.4, 5 and 7 also categorically stated about the inducement made by the accused Nos.1, accused No.2 company, accused Nos.3 and 6. The evidence clearly established the fraudulent and dishonest intention of the said accused before investing/depositing amounts by the victims. Facts and circumstances coupled with the evidence of witnesses clearly reveal that accused Nos.1, 3 and 6 who are none other than same family 64 C.C.No.6/2016 PDJC, Rjvm members conspired together, established accused No.2 company with an intention to cheat general public by collecting investments to get wrongful gain. Added to it, with the same conspiracy, accused Nos.1 and 3 also established nominal companies vide Exs.P29 to 41, so as to easily induce the general public.

f)So far as liability of accused Nos.4, 5, 7 and 8 is concerned, it is already stated that there is absolutely no positive material against the accused Nos.5 and 8 and a finding is already given in the first and third ancillary points that accused Nos.5 and 8 are neither directors nor participated in the affairs of accused Nos.2 company. With regard to the role of accused Nos.4 and 7 also, a finding is given that without their knowledge, their names are included in the list of directors and immediately after coming to know the same, they resigned and the same is acknowledged by the Registrar of companies vide Ex.P29. Further, evidence of agents, employees and independent witnesses clearly reveal that suddenly accused No.2 company is closed and they also caused disappearance of the evidence by removing total documents, furniture etc.,

g)So far as material against accused No.9 for the offences under

Sections 420, 120B and 201 of the Code, nowhere it is mentioned that

before collecting deposits also, accused No.9 joined hands with other

65 C.C.No.6/2016 PDJC, Rjvm accused, induced the victims, shared conspiracy and helped to cause disappearance of evidence. It is the specific case of prosecution that accused No.9 convened a meeting at Sivakodu village so as to settle the financial issues and he is none other than close friend of other accused

No.1. During trial, it came in the evidence of Pws.1, 6, 12, 13, 16, 18 and 21 that accused No.9 convened a meeting at Sivakodu village and Pw.9 stated that he came to know that accused No.9 convened a meeting and

PW.11 stated he came to know through the customers that accused No.9 convened meeting at Sivakodu village. Except that no other material is available on record to come to conclusion with regard to the active participation and role played by the accused No.9 either to induce the victims to collect deposits or commit default.

h)It is already stated above that it is incumbent on the part of prosecution to show that the accused had fraudulent intention at the time of making promise or representation and if the accused had no fraudulent or dishonest intention to induce the victims, the question of punishment under Section 420 of Code does not arise. Added to it, except stating that accused No.9 is friend and legal advisor of accused Nos.1, PW.31 also stated nothing about participation and involvement of accused No.9 and further, PW.32 stated nothing against accused No.9.

66 C.C.No.6/2016 PDJC, Rjvm

i)So, record clearly reveals that accused No.9 is no way concerned with the offence under Section 120B, 201, 417 and 420 of the Code and absolutely ingredients of provisions are not attracted against accused

No.9. Assuming for the sake of arguments, accused No.9 either convened meeting or conducted meeting also, even as per the version of the aforementioned witnesses, accused No.9 tried to settle the financial issues and absolutely it does not come under the purview of the punishable offences with which he is charged. So far as charge under

Section 411 of the Code is concerned, it is already stated that the case against accused No.10 is abated, as he died. Even otherwise also, prosecution has not produced any material to attract the ingredient of

Section 411 of the Code. In this regard, it is to be noted that there is no possibility to cover any amount from the accused as the prosecution failed to take steps in respect of the properties of accused Nos.1 to 3 and 6. Having obtained ad-interim order in respect of the properties of accused No.2 company, failed to take steps on judicial side to made absolute the attachment order.

j)For the foregoing reasons, this court without any doubt came to conclusion that prosecution has successfully established its case of the offences under Section 120B, 201, 420 of Indian Penal Code, against accused Nos.1, 2, 3 and 6 and failed to establish its case against 67 C.C.No.6/2016 PDJC, Rjvm accused Nos.4, 5, 7 to 9. Hence, this ancillary point is answered accordingly.

v)Ancillary point No.(v): Any laches on the part of the investigating officers i.e., Pws.31 and 32? If so, would they affect total case to disbelieve the version of prosecution as well as oral and documentary evidence?

i)At the cost of repetition, it is to be mentioned here that either at the time of registration of Ex.P48/first information report or during investigation or at the time of filing charge sheet or atleast before framing of charge, either PW.31 or PW.32 secured documents showing establishment of accused No.2 company and deposits made by the victims as well as appointment orders issued in the name of Pws.9, 10 and 11/employees and for which, during trail, learned Public Prosecutors took much strain to secure the said documents through the present investigating officer/PW.24 with great difficulty and faced challenges to file the said documents before this court and admit the same in the evidence of prosecution witnesses. Having stated that he had gone through the provisions of the Act, 1999, PW.31 gathered nothing and even as per his admission that except case diary file, he had not handed over any document to the Deputy Superintendent of Police/PW.32, who filed charge sheet, and PW.32 also being senior police officer, did not properly verify the investigation conducted by PW.31 and simply filed charge sheet, without appending any supportive documents. It is nothing but 68 C.C.No.6/2016 PDJC, Rjvm absolute dereliction of duties and negligence on the part of PWs.31 and 32.

ii)To attract the offence under Section 5 of the Act, 1999, the ingredients of the said provision have to be fulfilled and having knowledge about the ingredients, without any documentary proof regarding establishment of accused No.2 company, simply relied upon very informal material, PW.31 showed accused Nos.5 and 8 as directors of accused

No.2 company. PWs. 24 and 31 have categorically admitted in their cross examination that at the time of establishment of accused No.2 company, only accused Nos.1, 3, 4 and 7 were directors, but not accused Nos.5 and 8. Before relying upon the statements of some of the witnesses, who have stated the names of accused Nos.5 and 8 that they are directors of accused No.2 company, PW.31 should have been cross checked the same by obtaining relevant documents from the Registrar of Companies.

If he had no knowledge about the same, he should have been obtained legal opinion from the learned Public Prosecutor. Without there being any documentary proof, especially certificate of incorporation and list of directors, Pws.31 and 32 roped accused Nos.5 and 8 to this case for the offence under Section 5 of the Act, 1999.

iii)At the cost of repetition, it is mentioned that in the cross examination, PW.31 had categorically admitted that he has not collected 69 C.C.No.6/2016 PDJC, Rjvm any of documents showing registration of accused No.2 company and basing on the statements of victims, he came to conclusion that accused

No.1 is Managing Director and accused Nos.3 to 8 are directors of accused No.2 company, he has not tried to secure document showing registration of accused No.2 company, none of the victims have handed over documents to show that accused are directors of accused No.2 company. The aforementioned aspects clearly reveal the laches on the part of both the investigating officers/Pws.31 and 32 and while doing investigation, they should have been very cautious enough as criminal jurisprudence gives more stress over avoiding of false implication of an innocent to the extent where hundred guilty may go scot-free and the spirit behind the same is very pious and even otherwise, by one case of false implication of an innocent, rule of law loses one exponent (supporter) and a rebel with defiance towards rule of law is ready and futther, poor investigation with tainted prosecution is perfect recipe for such eventuality, as held in Nandu @ Nandakishore Vs. State of

Madha Pradesh 11 .

iv) Further, though there is no material against accused No.9 and though he is no way concerned with the affairs of the company, PW.32 filed charge sheet for the offence under Section 5 of the Act, 1999 against accused No.9 also, which is nothing but abuse process of law. Had really

11. C.A.NO.812/2008 & 866/2008, Dt.6.7.2018 OF Hon’ble Madya Pradesh High Court at Gwalior.

70 C.C.No.6/2016 PDJC, Rjvm both the Investigating Officers had that much of concern towards the crime and victims, they should have been taken every care at each and every stage of investigation. The interest shown by Pws.31 and 32 in registering the case and filing charge sheet is not there in conducting qualitative investigation. They have also not collected original bonds/ receipts/passbooks from the victims. During trial, by showing sufficient cause, the learned Public Prosecutor filed the same by summoning the same through the present Station House Officer i.e., PW.24. Because of the negligent attitude of Pws.31 and 32, this court also took much strain to unearth the truth regarding competency of officer to launch prosecution, receiving documents and giving detailed findings on all aspects. Record reveals that neither PW.31 nor PW.32 were not at all concern about the provisions and Rules of the Act, 1999 and Rules 2000.

Though there are laches on the part of investigation officer in not collecting the relevant documents at the appropriate time, not obtaining any written permission for conducting investigation and launching prosecution, in view of the reasons assigned in ancillary point No.2 and in this point, those laches do not affect the case of the prosecution.

vi) Ancillary point No.(vi): Final out come of the case?

a)It is to be noted that in catena of Judgments, Hon’ble Apex Court held that justice is nothing but a manifestation of the truth and the primary 71 C.C.No.6/2016 PDJC, Rjvm duty of a Court is to make a single-minded endeavour to unearth the truth hidden beneath the facts and thus, the Court is a search engine of truth, with procedural and substantive laws as its tools. Further, when procedural law stands in the way of the truth, the Court must find a way to circumvent it and similarly, when substantive law, as it appears, does not facilitate the emergence of the truth, it is the paramount duty of the Court to interpret the law in light of its teleos and such an exercise is warranted in a higher degree, particularly while considering a social welfare legislation. Further, in its journey, the Court must discern the truth, primarily from the material available on record in the form of pleadings, and arguments duly supported by documents and it must be kept in mind that the entire judicial system is meant for the discovery of the truth, it being the soul of a decision and for doing so, a Presiding Officer is expected to play an active role, rather than a passive one.

b)Further, in Maria Margarida Sequeria Fernandes v. Erasmo Jack

De Sequeira. 12 , hon’ble Apex Court has that:

“The truth should be the guiding star in the entire judicial process. Truth alone has to be the foundation of justice. The entire judicial system has been created only to discern and find out the real truth. Judges at all levels have to seriously engage themselves in the journey of discovering the truth. That is their mandate, obligation and bounden duty. Justice system will acquire credibility only when people will be convinced that justice is based on the foundation of the truth’.

12(2012) 5 SCC 370 72 C.C.No.6/2016 PDJC, Rjvm

c)And, In Munna Pandey v. State of Bihar 13 , Hon’ble Apex Court has held that:

“The role of a judge in dispensation of justice after ascertaining the true facts no doubt is very difficult one. In the pious process of unravelling the truth so as to achieve the ultimate goal of dispensing justice between the parties the judge cannot keep himself unconcerned and oblivious to the various happenings taking place during the progress of trial of any case. No doubt he has to remain very vigilant, cautious, fair and impartial, and not to give even a slightest of impression that he is biased or prejudiced either due to his own personal convictions or views in favour of one or the other party. This, however, would not mean that the Judge will simply shut his own eyes and be a mute spectator, acting like a robot or a recording machine to just deliver what stands feeded by the parties.

d)In this regard, it is to be noted that the incharge Additional Public

Prosecutor Sri K.Radhakrishnam Raju, who conducted trial in all the connected matters took every care of getting all relevant documents to connect all missing links to unearth the truth by this court. So, without any doubt it can be said that only because of his efforts, prosecution could place substantive material to attract the ingredients of the punishable Sections with which accused Nos.1, 2, 3 and 6 are charged.

e)On over all consideration of the material available on record and in view of the findings in ancillary point Nos(i) to (v), this court came to conclusion that prosecution successfully proved guilt of accused Nos.1, 2, 3 and 6 beyond reasonable doubt and as such, they are liable for

13. 2023 SCC online sc 1103 73 C.C.No.6/2016 PDJC, Rjvm punishment for the offences under Sections 120B, 201 and 420 of the

Code and under Section 5 of the Act, 1999 and they are not liable for punishment under Section 417 of the Code as they are liable for punishment which is aggravated form of cheating. Further, prosecution failed to prove guilt of accused Nos.4, 5, 7 to 9 and as such, they are not liable for punishment for the offences with which they are charged. This point is answered accordingly.

Result:

15.(a) In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offence punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

(b)Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds 74 C.C.No.6/2016 PDJC, Rjvm shall be continued for six months in view of Section 437A of Code of

Criminal Procedure.

Partly dictated to the stenographer, transcribed by him and and partly typed to my dictation corrected and pronounced by me in open court on this 16 th day of March, 2026.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 16:54:18 +0530

PRINCIPAL SESSIONS JUDGE

RAJHAMAHENDRAVARAM

i)Heard accused Nos.1, 3 and 6 under Section 248 (2) of Code of

Criminal Procedure on the quantum of sentence, to be imposed against accused Nos.1, 2, 3 and 6, for the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian

Penal Code and. Accused No.1 submitted that he has three children, presently he is not doing any job, attending private works, he has to perform marriage of his son and he has not committed any offence.

Accused No.3 who is wife of accused No.1 submitted the same.Further,

Accused No.6 who is daughter of accused No.1 submitted that she recently married, she does not know about the offence and she has not committed any offence.

(ii)Having considered the facts and circumstances, gravity of offence, nature of allegations levelled against the accused and submissions of all 75 C.C.No.6/2016 PDJC, Rjvm the accused, this court came to conclusion that this is a fit case to impose sentence of imprisonment against accused Nos.1, 2, 3 and 6 as follows:-

Accused No.1 issentenced to suffer rigorous imprisonment of

Seven (7) years of the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months.

Being Managing Director Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 on behalf of accused No.2 company and in default of payment of fine, accused No.1 who is Managing Director of accused No.1 company shall suffer simple imprisonment of six (6) months.

Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

76 C.C.No.6/2016 PDJC, Rjvm Accused No.6 issentenced to suffer rigorous imprisonment of

Three years (3) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of

Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

77 C.C.No.6/2016 PDJC, Rjvm

(iii)Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 14 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to award compensation out of the fine amout, to all the victims who have deposited amount, though they are examined or not, who sustained loss and injury and accordingly,

Rs.5,000/-(Rupees five thousand only) is awarded towards compensation to each victim irrespective of their deposit amounts to meet ends of justice. Further, at the time of filing petitions by the victims, to withdraw their compensation amounts, in due course of law and after attaining the finality of the case, learned Public Prosecutor must certify the said petition to rule out impersonation.

(iv)The accused Nos.1, 3 and 6 are not entitled to the benefit of the

Probation of Offenders Act, 1958, and this is not a fit case to invoke the provisions of the Probation of Offenders Act.

(v)All the sentence of imprisonment passed against the accused

Nos.1, 3 and 6 shall run concurrently.

(vi)Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.2/2016, 3/2016, 4/2016, 5/2016, and 7/2016 shall run concurrently.

14. 2013 AIR SCW 3153 78 C.C.No.6/2016 PDJC, Rjvm

(vii)The accused are informed about the right of appeal to the Hon’ble

High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative.

(viii) The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 11.12.2015 to 3.3.2016, accused No.3 from 11.12.2015 to 3.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure

(viii)Copy of judgment is furnished to the accused, as required under

Section 363 of Code of Criminal Procedure and Rule 72 of A.P. Criminal

Rules of Practice.

(ix) Copy of judgment is marked to the District Magistrate as required under Section 364 of Code of Criminal Procedure

(x)Copy of Judgment is marked to the Director of Prosecutions,

Andhra Pradesh, Vijayawada as required under Rule 72 of Criminal Rules of Practice.

Pronounced by me in open court on this 16th day of March, 2026.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 16:53:45 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

LIST OF PROSECUTION/DEFENCE/COURT WITNESSES

1. PROSECUTION:

RankNameNature of Evidence 79 C.C.No.6/2016 PDJC, Rjvm

PW.1Karri Samuel ReddiComplainant/victim PW.2Ambati SatyanarayanaComplainant/victim PW.3Bokka Srinivasa RaoComplainant/victim PW.4Kollu VishnuLodge boy, Ganapathi Plaza lodge, Amalapuram. Eye-witness for depsoit of money by the public. PW.5Pinipe PrasadLodge boy, Ganapathi Plaza lodge, Amalapuram. Eye-witness for depsoit of money by the public. PW.6Bokka Vinayaka RaoDepositor in the accused No.2 firm PW.7Thumu KrishnaRunning disposable items shop in the ground floor of Ganapthi Plaza, Amalpuram and eye-witness for deposit of money by the public. PW.8Pati LakshmiAccountant of accused No.2 firm PW.9Nakka Srinivasa RaoAccountant of accused No.2 firm PW.10Kusuma Rajesh KumarAccountant of accused No.2 firm PW.11Kottuju AnuradhaAccountant of accused No.2 firm PW.12Karri Jyothi KumariDepositor in the accused No.2 firm PW.13Karri Sandya RaniDepositor in the accused No.2 firm PW.14Karri Sheeba RaniDepositor in the accused No.2 firm PW.15Karri Vijaya Joyshe RaniDepositor in the accused No.2 firm PW.16UVVSS.Vara PrasadDepositor in the accused No.2 firm PW.17Kamuju Depositor in the accused No.2 firm V.V.V.Satyanarayana PW.18Guthala Ramesh KumarDepositor in the accused No.2 firm PW.19Pati Appa RaoDepositor in the accused No.2 firm PW.20Vithanala Srinivasa RaoDepositor in the accused No.2 firm PW.21Donga Ganga BhavaniDepositor in the accused No.2 firm PW.22K.Deena KumariDepositor in the accused No.2 firm PW.23M.JyothiDepositor in the accused No.2 firm PW.24P.Veera Babu,Inspector of Police, obtained certified Inspector of policecopies documents from Registrar of Companies relating to accused No.2’s firm. PW.25Adabala Srinivasa RaoMediator for confession statement of 80 C.C.No.6/2016 PDJC, Rjvm accused No.1 and also for arrest of accused No.1 PW.26KN.Srinivasa RaoMediator for confession statement of accused No.8 and also for arrest of accused No.8 PW.27DVVS.Durga KiranMediator for confession statement of accused No.9 and also for arrest of accused No.9 PW.28K.SatyanarayanaMediator for confession statement of accused No.5 and also for arrest of accused No.5 PW.29KVSJ.SrinivasMediator for confession statement of accused No.6 and also for arrest of accused No.6 PW.30T.PrakashMediator for confession statement of accused No.4 and also for arrest of accused No.4 PW.31Y.R.K.Srinivas,Inspector of police, registration of FIR, Inspector of policeexamination of witnesses, visiting of scene of offence, preparation of rough sketch, arrest of accused PW.32L.Ankaiah,Deputy Superintendent of Police, Deputy Superintendent of further investigation and filing of charge police. sheet.

2. Defence witnesses, if any:

RankNameNature of Evidence NIL

3. Court witnesses if any:

RankNameNature of Evidence NIL

LIST OF PROSECUTION/DEFENCE/COURT EXHIBITS

1. Prosecution:

Sr.NoSr.No.RankDescription 81 C.C.No.6/2016 PDJC, Rjvm 1Ex.P1/PW1Fixed deposit 2Ex.P2/PW1Complaint 3Ex.P3/PW3Passbook 4Ex.P4/PW8Fixed deposit 5Ex.P5/PW8Fixed deposit 6Ex.P6/PW8Fixed deposit 7Ex.P7/PW12Fixed deposit 8Ex.P8/PW12Fixed deposit 9Ex.P9/PW12Passbook 10Ex.P10/PW14Fixed deposit 11Ex.P11/PW14Fixed deposit 12Ex.P12/PW13Passbooks 13Ex.P13/PW15Fixed deposit 14Ex.P14/PW16Passbook 15Ex.P15/PW17Fixed deposit 16Ex.P16/PW17Passbook 17Ex.P17/PW18Fixed deposit 18Ex.P18/PW18Passbook 19Ex.P19/PW16Fixed deposit 20Ex.P20/PW20Passbook 21Ex.P21/PW21Passbook 22Ex.P22/PW21Passbook 23Ex.P23/PW22Fixed deposit 24Ex.P24/PW23Fixed deposit 25Ex.P25/PW24CC of Covering letter 26Ex.P26/PW24CC of company info Suvarna India Projects. 27Ex.P27/PW24CC of Certificate of incorporation Suvarna Infra Projects India. 28Ex.P28/PW24CC of fresh Certificate of incorporation 29Ex.P29/PW24CC of List of Directors M/s Suvarna India Projects. 30Ex.P30/PW24CC of company information relating to Suvarna India Iron and steel manufacturing private limited. 31Ex.P31/PW24CC of Incorporation Suvarna India Iron and steel 82 C.C.No.6/2016 PDJC, Rjvm manufacturing private limited. 32Ex.P32/PW25CC of List of Directors Suvarna India Iron and steel manufacturing private limited. 33Ex.P33/PW24CC of company info Prakash India Power Projects 34Ex.P34/PW24CC of incorporation Prakash India Power Projects 35Ex.P35/PW24CC of List of Directors Prakash India Power Projects 36Ex.P36/PW24CC of company info Supreme India TV Channel 37Ex.P37/PW24CC of certificate of incorporation Supreme India TV Channel 38Ex.P38/PW24CC of list of directors Supreme India TV Channel 39Ex.P39/PW24CC of company info Suvarna India Vidyut plant 40Ex.P40/PW24CC of certificate of incorporation Suvarna India Vidyut plant 41Ex.P41/PW24CC of list of directors Suvarna India Vidyut plant 42Ex.P42/PW25Relevant admissible portion of CC of mediators report dt.17.10.2015 at 7.00 AM arrest of A1. 43Ex.P43/PW26Relevant admissible portion of CC of mediators report dt.6.11.2015 at 10.00 AM arrest of A8. 44Ex.P44/PW27Relevant admissible portion of CC of mediators report dt.11.12.2015 at 10.00 AM arrest of A9. 45Ex.P45/PW28Relevant admissible portion of CC of mediators report dt.30.10.2015 at 7.00 AM arrest of A5. 46Ex.P46/PW29Relevant admissible portion of CC of mediators report dt.10.12.2015 at 8.00 AM arrest of A6. 47Ex.P47/PW30Relevant admissible portion of CC of mediators report dt.14.11.2015 at 10.00 AM arrest of A4. 48Ex.P48/PW31First Information Report in Cr.No.411/2015 of Amalapuram Town PS 49Ex.P49/PW31Rough Sketch

2. Defence: Sr.NoSr.No.RankDescription

1.Ex.D1/PW9Photo copy of appoint order dt.01.03.2012

3. Court witnesses, if any: Sr.NoSr.No.RankDescription NIL 83 C.C.No.6/2016 PDJC, Rjvm

4. Material objects: Sr.NoSr.No.RankDescription NIL

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 16:52:34 +0530

PRINCIPAL SESSIONS JUDGE

RAJHAMAHENDRAVARAM

1.The Registrar (Judl.), High Court of A.P., Nelapadu, Guntur District. 2.The Director of Prosecution, Beside Sarada College, Durgapuram P.O., Vijayawada. 3.The District Collector, Dr.B.R.Ambedkar Konaseema District, Amalapuram. 4.The Superintendent of Police, Dr.B.R.Ambedkar Konaseema District, Amalapuram.

84 C.C.No.6/2016 PDJC, Rjvm

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS

ACT–CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST

GODAVARI AT RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026.

CALENDER CASE NO.06/2016

Complainant::State-Represented by Sub Divisional Police Officer, Amalapuram

Represented by::Sri R.Prasad and Sri K.Radhakrinamraju, Public Prosecutors, East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

85 C.C.No.6/2016 PDJC, Rjvm 6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 8.11.2015

Date of First Information Report:: 08.11.2015

Date of Charge sheet:: 16.07.2016

Date of framing of charges:: 15.02.2019

Date of commencement of :: 06.03.2024 evidence

Date of which judgment is :: 02.03.2026 reserved 86 C.C.No.6/2016 PDJC, Rjvm

Date of Judgment:: 16.03.2026

Plea of accused:: Not guilty

Finding of the Court:: Accused Nos.1, 2, 3 and 6 are convicted Accused Nos.4, 5, 7 and 9 are acquitted.

Explanation for delay:: Along with this case, five other cases of similar nature of offences are also pending against the accused and there are several witnesses in each of the cases. In order to dispose of all the cases together and to avoid any conflict of judgments, after completion of trial in all the cases and upon hearing the arguments of both sides, all the cases were posted for judgment today.

Date of sentencing order, if any:: 16.03.2026

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offence punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure. Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of Criminal Procedure.

Accused No.1 issentenced to suffer rigorous imprisonment of Seven (7) years of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months.

87 C.C.No.6/2016 PDJC, Rjvm

Being Managing Director Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 on behalf of accused No.2 company and in default of payment of fine, accused No.1 who is Managing Director of accused No.1 company shall suffer simple imprisonment of six (6) months. Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused No.6 issentenced to suffer rigorous imprisonment of Three years (3) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 15 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to award compensation out of the fine amout, to all the victims who have deposited amount, though they are examined or not, who sustained loss and injury and accordingly, Rs.5,000/-(Rupees five thousand only) is awarded towards

15. 2013 AIR SCW 3153 88 C.C.No.6/2016 PDJC, Rjvm compensation to each victim irrespective of their deposit amounts to meet ends of justice. Further, at the time of filing petitions by the victims, to withdraw their compensation amounts, in due course of law and after attaining the finality of the case, learned Public Prosecutor must certify the said petition to rule out impersonation. The accused Nos.1, 3 and 6 are not entitled to the benefit of the Probation of Offenders Act, 1958, and this is not a fit case to invoke the provisions of the Probation of Offenders Act. All the sentence of imprisonment passed against the accused Nos.1, 3 and 6 shall run concurrently. Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.2/2016, 3/2016, 4/2016, 5/2016, and 7/2016 shall run concurrently. The accused are informed about the right of appeal to the Hon’ble High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative. The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 11.12.2015 to 3.3.2016, accused No.3 from 11.12.2015 to 3.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 16:52:01 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

APEG010023612016

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS ACT–

CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST GODAVARI AT

RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026

CALENDER CASE NO.05/2016

Complainant::State-Represented by Sub Divisional Police Officer, Amalapuram.

Represented by::Sri R.Prasad and Sri K.Radhakrishnam Raju Public Prosecutor, East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

2 C.C.No.5/2016 PDJC, Rjvm 6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 03.11.2015

Date of First Information Report:: 03.11.2015

Date of Charge sheet:: 26.08.2016

Date of framing of charges:: 15.02.2019

Date of commencement of evidence:: 05.03.2024

Date of which judgment is reserved:: 02.03.2026

Date of Judgment:: 16.03.2026

Date of sentencing order, if any:: 16.03.2026 3 C.C.No.5/2016 PDJC, Rjvm

ACCUSED DETAILS

Rank of the accused:: Accused No.1

Name of the accused:: Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem,H/o.Sivakodu village, Razole Mandal.

Rank of the accused:: Accused No.2

Name of the accused:: Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its Md. Busim Venkata Nagavenu @ Venu.

Rank of the accused:: Accused No.3

Name of the accused:: BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused:: Accused No.4

Name of the accused:: Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

Rank of the accused:: Accused No.5

Name of the accused:: BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem,H/o.Sivakodu village, Razole Madal.

Rank of the accused:: Accused No.6

Name of the accused:: Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem,H/o.Sivakodu village, Razole Mandal.

Rank of the accused:: Accused No.7

Name of the accused:: Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

4 C.C.No.5/2016 PDJC, Rjvm Rank of the accused:: Accused No.8

Name of the accused:: Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused:: Accused No.9

Name of the accused:: Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused:: Accused No.10

Name of the accused:: Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Date of arrest:: Accused No.1 on 03.03.2016 Accused No.2 is Firm Accused No.3 on 11.12.2015 Accused No.4 on 31.10.2015 Accused No.5 on 13.11.2015 Accused No.6 on 23.12.2015 Accused No.7 on 21.12.2015 Accused No.8 on 27.11.2015 Accused No.9 on 23.12.2015 Accused No.10 died

Date of release on bail:: Accused No.1 on 03.03.20165 Accused No.2 is Firm Accused No.3 on 03.03.2016 Accused No.4 on 22.12.2015 Accused No.5 on 16.12.2015 Accused No.6 on 03.03.2016 Accused No.7 on 21.12.2015 Accused No.8 on 22.12.2015 Accused No.9 on 18.10.2016 Accused No.10 died

Offences charged with:: Under Sections 120-B, 417, 420, 201, 411 r/w 34 of Indian Penal Code and Under Section 5 of Andhra Pradesh 5 C.C.No.5/2016 PDJC, Rjvm Protection of Depositors of Financial Establishment Act, 1999.

Whether acquitted or :: Accused Nos.1, 2, 3 and 6 are convicted. convicted Accused Nos.4, 5, 7 and 9 are acquitted.

Sentence imposed::

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offence punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of

Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of Criminal

Procedure.

Periodofdetention::Accused No.1 from 13.12.2015 to 3.3.2016 undergone during trial for Accused No.3 from 11.12.2015 to 3.3.2016 purpose of Section 428 Cr.P.C.Accused No.6 from 23.12.2015 to 3.3.2016

This case has come on 02.03.2026 for final hearing before me in the presence of Sri R.Prasad and Sri K.Radhakrishnam Raju, Public

Prosecutors for prosecution and of Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6, Sri S.S.Prakasarao, counsel for accused No.7 and Sri

I.Rambabu, counsel for accused No.9 and the matter having stood over for consideration to this day, this court delivered the following:- 6 C.C.No.5/2016 PDJC, Rjvm

J U D G M E N T

1.The Sub Divisional Police Officer, Amalapuram laid Charge sheet in

Crime No.399/2015 of Amalapuram Town Police Station of the offences under Sections 120-B, 406, 409, 411, 417, 420, 201 r/w.34 and 411 of

Indian Penal Code (herein after referred to as ‘the Code’) r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and Section 5 of the Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 (herein after referred to as ‘the Act 1999) against the accused Nos.1 to 10.

2.Case of the prosecution, in brief, is thus:

a)Accused No.1 is resident of Sivakodupalem, accused No.3 is wife of accused No.1, accused No.4 is resident of Nagarampalem, accused

No.5 is younger sister-in-law of accused No.1, accused No.6 is daughter of accused Nos.1 and 3, accused Nos.7 and 8 are distant relatives of accused No.1. Accused Nos.1 to 8 are directors of company and accused No.9 is henchmen and accused No.10 is close associate of accused No.1.

b)Defacto complainants/Pws.1 and 2 have given report alleging that they are residents of Kamanagaruvu village of Amalapuram Mandal.

Accused No.1 approached them and represented himself as man power 7 C.C.No.5/2016 PDJC, Rjvm agent of Suvarna India Infra Project Limited (real estate), his company has got approval of Reserve Bank of India, has many branches in and around the state of Andhra Pradesh, they are developing the financial status of poor and would give 20% interest to the investors and accordingly, induced them to collect money and deliver money by way of recurring deposit and fixed deposit and thereafter, they came to know that the said company is closed without making any payments. When they questioned Managing Director, he stated that he has several immovable properties in Andhra Pradesh and Telangana and he would return the amounts to all the depositors.

c)Accused No.1 established registered company under the name and style of Suvarna Real Estate Firm and opened branch office at shop bearing D.No.1-98, Amalapuram. Accused No.1 also established other companies in the names of Suvarna Infra Projects India Limited, Suvarna

Iron & Steel Manufacture Private Limited, Survarna India T.V. Channel

Private Limited, Prakash India Power Project Private Limited, Suvarna

India Vidhyut plant private limited, and accused No.3 to 8 are directors of suvarna real estate firm and subsequently, the name of Suvarna Infra

Project India Limited changed into Suvarna India Project Limited.

Accused Nos.1 to 8 with a deceitful, dishonest and fraudulent intention jointly conspired together, hatched plan to cheat the innocent public by 8 C.C.No.5/2016 PDJC, Rjvm way of investments, induced the victims to deliver lakhs of rupees, committed criminal breach of trust and thereby, cheated the victims to that effect. They also committed the offence under the companies Act.

Accused Nos.1 to 8 committed misappropriation and cheating to a tune of

Rs.99,42,980/- at various places of Andhra Pradesh and Telangana.

d)Basing on the report of defacto complainants/PW.1 to 3, a case in crime No.399/2015 of Amalapuram Town Police Station of the offences under Sections 120-B, 406, 409, 417, 420, 411, 201 r/w.34 of the Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under Section 5 of the Act, 1999 was registered against the accused.

e)During the course of investigation, LW.138/PW.33 examined witnesses, recorded their statements and came to conclusion that accused No.1 to 8 made believe several general public that they established several companies, collected deposits, investments, failed to repay the same. Accused Nos.9 and 10 who are henchmen and close associate of accused No.1 also participated in the crime.

f) On 20.4.2013, the company directors conducted general body meeting at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram for changing the name of the company and accused violated the provisions of Companies Act also, conspired with each other and has committed the 9 C.C.No.5/2016 PDJC, Rjvm offences under the Provisions of Indian Penal Code and A.P. Protection of

Depositors of Financial Establishment Act, 1999. Hence, the charge.

3.The case was taken on to file of the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and under Section 5 of the Act, 1999.

4.On appearance of accused, copies of the documents were furnished.

5.When the accused Nos.1 to 10 were examined under Section 239

Code of Criminal Procedure, they pleaded not guilty. Learned Public

Prosecutor and the learned counsel for the accused were heard regarding the charge. Upon considering the material on record, charge under

Section 5 of the A.P. Protection of Depositors of Financial Establishment

Act, 1999 and under Sections 120-B, 417, 420, 201, 411 r/w.34 of Indian

Penal Code were framed against the accused, read over and explained to them in Telugu and they pleaded not guilty and claimed to be tried.

6. In support of its case, prosecution examined in all P.Ws.1 to 34 out of 140 witnesses, and filed Exs.P.1 to P.55 documents and Ex.D1 is marked on behalf of the accused.

7. On the strength of the prosecution evidence, the accused Nos.1 to 9 were examined under Section 313 Code of Criminal Procedure 10 C.C.No.5/2016 PDJC, Rjvm regarding the incriminating circumstances appearing against them in the evidence. They denied the same and reported no defence evidence.

Case against Accused No.10 is abated as he died on 18.10.2025.

8.Heard both sides and learned Public Prosecutor and defence counsel filed written arguments.

9.Now, the point that would arises for determination is:

“Whether the prosecution proved the guilt of accused beyond

reasonable doubt and if so, whether they are liable for the

offences with which they are charged”?

10. Case of the prosecution is thus:

Accused No.1 is Managing Director and accused Nos.3 to 8 are directors of Accused No.2 company. PWs.1 to 5, 12 to 25 deposited amount in accused No.2 company. Accused No.1 approached the victims representing himself as a manpower agent of Suvarna India Infra Project

Limited, the company had Reserve Bank of India approval, it has several branches across the state of Andhra Pradesh, thy would improve the financial status of poor people by paying 20% interest on the investments.

Believing the deceitful words of accused Nos.1 to 8, thousands of victims invested money in accused No.2 company. Subsequently, the victims came to know that the said company is closed without making any payments and when questioned, Accused No.1, being the Managing

Director, assured that he owned several immovable properties in Andhra 11 C.C.No.5/2016 PDJC, Rjvm Pradesh and Telangana and promised to repay the deposit amounts.

Accused No.1 also established other companies in the names of Suvarna

Real Estate Limited, Suvarna Infra Projects India Limited, Suvarna Iron &

Steel Manufacture Private Limited, Survarna India T.V. Channel Private

Limited, Prakash India Power Project Private Limited and Suvarna India

Vidhyut plant private limited. Subsequently, the name of Suvarna Infra

Project India Limited is changed as Suvarna India Project Limited.

Accused Nos.1 to 8, with dishonest, fraudulent and deceitful intention, conspired together, induced innocent public to invest huge amounts and misappropriated Rs.19,86,504/-. Accused No.9 also participated in the crime. PWs.1 and 2 set the criminal law into motion by giving Ex.P10 report.

11. Evidence:

During trial, out of 140 witnesses, prosecution examined Pws.1 to

34. The witnesses may be categorized into six types and they are,

(i) Victims, (ii) Agents, (iii) Employees, (iv) Independent, (v) Mediators, and (vi) Official. Documentary evidence is also of two types i.e., one set is relating to victims and second one is official.

12 C.C.No.5/2016 PDJC, Rjvm

Description of witnesses

__________________________________________________

Victims/AgentsEmployeesIndependentMediatorsOfficial complainants

Pws.3 to 5.Pws.1 andPws.9 to 11Pws.6 to 8Pws.27 to Pw.26, 33 12 to 252 32and 34

Category of documents

______________________________

VictimsOfficial

Ex.P10/complaintExs.P31 to 53/correspondence, Exs.P1, 9, 11 to 30/bonds, cashcopies of documents obtained from receipts, pass booksMinistry of Corporate Affairs, Office of the Registrar of Companies, Andhra Pradesh relating to establishment of companies by the accused. Exs.P54 and 55/First information report and rough sketch.

13 C.C.No.5/2016 PDJC, Rjvm

12. Arguments:

a)Prosecution:

i)Accused No.1 established accused No.2 company in the name and style of Suvarna Infra Projects India Limited at Amalapurm, wherein accused Nos.3, 4, 6 and 7 are Directors. Accused No.1 also established four other private limited companies, and all the five companies were functioning from the same premises bearing D.No.3-1-98, Ganapathi

Plaza, Main Road, Amalapuram. Accused No.2 appointed employees and agents to collect deposits from the general public and induced them with a false promise of 20% interest.

ii)Accused Nos.1 to 8 collected an amount of about Rs.14 crores from thousands of investors, issued bonds in the names of Suvarna Real

Estate and receipts in the name of Suvarna India, and thereafter closed the company in the year 2014 without repaying any amount to the victims.

iii)Accused Nos.5, 8, 9 and 11 who are legal advisers and close associates of Accused No.1 also participated in the offence and in pursuance of their criminal conspiracy, accused misappropriated the amounts collected from the public, purchased immovable properties in the

States of Andhra Pradesh and Telangana.

iv)Earlier, Accused No.1 worked as a Marketing Manager in Sahara

India and having gained experience in mobilizing public funds, he 14 C.C.No.5/2016 PDJC, Rjvm conspired with other accused made false representations, dishonestly induced the victims to part with money and thereby, cheated them.

v)Oral evidence adduced by the prosecution coupled with the documentary evidence clearly establishes the conspiracy, inducement, collection of huge amount from thousands of people and misappropriation.

vi)Having worked in other financial institutions like Sahara India and having gained knowledge to escape from the liability intentionally issued receipts and bonds with other company names with a criminal conspiracy to cheat the general public.

vii)Though some of the accused are resigned from the post, they are also liable as they were present at the time of collection of deposit.

viii)Accused failed to adduce any evidence to show animosity between them and the prosecution witnesses.

b) Defence:

Having mentioned the material portion of evidence of all the witnesses, learned counsel for the accused argued through the written arguments as follows:-

i)Prosecution failed to secure certificate of registration of accused

No.2 company, registered a false case, and after lapse of nine years, filed certified copy of certificate of registration.

15 C.C.No.5/2016 PDJC, Rjvm ii)Prosecution failed to furnish all the documents as required under

Section 207 of Code of Criminal Procedure.

iii)Without any competency, Inspector of police/PW.33 registered seven crimes and without verifying the same on correct lines,

PW.34/Deputy Superintendent of Police conducted further investigation, filed charge sheets and both the officers are not competent persons to conduct investigation and file charge sheets.

iv)Investigating Officers prepared 161 Code of Criminal Procedure statements of all the witnesses in a copy and paste method.

v)The bonds and receipts which are relied upon by the prosecution do not contain the signatures of any of the accused.

vi)There are several inconsistencies in the evidence of prosecution witnesses. Most of the witnesses are not identified accused Nos.3 to 9.

vii)There is neither oral nor documentary evidence to show that the accused committed any offence of the offences with which they are charged.

viii)Accused Nos.3 to 9 are also no way concerned with the commission of offence. With the help of stock mediators and some other persons, prosecution prepared documents in Amalapuram Town Police

Station.

16 C.C.No.5/2016 PDJC, Rjvm xi)Prosecution utterly failed to produce documents showing assets of the accused and finally, relied upon following judgments:

1. Yousuf Bin Awad @ Yousauf Vs. State through Inspector of Police 1

2. Arnol Samadhan Nikam Vs. The state of Maharashtra 2

3. J.P.S. Enterprises and another Vs. State 3

13. Point:

a)Admitted facts are that basing on the reports of different persons seven crimes are registered for the same offences. Defacto complainants and victims in all the cases are different. Transactions are also different.

In all seven crimes vide C.C.Nos.1/2016 to 4/2016, 6/2016, 7/2016 and this case, PW.48 laid charge sheets of the same offences. Cognizance is taken for the offences under Section 120-B, 417, 420, 201, 411 r/w.34 of the code and under Section 5 of the the Act, 1999, and along with this case, five other cases vide C.C.Nos.2/2016 to 4/2016, 6/2016 and 7/2016 are pending and one more case vide C.C.No.1/2016 is ended in acquittal as there was no material evidence in that case to prove the guilt of the accused. Generally, all the cases have to be tried and disposed of together, to avoid multiplicity of verdicts. But, one of the case in

C.C.No.1/2016 was disposed in the year 2019 itself. So, all the remaining six cases including this case are taken up together for examination of

1. 2015 (3) ALT (CRL.) 171 (AP)

2. Crl. Petition No.1091/2025 of Hon’ble High Court of Judicature at Bombay bench at Aurangabad.

3. C.A.No.1048/2000, dt.27.7.2005 of Hon’ble High Court of Madras.

17 C.C.No.5/2016 PDJC, Rjvm witnesses, arguments etc. C.C.Nos.2/2016 to 4/2016, 6/2016 and 7/2016 are also posted today for judgments.

b)Having considered the material placed by the prosecution, Charge under Section 5 of the the Act 1999 and under Sections 120-B, 417, 420, 201, 411 r/w.34 of the code is framed. Now, it is to be seen that whether prosecution proved all the ingredients of the offences with which accused

Nos.1 to 9 are charged. Since charge is framed under several sections, it is apposite to consider the following ancillary points, for better appreciation, to avoid repetition and clear findings.

14.Ancillary points:

i). Establishment of accused No.2 company and its directors?

ii). Whether miscarriage of justice is done to the accused for

conducting investigation by PWs.33 and 34 and launch

prosecution by PW.34?

iii). Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

iv). Wether charge under Section 120B, 201, 417 and 420 of Indian

Penal Code is sustainable in addition to the charge under

Section 5 of the Act?

v). Any laches on the part of the investigating officers i.e., Pws.33

and 34? If so, would they affect total case to disbelieve the

version of prosecution as well as oral and documentary

evidence?

vi). Final out come of the case?

18 C.C.No.5/2016 PDJC, Rjvm

i)Ancillary point No.(i): Establishment of accused No.2 company and its directors.

a)To prove the origin of crime i.e., establishment of accused No.2 company and other companies, prosecution relied upon the evidence of

Pws.26, 33 and 34 coupled with Exs.P31 to 47. Prosecution case reveals that accused Nos.1, 3 to 8 established accused No.2 company, accused

No.1 is Managing Director and others are directors of the said company and further, accused Nos.1 and 3 established four other companies and under the guise of establishment of several companies, all the directors lured general public, collected investments, misappropriated that amounts, cheated the general public and failed to repay any amounts to the victims. Before appreciating of ocular evidence, it is appropriate to mention the details of companies and directors and they are as follows:-

Sl. Exhibit Name of Issued by Date of Directors Whether

No. numbe the incorporatio any

r document n & other director

details. resigned

1.Ex.P32Company Ministry of 09.11.20111.Busim -- information Corporate Venkata CIN.No.U454 Naga Venu relating to Affairs00AP2011PL (A1) Suvarna C077328 India Registered 2.Rajya Projects Address: lakshmi D.No.3-1-98, Limited Busim (A3) Ganapati Plaza, Main

3. Busim Road, Gowthami Amalapuram- (A6) 533201.

19 C.C.No.5/2016 PDJC, Rjvm 2Ex.P33Certificate Registrar of09.11.2011-- of Companies, CIN.No.U454 IncorporatioAndhra 00AP2011PL n relating toPradesh C077328 Survarna India Infra Registered Projects Address: India Limited. D.No.3-1-98, Ganapati Plaza, Main Road, Amalapuram- 533201.

3Ex.P34Fresh Registrar of23.04.2013-- certificate ofCompanies, incorporatioAndhra n, Pradesh CIN.No.U454 consequent 00AP2011PL upon C077328 change of name Registered relating to Address: Survarna D.No.3-1-98, Infra Ganapati Projects Plaza, Main India Road, Limited Amalapuram- 533201.

4Ex.P35List of Registrar --1.Busim directors of Companies,Venkata -- M/s.SurvarnAndhra Naga Venu a India Pradesh(A1), ProjectsManaging Director,

2. Rajya Lakshmi 20 C.C.No.5/2016 PDJC, Rjvm Busim (A3), Director 3.Phanendr Yes, On a Desai 15.5.2014 Kaneti (A4), Director 4.Vinod Yes, On Battu (A7), 30.11.12 Director 5.Busim Gowthami (A6), Director

5.Ex.P36Company Ministry of 31.10.20121.Busim -- Information Corporate Venkata CIN.No.U271 relating to affairsNaga Venu 00AP2012PT Survarna (A1) C083909 India Iron 2.Rajya and Steel Registered lakshmi Manufacturi Address: Busim (A3) ng Private Limited D.No.3-1-98, Ganapati Plaza, Main Road, Amalapuram- 533201.

6Ex.P37Certificate Registrar of31.10.2012-- of Companies, CIN.No.U271 incorporatioAndhra 00AP2012PT n relating toPradesh C083909 Survarna India Iron Registered and Steel Address: Manufacturi ng Private D.No.3-1-98, Ganapati 21 C.C.No.5/2016 PDJC, Rjvm Limited Plaza, Main Road, Amalapuram- 533201.

7Ex.P38List of Registrar of1.Busim -- directors of Companies,Venkata Survarna Andhra Naga Venu India Iron Pradesh(A1), and Steel Director. Manufacturi 2.Rajyalaks ng Private hmi Busim Limited (A2), Director.

8.Ex.P39Company Ministry of 22.1.20131.Busim -- information Corporate Venkata CIN.No.U403 relating to affairsNaga Venu 00AP2013PT Prakash (A1), C085447 India PowerDirector. Projects Registered 2.Rajyalaks Private Address: hmi Busim Limited (A2), D.No.1-98, Director. Near Hanuman Theater, Edarapalli Guntur, Amalapuram- 533201.

9.Ex.P40Certificate Registrar of22.1.2013-- of Companies, CIN.No.U403 IncorporatioAndhra 00AP2013PT n relating toPradesh C085447 Prakash India Power Registered Projects Address:D.N Private o.1-98, Near 22 C.C.No.5/2016 PDJC, Rjvm LimitedHanuman Theater, Edarapalli, Amalapuram- 533201.

10. Ex.P41List of Registrar of1.Busim -- Directors Companies,Venkata relating to Andhra Naga Venu Prakash Pradesh(A1) India Power 2.Rajyalaks Projects hmi Busim Private (A3), Limited Director 11Ex.P42Company Ministry of 15.11.20121.Busim -- information Corporate Venkata CIN.No.U923 relating to affairsNaga Venu 00AP2012PT Supreme (A1) C084161 India TV

2. Rajya channel Registered Lakshmi Private Address: Busim (A3) Limited D.No.3-1-98, Ganapathi Plaza, Main Road,Amalap uram- 533201.

12Ex.P43Certificate Registrar of15.11.2012-- of Companies, CIN.No.U923 IncorporatioAndhra 00AP2012PT n relating toPradesh C084161 Supreme India TV Registered channel Address: Private LimitedD.No.3-1-98, 23 C.C.No.5/2016 PDJC, Rjvm Ganapathi Plaza, Main Road,Amalap uram- 533201.

13Ex.P44List of Registrar of1.Busim -- Directors Companies,Venkata relating Andhra Naga Venu Supreme Pradesh(A1) India TV 2.Rajya channel Lakshmi Private Busim (A3) Limited 14Ex.P45Company Ministry of 28.1.20131.Busim -- information Corporate Venkata CIN.No.U401 relating to affairsNaga Venu 02AP2013PT Survarna (A1) C085476 India Vidyut

2. Rajya Plant Registered Lakshmi Private Address: Busim (A3) Limited D.No.1-98, NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

15Ex.P46Certificate Registrar of28.1.2013-- of Companies, CIN.No.U401 IncorporatioAndhra 02AP2013PT n relating toPradesh C085476 Survarna India Vidyut Registered Plant Address: Private 24 C.C.No.5/2016 PDJC, Rjvm LimitedD.No.1-98, NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

16Ex.P47List of Registrar of1.Busim -- Directors Companies,Venkata relating Andhra Naga Venu Survarna Pradesh(A1) India Vidyut 2.Rajya Plant Lakshmi Private Busim (A3) Limited

b)Admittedly, during the course of investigation, neither PW.33 nor

PW.34 collected single piece of document regarding establishment of accused No.2 company and laches on the part of the investigating officers would be discussed at a little later in ancillary point No.V. And, to show the establishment of accused No.2 company and other companies, during trial, prosecution took steps and after securing the documents vide

Exs.P31 to 47, filed the same through PW.26. In this regard, it is to be noted that it is not disputed by the accused about establishment of accused No.2 company and no where it is suggested that it was not established. Exs.P32, 36, 39, 42 and 45 are the proceedings issued by the Ministry of Corporate affairs and as per Ex.P32, initially accused No.2 company is established under the name and style of Survana India 25 C.C.No.5/2016 PDJC, Rjvm Projects Limited/accused No.2 on 9.11.2011 and Ex.P33 is its certificate of incorporation with Corporation Identity Number (CIN)-U45400AP 2011PLC077328 and its paid up capital is Rs.5,00,000/-. As per Ex.P34, name of accused No.2 company is slightly changed as Suvarna India

Infra Projects Limited with same CIN number and accordingly, Ministry of

Corporate Affairs, Registrar of Companies, Andhra Pradesh issued proceedings vide Ex.P34 dated 23.4.2013 and when accused No.2 company was established, the directors were accused Nos.3, 4, 6 and 7 besides Managing Director i.e., Accused No.1 vide Ex.P35, whereas, accused No.7 resigned as director on 30.11.2012 and accused No.4 resigned as director on 15.5.2014. In this regard, learned counsel for the accused argued that having taken advantage of relationship of accused

No.7 with accused No.1, name of accused No.7 is shown in the list of directors and immediately after coming to know about the same, he resigned as director on 30.11.2012 and the same is recorded vide

Ex.P35. The same argument is advanced on behalf of accused No.4 also. Ex.P35 reveals that accused No.4 also resigned as director on 15.5.2014 i.e., almost prior to one year of giving complaint in this case and in the connected matters. So, record clearly reveals that though the names of accused Nos.4 and 7 are shown in the list of directors, they resigned even very long prior to giving reports and registration of first information report vide Ex.P54. As per Ex.P35, accused Nos.1, 3 and 6 26 C.C.No.5/2016 PDJC, Rjvm continued as directors, out of which, accused No.1 is Managing Director of accused No.2 company. Accused Nos.3 and 6 are wife and daughter of accused No.1. Neither in the certificate of incorporation nor in the list of directors, names and other details of accused Nos.5 and 8 are find place and PW.26 admitted the same. PW.26 who secured Exs.P31 to P47 also categorically stated that initially accused No.1 was Managing

Director and accused Nos.3, 4, 6 and 7 were the directors of accused

No.2 company and accused No.7 and 4 resigned as directors on 30.11.2012 and 15.5.2014 respectively, and all the five companies registered office is at H.No.3-1-98, Ganapathi Plaza, Main Road,

Amalapuram. So, it can safely be concluded that accused No.5 and 8 are no way concerned with the company. It is not the case of prosecution that accused No.9 either director or induced the general public and absolutely no evidence to that affect also. With regard to the liability of the resigned directors, discussion would be made in the forth coming ancillary point No.iii.

c)In addition to the accused No.2 company, accused Nos.1 and 3 also established four other nominal companies with nominal paid up capital under the names and styles of Survarna india Iron and Steel

Manufacturing Private Limited, Prakash India Power Projects Private

Limited, Supreme India TV Channel Private Limited and Survarna India 27 C.C.No.5/2016 PDJC, Rjvm Vidyut Plant private Limited on 31.10.2012, 22.1.2013, 15.11.2012 and 28.1.2013 respectively. To that effect, certificates of incorporation also obtained vide Exs.P38,40, 43 and 46 and further, Exs.P38, 41, 44 and 47 reveal that the accused Nos.1 and 3 are directors of the said company.

d)For the foregoing reasons, this court came to conclusion that on 9.11.2011, initially accused No.2 company was established in the name and style of Suvarna India Projects Limited vide Ex.P32 and subsequently, the name of the said company is changed as Suvarna India

Infra Projects India Limited vide Ex.P34 and originally, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were the directors of accused No.2 company and subsequently, accused Nos.4 and 7 resigned as directors and the same is accepted by the Registrar of Companies vide Ex.P35 and further, accused Nos.5, 8 and 9 are no way concerned with the accused No.2 company. Hence, this ancillary point is answered accordingly.

ii)Ancillary point No.(ii): Whether miscarriage of justice is done to the accused for conducting investigation by PWs.33 and 34 and launch prosecution by PW.34?

a)Admittedly, Ex.P10 report is registered by PW.33/Inspector of

Police for the offences under Sections 120-B, 411, 417, 420, 201 r/w.34 of the Code and 411 of the Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under Section 5 of the Act, 1999 vide 28 C.C.No.5/2016 PDJC, Rjvm Ex.P54.The same investigating officer i.e., PW.33 conducted investigation including examination of witnesses and collection of documents.

PW.34/Deputy Superintendent of Police conducted further investigation and laid charge sheet. Learned defence counsel argued that PWs.33 and 34 violated the mandatory requirement under Rule 5 (2) of Andhra

Pradesh Depositors of Financial Establishment Rules and they are not competent persons to conduct investigation and launch prosecution and further, all the documents relating to the case are not furnished to the accused as required under Section 207 of Code of Criminal Procedure and as such, investigation done by PWs.33 and 34 is illegal and to substantiate their version relied upon judgment of Hon’ble High Court of

Andhra Pradesh in Yousuf Bin Award @ Yousauf (supra). For better understanding section 4 of the Act, 1999 and Rule 5 are set out below:-

Section 4: Competent Authority: (1) The Government may, by notification, appoint an authority hereinafter called "the competent authority" to exercise control over the properties attached by the Government under section 3. (2) The Competent authority shall have such other powers and discharge such other functions as may be prescribed, in addition to the powers and functions specified under this Act. (3) Upon receipt of the orders of the Government under section 3, the Competent authority shall apply within fifteen days to the Special Court constituted under this Act for making the ad-interim order of attachment absolute. (4) An application under sub-section (3) shall be accompanied by one or more affidavits, stating the grounds on which the belief that the financial establishment has committed any default or is likely to defraud, is founded, the amount of money or value of other property believed to have been procured by means of the deposits, and the 29 C.C.No.5/2016 PDJC, Rjvm details, if any, of persons in whose names such property is believed to have been invested or purchased out of the deposits or any other property attached under section 3

Rule 5 (2):-Where the competent authority satisfied or has reason to believe that the financial establishment has committed a default punishable under Section 5 of the Act, the Competent Authority shall be competent to launch prosecution before the Special Court against the Financial Establishment and any person responsible for the management of the affairs of the Financial Establishment including the promoter, manager or member of the Financial Establishment for levy of penalty under Section 5 of the Act.

b)Having considered G.O.Ms.No.346, Home (Gen.B), dated 14.11.2000, sub Rule 2 is added to Rule 5 and as per this Rule, competent authority has to launch prosecution before the Special Court, against the financial establishment or the persons responsible for the management of its affairs. In this regard, Additional Director General of police, C.I.D. is appointed as competent authority vide G.O.Ms.No.193,

Home (Gen.B), dated 23.8.2001 issued under Section 4 of the Act, 1999.

In the judgment relied upon by the learned defence counsel in Yousuf

Bin Award @ Yousauf (supra), having considered both the government orders dated 14.11.2000 and 23.8.2001 and also having considered the facts and circumstances of that case, Hon’ble High Court of Andhra

Pradesh set aside the conviction and sentence passed by the trial court for the offence under Section 5 of the Act, 1999. Facts of the said case are, originally first information report was not registered of the offence under Section 5 of the Act, 1999 and charge sheet was also not laid for 30 C.C.No.5/2016 PDJC, Rjvm the said offence and subsequently, that too, after framing charge, the

Inspector of Police, WCO Team-III, Hyderabad had filed memo requesting the court to add Section 5 of the Act, 1999.

c)As it is stated above, in the present case at hand, first information report was registered for the offence under Section 5 of the Act, 1999 along with the provisions under Indian Penal Code and other offences and charge sheet also laid for the same offences. It is not in dispute that neither PW.33 nor PW.34 nor the police officer in the cadre of Inspector of

Police or Deputy Superintendent of Police are appointed as competent authority to conduct investigation or launch prosecution. In the aforementioned case relied upon by the accused, prosecution suddenly introduced Section 5 of the Act, 1999 and in that case, it seems, accused not admitted establishment of company and as such, absolutely, it was surprise to them and since miscarriage of justice is caused, Hon’ble High

Court set aside the conviction. But, in this case, it is the admitted case of accused that accused No.2 company is established by accused No.1 and others. Charge sheet also laid for the offence under Section 201 of

Indian Penal Code on the allegation that the accused caused disappearance of the documentary evidence including the certificate of incorporation, list of directors, account books etc., from the place where the accused No.2 company is established vide Ex.P33. So, the argument 31 C.C.No.5/2016 PDJC, Rjvm of the learned counsel for the accused that for non supply of relevant documents regarding establishment of company vitiates the trial cannot be taken into consideration. Added to it, during trial when Exs.P32 to 47 filed and admitted in the evidence, accused did not dispute the said documents and moreover, categorically admitted the same in the evidence of investigating officers and other witnesses.

d)To consider the core point that whether total case vitiates for conducting investigation and launching prosecution by a person who is not competent, it is appropriate to refer to that before bifurcation of both the states of Andhra Pradesh and Telangana, the aforementioned

Government Orders dated 14.11.2000 and 23.8.2001 are issued in respect of competent authority and appointing Additional Director General of Police, C.I.D. as competent authority. After bifurcation, Government of

Telangana issued G.O.Ms.No.99 dated 5.9.2018 amending Rule 5(2) of the Telangana Protection of Depositors of Financial Establishment Act, 1999 to the effect empowering any police officer not below the rank of

Inspector of Police to launch prosecution under the Act 17/1999 and the

Rules framed thereunder with retrospective affect. When the said

G.O.Ms.No.99 is challenged, Hon’ble Division Bench of Hon’ble

Telangana High Court while deciding the writ petition in Mr.Syed Yousuf

Abbas Vs. State of Telangana 4 held that:-

4. Writ petition No.40775 & 40962/2018 32 C.C.No.5/2016 PDJC, Rjvm “The intention of the legislature by amending Rules with retrospective effect no way intends to regularize any flaw in respect of the trial. The Special Courts keeping in view the statutory provisions under the Act No.17 of 1999 and the Rules framed thereunder are proceeding ahead with the trial on the basis of the material brought before the Special Courts by the competent authority or by any police officer and merely because investigation has been carried by any police officer not below the rank of Inspector of Police prior to 05.09.2018, it does not mean that all the misdeeds of the petitioners can be wiped out as prayed by the petitioners. The petitioners' contention is that the amendment and the Rules has been done only with a view to object to nullify the Judgment delivered by this Court in Criminal Appeal No.1576 of 2005 and batch decided on 01.04.2015. In the considered opinion of this Court, the plea canvassed by the petitioners is ill-founded.

It does not nullify any Judgment. The act of the petitioners was certainly an offence earlier also and it is an offence under the amendment also and it is nobody's case that the act committed by the petitioners has been made an offence by amending the Act retrospectively”.

e)The said Government order is challenged before the common High

Court by duly issuing notice to the State Government. Admittedly, either after bifurcation of both the states of Andhra Pradesh and Telangana or after establishment of our Hon’ble High Court of Andhra Pradesh, State

Government of Andhra Pradesh has not issued similar Government order authorizing the Inspector of Police to launch prosecution for the reasons best known to it. In this regard, it is to be noted that in R.A.H. Siguran vs.

Shankare Gowda @ Shankara & Anr 5in which,Hon’ble Apex Court categorically held that unless accused proves that miscarriage of justice is done to him, the trial should not be vitiated. Though the said case 5. (2017) 16 SCC 126 33 C.C.No.5/2016 PDJC, Rjvm relates to the Immoral Traffic Act, by referring several precedents from 1955, Hon’ble Apex Court held the said principle.

f)In H.N. Rishbud and Anr. Vs. State of Delhi 6 the question considered by the Hon’ble Apex Court was whether after the court takes cognizance, trial can be held to be initiated merely on the ground that investigation was invalid and answering in the negative, it was held that if the plea of invalidity of investigation is raised at sufficiently early stage, the court, instead of taking cognizance direct reinvestigation by competent investigating officer. But, after cognizance is taken the trial cannot be quashed for invalidity of investigation.

The observations in the said judgment are as follows:- “9. The question then requires to be considered whether and to what extent the trial which follows such investigation is vitiated. Now, trial follows cognizance and cognizance is preceded by investigation. This is undoubtedly the basic scheme of the Code in respect of cognizable cases. But it does not necessarily follow that an invalid investigation nullifies the cognizance or trial based thereon. Here we are not concerned with the effect of the breach of a mandatory provision regulating the competence or procedure of the Court as regards cognizance or trial. It is only with reference to such a breach that the question as to whether it constitutes an illegality vitiating the proceedings or a mere irregularity arises. A defect or illegality in investigation, however serious, has no direct bearing on the competence or the procedure relating to cognizance or trial. No doubt a police report which results from an investigation is provided in Section 190 of the Code of Criminal Procedure as the material on which cognizance is taken. But it cannot be maintained that a valid and legal police report is the foundation of the jurisdiction of the Court to take cognizance.

6 AIR 1955 SC 196 34 C.C.No.5/2016 PDJC, Rjvm While no doubt, in one sense, clauses (a), (b) and (c) of Section 190(1) are conditions requisite for taking of cognizance, it is not possible to say that cognizance on an invalid police report is prohibited and is therefore a nullity. Such an invalid report may still fall either under clause (a) or (b) of Section 190(1), (whether it is the one or the other we need not pause to consider) and in any case cognizance so taken is only in the nature of error in a proceeding antecedent to the trial. To such a situation Section 537 of the Code of Criminal Procedure which is in the following terms is attracted:

“Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered on appeal or revision on account of any error, omission or irregularity in the complaint, summons, warrant, charge, proclamation, order, judgment or other proceedings before or during trial or in any enquiry or other proceedings under this Code, unless such error, omission or irregularity, has in fact occasioned a failure of justice.” “If, therefore, cognizance is in fact taken, on a police report vitiated by the breach of a mandatory provision relating to investigation, there can be no doubt that the result of the trial which follows it cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice. That an illegality committed in the course of investigation does not affect the competence and the jurisdiction of the Court for trial is well settled as appears from the cases in Prabhu v. Emperor (AIR 1944 PC 73) and Lumbhardar Zutshi v. King (AIR 1950 PC 26). These no doubt relate to the illegality of arrest in the course of investigation while we are concerned in the present cases with the illegality with reference to the machinery for the collection of the evidence. This distinction may have a bearing on the question of prejudice or miscarriage of justice, but both the cases clearly show that invalidity of the investigation has no relation to the competence of the Court. We are, therefore, clearly, also, of the opinion that where the cognizance of the case has in fact been taken and the case has proceeded to termination, the invalidity of the precedent investigation does not vitiate the result, unless miscarriage of justice has been caused thereby”.

35 C.C.No.5/2016 PDJC, Rjvm

g)Further, in State of Haryana v. Bhajan Lal 7, Hon’ble Apex Court held as under:

“119. It has been ruled by this Court in several decisions that Section 5-A of the Act is mandatory and not directory and the investigation conducted in violation thereof bears the stamp of illegality but that illegality committed in the course of an investigation does not affect the competence and the jurisdiction of the court for trial and where the cognizance of the case has in fact been taken and the case is proceeded to termination, the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. See (1) H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], (2) Major E.G. Barsay v. State of Bombay [AIR 1961 SC 1762], (3) Munnalal v. State of U.P [AIR 1964 SC 28], (4) Sailendranath Bose v. State of Bihar [AIR 1968 SC 1292], (5) Muni Lal v. Delhi Admn. [(1971) 2 SCC 48] and (6) Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. However, in Rishbud case [AIR 1955 SC 196] and Muni Lal case [(1971) 2 SCC 48], it has been ruled that if any breach of the said mandatory proviso relating to investigation is brought to the notice of the court at an early stage of the trial, the court will have to consider the nature and extent of the violation and pass appropriate orders as may be called for to rectify the illegality and cure the defects in the investigation.

h)And, in A.C. Sharma v. Delhi Admn 8, provision of Section 5-A again considered and held as under:

“15. As the foregoing discussion shows the investigation in the present case by the Deputy Superintendent of Police cannot be considered to be in any way unauthorised or contrary to law. In this connection it may not be out of place also to point out that the function of investigation is merely to collect evidence and any irregularity or even illegality in the course of collection of evidence can scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated. In H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], it was held that an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and 7. [1992 Supp (1) SCC 335]

8. (1973) 1 SCC 726 36 C.C.No.5/2016 PDJC, Rjvm where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. When any breach of the mandatory provisions relating to investigation is brought to the notice of the court at an early stage of the trial the Court will have to consider the nature and extent of the violation and pass appropriate orders for such reinvestigation as may be called for, wholly or partly, and by such officer as it considers appropriate with reference to the requirements of Section 5-A of the Prevention of Corruption Act, 1947. This decision was followed in Munnalal v. State of U.P. [AIR 1964 SC 28] where the decision in State of M.P. v. Mubarak Ali [AIR 1959 SC 707], was distinguished. The same view was taken in State of A.P. v. N. Venugopal [AIR 1964 SC 33] and more recently in Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. The decisions of the Calcutta, Punjab and Saurashtra High Courts relied upon by Mr Anthony deal with different points: in any event to the extent they contain any observations against the view expressed by this Court in the decisions just cited those observations cannot be considered good law.

i)Added to it, this case comes under the purview of Section 460 (c) of

Code of Criminal Procedure, but not under Section 461 of Code of

Criminal Procedure. Further, except posing questions in respect of Rule 5(2) to PWs.33 and 34 that they have to obtain permission from the

Superintendent of Police to register first information report and investigate the case and launch prosecution by following G.O.Ms.No.346, that too, by recalling them, accused did not raise any objection after registration of first information report, during investigation, before or after taking cognizance, before framing charge or during trial at the time of initial examination of PWs.33 and 34. Added to it, for the same offences, State

Government of Telangana which is bifurcated from the state of Andhra 37 C.C.No.5/2016 PDJC, Rjvm Pradesh had issued G.O.Ms.No.99 authorizing the Inspector of Police to launch prosecution with retrospective affect. So, even other wise it can be inferred that the same cadre police officials have competency to launch prosecution and in this case, Deputy Superintendent of Police filed charge sheet.

j)To sum up, having given thoughtful consideration to the aforementioned propositions, an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby and further, function of investigation is merely to collect evidence and any irregularity or even illegality in the course of collection of evidence can be scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated.

[k)For the foregoing reasons, this court came to conclusion absolutely miscarriage of justice is not done to the accused for conducting investigation by PWs.33 and 34 and launching prosecution by PW.34 who is none other than Deputy Superintendent of Police.

38 C.C.No.5/2016 PDJC, Rjvm iii) Ancillary point No.(iii): Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

a)It is already stated above that there is no dispute about the establishment of accused No.2 company and it is also not in dispute that accused No.1 was Managing Director and accused Nos.3, 4, 6 and 7 were directors at the time of establishment of accused No.2 company.

Further, Exs.P32, 33 and 35 reveal the same and further, name of accused No.2 is changed as Suverna India Projects Limited vide Ex.P34.

Before taking up appreciation in respect of this point, it is pertinent to refer

to the relevant provisions under the Act, 1999, which are extracted hereunder:

Section 2(b) and (c) of the Act reads as follows: “2-Definition:- In this Act, unless the context otherwise remains:

(a) xxxxxx

(b)‘Deposit’ means the deposit of a sum of money either in lumpsum or instalments made with a financial establishment for a fixed period, for interest or return in any kind;

(c)"Financial Establishment" means any person or group of individuals accepting deposit under any scheme or arrangement or in any other manner but does not include a corporation or a co-operative society owned or controlled by any State Government or the Central Government or a banking company as defined under clause (c) of section 5 of the Banking Regulation Act, 1949 (Central Act 10 of 1949).

Section 5 of the Act reads as follows:- Penalty for default - Where any financial establishment defaults in the return of the deposit either in cash or kind or defaults in the payment of interest on the deposit as agreed upon, every person responsible for the management of the affairs of the financial establishment including the promoter, Manager or Member of the financial establishment shall be punished with imprisonment for a term which may extend to ten years and with fine which may extend to rupees one lakh and such financial establishment shall also be liable for fine which may extend to rupees five lakh.

39 C.C.No.5/2016 PDJC, Rjvm

b)Now, coming to the facts and evidence of the case, it is already stated above that there are six categories of witnesses and two categories of documents. Out of which, first category of witnesses are victims, they are Pws.3 to 5 and 12 to 25 and second category of witnesses are agents. Before appreciating the evidence of victims, it is apposite to appreciate the evidence of agents and agents-cum-victims who set the criminal law into motion vide Ex.P10 to follow sequence.

c) Evidence of Agents: (Pws.1 and 2)

i)PWs.1 and 2 stated in one voice that accused No.1 who is none other than Managing Director of Suvarna India Infra Projects

Limited/accused No.2 company which is situated at Ganapathi Plaza,

Cinema Road, Amalapuram informed to them that they established accused No.2 company with an intention to collect recurring deposits from the general public to pay interest at 20% on the deposit amount and also to pay 4% of commission to the agents and further, their company has license and also obtained permission from the Reserve Bank of India and made believe them that accused No.2 is well established company and accordingly, they joined as agents. PW.1 collected Rs.19,86,504/- from 60 victims and PW.2 collected Rs.13,89,090/- from 85 victims and in turn, accused No.2 company issued bonds, pass books and receipts vide

Exs.P1 to P9 and also issued bonds in the name of customers.

40 C.C.No.5/2016 PDJC, Rjvm ii)So, as per the version of PWs.1 and 2, they collected an amount of

Rs.33,74,594/- and PW.1 also made personal deposit of Rs.2,20,000/-.

Both PWs.1 and 2 have categorically stated that they were appointed by the accused No.1 as agents so as to collect amounts from the general public and deposit the same in the accused No.2 company and further, they all know the directors and Managing Director, they promised to pay 20% interest to the customers and accordingly, bonds/receipts/pass books are issued to them, to some of the agents as well as victims.

Further, Pws.1 and 2 are none other than defacto complainants who set the criminal law into motion by giving Ex.P10 report.

iii)Learned counsel for the accused would argue that there is no proof to show that Pws.1 and 2 were appointed as agents, collected amounts on behalf of accused No.2 company and deposited the same and further, neither accused No.1 nor accused No.2 appointed them as agents and as such, accused No.2 company is not committed any offence. But, PWs.1 and 2 have consistently in one voice stated that they were appointed as agents by accused No.1 and they collected amounts to a tune of

Rs.33,74,594/- and PW.1 deposited Rs.2,20,000/- and in this regard, it is to be noted that a charge under Section 120-B of Indian Penal Code is also framed against the accused alleging that they conspired together, 41 C.C.No.5/2016 PDJC, Rjvm established accused No.2 company, collected amounts directly and through the agents.

iv)Further, it is already stated above that along with accused No.2 company, accused Nos.1 and 3 who are none other than husband and wife also established four other nominal companies which are referred above. So, it shows that from the inception of establishment of accused

No.2 company and other companies, they violated the provisions of the

Act, 1999 and further, another charge under Section 201 of Indian Penal

Code is also framed for causing disappearance of the evidence by removing of all the documents in respect of accused No.2 company and as per the version of prosecution, they could not secure single piece of document in the office of accused No.2 company. In the cross examination of all the witnesses, learned counsel for the accused elicited that Exs.P1 to 9 do not contain signature of accused No.1, seal in the name of Survarna Real estate is there on all the documents, some of the agents have not categorically stated before the investigating officer that they have given amounts either to the Manager or to the accused No.1. It is nowhere suggested that accused No.2 company is not at all established and their defence is that they never collected any amounts from any of the person and all the documents are fabricated. Learned counsel for the accused also elicited some formal inconsistencies in the 42 C.C.No.5/2016 PDJC, Rjvm evidence of PWs.1 and 2 which do not thrown away the version of the prosecution and dislodge their testimonies.

d) Evidence of Victims: (Pws.3 to 5, 12 to 25)

i)All the witnesses testified consistently that upon believing the words of accused Nos.1 and 3 or accused No.1 or accused Nos.1, 3, 6 and others about establishment of accused No.2 company at Gapanapthi

Plaza, Cinema road, Amalapuram and if they deposit amounts in their company, accused No.2 company would pay interest at 20%, they all deposited amounts in their names and in the names of their family members vide Exs.P1 to 9, 11 to 30, and in the cross examination of all the witnesses, all the suggestions posed by the learned defence counsel are denied, however, learned defence counsel elicited formal inconsistencies and omissions in respect of the statements which are not specifically given before the investigating officer with regard to the presence of either of the accused at the time of making payments, names of agents and further, all the witnesses are also admitted that that none of the bonds/receipts contain the name of accused No.2 company and they contain the name of Suvarna Real Estate company and the details of the witnesses, deposit amounts, documents etc., are stated as follows:

WitnessDepositRelevantThrough whom amount is deposited or (rupees)documentany other reference. PW.355,000/---Accused No.1 43 C.C.No.5/2016 PDJC, Rjvm PW.41,10,000/---Accused No.1 PW.535,000/---Accused No.1 PW.1235,700/-Ex.P11PW.1 He know accused Nos.1, 3, 5 to 7 PW.132,01,000/-Exs.P12 to 15Accused Nos.1 and 3 approached PW.1450,000/-Ex.P16PW.13 Paid in the presence of accused No.1 PW.1520,000/-Ex.P17PW.1/agent He know accused Nos.1, 3, 5, 6 and 7 PW.1630,000/-Exs.P18 and 19PW.1/agent He know accused Nos.1, 3, 5, 6 and 7 PW.171,20,000/---He know accused No.1 PW.1828,800/---PW.1 He know accused Nos.1, 3, 5 and others paid in the presence of accused Nos.1,3 and 7

PW.191,00,000/---PW.2 He know accused Nos.1 to 8

PW.2042,500/-Exs.P20 and 21PW.1 He know accused Nos.1, 3, 5 and 7 PW.211,47,500/-Exs.P22 and 23Accused No.1 He know accused Nos.3, 5 and others PW.2230,000/-Ex.P24PW.1. Paid in the presence of accused Nos.1, 3 and 6. PW.2318,000/-Exs.P25 to 28Vijaya Kumar/agent He know accused Nos.1, 4, 6 and 7 PW.2450,000/-Ex.P29Accused Nos.1 and 7 approached PW.251,00,000/-Ex.P30Accused No.1 44 C.C.No.5/2016 PDJC, Rjvm ii)So, as per the version of the victims, they deposited an amount of

Rs.10,26,000/- by believing the words of accused No.1 and others, either through agents or co-victims directly. Some of the witnesses stated that they know accused Nos.1 and 2, some stated that they know accused

Nos.1, 3, 5 and 7 and some other witnesses stated that they know accused Nos.1 to 3, 5 to 7. Further, some of the victims stated that accused No.1 went to their houses along with agents and some of the victims testified that they approached accused No.2 company situated at

Ganapathi Plaza along with agents and deposited amounts and except eliciting the material that the name of Suvarna real estate company is mentioned on the bonds and receipts, nothing more useful is elicited to disbelieve the version of victims. Learned counsel for the accused also elicited some formal inconsistencies in the evidence of Pws.3 to 5, 12 to 25 which do not thrown away the version of the prosecution.

e) Evidence of employees of accused No.2 (Pws.9 to 11):

i) It came in the evidence of PW.9 that accused No.1 is managing director of Suvarna India Infra Project Limited, Ganapathi Plaza,

Amalapuram, accused Nos.3 to 8 are directors of the said company, he came to know through some others about the establishment of the said company and accordingly, he went to the company and then, accused

No.1 appointed him as accountant and along with him some other 45 C.C.No.5/2016 PDJC, Rjvm persons also joined as Branch Managers and agents in the said company. Further, the Branch Manager and agents used to collect deposits from the general public and used to deposit the same in the company and at the end of every day, himself and others used to hand over total deposit amounts to the accused No.1, company used to issue bonds and receipts and whenever any customer approached the company to withdraw the deposit amount, accused No.1 used to postpone the payment by saying that they invested the said amounts in the Reserve Bank of India and if they wait for another six months, he would pay additional interest and finally, company is closed without leaving any evidence and by removing total records and furniture from

Ganapathi Plaza and finally, victims gave report to the police.

ii)In the cross examination, he had admitted that he stated in the connected matters in C.C.Nos.1/2016 and 2/2016 that he gave seven similar statements in all the connected matters and since the learned defence counsel questioned about the documentary proof regarding his appointment, witness produced photo copy of order dated 1.3.2012 vide

Ex.D1. He has further stated that, as per Ex.D1, he was appointed as operational manager, but not accountant, and in Ex.D1, name of the company is mentioned as Suvarna India, Suvarna Infra Projects India

Limited and he denied other suggestions posed by the learned defence 46 C.C.No.5/2016 PDJC, Rjvm counsel stating that he fabricated Ex.D1 and he further admitted that in

C.C.No.2/2016, he stated that he does not have any documentary proof to show his appointment and for which, he gave explanation that thereafter, he searched for the appointment order and could trace out it and some other formal material which is not useful to disbelieve the version of PW.9 is elicited in his cross examination.

iii)PW.10 testified that on 1.4.2012, he joined as accountant in

Suvarna India Infra Project Limited and initially, he worked for some period at P.Gannvaram and Muramalla and thereafter, he worked in the head office situated at Amalapuram, several branch managers and agents are appointed by the company and they used to collect deposits from the general public to run real estate business and Suvarna India

Infra Project Limited, accused No.1 is the Managing Director and accused

Nos.3 to 8 are directors of the said company, objectives of the company are to collect deposits from poor public, invest the same in the real estate business and pay deposit amount with 20% interest and further, general public used to come to the office to deposit amounts through agents and branch managers and they used to issue deposit bonds and receipts to the depositors and at the end of every day, they used to hand over total amount to the accused No.1. Further, after completion of maturity period also, accused No.1 failed to repay the amount, postponed the same on 47 C.C.No.5/2016 PDJC, Rjvm the ground that he invested the said amounts in other business and he would repay the same with additional interest and finally, the company is closed by removing all the records and furniture where accused No.2 is established and some of the victims gave report to the police. He also admitted in his cross examination that he gave evidence in the connected matters in C.C.Nos.1/2016 and 2/2016 that he gave similar statements in all the connected matters and denied the suggestions that he never worked in accused No.2 company and he had no acquaintance with accused No.1 and other accused and further, he pleaded ignorance about

DIN number of accused Nos.3 to 8.

iv)As per the version of PW.11, in the year 2013, he joined as accountant in accused No.2 company at Rajamahendravaram Branch, accused No.1 is managing director, accused Nos.3 to 9 are directors of the said company, its main office is situated at Ganapathi Plaza,

Amalapuram, objectives of the company are to run other business like real estate etc., and collect deposits from the general public and pay deposit amount with 20% interest, general public used to come to the branch office, Rajamahendravaram to deposit amounts through agents and branch managers, they used to issue deposit bonds and receipts to the depositors, at the end of every day, they used to hand over total amount to the accused No.1. Further, directors used to postpone the 48 C.C.No.5/2016 PDJC, Rjvm payment and on one day, when he went to the branch office,

Rajamahendravaram to attend work, it is found locked by removing total records and furniture and finally, some of the victims gave report to the police, and in the cross examination, he also stated that he gave evidence in the connected matters in C.C.Nos.1/2016 and 2/2016 that he joined in the company on 10.4.2012, accused No.9 took back his appointment letter when a meeting was conducted at Sivakodu. Further, he has stated he gave similar statements in all the connected matters and denied other suggestions posed by the learned defence counsel.

f) Evidence of independent witnesses (Pws.6 to 8):

i)It came in the evidence of PW.6 that since 2011, he has been working as lodge boy in Ganapathi Plaza, Amalapuram, in the year 2013,

Suvarna India Infra Private Limited was established in the first floor by accused Nos.1, accused Nos.3, 5, 6 and others served as directors, he know all the said persons, public used to come to the said company to deposit amounts and after receiving amounts, company used to issue receipts and in the year 2015, company is closed, general public deposited amounts to receive excessive interest, company failed to repay the amounts, company people also taken away total records and furniture from the said building and in the cross examination, he has stated that in

C.C.No.1/2016, he pleaded ignorance about the affairs of the company, 49 C.C.No.5/2016 PDJC, Rjvm and further, he has stated that he has no evidence to show that he has been working as lodge boy in Ganapathi Plaza and denied other suggestions.

ii)PW.7/other independent witness testified that he has been working as lodge boy in Ganapathi Plaza for the last 20 years, in the year 2011,

Suvarna India Infra Private Limited was established in the first floor of

Ganapathi Plaza by accused No.1, he know one Madhavi and accused

No.3 who served as directors, public used to come to the said company to deposit amounts and after receiving amounts, company used to issue receipts, in the year 2014, company is closed, general public deposited amounts to receive excessive interest, company failed to repay the amounts, company people also taken away total records and furniture from the said building, and in the cross examination, he has stated that in

C.C.No.1/2016, he pleaded ignorance about the affairs of the company, and he has further stated that he has no evidence to show that he has been working lodge boy in Ganapathi Plaza and denied other suggestions.

iii)As per the version of PW.8, he is running a shop for sale of disposable items in the ground floor of Ganapathi Plaza, main road,

Amalapuram and in the year 2011, Suvarna India Infra Private Limited was established in the first floor of Ganapathi Plaza by accused Nos.1, 3, 50 C.C.No.5/2016 PDJC, Rjvm 6 and others, public used to come to the said company to deposit amounts and after receiving amounts, the said company functioned for four years, they failed to repay the amounts, company people also taken way total records and furniture, several persons came to the Ganapathi

Plaza and demand for repayment of amounts and then, company failed to pay the same, and in the cross examination, he had admitted that there is no document to show that he is running a shop in Ganapathi Plaza, he has not obtained any license from the municipality and other suggestions posed by the learned defence counsel are denied.

iv)Pws.6 to 8 are independent witnesses and one cannot except document from them to prove their business and avocation. There is no reason to disbelieve the version of these witnesses. No animosity also attributed between them and the accused. It is not in dispute about establishment of accused No.2 company at D.No.3-1-98, Ganapathi

Plaza, main road, Amalapuram in the year 2011. Nothing useful material is elicited in their evidence. To sum up their evidence, accused No.2 company is established in Ganapathi Plaza, main road, Amalapuram, several persons came there, deposited amounts and when they demanded for repayment, accused No.2 company failed to pay the same, closed the company, removed all documentary evidence and furniture.

51 C.C.No.5/2016 PDJC, Rjvm

g) Evidence of mediators (Pws.27 to 32):

As per the version of Pws.27 to 32, PW.33 called them and other mediators, to act as mediators and in their presence, PW.33 arrested accused Nos.1, 8, 9, 5, 6 and 4 vide Exs.P48 to 53 on the respective dates and places and there is no dispute about the arrests of all these accused. Admittedly, nothing is seized from either of the accused. So, in view of the provisions under the Evidence Act, admissible and relevant portions in respect of names, other details of the accused and their arrests are only marked. PW.33 also stated on the same lines of evidence of Pws.27 to 32. Formal suggestions are posed by the learned defence counsel regarding preparation of documents in the police station and they are denied by Pws.27 to 32.

h) Evidence of official witnesses (Pws.26, 33 and 34):

i)It is already stated above that the present station house officer i.e.,

PW.26 took steps, during trial, secured documents vide Exs.P31 to 47 regarding establishment of the accused No.2 company and other companies at bearing D.No.3-1-98, Ganapathi Plaza, main road,

Amalapuram. PW.33 is very crucial witness who registered Ex.P10 report of Pws.1 and 2 vide Ex.P54 for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and Section 5 of the the Act, 1999 and in his chief examination, he stated supporting the case of prosecution and 52 C.C.No.5/2016 PDJC, Rjvm in the cross examination, he has categorically admitted that he has not collected any document showing registration of accused No.2 company, he tried to get registered document of accused No.2 company, basing on the statements of victims, he came to conclusion that accused Nos.1, 3 to 8 are directors of accused No.2 company and that he has not produced any document to show that he tried to secure documents showing registration of accused No.2 company and part-I case dairy shows that none of the victims have handed over documents to show that the accused are directors of accused No.2 company. He has further admitted that he has not shown other companies as accused in this case, though several bonds are issued in that name, he has not done investigation relating to Survarna Real estate, none of the victims have handed over documents issued in the name of accused No.2 company, he has not verified whether the bonds contain the signature of any of the accused, he has not collected any documents from the accused, after submitting resignation by accused No.1 to Sahara India private Limited, accused

Nos.1, 3 and 6 established accused No.2 company. Further, in the part-I case diary there is no specification that accused No.9 is legal advisor and friend of accused No.1, accused No.4 is advocate from Visakhapatnam, accused No.8 is resident of Samisrigudem of Nidadavolu and accused

No.10 is resident of Sivakodu village of Razole Mandal. Further, he has not produced any document to show movable and immovable properties 53 C.C.No.5/2016 PDJC, Rjvm transferred in the name of accused No.10 and except the case diary file, he has not handed over any document showing registration of accused

No.2 company and that PW.1 has not stated about involvement of accused No.9 in settling the matter. Further, he has not secured any document to show the agents and managers of accused No.2 company and after going through the provisions of Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999, he registered the report of defacto complainants.

ii)It is already stated above, being participated in the investigation including the registration of report of PWs.1 and 2 vide Ex.P54, PW.33 failed to secure single piece of document in respect of accused No.2 company and deposit amounts made by the victims. After registration of

Ex.P54/first information report, he simply recorded the statements of the witnesses in this case and in the connected cases. Even as per his categorical admissions, he has not even take steps to obtain the documents relating to accused No.2 company.

iii)Learned counsel for the accused argued that none of the documents i.e., deposit/bond/pass book contain the name or seal of accused No.2 company and as such, accused are no way concerned with

Exs.P1 to P30. Admittedly, neither the directors nor any concerned person of accused No.2 company signed Exs.P1 to P9, P11 to P30 and 54 C.C.No.5/2016 PDJC, Rjvm seal of Suvarna Real Estate is mentioned on the documents. In this regard, it is to be noted that name of accused No.2 company is Suvarna

India Projects Limited and accused Nos.1 and 3 are also established two other companies in the same name of Suvarna i.e., Suvarna India Iron and steel Manufacturing Private Limited and Suvarna India Vidyut Plant

Private Limited besides two other companies i.e., Prakash India Power

Projects Private Limited and Supreme India TV Channel Private Limited.

Further, several victims could not even say full name of the accused No.2 company and they simply stated as Suvarna Company, Suvarna India

Limited Company etc., Most of the victims studied 10th class or below 10th class, some are illiterates and some victims have completed graduation.

In this regard, it is to be noted that had the victims really had that much of knowledge and wisdom, they should not have believed the words of the accused who agreed to give very higher rate of interest at 20% which is not at all believable. So, it shows that the accused No.2 company lured all the victims in such a way to believe their words. Assuming for the sake of arguments that the accused No.2 company not at all issued any bonds/receipts/pass books to the victims also, their oral testimonies cannot be ruled out, without any proper defence. Having admitted establishment of accused No.2 company, accused simply denied collection of amounts from the victims. Had they really had good intention of running company, they should have been filed documents showing 55 C.C.No.5/2016 PDJC, Rjvm their business. Added to it, there is no explanation from the accused why they established accused No.2 company and other companies, if they had no intention of collecting investments.

h)Learned defence counsel relied upon the following judgments:

a)J.P.S.Enterprises and another Vs. State 9 , hon’ble High Court of

Madras has held that:

“A careful reading of the judgment of the learned Special Judge would also indicate his finding that even though none of the documents produced by the prosecution bear either the name of the second accused or his signature, yet the other circumstances would indicate that both the accused are guilty of the offence. A careful scrutiny of the entire evidence let in by the prosecution would in my opinion indicate that such finding has no basis at all for the reason that in none of the documents, the second accused has subscribed his signature”

The facts of the said case are entirely different. In view of the establishment of three companies in the same name i.e., Suvarna, there is every possibility of getting confused and moreover facts and circumstances of this case clearly indicate that from the inception of establishment of accused No.2 company, Managing Director and directors of the said company inducing general public.

b)Arnol Samadhan Nikam Vs. The State of Maharashtra 10 in which is held that:-

9. C.A.NO.1048/2000, dt.27.7.2005 of Hon’le High Court of Judicature at Madras

10.Criminal Application No.1091/2025, dated.29.4.2025 56 C.C.No.5/2016 PDJC, Rjvm “….we have noticed that even in serious offence, the investigating officer who had recorded the statements of the witnesses under Section 161 of the Code of Criminal Procedure, has literally made copy-paste of the statements. Even the paragraphs start with the same words and end with the same words. The culture of copy-paste statements is dangerous and may, in certain cases unnecessarily, give advantage to the accused persons. In such circumstances, the seriousness of the genuine case may get vanished….”.

In this case, charge sheet laid for the offences under Sections 306, 352, 504, 506 r/w. Section 34 of the Code, whereas, in the present case at hand, there are more than 140 witnesses and out of which, prosecution examined Pws.1 to 34 and as per the version of all the victims, agents, employees and independent witnesses either accused No.1 or accused

Nos.1 and 3 or other accused lured the victims to invest amount in accused No.2 company and promised to pay interest at 20% and further, they also made believe all the victims that the accused have several other companies, made investments in the Reserve Bank of India and as such, similar statements are given by all the victims before the police and also stated before this court. So, it cannot be said that they are copy paste statements and there is no substance in the evidence of prosecution witnesses.

i)So far as default committed by the accused No.2 company, evidence of Pws.1 to 25 and 27 to 32 clearly reveals that having collected amounts by way of deposits/investments, accused No.2 company committed default in return of deposits either in cash or kind and also 57 C.C.No.5/2016 PDJC, Rjvm committed default in payment of interest on the deposit as agreed upon and as such, Section 5 of the Act, 1999 applies to the present case at hand. So, it can safely be held that prosecution proved its case for the offence under Section 5 of the Act.

j)So far as liability of accused Nos.1, 3 to 8 is concerned, no doubt a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision. In this regard, it is to be noted that as per Section 5 of the Act, 1999 every person responsible for the management of the affairs of the financial establishment including the 58 C.C.No.5/2016 PDJC, Rjvm promoter, manager or member of the financial establishment shall be punished with imprisonment.

k)It is already stated above that initially at the time of establishment of company, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were directors and subsequently, accused Nos.4 and 7 resigned as directors on 15.5.2014 and 30.11.2012 respectively. It is also not in dispute that accused No.4 submitted resignation within one year of establishment of accused No.2 company and accused No.7 submitted his resignation long prior to registration of Ex.P54/first information report. In this regard, learned defence counsel argued that having taken advantage of relationship with accused No.7 and friendship with accused No.4, accused No.1 included their names in the list of directors and immediately after coming know the said fact, they submitted resignation and the same is acknowledged by the Registrar of Companies vide Ex.P35. Added to it, none of the witnesses have specifically stated about the inducement made by accused No.4 and 7 and their involvement in collection of amounts from them. It shows that though their names are initially shown in the list of directors vide Ex.P35, they resigned very long prior to the registration of Ex.P35. PWs.26 and 33 also admitted that accused Nos.1, 3 and 6 are responsible as they continued as directors. Added to it, accused Nos.3 and 6 are wife and daughters of accused No.1. And, 59 C.C.No.5/2016 PDJC, Rjvm absolutely there is no material to show that accused Nos.5 and 8 are directors of accused No.2 company and PW.26 also categorically admitted the same and it is not the case of prosecution that accused No.9 either director or induced the victims.

l)For the foregoing reasons, this court came to conclusion that the prosecution proved its case to direct punishment under Section 5 of the

Act, 1999 against accused Nos.1, 2, 3 and 6 as the accused No.2 company committed default in return of investments made by the victims and that accused Nos.4 and 7 are not at all participated in the affairs of accused No.2 company. Further, without there being any material, accused Nos.5 and 8 shown as directors of accused No.2 company.

iv) Ancillary point No.(iv) Wether charge under Section 120B, 201, 417 and 420 of Indian Penal Code is sustainable in addition to the charge under Section 5 of

the Act?

a)Absolutely charge under Section 120-B, 201 and 420 of the Code is sustainable in addition to the charge under Section 5 of the Act, 1999.

Section 5 of the Act, 1999 specifically deals with the situation when there is failure of financial establishment to return or pay interest and Section 420 of the Code deals with broader initial fraudulent inducement to make the victim to part with their money.

b)It is settled law by a catena of decisions that for establishing the offence of cheating, prosecution is required to show that the accused had 60 C.C.No.5/2016 PDJC, Rjvm fraudulent or dishonest intention at the time of making promise of representation. From his making failure to keep up promise subsequently, such a culpable intention right at the beginning i.e., at the time when the promise was made cannot be presumed. If there was absence of dishonest and fraudulent intention, the question of punishment under

Section 420 of the Code does not arise. Further, a bare perusal of

Section 415 r/w Section 420 of the Code would clearly lead to the conclusion that fraudulent or dishonest inducement on the part of the accused must be at the inception and not at a subsequent stage. Section 415 of the Code defines ‘cheating’ that whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. So, as per

Section 415 of the Code, cheating can be by deception inducing any person fraudulently or dishonestly to do things or by inducing a person intentionally to do or omit to do things mentioned in Section 415 of the

Act. Deception has in it the element of misleading, of a making a person believe something which is not real. It implies causing a person to believe as true something that is false. According to the Webster’s New 61 C.C.No.5/2016 PDJC, Rjvm international dictionary the word ‘deceive’ indicates ‘inculcating of one so that he takes the false as true, the unreal as existent, the spurious as genuine’. It is immaterial whether the deception has the capability of imposing upon ordinary minds. What is required is that it must impose upon the mind of the person deceived. To hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfill the promise.

c)It is already stated above that charge under Section 417 and 420 of the Code is framed, on the ground of cheating. It is needless to say that

Section 420 of the Code is aggravated form of Section 417. Section 120A of the Code defines the offence of criminal conspiracy and punishment is provided under Section 120B of the Code. Criminal conspiracy under the

Code is an agreement between two or more persons to commit an illegal act or to commit a lawful act by illegal means and in other words, it is a criminal offence where two or more individuals agree to plan and execute a criminal act. It is needless to say that all conspirators share common liability for the offence, regardless of their individual roles in the execution of crime. Further, seriousness of the intended offence, the degree of planing involved, the role of each conspirator, and any mitigating 62 C.C.No.5/2016 PDJC, Rjvm circumstances such as the conspirator’s age or mental health have also to be taken into consideration. Section 201 of the Code deals with causing the disappearance of evidence.

d)To avoid repetition, evidence of Pws.1 to 25 who are victims, agents, employees and independent witnesses is not mentioning as it is already discussed in the aforementioned ancillary point and upon over all scrutinization of oral evidence coupled with Exs.P1 to 9, 11 to 30, accused No.1 directly or through agents or friends and relatives made believe all the victims and agents that they established accused No.2 company with an objective to collect investments/deposits with a promise to pay interest at 20%, they have business affairs, established other companies, made investments in the Reserve Bank of India and accordingly, PWs.1 and 2 joined as agents, PW.1 also made investment to a tune of Rs.2,20,000/- and they collected amounts to a tune of

Rs.33,74,594/- and further, Pws.3 to 5, 12 to 25 invested/deposited an amount of Rs.10,26,000/- directly or through agents or through relatives and without paying any amount, accused No.2 company is closed.

e)Further, employees/Pws.9 to 11 and independent witnesses/Pws.6 to 8 also categorically stated about the inducement made by the accused

Nos.1, accused No.2 company, accused Nos.3 and 6. The evidence clearly established the fraudulent and dishonest intention of the said 63 C.C.No.5/2016 PDJC, Rjvm accused before investing/deposting amounts by the victims. Facts and circumstances coupled with the evidence of witnesses clearly reveal that accused Nos.1, 3 and 6 who are none other than same family members conspired together, established accused No.2 company with an intention to cheat general public by collecting investments to get wrongful gain.

Added to it, with the same conspiracy, accused Nos.1 and 3 also established nominal companies vide Exs.P35 to 47, so as to easily induce the general public.

f)So far as liability of accused Nos.4, 5, 7 and 8 is concerned, it is already stated that there is absolutely no positive material against the accused Nos.5 and 8 and a finding is already given in the first and third ancillary points that accused Nos.5 and 8 are neither directors nor participated in the affairs of accused Nos.2 company. With regard to the role of accused Nos.4 and 7 also, a finding is given that without their knowledge, their names are included in the list of directors and immediately after coming to know the same, they resigned and the same is acknowledged by the Registrar of companies vide Ex.P54. Further, evidence of agents, employees and independent witnesses clearly reveal that suddenly accused No.2 company is closed and they also caused disappearance of the evidence by removing total documents, furniture etc.

64 C.C.No.5/2016 PDJC, Rjvm

g)So far as material against accused No.9 for the offences under

Sections 420, 120B and 201 of the Code, nowhere it is mentioned that

before collecting deposits also, accused No.9 joined hands with other

accused, induced the victims, shared conspiracy and helped to cause disappearance of evidence. It is the specific case of prosecution that accused No.9 convened a meeting at Sivakodu village so as to settle the financial issues and he is none other than close friend of other accused.

During trial, it came in the evidence of Pws.9, 12 and others that accused

No.9 convened a meeting at Sivakodu village and PW.10 stated that accused No.9 mediated the dispute, PW.3 stated that in the presence of accused No.9, accused No.1 convened meeting, PW.4 stated that accused No.1 promised to pay in the meeting and PW.5 stated that accused Nos.1 and 9 convened meeting etc. Except that no other material is available on record to come to conclusion with regard to the active participation and role played by the accused No.9 either to induce the victims to collect deposits or commit default.

h)It is already stated above that it is incumbent on the part of prosecution to show that the accused had fraudulent intention at the time of making promise or representation and if the accused had no fraudulent or dishonest intention to induce the victims, the question of punishment under Section 420 of Code does not arise. Added to it, except stating that 65 C.C.No.5/2016 PDJC, Rjvm accused No.9 is friend and legal advisor of accused Nos.1, PW.33 also stated nothing about participation and involvement of accused No.9 and further, PW.34 stated nothing against accused No.9.

i)So, record clearly reveals that accused No.9 is no way concerned with the offence under Section 120B, 201, 417 and 420 of the Code and absolutely ingredients of provisions are not attracted against accused

No.9. Assuming for the sake of arguments, accused No.9 either convened meeting or conducted meeting also, even as per the version of the aforementioned witnesses, accused No.9 tried to settle the financial issues and absolutely it does not come under the purview of the punishable offences with which he is charged. So far as charge under

Section 411 of the Code is concerned, it is already stated that the case against accused No.10 is abated, as he died. Even otherwise also, prosecution has not produced any material to attract the ingredients of

Section 411 of the Code. In this regard, it is to be noted that there is no possibility to cover any amount from the accused as the prosecution failed to take steps in respect of the properties of accused Nos.1 to 3 and 6. Having obtained ad-interim order in respect of the properties of accused No.2 company, failed to take steps on judicial side to made absolute the attachment order.

66 C.C.No.5/2016 PDJC, Rjvm

j)For the foregoing reasons, this court without any doubt came to conclusion that prosecution has successfully established its case of the offences under Section 120B, 201, 420 of Indian Penal Code, against accused Nos.1, 2, 3 and 6 and failed to establish its case against accused Nos.4, 5, 7 to 9. Hence, this ancillary point is answered accordingly.

v)Ancillary point No.(v): Any laches on the part of the investigating officers i.e., Pws.33 and 34, if so, would they affect total case to disbelieve the version of prosecution as well as oral and documentary evidence?

i)At the cost of repetition, it is to be mentioned here that either at the time of registration of Ex.P54/first information report or during investigation or at the time of filing charge sheet or atleast before framing of charge, either PW.33 or PW.34 secured documents showing establishment of accused No.2 company and deposits made by the victims as well as appointment orders issued in the name of Pws.9, 10 and 11/employees and for which, during trail, learned Public Prosecutors took much strain to secure the said documents through the present investigating officer/PW.26 with great difficulty and faced challenges to file the said documents before this court and admit the same in the evidence of prosecution witnesses. Having stated that he had gone through the provisions of the Act, 1999, PW.33 gathered nothing and even as per his admission that except case diary file, he had not handed over any 67 C.C.No.5/2016 PDJC, Rjvm document to the Deputy Superintendent of Police/PW.34, who filed charge sheet, and PW.34 also being senior police officer, did not properly verify the investigation conducted by PW.33 and simply filed charge sheet, without appending any supportive documents. It is nothing but absolute dereliction of duties and negligence on the part of PWs.33 and 34.

ii)To attract the offence under Section 5 of the Act, 1999, the ingredients of the said provision have to be fulfilled and having knowledge about the ingredients, without any documentary proof regarding establishment of accused No.2 company, simply relied upon very informal material, PW.33 showed accused Nos.5 and 8 as directors of accused

No.2 company. PWs. 26 and 33 have categorically admitted in their cross examination that at the time of establishment of accused No.2 company, only accused Nos.1, 3, 4 and 7 were directors, but not accused Nos.5 and 8. Before relying upon the statements of some of the witnesses, who have stated the names of accused Nos.5 and 8 that they are directors of accused No.2 company, PW.33 should have been cross checked the same by obtaining relevant documents from the Registrar of Companies.

If he had no knowledge about the same, he should have been obtained legal opinion from the learned Public Prosecutor. Without there being any documentary proof, especially certificate of incorporation and list of 68 C.C.No.5/2016 PDJC, Rjvm directors, Pws.33 and 34 roped accused Nos.5 and 8 to this case for the offence under Section 5 of the Act, 1999.

iii)At the cost of repetition, it is mentioned that in the cross examination, PW.33 had categorically admitted that he has not collected any of documents showing registration of accused No.2 company and basing on the statements of victims, he came to conclusion that accused

No.1 is Managing Director and accused Nos.3 to 8 are directors of accused No.2 company, he has not tried to secure document showing registration of accused No.2 company, none of the victims have handed over documents to show that accused are directors of accused No.2 company. The aforementioned aspects clearly reveal the laches on the part of both the investigating officers/Pws.33 and 34 and while doing investigation, they should have been very cautious enough as criminal jurisprudence gives more stress over avoiding of false implication of an innocent to the extent where hundred guilty may go scot-free and the spirit behind the same is very pious and even otherwise, by one case of false implication of an innocent, rule of law loses one exponent (supporter) and a rebel with defiance towards rule of law is ready and futther, poor investigation with tainted prosecution is perfect recipe for such eventuality, as held in Nandu @ Nandakishore Vs. State of

Madha Pradesh 11 .

11. C.A.NO.812/2008 & 866/2008, Dt.6.7.2018 OF Hon’ble Madya Pradesh High Court at Gwalior.

69 C.C.No.5/2016 PDJC, Rjvm iv) Further, though there is no material against accused No.9 and though he is no way concerned with the affairs of the company, PW.33 filed charge sheet for the offence under Section 5 of the Act, 1999 against accused No.9 also, which is nothing but abuse the process of law. Had really both the Investigating Officers had that much of concern towards the crime and victims, they should have been taken every care at each and every stage of investigation. The interest shown by Pws.33 and 34 in registering the case and filing charge sheet is not there in conducting qualitative investigation. They have also not collected original bonds/ receipts/passbooks from the victims. During trial, by showing sufficient cause, the learned Public Prosecutor filed the same by summoning the same through the present Station House Officer i.e., PW.26. Because of the negligent attitude of Pws.33 and 34, this court also took much strain to unearth the truth regarding competency of officer to launch prosecution, receiving documents and giving detailed findings on all aspects. Record reveals that neither PW.33 nor PW.34 were not at all concern about the provisions and Rules of the Act, 1999 and Rules 2000.

Though there are laches on the part of investigating officers in not collecting the relevant documents at the appropriate time, not obtaining any written permission for conducting investigation and launching prosecution, in view of the reasons assigned in ancillary point No.2 and in this point, those laches do not affect the case of the prosecution.

70 C.C.No.5/2016 PDJC, Rjvm vi) Ancillary point No.(vi): Final out come of the case?

a)It is to be noted that in catena of Judgments, Hon’ble Apex Court held that justice is nothing but a manifestation of the truth and the primary duty of a Court is to make a single-minded endeavour to unearth the truth hidden beneath the facts and thus, the Court is a search engine of truth, with procedural and substantive laws as its tools. Further, when procedural law stands in the way of the truth, the Court must find a way to circumvent it and similarly, when substantive law, as it appears, does not facilitate the emergence of the truth, it is the paramount duty of the Court to interpret the law in light of its teleos and such an exercise is warranted in a higher degree, particularly while considering a social welfare legislation. Further, in its journey, the Court must discern the truth, primarily from the material available on record in the form of pleadings, and arguments duly supported by documents and it must be kept in mind that the entire judicial system is meant for the discovery of the truth, it being the soul of a decision and for doing so, a Presiding Officer is expected to play an active role, rather than a passive one.

b)Further, in Maria Margarida Sequeria Fernandes v. Erasmo Jack

De Sequeira 12 , hon’ble Apex Court has held that:

“The truth should be the guiding star in the entire judicial process. Truth alone has to be the foundation of justice. The entire judicial system has 12(2012) 5 SCC 370 71 C.C.No.5/2016 PDJC, Rjvm been created only to discern and find out the real truth. Judges at all levels have to seriously engage themselves in the journey of discovering the truth. That is their mandate, obligation and bounden duty. Justice system will acquire credibility only when people will be convinced that justice is based on the foundation of the truth’.

c)And, In Munna Pandey v. State of Bihar 13 , Hon’ble Apex Court has held that:

“The role of a judge in dispensation of justice after ascertaining the true facts no doubt is very difficult one. In the pious process of unravelling the truth so as to achieve the ultimate goal of dispensing justice between the parties the judge cannot keep himself unconcerned and oblivious to the various happenings taking place during the progress of trial of any case. No doubt he has to remain very vigilant, cautious, fair and impartial, and not to give even a slightest of impression that he is biased or prejudiced either due to his own personal convictions or views in favour of one or the other party. This, however, would not mean that the Judge will simply shut his own eyes and be a mute spectator, acting like a robot or a recording machine to just deliver what stands feeded by the parties.

d)In this regard, it is to be noted that the incharge Additional Public

Prosecutor Sri K.Radhakrishnam Raju, who conducted trial in all the connected matters took every care of getting all relevant documents to connect all missing links to unearth the truth by this court. So, without any doubt it can be said that only because of his efforts, prosecution could place substantive material to attract the ingredients of the punishable Sections with which accused Nos.1, 2, 3 and 6 are charged.

13. 2023 SCC online sc 1103 72 C.C.No.5/2016 PDJC, Rjvm

d)On over all consideration of the material available on record and in view of the findings in ancillary point Nos(i) to (v), this court came to conclusion that prosecution successfully proved guilt of accused Nos.1, 2, 3 and 6 beyond reasonable doubt and as such, they are liable for punishment for the offences under Sections 120B, 201 and 420 of the

Code and under Section 5 of the Act, 1999 and they are not liable for punishment under Section 417 of the Code as they are liable for punishment which is aggravated form of cheating. Further, prosecution failed to prove guilt of accused Nos.4, 5, 7 to 9 and as such, they are not liable for punishment for the offences with which they are charged. This point is answered accordingly.

Result:

15.(a) In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

(b)Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of 73 C.C.No.5/2016 PDJC, Rjvm Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of

Criminal Procedure.

Partly dictated to the stenographer, transcribed by him and and partly typed to my dictation corrected and pronounced by me in open court on this 16 th day of March, 2026. Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 17:09:26 +0530

PRINCIPAL SESSIONS JUDGE

RAJHAMAHENDRAVARAM

i)Heard accused Nos.1, 3 and 6 under Section 248 (2) of Code of

Criminal Procedure on the quantum of sentence, to be imposed against accused Nos.1, 2, 3 and 6, for the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian

Penal Code and. Accused No.1 submitted that he has three children, presently he is not doing any job, attending private works, he has to perform marriage of his son and he has not committed any offence.

Accused No.3 who is wife of accused No.1 submitted the same.Further,

Accused No.6 who is daughter of accused No.1 submitted that she recently married, she does not know about the offence and she has not committed any offence.

74 C.C.No.5/2016 PDJC, Rjvm

(ii)Having considered the facts and circumstances, gravity of offence, nature of allegations levelled against the accused and submissions of all the accused, this court came to conclusion that this is a fit case to impose sentence of imprisonment against accused Nos.1, 2, 3 and 6 as follows:-

Accused No.1 issentenced to suffer rigorous imprisonment of

Seven (7) years of the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months.

Being Managing Director Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 on behalf of accused No.2 company and in default of payment of fine, accused No.1 who is Managing Director of accused No.1 company shall suffer simple imprisonment of six (6) months.

Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in 75 C.C.No.5/2016 PDJC, Rjvm default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

Accused No.6 issentenced to suffer rigorous imprisonment of

Three years (3) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of

Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five 76 C.C.No.5/2016 PDJC, Rjvm thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

(iii)Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 14 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to award compensation out of the fine amout, to all the victims who have deposited amount, though they are examined or not, who sustained loss and injury and accordingly,

Rs.5,000/-(Rupees five thousand only) is awarded towards compensation to each victim irrespective of their deposit amounts to meet ends of justice. Further, at the time of filing petitions by the victims, to withdraw their compensation amounts, in due course of law and after attaining the finality of the case, learned Public Prosecutor must certify the said petition to rule out impersonation.

(iv)The accused Nos.1, 3 and 6 are not entitled to the benefit of the

Probation of Offenders Act, 1958, and this is not a fit case to invoke the provisions of the Probation of Offenders Act.

(v)All the sentence of imprisonment passed against the accused

Nos.1, 3 and 6 shall run concurrently.

14. 2013 AIR SCW 3153 77 C.C.No.5/2016 PDJC, Rjvm

(vi)Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.2/2016, 3/2016, 4/2016, 6/2016, and 7/2016 shall run concurrently.

(vii)The accused are informed about the right of appeal to the Hon’ble

High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative.

(viii) The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 11.12.2015 to 3.3.2016, accused No.3 from 11.12.2015 to 3.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure

(viii)Copy of judgment is furnished to the accused, as required under

Section 363 of Code of Criminal Procedure and Rule 72 of A.P. Criminal

Rules of Practice.

(ix) Copy of judgment is marked to the District Magistrate as required under Section 364 of Code of Criminal Procedure

(x)Copy of Judgment is marked to the Director of Prosecutions,

Andhra Pradesh, Vijayawada as required under Rule 72 of Criminal Rules of Practice.

Pronounced by me in open court on this 16th day of March, 2026.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 17:10:05 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

78 C.C.No.5/2016 PDJC, Rjvm

LIST OF PROSECUTION/DEFENCE/COURT WITNESSES

1. PROSECUTION:

RankNameNature of Evidence PW.1Balla Sridhar BabuComplainant/victim PW.2Kotim Vijaya KumarComplainant/victim PW.3Uttaravalli ChinnammuduDepositor in the accused No.2 firm PW.4Uttaravalli Ganapathi RaoDepositor in the accused No.2 firm PW.5Reddi LakshmiDepositor in the accused No.2 firm PW.6Kollu VishnuLodge boy, Ganapathi Plaza lodge, Amalapuram. Eye-witness for depsoit of money by the public. PW.7Pinipe PrasadLodge boy, Ganapathi Plaza lodge, Amalapuram. Eye-witness for depsoit of money by the public. PW.8Thumu KrishnaRunning disposable items shop in the ground floor of Ganapthi Plaza, Amalpuram and eye-witness for deposit of money by the public. PW.9Nakka Srinivasa RaoAccountant in the accused No.2 firm PW.10Kusuma Rajesh KumarAccountant in the accused No.2 firm PW.11Kottuju AnuradhaAccountant in the accused No.2 firm PW.12Tadi DeepakDepositor in the accused No.2 firm PW.13Tadi VinodDepositor in the accused No.2 firm PW.14Pidugu Vijaya BhaskarDepositor in the accused No.2 firm PW.15Rayudu YesubabuDepositor in the accused No.2 firm PW.16Angarapu SattibabuDepositor in the accused No.2 firm PW.17Pati BhavaniDepositor in the accused No.2 firm

PW.18Gubbala VanithaDepositor in the accused No.2 firm PW.19Nalli Kiran KumarDepositor in the accused No.2 firm PW.20GVV.SatyanarayanaDepositor in the accused No.2 firm PW.21Rapaka Rani KumariDepositor in the accused No.2 firm PW.22DVV Nageswara RaoDepositor in the accused No.2 firm PW.23A.Pratibha KumariDepositor in the accused No.2 firm PW.24K.GouthamDepositor in the accused No.2 firm 79 C.C.No.5/2016 PDJC, Rjvm PW.25A.Venkateswara RaoDepositor in the accused No.2 firm PW.26P.Veera Babu,Obtained certified copies documents Inspector of police.from Registrar of Companies relating to accused No.2’s firm. PW.27Adabala Srinivasa RaoMediator for confession statement of accused No.1 and also for arrest of accused No.1 PW.28KN.Srinivasa RaoMediator for confession statement of accused No.8 and also for arrest of accused No.8 PW.29DVVS.Durga KiranMediator for confession statement of accused No.9 and also for arrest of accused No.9 PW.30K.SatyanarayanaMediator for confession statement of accused No.5 and also for arrest of accused No.5 PW.31KVSJ.SrinivasMediator for confession statement of accused No.6 and also for arrest of accused No.6 PW.32T.PrakashMediator for confession statement of accused No.4 and also for arrest of accused No.4 PW.33Y.R.K.Srinivas Inspector of Police, registration of Inspector of PoliceFIR, examination of witnesses, visiting of scene of offence, preparation of rough sketch, arrest of accused PW.34L.Ankaiah, Deputy Deputy Superintendent of Police, Superintendent of Police,further investigation and filing of charge sheet.

2. Defence witnesses, if any:

RankNameNature of Evidence NIL

3. Court witnesses if any:

RankNameNature of Evidence NIL 80 C.C.No.5/2016 PDJC, Rjvm

LIST OF PROSECUTION/DEFENCE/COURT EXHIBITS

1. Prosecution:

Sr.NoSr.No.RankDescription 1Ex.P1/PW1Bond 2Ex.P2/PW1Passbook 3Ex.P3/PW1Bond & Receipt 4Ex.P4/PW1Bond 5Ex.P5/PW1Passbook 6Ex.P6/PW1Passbook 7Ex.P7/PW1Bond & Receipt 8Ex.P8/PW1Bond 9Ex.P9/PW1Passbook 10Ex.P10/PW1Report 11Ex.P11/PW12Passbook 12Ex.P12/PW13Passbooks 13Ex.P13/PW13Bond 14Ex.P14/PW13Bonds 15Ex.P15/PW13Passbook 16Ex.P16/PW14Bond 17Ex.P17/PW15Fixed deposit 18Ex.P18/PW16Fixed deposit 19Ex.P19/PW16Fixed deposit 20Ex.P20/PW20Fixed deposit 21Ex.P21/PW20Fixed deposit 22Ex.P22/PW21Fixed deposit 23Ex.P23/PW21Fixed deposit 24Ex.P24/PW22Passbook 25Ex.P25/PW23Fixed deposit 26Ex.P26/PW23Passbook 27Ex.P27/PW23Passbooks 28Ex.P28/PW23Passbook 29Ex.P29/PW24Fixed deposit 81 C.C.No.5/2016 PDJC, Rjvm 30Ex.P30/PW25Fixed deposit 31Ex.P31/PW26CC of Covering letter 32Ex.P32/PW26CC of company info Suvarna India Projects. 33Ex.P33/PW26CC of Certificate of incorporation Suvarna Infra Projects India. 34Ex.P34/PW26CC of fresh Certificate of incorporation. 35Ex.P35/PW26CC of List of Directors M/s Suvarna India Projects. 36Ex.P36/PW26CC of company information relating to Suvarna India iron and steel Manufacturing Private limited. 37Ex.P37/PW26CC of Incorporation Suvarna India iron and steel Manufacturing Private limited. 38Ex.P38/PW26CC of List of Directors Suvarna India iron and steel Manufacturing Private limited. 39Ex.P39/PW26CC of company info Prakash India Power Projects 40Ex.P40/PW26CC of incorporation Prakash India Power Projects 41Ex.P41/PW26CC of List of Directors Prakash India Power Projects 42Ex.P42/PW26CC of company info Supreme India TV Channel 43Ex.P43/PW26CC of certificate of incorporation Supreme India TV Channel 44Ex.P44/PW26CC of list of directors Supreme India TV Channel 45Ex.P45/PW26CC of company info Suvarna India Vidyut plant 46Ex.P46/PW26CC of certificate of incorporation Suvarna India Vidyut plant 47Ex.P47/PW26CC of list of directors Suvarna India Vidyut plant 48Ex.P48/PW27Relevant admissible portion of CC of mediators report dt.17.10.2015 at 7.00 AM arrest of A1. 49Ex.P49/PW28Relevant admissible portion of CC of mediators report dt.6.11.2015 at 10.00 AM arrest of A8. 50Ex.P50/PW29Relevant admissible portion of CC of mediators report dt.11.12.2015 at 10.00 AM arrest of A9. 51Ex.P51/PW30Relevant admissible portion of CC of mediators report dt.30.10.2015 at 7.00 AM arrest of A5. 52Ex.P52/PW31Relevant admissible portion of CC of mediators report dt.10.12.2015 at 8.00 AM arrest of A6. 53Ex.P53/PW32Relevant admissible portion of CC of mediators report dt.14.11.2015 at 10.00 AM arrest of A4.

82 C.C.No.5/2016 PDJC, Rjvm 54Ex.P54/PW33First information report in Cr.No.399/2015 of Amalapuram Town PS 55Ex.P55/PW33Rough Sketch

2. Defence: Sr.NoSr.No.RankDescription

1.Ex.D1/PW9Photo copy of appointment order

3. Court witnesses, if any: Sr.NoSr.No.RankDescription NIL

4. Material objects: Sr.NoSr.No.RankDescription NIL

GANDHAMDigitally Signed by

SUNITHAGANDHAM SUNITHA

Principal Sessions Judge,

Date: 2026.03.16 17:10:45 +0530

Rajamahendravaram.

1.The Registrar (Judl.), High Court of A.P., Nelapadu, Guntur District. 2.The Director of Prosecution, Beside Sarada College, Durgapuram P.O., Vijayawada. 3.The District Collector, Dr.B.R.Ambedkar Konaseema District, Amalapuram. 4.The Superintendent of Police, Dr.B.R.Ambedkar Konaseema District, Amalapuram.

83 C.C.No.5/2016 PDJC, Rjvm

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS

ACT–CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST

GODAVARI AT RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026.

CALENDER CASE NO.05/2016

Complainant::State-Represented by Sub Divisional Police Officer, Amalapuram

Represented by::Sri R.Prasad and Sri K.Radhakrinamraju, Public Prosecutors, East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

84 C.C.No.5/2016 PDJC, Rjvm 6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 3.11.2015

Date of First Information Report:: 03.11.2015

Date of Charge sheet:: 26.08.2016

Date of framing of charges:: 15.02.2019

Date of commencement of :: 05.03.2024 evidence

Date of which judgment is :: 02.03.2026 reserved

Date of Judgment:: 16.03.2026 85 C.C.No.5/2016 PDJC, Rjvm Plea of accused:: Not guilty

Finding of the Court:: Accused Nos.1, 2, 3 and 6 are convicted Accused Nos.4, 5, 7 and 9 are acquitted.

Explanation for delay:: Along with this case, five other cases of similar nature of offences are also pending against the accused and there are several witnesses in each of the cases. In order to dispose of all the cases together and to avoid any conflict of judgments, after completion of trial in all the cases and upon hearing the arguments of both sides, all the cases were posted for judgment today.

Date of sentencing order, if any:: 16.03.2026

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure. Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of Criminal Procedure.

Accused No.1 issentenced to suffer rigorous imprisonment of Seven (7) years of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months. Being Managing Director Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence 86 C.C.No.5/2016 PDJC, Rjvm under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 on behalf of accused No.2 company and in default of payment of fine, accused No.1 who is Managing Director of accused No.1 company shall suffer simple imprisonment of six (6) months. Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused No.6 issentenced to suffer rigorous imprisonment of Three years (3) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 15 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to award compensation out of the fine amout, to all the victims who have deposited amount, though they are examined or not, who sustained loss and injury and accordingly, Rs.5,000/-(Rupees five thousand only) is awarded towards compensation to each victim irrespective of their deposit amounts to meet ends of justice. Further, at the time of filing petitions by the

15. 2013 AIR SCW 3153 87 C.C.No.5/2016 PDJC, Rjvm victims, to withdraw their compensation amounts, in due course of law and after attaining the finality of the case, learned Public Prosecutor must certify the said petition to rule out impersonation. The accused Nos.1, 3 and 6 are not entitled to the benefit of the Probation of Offenders Act, 1958, and this is not a fit case to invoke the provisions of the Probation of Offenders Act. All the sentence of imprisonment passed against the accused Nos.1, 3 and 6 shall run concurrently. Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.2/2016, 3/2016, 4/2016, 6/2016, and 7/2016 shall run concurrently. The accused are informed about the right of appeal to the Hon’ble High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative. The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 11.12.2015 to 3.3.2016, accused No.3 from 11.12.2015 to 3.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 17:11:24 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

APEG010009032016

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS ACT–

CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST GODAVARI AT

RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026

CALENDER CASE NO.03/2016

Complainant::State-Represented by The Inspector of Police, Amalapuram Town Police Station.

Represented by::Sri R.Prasad and Sri K.Radhakrishnam raju, Public Prosecutors, East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

2 C.C.No.3/2016 PDJC, Rjvm 6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 20.10.2015

Date of First Information Report:: 20.10.2015

Date of Charge sheet:: 16.05.2016

Date of framing of charges:: 15.02.2019

Date of commencement of evidence:: 16.03.2020

Date of which judgment is reserved:: 02.03.2026

Date of Judgment:: 16.03.2026

Date of sentencing order, if any:: 16.03.2026 3 C.C.No.3/2016 PDJC, Rjvm

ACCUSED DETAILS

Rank of the accused::Accused No.1

Name of the accused::Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.2

Name of the accused::Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its Md. Busim Venkata Nagavenu @ Venu.

Rank of the accused::Accused No.3

Name of the accused::BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.4

Name of the accused::Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

Rank of the accused::Accused No.5

Name of the accused::BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

Rank of the accused::Accused No.6

Name of the accused::Busim Gowthami, D/o.Venkata Nagavenu @ Venu,23years,SCMala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.7

Name of the accused::Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

4 C.C.No.3/2016 PDJC, Rjvm

Rank of the accused::Accused No.8

Name of the accused::Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused::Accused No.9

Name of the accused::Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused::Accused No.10

Name of the accused::Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Date of arrest::Accused No.1 on 13.11.2015 Accused No.2 is Firm Accused No.3 on 11.12.2015 Accused No.4 on 27.11.2015 Accused No.5 on 13.11.2015 Accused No.6 on 23.12.2015 Accused No.7 on 07.01.2016 Accused No.8 on 27.11.2015 Accused No.9 on 23.12.2015 Accused No.10 died

Date of release on bail::Accused No.1 on 03.03.2016 Accused No.2 is Firm Accused No.3 on 03.03.2016 Accused No.4 on 22.12.2015 Accused No.5 on 16.12.2015 Accused No.6 on 03.03.2016 Accused No.7 on 07.01.2016 Accused No.8 on 22.12.2015 Accused No.9 on 29.03.2017 Accused No.10 died

Offences charged with::Under Sections 120-B, 417, 420, 201, 411 r/w 34 of Indian Penal Code and Under Section 5 of Andhra Pradesh Protection of 5 C.C.No.3/2016 PDJC, Rjvm

Depositors of Financial Establishment Act, 1999.

Whether acquitted or ::Accused Nos.1, 2, 3 and 6 are convicted convicted Accused Nos.4, 5, 7 and 9 are acquitted.

Sentence imposed::

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of

Code of Criminal Procedure.

Period of detention::Accused No.1 from 13.11.2015 to 3.3.2016 undergone during trial Accused No.3 from 11.12.2015 to 3.3.2016 for purpose of Section Accused No.6 from 23.12.2015 to 3.3.2016 428 Cr.P.C.

This case has come on 2.3.2026 for final hearing before me in the presence of Sri R.Prasad and Sri K.Radhakrishnam Raju, Public Prosecutors for prosecution and of Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6, Sri S.S.Prakasarao, counsel for accused No.7 and Sri I.Rambabu, counsel for accused No.9 and the matter having stood over for consideration to this day, this court delivered the following:- 6 C.C.No.3/2016 PDJC, Rjvm

J U D G M E N T

1.The Sub Divisional Police Officer, Amalapuram laid Charge sheet in

Crime No.379/2015 of Amalapuram Town Police Station of the offences under Sections 120-B, 406, 409, 411, 417, 420, 201 r/w.34 and 411 of

Indian Penal Code (herein after referred to as ‘the code’) r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under

Section 5 of the Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999(herein after referred to as ‘the Act 1999), against the accused Nos.1 to 10.

2.Case of the prosecution, in brief, is thus:

a)Accused No.1 is resident of Sivakodupalem, accused No.3 is wife of accused No.1, accused No.4 is resident of Nagarampalem, accused

No.5 is younger sister-in-law of accused No.1, accused No.6 is daughter of accused Nos.1 and 3, accused Nos.7 and 8 are distant relatives of accused No.1. Accused Nos.1 to 8 are directors of company and accused

No.9 is henchmen and accused No.10 is close associate of accused

No.1.

b)Defacto complainants/PWs.1 to 3 gave report alleging that they are residents of Ambajipeta village and Mandal. Accused No.1 approached them and represented himself as man power agent of Suvarna India Infra

Project Limited (real estate), his company has got approval of Reserve 7 C.C.No.3/2016 PDJC, Rjvm Bank of India, has many branches in and around the state of Andhra

Pradesh, they are developing the financial status of poor and would give 20% interest to the investors and accordingly, induced them to collect money and deliver money by way of recurring and fixed deposits and thereafter, they came to know that the said company is closed without making any payments. When they questioned Managing Director, he stated that he has several immovable properties in Andhra Pradesh and

Telangana and he would return the amounts to all the depositors.

c)Accused No.1 established registered company under the name and style of Suvarna Real Estate Firm and opened branch office at shop bearing D.No.1-98, Amalapuram. Accused No.1 also established other companies in the names of Suvarna Infra Projects India Limited, Suvarna

Iron & Steel Manufacture Private Limited, Survarna India T.V. Channel

Private Limited, Prakash India Power Project Private Limited, Suvarna

India Vidhyut plant private limited, and accused No.3 to 8 are directors of suvarna real estate firm and subsequently, the name of Suvarna Infra

Project India Limited changed into Suvarna India Project Limited.

Accused Nos.1 to 8 with a deceitful, dishonest and fraudulent intention jointly conspired together, hatched plan to cheat the innocent public by way of investments, induced the victims to deliver lakhs of rupees, committed criminal breach of trust and thereby, cheated the victims to that 8 C.C.No.3/2016 PDJC, Rjvm effect. They also committed the offence under the companies Act.

Accused Nos.1 to 8 committed misappropriation and cheating to a tune of

Rs.99,42,980/- at various places of Andhra Pradesh and Telangana.

d)Basing on the report of defacto complainant/PW.1, a case in crime

No.379/2015 of Amalapuram Town Police Station of the offences under

Sections 120-B, 406, 409, 417, 420, 411, 201 r/w.34 of the Code r/w.

Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under Section 5 of the Act, 1999 was registered against the accused.

e)During the course of investigation, LW.162/PW.28 examined witnesses, recorded their statements and came to conclusion that accused No.1 to 8 made believe several general public that they established several companies, collected deposits, investments, failed to repay the same. Accused Nos.9 and 10 who are henchmen and close associate of accused No.1 also participated in the crime.

f) On 20.4.2013, the company directors conducted general body meeting at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram for changing the name of the company and accused violated the provisions of Companies Act also, conspired with each other and has committed the offences under the Provisions of Indian Penal Code and A.P. Protection of

Depositors of Financial Establishment Act, 1999. Hence, the charge.

9 C.C.No.3/2016 PDJC, Rjvm

3.The case was taken on to file of the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of Indian Penal Code and under Section 5 of the A.P. Protection of Depositors of Financial Establishment Act, 1999.

4.On appearance of accused, copies of the documents were furnished.

5.When the accused Nos.1 to 10 were examined under Section 239

Code of Criminal Procedure, they pleaded not guilty. Learned Public

Prosecutor and the learned counsel for the accused were heard regarding the charge. Upon considering the material on record, charge under

Section 5 of the A.P. Protection of Depositors of Financial Establishment

Act, 1999 and Sections 120-B, 417, 420, 201, 411 r/w.34 of Indian Penal

Code were framed against the accused, read over and explained to them in Telugu and they pleaded not guilty and claimed to be tried.

6. In support of its case, prosecution examined in all P.Ws.1 to 29 out of 164 listed witnesses, and filed Exs.P1 to P50 documents and Ex.D1 are marked on behalf of the accused.

7. On the strength of the prosecution evidence, the accused Nos.1 to 9 were examined under Section 313 Code of Criminal Procedure regarding the incriminating circumstances appearing against them in the 10 C.C.No.3/2016 PDJC, Rjvm evidence. They denied the same and reported no defence evidence.

Case against Accused No.10 is abated as he died on 18.10.2025.

8.Heard both sides and learned Public Prosecutor and defence counsel filed written arguments.

9.Now, the point that would arises for determination is:

“Whether the prosecution proved the guilt of accused beyond

reasonable doubt and if so, whether they are liable for the

offences with which they are charged”?

10. Case of the prosecution is thus:

Accused No.1 is Managing Director and accused Nos.3 to 8 are directors of Accused No.2 company. PWs.1 to 3, 6, 7, 9, 12 to 19 deposited amounts in accused No.2 company. Accused No.1 approached them and victims representing himself as a manpower agent of Suvarna

India Infra Project Limited, the company had Reserve Bank of India approval, it has several branches across the state of Andhra Pradesh, they would improve the financial status of poor people by paying 20% interest on the investments. Believing the deceitful words of accused

Nos.1 to 8, thousands of victims invested money in accused No.2 company. Subsequently, the victims came to know that the said company is closed without making any payments and when questioned, Accused

No.1, being the Managing Director, assured that he owned several 11 C.C.No.3/2016 PDJC, Rjvm immovable properties in Andhra Pradesh and Telangana and promised to repay the deposit amounts. Accused No.1 also established other companies in the names of Suvarna Real Estate Limited, Suvarna Infra

Projects India Limited, Suvarna Iron & Steel Manufacture Private Limited,

Survarna India T.V. Channel Private Limited, Prakash India Power Project

Private Limited and Suvarna India Vidhyut plant private limited.

Subsequently, the name of Suvarna Infra Project India Limited is changed as Suvarna India Project Limited. Subsequently, the name of Suvarna

Infra Project India Limited is changed as Suvarna India Project Limited.

Accused Nos.1 to 8, with dishonest, fraudulent and deceitful intention, conspired together, induced innocent public to invest huge amounts and misappropriated the same. Accused No.9 also participated in the crime.

PWs.1 and 2/employees of accused No.2 firm set the criminal law into motion by giving Ex.P5 report.

11. Evidence:

During trial, out of 164 witnesses, prosecution examined Pws.1 to

29. The witnesses may be categorized into six types and they are,

(i) Victims, (ii) Agents, (iii) Employees, (iv) Independent, (v) Mediators, and (vi) Official. Documentary evidence is also of two types i.e., one set is relating to victims and second one is official.

12 C.C.No.3/2016 PDJC, Rjvm

Description of witnesses

__________________________________________________

Victims/Agents/Employees/IndependentMediatorsOfficial salescomplainant managers

Pws.6, 7, 9,Pws.1 to 4 Pws.1, 5, 8,Pw.21Pws.22 to Pw.20, 28 12 to 1910 & 11 27and 29

Category of documents

______________________________

VictimsOfficial

Ex.P5/complaintExs.P26 to 48/correspondence, Exs.P2 to P4, 6 to 25/ bonds, cashcopies of documents obtained from receipts, pass booksMinistry of Corporate Affairs, Office of the Registrar of Companies, Andhra Pradesh relating to establishment of companies by the accused. Exs.P49 and 50/First information report and rough sketch.

13 C.C.No.3/2016 PDJC, Rjvm

12. Arguments:

a) Prosecution:

i)Accused No.1 established accused No.2 company in the name and style of Suvarna Infra Projects India Limited at Amalapurm, wherein accused Nos.3, 4, 6 and 7 are Directors. Accused No.1 also established four other private limited companies, and all the five companies were functioning from the same premises bearing D.No.3-1-98, Ganapathi

Plaza, Main Road, Amalapuram. Accused No.2 appointed employees and agents to collect deposits from the general public and induced them with a false promise of 20% interest.

ii)Accused Nos.1 to 8 collected an amount of about Rs.14 crores from thousands of investors, issued bonds in the names of Suvarna Real

Estate and receipts in the name of Suvarna India, and thereafter closed the company in the year 2014 without repaying any amount to the victims.

iii)Accused Nos.5, 8, 9 and 10 who are legal advisers and close associates of Accused No.1 also participated in the offence and in pursuance of their criminal conspiracy, accused misappropriated the amounts collected from the public, purchased immovable properties in the

States of Andhra Pradesh and Telangana.

iv)Earlier, Accused No.1 worked as a Marketing Manager in Sahara

India and having gained experience in mobilizing public funds, he 14 C.C.No.3/2016 PDJC, Rjvm conspired with other accused made false representations, dishonestly induced the victims to part with money and thereby, cheated them.

v)Oral evidence adduced by the prosecution coupled with the documentary evidence clearly establishes the conspiracy, inducement, collection of huge amount from thousands of people and misappropriation.

vi)Having worked in other financial institutions like Sahara India and having gained knowledge to escape from the liability intentionally issued receipts and bonds with other company names with a criminal conspiracy to cheat the general public.

vii)Though some of the accused are resigned from the post, they are also liable as they were present at the time of collection of deposit.

viii)Accused failed to adduce any evidence to show animosity between them and the prosecution witnesses.

b) Defence:

Having mentioned the material portion of evidence of all the witnesses, learned counsel for the accused argued through the written arguments as follows:-

i)Prosecution failed to secure certificate of registration of accused

No.2 company, registered a false case, and after lapse of nine years, filed certified copy of certificate of registration.

15 C.C.No.3/2016 PDJC, Rjvm ii)Prosecution failed to furnish all the documents as required under

Section 207 of Code of Criminal Procedure.

iii)Without any competency, Inspector of police/PW.28 registered seven crimes and without verifying the same on correct lines,

PW.29/Deputy Superintendent of Police conducted further investigation, filed charge sheets and both the officers are not competent persons to conduct investigation and file charge sheets.

iv)Investigating Officers prepared 161 Code of Criminal Procedure statements of all the witnesses in a copy and paste method.

v)The bonds and receipts which are relied upon by the prosecution do not contain the signatures of any of the accused.

vi)There are several inconsistencies in the evidence of prosecution witnesses. Most of the witnesses are not identified accused Nos.3 to 9.

vii)There is neither oral nor documentary evidence to show that the accused committed any offence of the offences with which they are charged.

viii)Accused Nos.3 to 9 are also no way concerned with the commission of offence. With the help of stock mediators and some other persons, prosecution prepared documents in Amalapuram Town Police

Station.

16 C.C.No.3/2016 PDJC, Rjvm xi)Prosecution utterly failed to produce documents showing assets of the accused and finally, relied upon following judgments:

1. Yousuf Bin Awad @ Yousauf Vs. State through Inspector of Police 1

2. Arnol Samadhan Nikam Vs. The state of Maharashtra 2

3. J.P.S. Enterprises and another Vs. State 3

13. Point:

a)Admitted facts are that basing on the reports of different persons seven crimes are registered for the same offences. Defacto complainants and victims in all the cases are different. Transactions are also different.

In all seven crimes vide C.C.Nos.1/2016, 2/2016, 4/2016 to 7/2016 and this case, PW.29 laid charge sheets of the same offences. Cognizance is taken for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code, and Section 5 of the Act, 1999 and along with this case, five other cases vide C.C.Nos. 2/2016, 4/2016 to 7/2016 are pending and one more case vide C.C.No.1/2016 is ended in acquittal as there was no material evidence in that case to prove the guilt of the accused.

Generally, all the cases have to be tried and disposed of together, to avoid multiplicity of verdicts. But, one of the case in C.C.No.1/2016 was disposed in the year 2019 itself. So, all the remaining six cases including this case are taken up together for examination of witnesses, arguments

1. 2015 (3) ALT (CRL.) 171 (AP)

2. Crl. Petition No.1091/2025 of Hon’ble High Court of Judicature at Bombay bench at Aurangabad.

3. C.A.No.1048/2000, dt.27.7.2005 of Hon’ble High Court of Madras.

17 C.C.No.3/2016 PDJC, Rjvm etc. C.C.Nos. 2/2016, 4/2016 to 7/2016 are also posted today for judgments.

b)Having considered the material placed by the prosecution, Charge under Section 5 of the the Act, 1999 and under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code is framed. Now, it is to be seen that whether prosecution proved all the ingredients of the offences with which accused Nos.1 to 9 are charged. Since charge is framed under several sections, it is apposite to consider the following ancillary points, for better appreciation, to avoid repetition and clear findings.

14.Ancillary points:

i). Establishment of accused No.2 company and its directors?

ii). Whether miscarriage of justice is done to the accused for

conducting investigation by PWs.28 and 29 and launch

prosecution by PW.29?

iii). Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

iv). Wether charge under Section 120B, 201, 417 and 420 of Indian

Penal Code is sustainable in addition to the charge under

Section 5 of the Act?

v). Any laches on the part of the investigating officers i.e., Pws.28

and 29? if so, would they affect total case to disbelieve the

version of prosecution as well as oral and documentary

evidence?

vi). Final out come of the case?

18 C.C.No.3/2016 PDJC, Rjvm

i)Ancillary point No.(i): Establishment of accused No.2 company

and its directors.

a)To prove the origin of crime i.e., establishment of accused No.2 company and other companies, prosecution relied upon the evidence of

PWs.20 to 28 and Exs.P26 to 42. Prosecution case reveals that accused

Nos.1, 3 to 8 established accused No.2 company. Accused No.1 is

Managing Director and others are directors of the said company and further, accused Nos.1 and 3 are established four other companies and under the guise of establishment of several companies, they lured general public, collected investments, misappropriated that amounts, cheated the general public and failed to repay any amounts to the victims.

Before appreciation of ocular evidence, it is appropriate to mention the

details of companies, its details and directors and they are as follows:-

Sl. Exhibit Name of Issued by Date of Directors Whether

No. numbe the incorporatio any

r document n & other director

details. resigned

1.Ex.P27Company Ministry of 09.11.20111.Busim -- information Corporate Venkata CIN.No.U454 relating to AffairsNaga Venu 00AP2011PL Suvarna (A1) C077328 India 2.Rajya Projects Registered lakshmi Limited Address: Busim (A3) D.No.3-1-98,

3. Busim Ganapati Gowthami Plaza, Main 19 C.C.No.3/2016 PDJC, Rjvm

Road, (A6) Amalapuram- 533201.

2Ex.P28Certificate Registrar of09.11.2011-- of Companies, CIN.No.U454 IncorporatioAndhra 00AP2011PL n relating toPradesh C077328 Survarna India Infra Registered Projects Address: India Limited. D.No.3-1-98, Ganapati Plaza, Main Road, Amalapuram- 533201.

3Ex.P29Fresh Registrar of23.04.2013-- certificate ofCompanies, incorporatioAndhra n, Pradesh CIN.No.U454 consequent 00AP2011PL upon C077328 change of name Registered relating to Address: Survarna D.No.3-1-98, Infra Ganapati Projects Plaza, Main India Road, Limited Amalapuram- 533201.

4Ex.P30List of Registrar --1.Busim directors of Companies,Venkata -- M/s.SurvarnAndhra Naga Venu a India Pradesh(A1), ProjectsManaging 20 C.C.No.3/2016 PDJC, Rjvm

Director,

2. Rajya Lakshmi Busim (A3), Director 3.Phanendr Yes, On a Desai 15.5.2014 Kaneti (A4), Director 4.Vinod Yes, On Battu (A7), 30.11.12 Director 5.Busim Gowthami (A6), Director

5.Ex.P31Company Ministry of 31.10.20121.Busim -- Information Corporate Venkata CIN.No.U271 relating to affairsNaga Venu 00AP2012PT Survarna (A1) C083909 India Iron Registered 2.Rajya and Steel Address:lakshmi Manufacturi Busim (A3) ng Private D.No.3-1-98, Limited Ganapati Plaza, Main Road, Amalapuram- 533201.

6Ex.P32Certificate Registrar of31.10.2012-- of Companies, CIN.No.U271 incorporatioAndhra 00AP2012PT n relating toPradesh C083909 Survarna India Iron Registered and Steel 21 C.C.No.3/2016 PDJC, Rjvm

ManufacturiAddress: ng Private D.No.3-1-98, Limited Ganapati Plaza, Main Road, Amalapuram- 533201.

7Ex.P33List of Registrar of1.Busim -- directors of Companies,Venkata Survarna Andhra Naga Venu India Iron Pradesh(A1), and Steel Director. Manufacturi 2.Rajyalaks ng Private hmi Busim Limited (A2), Director.

8.Ex.P34Company Ministry of 22.1.20131.Busim -- information Corporate Venkata CIN.No.U403 relating to affairsNaga Venu 00AP2013PT Prakash (A1), C085447 India PowerDirector. Registered Projects Address:2.Rajyalaks Private hmi Busim LimitedD.No.1-98, (A2), Near Director. Hanuman Theater, Edarapalli Guntur, Amalapuram- 533201.

9.Ex.P35Certificate Registrar of22.1.2013CIN-- of Companies,.No.U40300A IncorporatioAndhra P2013PTC08 n relating toPradesh5447Register Prakash ed India PowerAddress:D.N 22 C.C.No.3/2016 PDJC, Rjvm

Projects o.1-98, Near Private Hanuman LimitedTheater, Edarapalli, Amalapuram- 533201.

10. Ex.P36List of Registrar of1.Busim -- Directors Companies,Venkata relating to Andhra Naga Venu Prakash Pradesh(A1) India Power 2.Rajyalaks Projects hmi Busim Private (A3), Limited Director 11Ex.P37Company Ministry of 15.11.20121.Busim -- information Corporate Venkata CIN.No.U923 relating to affairsNaga Venu 00AP2012PT Supreme (A1) C084161 India TV

2. Rajya channel Registered Lakshmi Private Address: Busim (A3) Limited D.No.3-1-98, Ganapathi Plaza, Main Road,Amalap uram- 533201.

12Ex.P38Certificate Registrar of15.11.2012-- of Companies, CIN.No.U923 IncorporatioAndhra 00AP2012PT n relating toPradesh C084161 Supreme India TV Registered channel Address: Private 23 C.C.No.3/2016 PDJC, Rjvm

LimitedD.No.3-1-98, Ganapathi Plaza, Main Road,Amalap uram- 533201.

13Ex.P39List of Registrar of1.Busim -- Directors Companies,Venkata relating Andhra Naga Venu Supreme Pradesh(A1) India TV 2.Rajya channel Lakshmi Private Busim (A3) Limited 14Ex.P40Company Ministry of 28.1.20131.Busim -- information Corporate Venkata CIN.No.U401 relating to affairsNaga Venu 02AP2013PT Survarna (A1) C085476 India Vidyut

2. Rajya Plant Registered Lakshmi Private Address: Busim (A3) Limited D.No.1-98, NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

15Ex.P41Certificate Registrar of28.1.2013-- of Companies, CIN.No.U401 IncorporatioAndhra 02AP2013PT n relating toPradesh C085476 Survarna India Vidyut Registered Plant 24 C.C.No.3/2016 PDJC, Rjvm

Private Address: Limited D.No.1-98, NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

16Ex.P42List of Registrar of1.Busim -- Directors Companies,Venkata relating Andhra Naga Venu Survarna Pradesh(A1) India Vidyut 2.Rajya Plant Lakshmi Private Busim (A3) Limited

b)Admittedly, during the course of investigation, neither PW.28 nor

PW.29 collected single piece of document regarding establishment of accused No.2 company and laches on the part of the investigating officers would be discussed at a little later in ancillary point No.V. And, to show the establishment of accused No.2 company and other companies, during trial, prosecution took steps and after securing the documents vide

Exs.P26 to 42, filed the same through PW.20. In this regard, it is to be noted that it is not disputed by the accused about establishment of accused No.2 company and no where it is suggested that it was not established. Exs.P27, P31, P34, P36 and P40 are the proceedings issued 25 C.C.No.3/2016 PDJC, Rjvm by the Ministry of Corporate affairs and as per Ex.P27, initially accused

No.2 company is established under the name and style of Survana India

Projects Limited/accused No.2 on 9.11.2011 and Ex.P28 is its certificate of incorporation with Corporation Identity Number (CIN)-U45400AP 2011PLC077328 and its paid up capital is Rs.5,00,000/-. As per Ex.P29, name of accused No.2 company is slightly changed as Suvarna India

Infra Projects Limited with same CIN number and accordingly, Ministry of

Corporate Affairs, Registrar of Companies, Andhra Pradesh issued proceedings vide Ex.P29 dated 23.4.2013 and when accused No.2 company was established, the directors were accused Nos.3, 4, 6 and 7 besides Managing Director i.e., Accused No.1 vide Ex.P30, whereas, accused No.7 resigned as director on 30.11.2012 and accused No.4 resigned as director on 15.5.2014. In this regard, learned counsel for the accused submitted that having taken advantage of relationship of accused No.7 with accused No.1, name of accused No.7 is shown in the list of directors and immediately after coming to know about the same, he resigned as director on 30.11.2012 and the same is recorded vide

Ex.P30. The same argument is advanced on behalf of accused No.4 also. Ex.P30 reveals that accused No.4 also resigned as director on 15.5.2014 i.e., almost prior to one year of giving complaint in this case and in the connected matters. So, record clearly reveals that though the 26 C.C.No.3/2016 PDJC, Rjvm names of accused Nos.4 and 7 are shown in the list of directors, they resigned even very long prior to giving reports and registration of first information report vide Ex.P49. As per Ex.P30, accused Nos.1, 3 and 6 continued as directors, out of which, accused No.1 is Managing Director of accused No.2 company. Accused Nos.3 and 6 are wife and daughters of accused No.1. Neither in the certificate of incorporation nor in the list of directors, names and other details of accused Nos.5 and 8 are find place and PW.20 also admitted the same. PW.20 who secured Exs.P26 to 42 also categorically stated that initially accused No.1 was Managing

Director and accused Nos.3, 4, 6 and 7 were the directors of accused

No.2 company and accused No.7 and 4 resigned as directors on 30.11.2012 and 15.5.2014 respectively, and all the five companies registered office is at H.No.3-1-98, Ganapathi Plaza, Main Road,

Amalapuram. So, it can safely be concluded that accused No.5 and 8 are no way concerned with the company. It is not the case of prosecution that accused No.9 either director or induced general public and absolutely no evidence to that affect. With regard to the liability of the resigned directors, discussion would be made in the forth coming ancillary point

No.iii.

27 C.C.No.3/2016 PDJC, Rjvm

c)In addition to the accused No.2 company, accused Nos.1 and 3 also established four other nominal companies with nominal paid up capital under the names and styles of Survarna india Iron and Steel

Manufacturing Private Limited, Prakash India Power Projects Private

Limited, Supreme India TV Channel Private Limited and Survarna India

Vidyut Plant private Limited on 31.10.2012, 22.1.2013, 15.11.2012 and 28.1.2013 respectively. To that effect, certificates of incorporation also obtained vide Exs.P32, 35, 38 and 41 and further, Exs.P33, 36, 39 and 42 reveal that the accused Nos.1 and 3 are directors of the said company.

d)For the foregoing reasons, this court came to conclusion that on 9.11.2011, initially accused No.2 company was established in the name and style of Suvarna India Projects Limited vide Ex.P27 and subsequently, the name of the said company is changed as Suvarna India

Infra Projects India Limited vide Ex.P29 and originally accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were the directors of accused No.2 company and subsequently, accused Nos.4 and 7 resigned as directors and the same is accepted by the Registrar of Companies vide Ex.P30 and further, accused Nos.5, 8 and 9 are no way concerned with the accused No.2 company. Hence, this ancillary point is answered accordingly.

28 C.C.No.3/2016 PDJC, Rjvm

Ancillary point No.(ii): Whether miscarriage of justice is done

ii) to the accused for conducting investigation by PWs.28 and 29 and launch prosecution by PW.29?

a)Admittedly, Ex.P5 report is registered by PW.28/Inspector of Police for the offences under Sections 120-B, 411, 417, 420, 201 r/w.34 and 411 of the Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies

Act, 2013 and under Section 5 of the Act, 1999 vide Ex.P49. The same investigating officer i.e., PW.28 conducted investigation including examination of witnesses and collection of documents. PW.29/Deputy

Superintendent of Police conducted further investigation and laid charge sheet. Learned defence counsel argued that PWs.28 and 29 violated the mandatory requirement under Rule 5 (2) of Andhra Pradesh Depositors of

Financial Establishment Rules and they are not competent persons to conduct investigation and launch prosecution and further, all the documents relating to the case are not furnished to the accused as required under Section 207 of Code of Criminal Procedure and as such, investigation done by PWs.28 and 29 is illegal and to substantiate their version relied upon judgment of Hon’ble High Court of Andhra Pradesh in

Yousuf Bin Award @ Yousauf (supra). For better understanding section 4 of the Act, 1999 and Rule 5 are set out below:-

Section 4: Competent Authority: (1) The Government may, by notification, appoint an authority hereinafter called "the competent authority" to exercise control over the properties attached by the 29 C.C.No.3/2016 PDJC, Rjvm

Government under section 3. (2) The Competent authority shall have such other powers and discharge such other functions as may be prescribed, in addition to the powers and functions specified under this Act. (3) Upon receipt of the orders of the Government under section 3, the Competent authority shall apply within fifteen days to the Special Court constituted under this Act for making the ad-interim order of attachment absolute. (4) An application under sub-section (3) shall be accompanied by one or more affidavits, stating the grounds on which the belief that the financial establishment has committed any default or is likely to defraud, is founded, the amount of money or value of other property believed to have been procured by means of the deposits, and the details, if any, of persons in whose names such property is believed to have been invested or purchased out of the deposits or any other property attached under section 3

Rule 5 (2):-Where the competent authority satisfied or has reason to believe that the financial establishment has committed a default punishable under Section 5 of the Act, the Competent Authority shall be competent to launch prosecution before the Special Court against the Financial Establishment and any person responsible for the management of the affairs of the Financial Establishment including the promoter, manager or member of the Financial Establishment for levy of penalty under Section 5 of the Act.

b)Having considered G.O.Ms.No.346, Home (Gen.B), dated 14.11.2000, sub Rule 2 is added to Rule 5 and as per this rule, competent authority has to launch prosecution before the Special Court, against the financial establishment or the persons responsible for the management of its affairs. In this regard, Additional Director General of police, C.I.D. is appointed as competent authority vide G.O.Ms.No.193,

Home (Gen.B), dated 23.8.2001 issued under Section 4 of the Act, 1999.

In the judgment relied upon by the learned defence counsel in Yousuf 30 C.C.No.3/2016 PDJC, Rjvm Bin Award @ Yousauf (supra), having considered both the government orders dated 14.11.2000 and 23.8.2001 and also having considered the facts and circumstances of that case, Hon’ble High Court of Andhra

Pradesh set aside the conviction and sentence passed by the trial court for the offence under Section 5 of the Act, 1999. Facts of the said case are, originally first information report was not registered of the offence under Section 5 of the Act, 1999 and charge sheet was also not laid for the said offence and subsequently, that too, after framing charge, the

Inspector of Police, WCO Team-III, Hyderabad had filed memo requesting the court to add Section 5 of the Act, 1999.

c)As it is stated above, in the present case at hand, first information report was registered for the offence under Section 5 of the Act, 1999 along with the provisions under Indian Penal Code and other offences and charge sheet also laid for the same offences. It is not in dispute that neither PW.28 nor PW.29 nor the police officer in the cadre of Inspector of

Police or Deputy Superintendent of Police are appointed as competent authority to conduct investigation or launch prosecution. In the aforementioned case relied upon by the accused, prosecution suddenly introduced Section 5 of the Act, 1999 and in that case, it seems, accused not admitted about establishment of company and as such, absolutely, it was surprise to them and since miscarriage of justice is caused, Hon’ble 31 C.C.No.3/2016 PDJC, Rjvm High Court set aside the conviction. But, in this case, it is the admitted case of accused that accused No.2 company is established by accused

No.1 and others. Charge sheet also laid for the offence under Section 201 of Indian Penal Code on the allegation that the accused caused disappearance of the documentary evidence including the certificate of incorporation, list of directors, account books etc., from the place where the accused No.2 company is established vide Ex.P28. So, the argument of the learned counsel for the accused that for non supply of relevant documents regarding establishment of company vitiates the trial cannot be taken into consideration. Added to it, during trial when Exs.P26 to 42 filed and admitted in the evidence, accused did not dispute the said documents and moreover, categorically admitted the same in the evidence of investigating officers and other witnesses.

d)To consider the core point that whether total case vitiates for conducting investigation and launching prosecution by a person who is not competent, it is appropriate to refer to that before bifurcation of both the states of Andhra Pradesh and Telangana, the aforementioned

Government Orders dated 14.11.2000 and 23.8.2001 are issued in respect of competent authority and appointing Additional Director General of Police, C.I.D. as competent authority. After bifurcation, Government of

Telangana issued G.O.Ms.No.99 dated 5.9.2018 amending Rule 5(2) of 32 C.C.No.3/2016 PDJC, Rjvm the Telangana Protection of Depositors of Financial Establishment Act, 1999 to the effect empowering any police officer not below the rank of

Inspector of Police to launch prosecution under the Act 17/1999 and the

Rules framed thereunder with retrospective affect. When the said

G.O.Ms.No.99 is challenged, Hon’ble Division Bench of Hon’ble

Telangana High Court while deciding the writ petition in Mr.Syed Yousuf

Abbas Vs. State of Telangana 4 held that:- “The intention of the legislature by amending Rules with retrospective effect no way intends to regularize any flaw in respect of the trial. The Special Courts keeping in view the statutory provisions under the Act No.17 of 1999 and the Rules framed thereunder are proceeding ahead with the trial on the basis of the material brought before the Special Courts by the competent authority or by any police officer and merely because investigation has been carried by any police officer not below the rank of Inspector of Police prior to 05.09.2018, it does not mean that all the misdeeds of the petitioners can be wiped out as prayed by the petitioners. The petitioners' contention is that the amendment and the Rules has been done only with a view to object to nullify the Judgment delivered by this Court in Criminal Appeal No.1576 of 2005 and batch decided on 01.04.2015. In the considered opinion of this Court, the plea canvassed by the petitioners is ill-founded.

It does not nullify any Judgment. The act of the petitioners was certainly an offence earlier also and it is an offence under the amendment also and it is nobody's case that the act committed by the petitioners has been made an offence by amending the Act retrospectively”.

e)The said Government order is challenged before the common High

Court by duly issuing notice to the State Government. Admittedly, either after bifurcation of both the states of Andhra Pradesh and Telangana or

4. Writ petition No.40775 & 40962/2018 33 C.C.No.3/2016 PDJC, Rjvm after establishment of our Hon’ble High Court of Andhra Pradesh, State

Government of Andhra Pradesh has not issued similar Government order authorizing the Inspector of Police to launch prosecution for the reasons best known to it. In this regard, it is to be noted that in R.A.H. Siguran vs. Shankare Gowda @ Shankara & Anr 5in which,Hon’ble Apex Court categorically held that unless accused proves that miscarriage of justice is done to him, the trial should not be vitiated. Though the said case relates to the Immoral Traffic Act, by referring several precedents from 1955, Hon’ble Apex Court held the said principle.

f)In H.N. Rishbud and Anr. Vs. State of Delhi 6 the question considered by the Hon’ble Apex Court was whether after the court takes cognizance, trial can be held to be vitiated merely on the ground that investigation was invalid and answering in the negative, it was held that if the plea of invalidity of investigation is raised at sufficiently early stage, the court, instead of taking cognizance direct reinvestigation by competent investigating officer. But, after cognizance is taken the trial cannot be quashed for invalidity of investigation.

The observations in the said judgment are as follows:- “9. The question then requires to be considered whether and to what extent the trial which follows such investigation is vitiated. Now, trial follows cognizance and cognizance is preceded by investigation. This is 5. (2017) 16 SCC 126 6 AIR 1955 SC 196 34 C.C.No.3/2016 PDJC, Rjvm undoubtedly the basic scheme of the Code in respect of cognizable cases. But it does not necessarily follow that an invalid investigation nullifies the cognizance or trial based thereon. Here we are not concerned with the effect of the breach of a mandatory provision regulating the competence or procedure of the Court as regards cognizance or trial. It is only with reference to such a breach that the question as to whether it constitutes an illegality vitiating the proceedings or a mere irregularity arises. A defect or illegality in investigation, however serious, has no direct bearing on the competence or the procedure relating to cognizance or trial. No doubt a police report which results from an investigation is provided in Section 190 of the Code of Criminal Procedure as the material on which cognizance is taken. But it cannot be maintained that a valid and legal police report is the foundation of the jurisdiction of the Court to take cognizance.

While no doubt, in one sense, clauses (a), (b) and (c) of Section 190(1) are conditions requisite for taking of cognizance, it is not possible to say that cognizance on an invalid police report is prohibited and is therefore a nullity. Such an invalid report may still fall either under clause (a) or (b) of Section 190(1), (whether it is the one or the other we need not pause to consider) and in any case cognizance so taken is only in the nature of error in a proceeding antecedent to the trial. To such a situation Section 537 of the Code of Criminal Procedure which is in the following terms is attracted:

“Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered on appeal or revision on account of any error, omission or irregularity in the complaint, summons, warrant, charge, proclamation, order, judgment or other proceedings before or during trial or in any enquiry or other proceedings under this Code, unless such error, omission or irregularity, has in fact occasioned a failure of justice.” “If, therefore, cognizance is in fact taken, on a police report vitiated by the breach of a mandatory provision relating to investigation, there can be no doubt that the result of the trial which follows it cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice. That an illegality committed in the course of investigation does not affect the competence and the jurisdiction of the 35 C.C.No.3/2016 PDJC, Rjvm Court for trial is well settled as appears from the cases in Prabhu v. Emperor (AIR 1944 PC 73) and Lumbhardar Zutshi v. King (AIR 1950 PC 26). These no doubt relate to the illegality of arrest in the course of investigation while we are concerned in the present cases with the illegality with reference to the machinery for the collection of the evidence. This distinction may have a bearing on the question of prejudice or miscarriage of justice, but both the cases clearly show that invalidity of the investigation has no relation to the competence of the Court. We are, therefore, clearly, also, of the opinion that where the cognizance of the case has in fact been taken and the case has proceeded to termination, the invalidity of the precedent investigation does not vitiate the result, unless miscarriage of justice has been caused thereby”.

g)Further, in State of Haryana v. Bhajan Lal 7, Hon’ble Apex Court held as under:

“119. It has been ruled by this Court in several decisions that Section 5-A of the Act is mandatory and not directory and the investigation conducted in violation thereof bears the stamp of illegality but that illegality committed in the course of an investigation does not affect the competence and the jurisdiction of the court for trial and where the cognizance of the case has in fact been taken and the case is proceeded to termination, the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. See (1) H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], (2) Major E.G. Barsay v. State of Bombay [AIR 1961 SC 1762], (3) Munnalal v. State of U.P [AIR 1964 SC 28], (4) Sailendranath Bose v. State of Bihar [AIR 1968 SC 1292], (5) Muni Lal v. Delhi Admn. [(1971) 2 SCC 48] and (6) Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. However, in Rishbud case [AIR 1955 SC 196] and Muni Lal case [(1971) 2 SCC 48], it has been ruled that if any breach of the said mandatory proviso relating to investigation is brought to the notice of the court at an early stage of the trial, the court will have to consider the nature and extent of the violation and pass appropriate orders as may be called for to rectify the illegality and cure the defects in the investigation.

7. [1992 Supp (1) SCC 335] 36 C.C.No.3/2016 PDJC, Rjvm

h)And, in A.C. Sharma v. Delhi Admn 8, provision of Section 5-A again considered and held as under:

“15. As the foregoing discussion shows the investigation in the present case by the Deputy Superintendent of Police cannot be considered to be in any way unauthorised or contrary to law. In this connection it may not be out of place also to point out that the function of investigation is merely to collect evidence and any irregularity or even illegality in the course of collection of evidence can scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated. In H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], it was held that an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. When any breach of the mandatory provisions relating to investigation is brought to the notice of the court at an early stage of the trial the Court will have to consider the nature and extent of the violation and pass appropriate orders for such reinvestigation as may be called for, wholly or partly, and by such officer as it considers appropriate with reference to the requirements of Section 5-A of the Prevention of Corruption Act, 1947. This decision was followed in Munnalal v. State of U.P. [AIR 1964 SC 28] where the decision in State of M.P. v. Mubarak Ali [AIR 1959 SC 707], was distinguished. The same view was taken in State of A.P. v. N. Venugopal [AIR 1964 SC 33] and more recently in Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. The decisions of the Calcutta, Punjab and Saurashtra High Courts relied upon by Mr Anthony deal with different points: in any event to the extent they contain any observations against the view expressed by this Court in the decisions just cited those observations cannot be considered good law.

i)Added to it, this case comes under the purview of Section 460 (c) of

Code of Criminal Procedure, but not under Section 461 of Code of

Criminal Procedure. Further, except posing questions in respect of Rule

8. (1973) 1 SCC 726 37 C.C.No.3/2016 PDJC, Rjvm 5(2) to Pws.28 and 29 that they have to obtain permission from the

Superintendent of Police to register first information report and investigate the case and launch prosecution by following G.O.Ms.No.346, that too, by recalling them, accused did not raise any objection either after registration of first information report or during investigation or before or after taking cognizance or before framing charge or during trial at the time of initial examination of PWs.28 and 29. Added to it, for the same offences, State

Government of Telangana which is bifurcated from the state of Andhra

Pradesh had issued G.O.Ms.No.99 authorizing the Inspector of Police to launch prosecution with retrospective affect. So, even other wise it can be inferred that the same cadre police officials have competency to launch prosecution and moreover, in this case, Deputy Superintendent of

Police filed charge sheet.

j)To sum up, having given thoughtful consideration to the aforementioned propositions, an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby and further, function of investigation is merely to collect evidence and any irregularity or even illegality in the course of 38 C.C.No.3/2016 PDJC, Rjvm collection of evidence can be scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated.

[k)For the foregoing reasons, this court came to conclusion absolutely miscarriage of justice is not done to the accused for conducting investigation by PWs.28 and 29 and launching prosecution by PW.29 who is none other than Deputy Superintendent of Police.

iii) Ancillary point No.(iii): Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

a)It is already stated above that there is no dispute about establishment of accused No.2 company and it is also not in dispute that accused No.1 was Managing Director and accused Nos.3, 4, 6 and 7 were directors at the time of establishment of accused No.2 company.

Further, Exs.P27, 28 and 30 reveal the same and further, name of accused No.2 is changed as Suvarna India Projects Limited vide Ex.P29.

Before taking up appreciation in respect of this point, it is pertinent to refer

to the relevant provisions under the Act, 1999, which are extracted hereunder for the sake of reference:

Section 2(b) and (c) of the Act reads as follows: “2-Definition:- In this Act, unless the context otherwise remains:

(a) xxxxxx

(b)‘Deposit’ means the deposit of a sum of money either in lumpsum or instalments made with a financial establishment for a fixed period, for interest or return in any kind; 39 C.C.No.3/2016 PDJC, Rjvm

(c)"Financial Establishment" means any person or group of individuals accepting deposit under any scheme or arrangement or in any other manner but does not include a corporation or a co-operative society owned or controlled by any State Government or the Central Government or a banking company as defined under clause (c) of section 5 of the Banking Regulation Act, 1949 (Central Act 10 of 1949).

Section 5 of the Act reads as follows:-

Penalty for default - Where any financial establishment defaults in the return of the deposit either in cash or kind or defaults in the payment of interest on the deposit as agreed upon, every person responsible for the management of the affairs of the financial establishment including the promoter, Manager or Member of the financial establishment shall be punished with imprisonment for a term which may extend to ten years and with fine which may extend to rupees one lakh and such financial establishment shall also be liable for fine which may extend to rupees five lakh.

b)Now, coming to the facts and evidence of the case, it is already stated above that there are six categories of witnesses and two categories of documents. Out of which, first category of witnesses are victims, they are PWs.6, 7, 9, 12 to 19 and second category of witnesses are agents-Cum-victims. Before appreciating the evidence of victims, it is apposite to appreciate the evidence of sales manager, agents-Cum- victims who set the criminal law into motion vide Ex.P5 to follow sequence. Though PW.3 is examined in chief in part, he did not turn up for further examination and therefore, his evidence is eschewed.

c) Evidence of Agents: ( PWs.1, 2 and 4)

i)PWs.1, 2 and 4 stated in one voice that accused No.1 who is none other than Managing Director of Suvarna India Infra Projects 40 C.C.No.3/2016 PDJC, Rjvm Limited/accused No.2 company which is situated at Ganapathi Plaza,

Cinema Road, Amalapuram informed to them that they established accused No.2 company with an intention to collect recurring deposits from the general public to pay interest at 20% on the deposit amount and also to pay 4% of commission to the agents and further, their company has license and also obtained permission from the Reserve Bank of India and made believe the witnesses that accused No.2 is well established company and accordingly, they joined as sales manager and agents, collected amounts from the general public and further, they also deposited amounts in the accused No.2 company and as per the version of some of the witnesses, they directly paid amounts to the accused No.1 and some others paid the same to the employees of accused No.2 company, in the presence of accused No.1. PWs.1, 2 and 4 further stated that when they demanded accused No.1 to repay the amount, after completion of maturity period, he replied that he has made investments at several places and promised to repay the same, and a meeting is conveyed at Sivakodu and finally, the company is closed and further, several victims questioned them for repayment. For better clarification, the details of amounts collected by Pws.1 to 3 and their personal deposits are mentioned hereunder:

41 C.C.No.3/2016 PDJC, Rjvm

S.NNumber ofCollected amountPersonal depositRelevant o.witness(Rupees)document/s 1PW.1 12,85,750/-1,50,000/-Exs.P1 to 4 (sales(paid to accused manager)No.1) 2PW.26,43,600/-3,000/-Ex.P7 3PW.45,51,420/---Ex.P9 iii)So, as per the version of PWs.1, 2 and 4, they collected an amount of Rs.24,80,770/- and also made personal deposits of Rs.1,53,000/-. All the witnesses/agents have categorically stated that they were appointed by the accused No.1 as sales manager and agents so as to collect amounts from the general public and deposit the same in the accused

No.2 company and further, Managing Director promised to pay 20% interest to the customers and accordingly, bonds/receipts/pass books are issued to them as well as victims. Further, PWs.1, 2 and 4 are none other than defacto complainants who set the criminal law into motion by giving

Ex.P5 report.

iv)Learned counsel for the accused would argue that there is no proof to show that Pws.1 to 3 were appointed as sales manager and agents, collected amounts on behalf of accused No.2 company and deposited the same and further, neither accused No.1 nor accused No.2 appointed them as agents and as such, accused No.2 company is not committed any offence. But, PWs.1, 2 and 4 have consistently in one voice stated 42 C.C.No.3/2016 PDJC, Rjvm that they were appointed as sales managers and agents by accused No.1 and they collected amounts to a tune of Rs.24,80,770/- and also deposited Rs.1,53,000/- and in this regard, it is to be noted that a charge under Section 120-B of Indian Penal Code is also framed against the accused alleging that they conspired together, established accused No.2 company, collected amounts directly and through the agents.

v)Further, it is already stated above that along with accused No.2 company, accused Nos.1 and 3 who are none other than husband and wife also established four other nominal companies which are referred above. So, it shows that from the inception of establishment of accused

No.2 company and other companies, they violated the provisions of the

Act, 1999 and further, another charge under Section 201 of the Code is also framed for causing the disappearance of the evidence by removing all the documents in respect of accused No.2 company and as per the version of prosecution, they could not secure single piece of document in the office of accused No.2 company. In the cross examination of all the witnesses, learned counsel for the accused elicited that Exs.P1 to 4, 6 to 24 do not contain signature of accused No.1, seal in the name of

Survarna Real estate is there on all the documents. But, it is nowhere suggested that accused No.2 company is not at all established and their defence is that they never collected any amounts from any of the person 43 C.C.No.3/2016 PDJC, Rjvm and all the documents are fabricated. Learned counsel for the accused also elicited some formal inconsistencies in the evidence of PWs.1, 2 and 4 which do not thrown away the version of the prosecution and dislodge their testimonies.

d) Evidence of Victims: ( PWs.6, 7, 9, 12 to 19)

i)All the witnesses testified consistently that upon believing the words of accused Nos.1 and 3 or accused No.1 or accused Nos.1, 3 and 6 about establishment of accused No.2 company at Gapanapthi Plaza,

Cinema road, Amalapuram and if they deposit amounts in their company, accused No.2 company would pay interest at 20%, they all deposited amounts in their names and in the names of their family members vide

Exs.P4 to 24, and in the cross examination of all the witnesses, all the suggestions posed by the learned defence counsel are denied, however, learned defence counsel elicited formal inconsistencies and omissions in respect of the statements which are not specifically given before the investigating officer with regard to the presence of either of the accused at the time of making payments, names of agents and further, all the witnesses are also admitted that that none of the bonds/receipts contain the name of accused No.2 company and they contain the name of

Suvarna Real Estate company and the details of the witnesses, deposit amounts, documents etc., are stated as follows:

44 C.C.No.3/2016 PDJC, Rjvm

WitnessDepositRelevantThrough whom amount is deposited or (rupees)documentany other reference. PW.55,000/-Ex.P14Accused No.1 and PW.1 PW.72,50,000/-Ex.P15-- PW.950,000/-Ex.P16PW.2 and accused No.1 PW.1241,670/-Ex.P17Accused No.1 approached PW.132,000/-Ex.P18Accused No.1 approached PW.1430,000/-Ex.P19Accused Nos.1, 3, 6, 7 went to his village PW.153,000/-Ex.P20Accused No.1 PW.166,000/-Ex.P21Accused Nos.1 and 8 PW.1724,000/-Exs.P22 and 23 PW.1 and accused No.1 approached PW.1818,000/-Ex.P24PW.1 and accused No.1 approached PW.192,000/-Ex.P25PW.1, accused Nos.1, 6 and 8 ii)So, as per the version of the victims, they deposited an amount of

Rs.4,31,670/- by believing the words of accused No.1 and others, either through agents or directly. Some of the witnesses stated that they know accused Nos.1 and 2, some stated that they know accused Nos.1, 3, 6 and some other witnesses stated that they know accused Nos.1 to 3, 5 to

7. Further, some of the victims stated that accused No.1 went to their houses and churches along with agents and family members. Some of the victims testified that they approached accused No.2 company situated at Ganapathi Plaza along with agents and deposited amounts and except eliciting the material that the name of Suvarna real estate company is mentioned on the bonds and receipts, nothing more useful is elicited to disbelieve the version of victims. Learned counsel for the accused also 45 C.C.No.3/2016 PDJC, Rjvm elicited some formal inconsistencies in the evidence of Pws.6, 8 to 23 which do not thrown away the version of the prosecution.

e) Evidence of employees of accused No.2 (Pws.5, 8, 10 and 11):

i) It came in the evidence of PWs.5 and 9 that accused No.1 is managing director of Suvarna India Infra Project Limited, Ganapathi

Plaza, Amalapuram, accused Nos.3 to 8 are directors of the said company, he came to know through some others about the establishment of the said company and accordingly, he went to the company and then, accused No.1 appointed them as branch manager and accountant respectively and along with PW.8 some other persons also joined as

Branch Managers and agents in the said company. Further, PW.5 and agents used to collect deposits from the general public and used to deposit the same in the company and at the end of every day, PW.8 and others used to hand over total deposit amounts to the accused No.1, company used to issue bonds and receipts, PW.5 also deposited

Rs.90,000/- vide Exs.P9 to 13, and whenever any customer approached the company to withdraw the deposit amount, accused No.1 used to postpone the payment by saying that they invested the said amounts in the Reserve Bank of India and if they wait for another six months, he would pay additional interest and finally, company is closed without 46 C.C.No.3/2016 PDJC, Rjvm leaving any evidence and by removing total records and furniture from

Ganapathi Plaza and finally, victims gave report to the police.

ii)In the cross examination, they admitted that they stated in the connected matters in C.C.Nos.1/2016 and 2/2016 that they gave seven similar statements in all the connected matters and since the learned defence counsel questioned about the documentary proof regarding their appointments, PW.8 produced photo copy of order dated 1.3.2012 vide

Ex.D1. He has further stated that, as per Ex.D1, he was appointed as operational manager, but not accountant, and in Ex.D1, name of the company is mentioned as Suvarna India, Suvarna Infra Projects India

Limited and he denied other suggestions posed by the learned defence counsel stating that he fabricated Ex.D1 and he further admitted that in

C.C.No.2/2016, he stated that he does not have any documentary proof to show his appointment and for which, he gave explanation that thereafter, he searched for the appointment order and could trace out it and some other formal material which is not useful to disbelieve the version of PW.9 is elicited in his cross examination.

iii)PW.10 testified that on 1.4.2012, he joined as accountant in

Suvarna India Infra Project Limited and initially, he worked for some period at P.Gannvaram and Muramalla and thereafter, he worked in the head office situated at Amalapuram, several branch managers and 47 C.C.No.3/2016 PDJC, Rjvm agents are appointed by the company and they used to collect deposits from the general public to run real estate business and Suvarna India

Infra Project Limited, accused No.1 is the Managing Director and accused

Nos.3 to 8 are directors of the said company, objectives of the company are to collect deposits from poor public, invest the same in the real estate business and pay deposit amount with 20% interest and further, general public used to come to the office to deposit amounts through agents and branch managers and they used to issue deposit bonds and receipts to the depositors and at the end of every day, they used to hand over total amount to the accused No.1. Further, after completion of maturity period also, accused No.1 failed to repay the amount, postponed the same on the ground that he invested the said amounts in other business and he would repay the same with additional interest and finally, the company is closed by removing all the records and furniture where accused No.2 is established and some of the victims gave report to the police. He also admitted in his cross examination that he gave evidence in the connected matters in C.C.Nos.1/2016 and 2/2016 that he gave similar statement in all the connected matters and denied the suggestions that he never worked in accused No.2 company and he had no acquaintance with accused No.1 and other accused and further, he pleaded ignorance about

DIN number of accused Nos.3 to 8.

48 C.C.No.3/2016 PDJC, Rjvm iv)As per the version of PW.11, in the year 2013, he joined as accountant in accused No.2 company at Rajamahendravaram Branch, accused No.1 is managing director, accused Nos.3 to 9 are directors of the said company, its main office is situated at Ganapathi Plaza,

Amalapuram, objectives of the company are to run other business like real estate etc., and collect deposits from the general public and pay deposit amount with 20% interest, general public used to come to the branch office, Rajamahendravaram to deposit amounts through agents and branch managers, they used to issue deposit bonds and receipts to the depositors, at the end of every day, they used to hand over total amount to the accused No.1. Further, directors used to postpone the payment and on one day, when he went to the branch office,

Rajamahendravaram to attend work, it is found locked by removing total records and furniture and finally, some of the victims gave report to the police, and in the cross examination, he also stated that he gave evidence in the connected matters in C.C.Nos.1/2016 and 2/2016 that he joined in the company on 10.4.2012, accused No.9 took back his appointment letter when a meeting was conducted at Sivakodu. Further, he has stated he gave similar statements in all the connected matters and denied other suggestions posed by the learned defence counsel.

49 C.C.No.3/2016 PDJC, Rjvm

f) Evidence of independent witness (PW.21):

i)It came in the evidence of PW.21 that since 2011, he has been working as lodge boy in Ganapathi Plaza, Amalapuram, in the year 2013,

Suvarna India Infra Private Limited was established in the first floor by accused Nos.1, accused Nos.3, 5, 6 and others served as directors, he know all the said persons, public used to come to the said company to deposit amounts and after receiving amounts, company used to issue receipts and in the year 2015, company is closed, general public deposited amounts to receive excessive interest, company failed to repay the amounts, company people also taken away total records and furniture from the said building and in the cross examination, he has stated that in

C.C.No.1/2016, he pleaded ignorance about the affairs of the company, and further, he has stated that he has no evidence to show that he has been working as lodge boy in Ganapathi Plaza and denied other suggestions.

ii)Pw.21 is independent witnesses and one cannot except document from them to prove their business and avocation. There is no reason to disbelieve the version of these witnesses. No animosity also attributed between them and the accused. It is not in dispute about establishment of accused No.2 company at D.No.3-1-98, Ganapathi Plaza, main road,

Amalapuram in the year 2011. Nothing useful material is elicited in their 50 C.C.No.3/2016 PDJC, Rjvm evidence. To sum up their evidence, accused No.2 company is established in Ganapathi Plaza, main road, Amalapuram, several persons came there, deposited amounts and when they demanded for repayment, accused No.2 company failed to pay the same, closed the company, removed all documentary evidence and furniture.

g) Evidence of mediators (Pws.22 to 27):

As per the version of Pws.22 to 27, PW.28 called them and other mediators, to act as mediators and in their presence, PW.28 arrested accused Nos.1, 8, 9, 5, 6 and 4 vide Exs.P43 to 48 on the respective dates and places and there is no dispute about the arrests of all these accused. Admittedly, nothing is seized from either of the accused. So, in view of the provisions under the Evidence Act, admissible and relevant portions in respect of names, other details of the accused and their arrests are only marked. PW.28 also stated on the same lines of evidence of Pws.22 to 27. Formal suggestions are posed by the learned defence counsel regarding preparation of documents in the police station and they are denied by Pws.27 to 27.

h) Evidence of official witnesses (Pws.20, 28 and 29):

i)It is already stated above that the present station house officer i.e.,

PW.20 took steps, during trial, secured documents vide Exs.P26 to 42 51 C.C.No.3/2016 PDJC, Rjvm regarding establishment of the accused No.2 company and other companies at bearing D.No.3-1-98, Ganapathi Plaza, main road,

Amalapuram. PW.31 is very crucial witness who registered Ex.P5 report of Pws.1 and 2 vide Ex.P49 for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and under Section 5 of the Act, 1999 and in his chief examination, he stated supporting the case of prosecution and in the cross examination, he has categorically admitted that he has not collected any document showing registration of accused No.2 company, he tried to get registered document of accused No.2 company, basing on the statements of victims, he came to conclusion that accused

Nos.1, 3 to 8 are directors of accused No.2 company and that he has not produced any document to show that he tried to secure documents showing registration of accused No.2 company and part-I case dairy shows that none of the victims have handed over documents to show that the accused are directors of accused No.2 company. He has further admitted that he has not shown other companies as accused in this case, though several bonds are issued in that name, he has not done investigation relating to Survarna Real estate, none of the victims have handed over documents issued in the name of accused No.2 company, he has not verified whether the bonds contain the signature of any of the accused, he has not collected any documents from the accused, after 52 C.C.No.3/2016 PDJC, Rjvm submitting resignation by accused No.1 to Sahara India private Limited, accused Nos.1, 3 and 6 established accused No.2 company. Further, in the part-I case diary there is no specification that accused No.9 is legal advisor and friend of accused No.1, accused No.4 is advocate from

Visakhapatnam, accused No.8 is resident of Samisrigudem of Nidadavolu and accused No.10 is resident of Sivakodu village of Razole Mandal.

Further, he has not produced any document to show movable and immovable properties transferred in the name of accused No.10 and except the case diary file, he has not handed over any document showing registration of accused No.2 company and that PW.1 has not stated about involvement of accused No.9 in settling the matter. Further, he has nor secured any document to show the agents and managers of accused

No.2 company and after going through the provisions of the Act, 1999, he registered the report of defacto complainants.

ii)It is already stated above, being participated in the investigation including the registration of reports of PWs.1 and 2 vide Ex.P49, PW.28 failed to secure single piece of document in respect of accused No.2 company and deposit amounts made by the victims. After registration of

Ex.P49/first information report, he simply recorded the statements of the witnesses in this case and in the connected cases. Even as per his 53 C.C.No.3/2016 PDJC, Rjvm categorical admissions, he has not even take steps to obtain the documents relating to accused No.2 company.

iii)Learned counsel for the accused argued that none of the documents i.e., deposit/bond/pass book contain the name or seal of accused No.2 company and as such, accused are no way concerned with

Exs.P1 to P50. Admittedly, neither the directors nor any concerned person of accused No.2 company signed Exs.P1 to 4, 6 to 25 and seal of

Suvarna Real Estate is mentioned on the documents. In this regard, it is to be noted that name of accused No.2 company is Suvarna India

Projects Limited and accused Nos.1 and 3 are also established two other companies in the same name of Suvarna i.e., Suvarna India Iron and steel Manufacturing Private Limited and Suvarna India Vidyut Plant

Private Limited besides two other companies i.e., Prakash India Power

Projects Private Limited and Supreme India TV Channel Private Limited.

Further, several victims could not even say full name of the accused No.2 company and they simply stated as Suvarna Company, Suvarna India

Limited Company etc., Most of the victims studied 10th class or below 10th class, some illiterates and some victims have completed graduation. In this regard, it is to be noted that had the victims really had that much of knowledge and wisdom, they should not have believed the words of the accused who agreed to give very higher rate of interest at 20% which is 54 C.C.No.3/2016 PDJC, Rjvm not at all believable. So, it shows that the accused No.2 company lured all the victims in such a way to believe their words. Assuming for the sake of arguments that the accused No.2 company not at all issued any bonds/receipts/pass books to the victims also, their oral testimonies cannot be ruled out, without any proper defence. Having admitted establishment of accused No.2 company, accused simply denied collection of amounts from the victims. Had they really had good intention of running company, they should have been filed documents showing their business. Added to it, there is no explanation from the accused why they established accused No.2 company and other companies, if they had no intention of collecting investments.

h)Learned defence counsel relied upon the following judgments:

a)J.P.S.Enterprises and another Vs. State 9 , hon’ble High Court of

Madras has held that:

“A careful reading of the judgment of the learned Special Judge would also indicate his finding that even though none of the documents produced by the prosecution bear either the name of the second accused or his signature, yet the other circumstances would indicate that both the accused are guilty of the offence. A careful scrutiny of the entire evidence let in by the prosecution would in my opinion indicate that such finding has no basis at all for the reason that in none of the documents, the second accused has subscribed his signature”

The facts of the said case are entirely different. In view of the establishment of three companies in the same name i.e., Suvarna, there

9. C.A.NO.1048/2000, dt.27.7.2005 of Hon’le High Court of Judicature at Madras 55 C.C.No.3/2016 PDJC, Rjvm is every possibility of getting confused and moreover facts and circumstances of this case clearly indicate that from the inception of establishment of accused No.2 company, Managing Director and directors of the said company inducing general public.

b)Arnol Samadhan Nikam Vs. The State of Maharashtra 10 in which is held that:- “….we have noticed that even in serious offence, the investigating officer who had recorded the statements of the witnesses under Section 161 of the Code of Criminal Procedure, has literally made copy-paste of the statements. Even the paragraphs start with the same words and end with the same words. The culture of copy-paste statements is dangerous and may, in certain cases unnecessarily, give advantage to the accused persons. In such circumstances, the seriousness of the genuine case may get vanished….”.

In this case, charge sheet laid for the offences under Sections 306, 352, 504, 506 r/w.Section 34 of Indian Penal Code, whereas, in the present case at hand, there are more than 164 witnesses and out of which, prosecution examined Pws.1 to 29 and as per the version of all the victims, agents, employees and independent witnesses either accused

No.1 or accused Nos.1 and 3 or other accused lured the victims to invest amounts in accused No.2 company and promised to pay interest at 20% and further, they also made believe all the victims that the accused have several other companies, made investments in the Reserve Bank of India and as such, similar statements are given by all the victims before the

10.Criminal Application No.1091/2025, dated.29.4.2025 56 C.C.No.3/2016 PDJC, Rjvm police and also stated before this court. So, it cannot be said that they are copy paste statements and there is no substance in the evidence of prosecution witnesses.

i)So far as default committed by the accused No.2 company, evidence of Pws.1 to 10 clearly reveals that having collected amounts by way of deposits/investments, accused No.2 company committed default in return of deposits either in cash or kind and also committed default in payment of interest on the deposit as agreed upon and as such, Section 5 of the Act, 1999 applies to the present case at hand. So, it can safely be held that prosecution proved its case for the offence under Section 5 of the Act.

j)So far as liability of accused Nos.1, 3 to 8 is concerned, no doubt a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is 57 C.C.No.3/2016 PDJC, Rjvm sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision. In this regard, it is to be noted that as per Section 5 of the Act, 1999 every person responsible for the management of the affairs of the financial establishment including the promoter, manager or member of the financial establishment shall be punished with imprisonment.

k)It is already stated above that initially at the time of establishment of company, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were directors and subsequently, accused Nos.4 and 7 resigned as directors on 15.5.2014 and 30.11.2012 respectively. It is also not in dispute that accused No.4 submitted resignation within one year of establishment of accused No.2 company and accused No.7 submitted his resignation long prior to registration of Ex.P49/first information report. In this regard, learned defence counsel argued that having taken advantage of relationship with accused No.7 and friendship with accused No.4, accused No.1 included their names in the list of directors and immediately after coming know the said fact, they submitted resignation and the same is acknowledged by the Registrar of Companies vide Ex.P30. Added to it, none of the witnesses have specifically stated about the inducement 58 C.C.No.3/2016 PDJC, Rjvm made by accused No.4 and 7 and their involvement in collection of amounts from them. It shows that though their names are initially shown in the list of directors vide Ex.P30, they resigned very long prior to the registration of Ex.P49. PWs.20 and 31 also admitted that accused Nos.1, 3 and 6 are responsible as they continued as directors. Added to it, accused Nos.3 and 6 are wife and daughters of accused No.1. And, absolutely there is no material to show that accused Nos.5 and 8 are directors of accused No.2 company and PW.20 also categorically admitted the same and it is not the case of prosecution that accused No.9 is either director or induced the victims.

l)For the foregoing reasons, this court came to conclusion that the prosecution proved its case to direct punishment under Section 5 of the

Act, 1999 against accused Nos.1, 2, 3 and 6 as the accused No.2 company committed default in return of investments made by the victims and that accused Nos.4 and 7 are not at all participated in the affairs of accused No.2 company. Further, without there being any material, accused Nos.5 and 8 shown as directors of accused No.2 company.

iv) Ancillary point No.(iv): Wether charge under Section 120B, 201, 417 and 420 of Indian Penal Code is sustainable in addition to the charge under Section 5 of the Act?

a)Absolutely charge under Section 120-B, 201 and 420 of Indian

Penal Code is sustainable in addition to the charge under Section 5 of the 59 C.C.No.3/2016 PDJC, Rjvm Act, 1999. Section 5 of the Act, 1999 specifically deals with the situation when there is failure of financial establishment to return or pay interest and Section 420 of the Code deals with broader initial fraudulent inducement to make the victim to part with their money.

b)It is settled law by catena of decisions that for establishing the offence of cheating, prosecution is required to show that the accused had fraudulent or dishonest intention at the time of making promise of representation. From his making failure to keep up promise subsequently, such a culpable intention right at the beginning i.e., at the time when the promise was made cannot be presumed. If there was absence of dishonest and fraudulent intention, the question of punishment under

Section 420 of the Code does not arise. Further, a bare perusal of

Section 415 r/w Section 420 of the Code would clearly lead to the conclusion that fraudulent or dishonest inducement on the part of the accused must be at the inception and not at a subsequent stage. Section 415 of the Code defines ‘cheating’ that whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage 60 C.C.No.3/2016 PDJC, Rjvm or harm to that person in body, mind, reputation or property. So, as per

Section 415 of the Code, cheating can be by deception inducing any person fraudulently or dishonestly to do things or by inducing a person intentionally to do or omit to do things mentioned in Section 415 of the

Act. Deception has in it the element of misleading, of a making a person believe something which is not real. It implies causing a person to believe as true something that is false. According to the Webster’s New international dictionary the word ‘deceive’ indicates ‘inculcating of one so that he takes the false as true, the unreal as existent, the spurious as genuine’. It is immaterial whether the deception has the capability of imposing upon ordinary minds. What is required is that it must impose upon the mind of the person deceived. To hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfill the promise.

c)It is already stated above that charge under Section 417 and 420 of the Code is framed, on the ground of cheating. It is needless to say that

Section 420 of the Code is aggravated form of Section 417. Section 120A of the Code defines the offence of criminal conspiracy and punishment is provided under Section 120B of the Code. Criminal conspiracy under the 61 C.C.No.3/2016 PDJC, Rjvm Code is an agreement between two or more persons to commit an illegal act or to commit a lawful act by illegal means and in other words, it is a criminal offence where two or more individuals agree to plan and execute a criminal act. It is needless to say that all conspirators share common liability for the offence, regardless of their individual roles in the execution of crime. Further, seriousness of the intended offence, the degree of planing involved, the role of each conspirator, and any mitigating circumstances such as the conspirator’s age or mental health have also to be taken into consideration. Section 201 of the Code deals with causing the disappearance of evidence.

d)To avoid repetition, evidence of Pws.1 to 21 who are victims, agents, employees and independent witnesses is not mentioning as it is already discussed in the aforementioned ancillary point and upon over all scrutinization of oral evidence coupled with Exs.P1 to 4, 6 to 25, accused

No.1 directly or through agents or friends and relatives made believe all the victims and agents that they established accused No.2 company with an objective to collect investments/deposits with a promise to pay interest at 20%, they have business affairs, established other companies, made investments in the Reserve Bank of India and accordingly, Pws.1 to 3 joined as agents, some of them also made investments to a tune of

Rs.1,53,000/- and also made personal deposits of Rs.24,80,770/- and 62 C.C.No.3/2016 PDJC, Rjvm further, Pws.6 to 9, 12 to 19 invested/deposited an amount of

Rs.4,31,676/- directly or through agents or through relatives and without paying any amount, accused No.2 company is closed.

e)Further, employees/Pws.5, 8, 10 and 11 independent witness/

Pw.21 also categorically stated about the inducement made by the accused Nos.1, accused No.2 company, accused Nos.3 and 6. The evidence clearly established the fraudulent and dishonest intention of the said accused before investing/depositing amounts by the victims. Facts and circumstances coupled with the evidence of witnesses clearly reveal that accused Nos.1, 3 and 6 who are none other than same family members conspired together, established accused No.2 company with an intention to cheat general public by collecting investments to get wrongful gain. Added to it, with the same conspiracy, accused Nos.1 and 3 also established nominal companies vide Exs.P26 to 42, so as to easily induce the general public.

f)So far as liability of accused Nos.4, 5, 7 and 8 is concerned, it is already stated that there is absolutely no positive material against the accused Nos.5 and 8 and a finding is already given in the first and third ancillary points that accused Nos.5 and 8 are neither directors nor participated in the affairs of accused Nos.2 company. With regard to the role of accused Nos.4 and 7 also, a finding is given that without their 63 C.C.No.3/2016 PDJC, Rjvm knowledge, their names are included in the list of directors and immediately after coming to know the same, they resigned and the same is acknowledged by the Registrar of companies vide Ex.P30. Further, evidence of agents, employees and independent witnesses clearly reveal that suddenly accused No.2 company is closed and they also caused disappearance of the evidence by removing total documents, furniture etc.,

g)So far as material against accused No.9 for the offences under

Sections 420, 120B and 201 of the Code, nowhere it is mentioned that

before collecting deposits also, accused No.9 joined hands with other

accused, induced the victims, shared conspiracy and helped to cause disappearance of evidence. It is the specific case of prosecution that accused No.9 convened a meeting at Sivakodu village so as to settle the financial issues and he is none other than close friend of other accused.

During trial, it came in the evidence of Pws.4 and 16 that accused No.9 convened a meeting at Sivakodu village and Pw.7 stated that accused

No.1 convened a meeting in the presence of accused Nos.8 and 9 and

PW.18 stated accused No.9 informed that accused No.1 and others have assets. Except that no other material is available on record to come to conclusion with regard to the active participation and role played by the 64 C.C.No.3/2016 PDJC, Rjvm accused No.9 either to induce the victims to collect deposits or commit default.

h)It is already stated above that it is incumbent on the part of prosecution to show that the accused had fraudulent intention at the time of making promise or representation and if the accused had no fraudulent or dishonest intention to induce the victims, the question of punishment under Section 420 of Code does not arise. Added to it, except stating that accused No.9 is friend and legal advisor of accused Nos.1, PW.28 also stated nothing about participation and involvement of accused No.9 and further, PW.29 stated nothing against accused No.9.

i)So, record clearly reveals that accused No.9 is no way concerned with the offence under Section 120B, 201, 417 and 420 of the Code and absolutely ingredients of provisions are not attracted against accused

No.9. Assuming for the sake of arguments, accused No.9 either convened meeting or conducted meeting also, even as per the version of the aforementioned witnesses, accused No.9 tried to settle the financial issues and absolutely it does not come under the purview of the punishable offences with which he is charged. So far as charge under

Section 411 of the Code is concerned, it is already stated that the case against accused No.10 is abated, as he died. Even otherwise also, prosecution has not produced any material to attract the ingredient of 65 C.C.No.3/2016 PDJC, Rjvm Section 411 of the Code. In this regard, it is to be noted that there is no possibility to cover any amount from the accused as the prosecution failed to take steps in respect of the properties of accused Nos.1 to 3 and 6. Having obtained ad-interim order in respect of the properties of accused No.2 company, failed to take steps on judicial side to made absolute the attachment order.

j)For the foregoing reasons, this court without any doubt came to conclusion that prosecution has successfully established its case of the offences under Section 120B, 201, 420 of Indian Penal Code, against accused Nos.1, 2, 3 and 6 and failed to establish its case against accused Nos.4, 5, 7 to 9. Hence, this ancillary point is answered accordingly.

v)Ancillary point No.(v): Any laches on the part of the investigating officers i.e., Pws.28 and 29? If so, would they affect total case to disbelieve the version of prosecution as well as oral and documentary evidence?

i)At the cost of repetition, it is to be mentioned here that either at the time of registration of Ex.P49/first information report or during investigation or at the time of filing charge sheet or atleast before framing charge, either PW.28 or PW.29 secured documents showing establishment of accused No.2 company and deposits made by the victims as well as appointment orders issued to PWs.1, 5, 8, 10 and 66 C.C.No.3/2016 PDJC, Rjvm 11/employees and for which, during trial, learned Public Prosecutors took much strain to secure the said documents through the present investigating officer/PW.20 with great difficulty and faced challenges to file the said documents before this court and admit the same in the evidence of prosecution witnesses. Having stated that he had gone through the provisions of the Act, 1999, PW.28 gathered nothing and even as per his admission that except case diary file, he had not handed over any document to the Deputy Superintendent of Police/PW.29, who filed charge sheet, and PW.29 also being senior police officer, did not properly verify the investigation conducted by PW.29 and simply filed charge sheet, without appending any supportive documents. It is nothing but absolute dereliction of duties and negligence on the part of PWs.28 and 29.

ii)To attract the offence under Section 5 of the Act, 1999, the ingredients of the said provision have to be fulfilled and having knowledge about the ingredients, without any documentary proof regarding establishment of accused No.2 company, simply relied upon very informal material, PW.28 showed accused Nos.5 and 8 as directors of accused

No.2 company. PWs. 20 and 28 have categorically admitted in their cross examination that at the time of establishment of accused No.2 company, only accused Nos.1, 3, 4 and 7 were directors, but not accused Nos.5 67 C.C.No.3/2016 PDJC, Rjvm and 8. Before relying upon the statements of some of the witnesses, who have stated the names of accused Nos.5 and 8 that they are directors of accused No.2 company, PW.29 should have been cross checked the same by obtaining relevant documents from the Registrar of Companies.

If he had no knowledge about the same, he should have been obtained legal opinion from the learned Public Prosecutor. Without there being any documentary proof, especially certificate of incorporation and list of directors, Pws.28 and 29 roped accused Nos.5 and 8 to this case for the offence under Section 5 of the Act, 1999.

iii)At the cost of repetition, it is mentioned that in the cross examination, PW.29 had categorically admitted that he has not collected any of documents showing registration of accused No.2 company and basing on the statements of victims, he came to conclusion that accused

No.1 is Managing Director and accused Nos.3 to 8 are directors of accused No.2 company, he has not tried to secure document showing registration of accused No.2 company, none of the victims have handed over documents to show that accused are directors of accused No.2 company. The aforementioned aspects clearly reveal the laches on the part of both the investigating officers/Pws.28 and 29 and while doing investigation, they should have been very cautious enough as criminal jurisprudence gives more stress over avoiding of false implication of an 68 C.C.No.3/2016 PDJC, Rjvm innocent to the extent where hundred guilty may go scot-free and the spirit behind the same is very pious and even otherwise, by one case of false implication of an innocent, rule of law loses one exponent (supporter) and a rebel with defiance towards rule of law is ready and futther, poor investigation with tainted prosecution is perfect recipe for such eventuality, as held in Nandu @ Nandakishore Vs. State of

Madha Pradesh 11 .

iv) Further, though there is no material against accused No.9 and though he is no way concerned with the affairs of the company, PW.29 filed charge sheet for the offence under Section 5 of the Act, 1999 against accused No.9 also, which is nothing but abuse the process of law. Had really both the Investigating Officers had that much of concern towards the crime and victims, they should have been taken every care at each and every stage of investigation. The interest shown by Pws.28 and 29 in registering the case and filing charge sheet is not there in conducting qualitative investigation. They have also not collected original bonds/ receipts/passbooks from the victims. During trial, by showing sufficient cause, the learned Public Prosecutor filed the same by obtaining the same through the present Station House Officer i.e., PW.20. Because of the negligent attitude of Pws.28 and 29, this court also took much strain to unearth the truth regarding competency of officer to launch

11. C.A.NO.812/2008 & 866/2008, Dt.6.7.2018 OF Hon’ble Madya Pradesh High Court at Gwalior.

69 C.C.No.3/2016 PDJC, Rjvm prosecution, receiving documents and giving detailed findings on all aspects. Record reveals that neither PW.28 nor PW.29 were not at all concern about the provisions and Rules of the Act, 1999 and Rules 2000.

Though there are laches on the part of investigating officers in not collecting the relevant documents at the appropriate time not obtaining any written permission for conducting investigation and launching prosecution, in view of the reasons assigned in ancillary point No.2 and in this point, those laches do not affect the case of the prosecution.

vi) Ancillary point No.(vi): Final out come of the case?

a)It is to be noted that in catena of Judgments, Hon’ble Apex Court held that justice is nothing but a manifestation of the truth and the primary duty of a Court is to make a single-minded endeavour to unearth the truth hidden beneath the facts and thus, the Court is a search engine of truth, with procedural and substantive laws as its tools. Further, when procedural law stands in the way of the truth, the Court must find a way to circumvent it and similarly, when substantive law, as it appears, does not facilitate the emergence of the truth, it is the paramount duty of the Court to interpret the law in light of its teleos and such an exercise is warranted in a higher degree, particularly while considering a social welfare legislation. Further, in its journey, the Court must discern the truth, primarily from the material available on record in the form of pleadings, 70 C.C.No.3/2016 PDJC, Rjvm and arguments duly supported by documents and it must be kept in mind that the entire judicial system is meant for the discovery of the truth, it being the soul of a decision and for doing so, a Presiding Officer is expected to play an active role, rather than a passive one.

b)Further, in Maria Margarida Sequeria Fernandes v. Erasmo Jack

De Sequeira. 12 , hon’ble Apex Court has that:

“The truth should be the guiding star in the entire judicial process. Truth alone has to be the foundation of justice. The entire judicial system has been created only to discern and find out the real truth. Judges at all levels have to seriously engage themselves in the journey of discovering the truth. That is their mandate, obligation and bounden duty. Justice system will acquire credibility only when people will be convinced that justice is based on the foundation of the truth’.

c)And, In Munna Pandey v. State of Bihar 13 , Hon’ble Apex Court has held that:

“The role of a judge in dispensation of justice after ascertaining the true facts no doubt is very difficult one. In the pious process of unravelling the truth so as to achieve the ultimate goal of dispensing justice between the parties the judge cannot keep himself unconcerned and oblivious to the various happenings taking place during the progress of trial of any case. No doubt he has to remain very vigilant, cautious, fair and impartial, and not to give even a slightest of impression that he is biased or prejudiced either due to his own personal convictions or views in favour of one or the other party. This, however, would not mean that the Judge will simply shut his own eyes and be a mute spectator, acting like a robot or a recording machine to just deliver what stands feeded by the parties.

12(2012) 5 SCC 370

13. 2023 SCC online sc 1103 71 C.C.No.3/2016 PDJC, Rjvm

d)In this regard, it is to be noted that the incharge Additional Public

Prosecutor Sri K.Radhakrishnam Raju, who conducted trial in all the connected matters took every care of getting all relevant documents to connect all missing links to unearth the truth by this court. So, without any doubt it can be said that only because of his efforts, prosecution could place substantive material to attract the ingredients of the punishable Sections with which accused Nos.1, 2, 3 and 6 are charged.

e)On over all consideration of the material available on record and in view of the findings in ancillary point Nos(i) to (v), this court came to conclusion that prosecution successfully proved the guilt of accused

Nos.1, 2, 3 and 6 beyond reasonable doubt and as such, they are liable for punishment for the offences under Sections 120B, 201 and 420 of the

Code and under Section 5 of the Act, 1999 and they are not liable for punishment under Section 417 of the Code as they are liable for punishment which is aggravated form of cheating. Further, prosecution failed to prove guilt of accused Nos.4, 5, 7 to 9 and as such, they are not liable for punishment for the offences with which they are charged. This point is answered accordingly.

72 C.C.No.3/2016 PDJC, Rjvm Result:

15.(a) In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

(b)Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of

Criminal Procedure.

Partly dictated to the stenographer, transcribed by him and and partly typed to my dictation corrected and pronounced by me in open court on this 16 th day of March, 2026. Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 17:57:24 +0530

PRINCIPAL SESSIONS JUDGE

RAJHAMAHENDRAVARAM

73 C.C.No.3/2016 PDJC, Rjvm

i)Heard accused Nos.1, 3 and 6 under Section 248 (2) of Code of

Criminal Procedure on the quantum of sentence, to be imposed against accused Nos.1, 2, 3 and 6, for the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian

Penal Code and. Accused No.1 submitted that he has three children, presently he is not doing any job, attending private works, he has to perform marriage of his son and he has not committed any offence.

Accused No.3 who is wife of accused No.1 submitted the same.Further,

Accused No.6 who is daughter of accused No.1 submitted that she recently married, she does not know about the offence and she has not committed any offence.

(ii)Having considered the facts and circumstances, gravity of offence, nature of allegations levelled against the accused and submissions of all the accused, this court came to conclusion that this is a fit case to impose sentence of imprisonment against accused Nos.1, 2, 3 and 6 as follows:-

Accused No.1 issentenced to suffer rigorous imprisonment of

Seven (7) years of the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in 74 C.C.No.3/2016 PDJC, Rjvm default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months.

Being Managing Director Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 on behalf of accused No.2 company and in default of payment of fine, accused No.1 who is Managing Director of accused No.1 company shall suffer simple imprisonment of six (6) months.

Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

Accused No.6 issentenced to suffer rigorous imprisonment of

Three years (3) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

75 C.C.No.3/2016 PDJC, Rjvm Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of

Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

(iii)Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 14 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to award compensation out of the fine amout, to all the victims who have deposited amount, though they are examined or not, who sustained loss and injury and accordingly,

14. 2013 AIR SCW 3153 76 C.C.No.3/2016 PDJC, Rjvm Rs.5,000/-(Rupees five thousand only) is awarded towards compensation to each victim irrespective of their deposit amounts to meet ends of justice. Further, at the time of filing petitions by the victims, to withdraw their compensation amounts, in due course of law and after attaining the finality of the case, learned Public Prosecutor must certify the said petition to rule out impersonation.

(iv)The accused Nos.1, 3 and 6 are not entitled to the benefit of the

Probation of Offenders Act, 1958, and this is not a fit case to invoke the provisions of the Probation of Offenders Act.

(v)All the sentence of imprisonment passed against the accused

Nos.1, 3 and 6 shall run concurrently.

(vi)Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.2/2016, 4/2016, 5/2016, 6/2016, and 7/2016 shall run concurrently.

(vii)The accused are informed about the right of appeal to the Hon’ble

High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative.

(viii) The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 13.11.2015 to 3.3.2016, accused No.3 from 11.12.2015 to 3.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure 77 C.C.No.3/2016 PDJC, Rjvm

(viii)Copy of judgment is furnished to the accused, as required under

Section 363 of Code of Criminal Procedure and Rule 72 of A.P. Criminal

Rules of Practice.

(ix) Copy of judgment is marked to the District Magistrate as required under Section 364 of Code of Criminal Procedure

(x)Copy of Judgment is marked to the Director of Prosecutions,

Andhra Pradesh, Vijayawada as required under Rule 72 of Criminal Rules of Practice.

Pronounced by me in open court on this 16th day of March, 2026.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 17:56:57 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

LIST OF PROSECUTION/DEFENCE/COURT WITNESSES

1. PROSECUTION:

RankNameNature of Evidence PW.1Chinta Ratnam RajuComplainant, depositor and Sales Manager of accused No.2 firm. PW.2Pilla Sai BabuAgent and depositor of accused No.2 firm PW.3Vegi Marthanda KrishnaAgent and depositor of accused No.2 firm PW.4Sape SatyanarayanaAgent and depositor of accused No.2 firm PW.5P.Vijaya KumarBranch Manager of accused No.2 firm PW.6Chinta VijayaDepositor in accused No.2 firm PW.7Nagabhathula Anand KumarDepositor in accused No.2 firm PW.8Nakka Srinivasa RaoAccountant in accused No.2 firm 78 C.C.No.3/2016 PDJC, Rjvm

PW.9Kadali Govinda RaoDepositor in accused No.2 firm PW.10Kusuma Rajesh KumarAccountant in accused No.2 firm PW.11Kottoju AnuradhaAccountant in accused No.2 firm PW.12Bathula VisalaDepositor in accused No.2 firm PW.13Mothabathula ManiDepositor in accused No.2 firm PW.14Mallavarapu NagarjunaDepositor in accused No.2 firm PW.15Kadali Laxmi GaneshDepositor in accused No.2 firm PW.16Nelapudi YesubabuDepositor in accused No.2 firm PW.17Make Mohana RaoDepositor in accused No.2 firm

PW.18Nagavarapu BalayogiDepositor in accused No.2 firm PW.19Undurthi Betala SwamyDepositor in accused No.2 firm PW.20P.Veera Babu,Inspector of Police, obtained Inspector of police. certified copies documents from Registrar of Companies relating to accused No.2 firm. PW.21Kolli VishnuLodge boy in Ganathi Plaza, Amalapuram. Eye witness for deposit of money by the public.

PW.22Adabala SrinivasMediator for arrest of accused No.1 and recording of his confessional statement. PW.23K.Naga Srinivasa RaoMediator for arrest of accused No.8 and recording of his confessional statement. PW.24DVV Satya Durga KiranMediator for arrest of accused No.9 and recording of his confessional statement. PW.25K.SatyanarayanaMediator for arrest of accused No.5 and recording of his confessional statement. PW.26KVSJ SrinivasMediator for arrest of accused No.6 and recording of his confessional statement. PW.27T.PrakashMediator for arrest of accused No.4 and recording of his confessional statement. PW.28Y.R.K.SrinivasInspector of police, registration of 79 C.C.No.3/2016 PDJC, Rjvm

Inspector of PoliceFIR, examination of witnesses, visiting of scene of offence, preparation of rough sketch, arrest of accused PW.29L.Ankaiah.Deputy Superintendent of Police, Deputy Superintendent of further investigation and filing of Police. charge sheet.

2. Defence witnesses, if any:

RankNameNature of Evidence NIL

3. Court witnesses if any:

RankNameNature of Evidence NIL

LIST OF PROSECUTION/DEFENCE/COURT EXHIBITS

1. Prosecution:

Sr.NoSr.No.RankDescription 1Ex.P1/PW1Bond 2Ex.P2/PW1Cash receipt 3Ex.P3/PW1Bond 4Ex.P4/PW1Cash receipt 5Ex.P5/PW1Report 6Ex.P6/PW2Passbook 7Ex.P7/PW2Cash receipt 8Ex.P8/PW2PW2 signature on Ex.P5 report 9Ex.P9/PW5Passbook 10Ex.P10/PW5Cash receipt 11Ex.P11/PW5Passbook 12Ex.P12/PW5Cash receipt 13Ex.P13/PW5Cash receipt 14Ex.P14/PW6Pass book 80 C.C.No.3/2016 PDJC, Rjvm 15Ex.P15/PW7Fixed deposit. 16Ex.P16/PW9Fixed deposit. 17Ex.P17/PW12Fixed deposit. 18Ex.P18/PW13Passbook 19Ex.P19/PW14Fixed deposit. 20Ex.P20/PW15Passbook 21Ex.P21/PW16Passbook 22Ex.P22/PW17Passbook 23Ex.P23/PW17Passbook 24Ex.P24/PW18Passbook 25Ex.P25/PW19Passbook 26Ex.P26/PW20CC of Covering letter 27Ex.P27/PW20CC of company info Suvarna India Projects Ltd 28Ex.P28/PW20CC of Certificate of incorporation Suvarna Infra Projects. 29Ex.P29/PW20CC of fresh Certificate of incorporation. 30Ex.P30/PW20CC of List of Directors M/s Suvarna India Projects. 31Ex.P31/PW20CC of company information relating to Suvarna India Iron and Steel Manufacturing private limited. 32Ex.P32/PW20CC of Incorporation Suvarna India Iron and Steel Manufacturing private limited. 33Ex.P33/PW20CC of List of Directors Suvarna India Iron and Steel Manufacturing private limited. 34Ex.P34/PW20CC of company info Prakash India Power Projects 35Ex.P35/PW20CC of incorporation Prakash India Power Projects 36Ex.P36/PW20CC of List of Directors Prakash India Power Projects 37Ex.P36/PW20CC of List of Directors Prakash India Power Projects 38Ex.P38/PW20CC of certificate of incorpora-tion Supreme India TV Channel 39Ex.P39/PW20CC of list of directors Supreme India TV Channel 40Ex.P40/PW20CC of company info Suvarna India Vidyut plant 41Ex.P41/PW20CC of certificate of incorporation Suvarna India Vidyut plant 42Ex.P42/PW20CC of list of directors Suvarna India Vidyut plant 81 C.C.No.3/2016 PDJC, Rjvm 43Ex.P43/PW22Relevant admissible portion of CC of mediators report dt.17.10.2015 at 7.00 AM 44Ex.P44/PW23Relevant admissible portion of CC of mediators report dt.6.11.2015 at 10.00 AM arrest of A8. 45Ex.P45/PW24Relevant admissible portion of CC of mediators report dt.11.12.2015 at 10.00 AM arrest of A9. 46Ex.P46/PW25Relevant admissible portion of CC of mediators report dt.30.10.2015 at 7.00 AM arrest of A5. 47Ex.P47/PW26Relevant admissible portion of CC of mediators report dt.10.12.2015 at 8.00 AM arrest of A6. 48Ex.P48/PW27Relevant admissible portion of CC of mediators report dt.14.11.2015 at 10.00 AM arrest of A4. 49Ex.P49/PW28First Information Report in Cr.No.379/2015 of Amalapuram Town PS 50Ex.P50/PW28Rough Sketch

2. Defence: Sr.NoSr.No.RankDescription

1.Ex.D1/PW8Photocopy of Appointment Order

3. Court witnesses, if any: Sr.NoSr.No.RankDescription NIL

4. Material objects: Sr.NoSr.No.RankDescription NIL Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 17:56:27 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

1.The Registrar (Judl.), High Court of A.P., Nelapadu, Guntur District. 2.The Director of Prosecution, Beside Sarada College, Durgapuram P.O., Vijayawada. 3.The District Collector, Dr.B.R.Ambedkar Konaseema District, Amalapuram. 4.The Superintendent of Police, Dr.B.R.Ambedkar Konaseema District, Amalapuram.

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS

ACT–CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST

GODAVARI AT RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026.

CALENDER CASE NO.03/2016

Complainant::State-Represented by The Inspector of Police, Amalapuram Town Police Station.

Represented by::Sri R.Prasad and Sri K.Radhakrinamraju, Public Prosecutors, East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

83 C.C.No.3/2016 PDJC, Rjvm 7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 20.10.2015

Date of First Information Report:: 20.10.2015

Date of Charge sheet:: 16.05.2016

Date of framing of charges:: 15.02.2019

Date of commencement of :: 16.03.2020 evidence

Date of which judgment is :: 02.03.2026 reserved

Date of Judgment:: 16.03.2026

Plea of accused:: Not guilty

Finding of the Court:: Accused Nos.1, 2, 3 and 6 are convicted 84 C.C.No.3/2016 PDJC, Rjvm

Accused Nos.4, 5, 7 and 9 are acquitted.

Explanation for delay:: Along with this case, five other cases of similar nature of offences are also pending against the accused and there are several witnesses in each of the cases. In order to dispose of all the cases together and to avoid any conflict of judgments, after completion of trial in all the cases and upon hearing the arguments of both sides, all the cases were posted for judgment today.

Date of sentencing order, if any:: 16.03.2026

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure. Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of Criminal Procedure.

Accused No.1 issentenced to suffer rigorous imprisonment of Seven (7) years of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months. Being Managing Director Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 on behalf of accused No.2 company and in default of payment of fine, accused No.1 who is Managing Director of 85 C.C.No.3/2016 PDJC, Rjvm accused No.1 company shall suffer simple imprisonment of six (6) months. Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused No.6 issentenced to suffer rigorous imprisonment of Three years (3) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 15 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to award compensation out of the fine amout, to all the victims who have deposited amount, though they are examined or not, who sustained loss and injury and accordingly, Rs.5,000/-(Rupees five thousand only) is awarded towards compensation to each victim irrespective of their deposit amounts to meet ends of justice. Further, at the time of filing petitions by the victims, to withdraw their compensation amounts, in due course of law and after attaining the finality of the case, learned Public Prosecutor must certify the said petition to rule out impersonation.

15. 2013 AIR SCW 3153 86 C.C.No.3/2016 PDJC, Rjvm

The accused Nos.1, 3 and 6 are not entitled to the benefit of the Probation of Offenders Act, 1958, and this is not a fit case to invoke the provisions of the Probation of Offenders Act. All the sentence of imprisonment passed against the accused Nos.1, 3 and 6 shall run concurrently. Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.2/2016, 4/2016, 5/2016, 6/2016, and 7/2016 shall run concurrently. The accused are informed about the right of appeal to the Hon’ble High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative. The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 13.11.2015 to 3.3.2016, accused No.3 from 11.12.2015 to 3.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 17:55:55 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

APEG010019462016

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS

ACT–CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST

GODAVARI AT RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026.

CALENDER CASE NO.02/2016

Complainant::State-Represented by Inspector of Police, AmalapuramTownPoliceStation, Amalapuram.

Represented by::Sri R.Prasad and K.Radhakrishnamraju, Public Prosecutors,East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

2 C.C.No.2/2016 PDJC, Rjvm 6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 16.10.2015

Date of First Information Report:: 16.10.2015

Date of Charge sheet:: 22.05.2016

Date of framing of charges:: 15.02.2019

Date of commencement of evidence :: 10.12.2019

Date of which judgment is reserved:: 02.03.2026

Date of Judgment:: 16.03.2026

Date of sentencing order, if any:: 16.03.2026 3 C.C.No.2/2016 PDJC, Rjvm

ACCUSED DETAILS

Rank of the accused::Accused No.1

Name of the accused::Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.2

Name of the accused::Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its Md. Busim Venkata Nagavenu @ Venu.

Rank of the accused::Accused No.3

Name of the accused::BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.4

Name of the accused::Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

Rank of the accused::Accused No.5

Name of the accused::BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

Rank of the accused::Accused No.6

Name of the accused::Busim Gowthami, D/o.Venkata Nagavenu @ Venu,23years,SCMala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

Rank of the accused::Accused No.7

Name of the accused::Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

4 C.C.No.2/2016 PDJC, Rjvm

Rank of the accused::Accused No.8

Name of the accused::Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused::Accused No.9

Name of the accused::Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years, C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

Rank of the accused::Accused No.10

Name of the accused::Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Date of arrest::Accused No.1 on 13.11.2015 Accused No.2 is Firm Accused No.3 on 11.12.2015 Accused No.4 on 27.11.2015 Accused No.5 on 13.11.2015 Accused No.6 on 23.12.2015 Accused No.7 on 07.01.2016 Accused No.8 on 29.11.2015 Accused No.9 on 23.12.2015 Accused No.10 died

Date of release on bail::Accused No.1 on 03.03.2016 Accused No.2 is Firm Accused No.3 on 03.03.2016 Accused No.4 on 22.12.2015 Accused No.5 on 16.12.2015 Accused No.6 on 03.03.2016 Accused No.7 on 07.01.2016 Accused No.8 on 22.12.2015 Accused No.9 on 24.11.2016 Accused No.10 died

Offences charged with::Under Sections 120-B, 417, 420, 201, 411 r/w 34 of Indian Penal Code and Under Section 5 of Andhra Pradesh Protection of 5 C.C.No.2/2016 PDJC, Rjvm

Depositors of Financial Establishment Act, 1999.

Whether acquitted or ::Accused Nos.1, 2, 3 and 6 are convicted convicted Accused Nos.4, 5, 7 and 9 are acquitted.

Sentence imposed:

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of Criminal Procedure.

Period of detention::Accused No.1 from 13.11.2015 to 3.3.2016 undergone during trial Accused No.3 from 11.12.2015 to 3.3.2016 for purpose of Section Accused No.6 from 23.12.2015 to 3.3.2016 428 Cr.P.C.

This case has come on 2.3.2026 for final hearing before me in the presence of Sri R.Prasad and Sri K.Radhakrishnam Raju, Public Prosecutors for prosecution and of Sri Ch.Venkateswararao, counsel

for accused Nos.1 to 6, Sri S.S.Prakasarao, counsel for accused No.7

and Sri I.Rambabu, counsel for accused No.9 and the matter having stood over for consideration to this day, this court delivered the following:- 6 C.C.No.2/2016 PDJC, Rjvm

J U D G M E N T

1.The Sub Divisional Police Officer, Amalapuram laid Charge sheet in

Crime No.376/2015 of Amalapuram Town Police Station of the offences under Sections 120-B, 406, 409, 411, 417, 420, 201 r/w.34 and 411 of

Indian Penal Code (herein after referred to as ‘the Code’) r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under

Section 5 of the Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 (herein after referred to as ‘the Act, 1999), against the accused Nos.1 to 10.

2.Case of the prosecution, in brief, is thus:

a)Accused No.1 is resident of Sivakodupalem, accused No.3 is wife of accused No.1, accused No.4 is resident of Nagarampalem, accused

No.5 is younger sister-in-law of accused No.1, accused No.6 is daughter of accused Nos.1 and 3, accused Nos.7 and 8 are distant relatives of accused No.1. Accused Nos.1 to 8 are directors of company and accused No.9 is henchmen and accused No.10 is close associate of accused No.1.

b)Defacto complainants/Pws.1 to 5 have given report alleging that they are residents of Gowthami Nagar, Peruru, Amalapuram Mandal.

Accused No.1 approached them and represented himself as man power 7 C.C.No.2/2016 PDJC, Rjvm agent of Suvarna India Infra Project Limited (real estate), his company has got approval of Reserve Bank of India, has many branches in and around the state of Andhra Pradesh, they are developing the financial status of poor and would give 20% interest to the investors and accordingly, induced them to collect money and deliver money by way of recurring and fixed deposits and thereafter, they came to know that the said company is closed without making any payments. When they questioned Managing Director, he stated that he has several immovable properties in Andhra Pradesh and Telangana and he would return the amounts to all the depositors.

c)Accused No.1 established a registered company under the name and style of Suvarna Real Estate Firm and opened branch office at shop bearing D.No.1-98, Amalapuram. Accused No.1 also established other companies in the names of Suvarna Infra Projects India Limited, Suvarna

Iron & Steel Manufacture Private Limited, Survarna India T.V. Channel

Private Limited, Prakash India Power Project Private Limited, Suvarna

India Vidhyut plant private limited, and accused No.3 to 8 are directors of suvarna real estate firm and subsequently, the name of Suvarna Infra

Project India Limited changed into Suvarna India Project Limited.

Accused Nos.1 to 8 with a deceitful, dishonest and fraudulent intention jointly conspired together, hatched plan to cheat the innocent public by 8 C.C.No.2/2016 PDJC, Rjvm way of investments, induced the victims to deliver lakhs of rupees, committed criminal breach of trust and thereby, cheated the victims to that effect. They also committed the offence under the companies Act.

Accused Nos.1 to 8 committed misappropriation and cheating to a tune of

Rs.99,42,980/- at various places of Andhra Pradesh and Telangana.

d)Basing on the report of defacto complainants/PW.1 to PW.5, a case in crime No.376/2015 of Amalapuram Town Police Station of the offences under Sections 120-B, 406, 409, 417, 420, 411, 201 r/w.34 of the Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies Act, 2013 and under Section 5 of the Act, 1999 was registered against the accused.

e)During the course of investigation, LW.33/PW.21 examined witnesses, recorded their statements and came to conclusion that accused No.1 to 8 made believe several general public that they established several companies, collected deposits, investments, failed to repay the same. Accused Nos.9 and 10 who are henchmen and close associate of accused No.1 also participated in the crime.

f) On 20.4.2013, the company directors conducted general body meeting at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram for changing the name of the company and accused violated the provisions of Companies Act also, conspired with each other and has committed the 9 C.C.No.2/2016 PDJC, Rjvm offences under the Provisions of Indian Penal Code and A.P. Protection of

Depositors of Financial Establishment Act, 1999. Hence, the charge.

3.The case was taken on to file of the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and Section 5 of the Act, 1999.

4.On appearance of accused, copies of the documents were furnished.

5.When the accused Nos.1 to 10 were examined under Section 239

Code of Criminal Procedure, they pleaded not guilty. Learned Public

Prosecutor and the learned counsel for the accused were heard regarding the charge. Upon considering the material on record, charge under

Section 5 of the A.P. Protection of Depositors of Financial Establishment

Act, 1999 and under Sections 120-B, 417, 420, 201, 411 r/w.34 of Indian

Penal Code were framed against the accused, read over and explained to them in Telugu and they pleaded not guilty and claimed to be tried.

6. In support of its case, prosecution in all examined P.Ws.1 to 23 out of 34 witnesses and filed Exs.P1 to P36 documents and Exs.D1 to D8 are marked on behalf of the accused.

7. On the strength of the prosecution evidence, the accused Nos.

1 to 9 were examined under Section 313 Code of Criminal Procedure regarding the incriminating circumstances appearing against them in the 10 C.C.No.2/2016 PDJC, Rjvm evidence. They denied the same and reported no defence evidence.

Case against Accused No.10 is abated as he died on 18.10.2025.

8.Heard both sides and learned Public Prosecutor and defence counsel filed written arguments.

9.Now, the point that would arises for determination is:

“Whether the prosecution proved the guilt of accused beyond

reasonable doubt and if so, whether they are liable for the

offences with which they are charged”?

10. Case of the prosecution is thus:

Accused No.1 is Managing Director and accused Nos.3 to 8 are directors of accused No.2 company. PWs.1 to 5, 8 to 13, 17 and 19 deposited amounts in accused No.2 company. Accused No.1 approached the victims and agents representing himself as a manpower agent of

Suvarna India Infra Project Limited, the company had Reserve Bank of

India approval, it has several branches across the state of Andhra

Pradesh, they would improve the financial status of poor people by paying 20% interest on the investments. Believing the deceitful words of accused

Nos.1 to 8, thousands of victims invested money in accused No.2 company. Subsequently, the victims came to know that the said company is closed without making any payments and when questioned, Accused

No.1, being the Managing Director, assured that he owned several immovable properties in Andhra Pradesh and Telangana and promised to 11 C.C.No.2/2016 PDJC, Rjvm repay the deposit amounts. Accused No.1 also established other companies in the names of Suvarna Real Estate Firm, Suvarna Infra

Projects India Limited, Suvarna Iron & Steel Manufacture Private Limited,

Survarna India T.V. Channel Private Limited, Prakash India Power Project

Private Limited and Suvarna India Vidhyut plant private limited.

Subsequently, the name of Suvarna Infra Project India Limited is changed as Suvarna India Project Limited. Accused Nos.1 to 8, with dishonest, fraudulent and deceitful intention, conspired together, induced innocent public to invest huge amounts. Accused No.9 also participated in the crime and Pws.1 to 5/depositors set the criminal law into motion by giving

Ex.P1 report.

11. Evidence:

During trial, out of 34 witnesses, prosecution examined Pws.1 to

23. The witnesses may be categorized into six types and they are,

(i) Victims, (ii) Agents, (iii) Employees, (iv) Independent, (v) Mediators, and (vi) Official. Documentary evidence is also of two types i.e., one set is relating to victims and second one is official.

12 C.C.No.2/2016 PDJC, Rjvm

Description of witnesses

__________________________________________________

Victims/AgentEmployeesIndependentMediatorsOfficial complainants

Pws.1 to 5, 8Pw.6 Pws.7,Pw.16PW.18 Pw.20 to to 11, 13,12,14,15 23 17, 19

Category of documents

______________________________

VictimsOfficial

Ex.P1/complaint, P3, P5, P7, P9 areExs.P18 and 19/First information signatures on Ex.P1report and rough sketch. Exs.P2, 4, 6, 8, 10 to P17/ bonds,Exs.P20 to 36/correspondence, signatures of complainants, copies of documents obtained from Ministry of Corporate Affairs, Office of the Registrar of Companies, Andhra Pradesh relating to establishment of companies by the accused.

13 C.C.No.2/2016 PDJC, Rjvm

12. Arguments:

a) Prosecution:

i)Accused No.1 established accused No.2 company in the name and style of Suvarna Infra Projects India Limited at Amalapurm, wherein accused Nos.3, 4, 6 and 7 are Directors. Accused No.1 also established four other private limited companies, and all the five companies were functioning from the same premises bearing D.No.3-1-98, Ganapathi

Plaza, Main Road, Amalapuram. Accused No.2 appointed employees and agents to collect deposits from the general public and induced them with a false promise of 20% interest.

ii)Accused Nos.1 to 8 collected an amount of about Rs.14 crores from thousands of investors, issued bonds in the names of Suvarna Real

Estate and receipts in the name of Suvarna India, and thereafter closed the company in the year 2014 without repaying any amount to the victims.

iii)Accused Nos.5, 8, 9 and 10 who are legal advisers and close associates of Accused No.1 also participated in the offence and in pursuance of their criminal conspiracy, accused misappropriated the amounts collected from the public, purchased immovable properties in the

States of Andhra Pradesh and Telangana.

iv)Earlier, Accused No.1 worked as a Marketing Manager in Sahara

India and having gained experience in mobilizing public funds, he 14 C.C.No.2/2016 PDJC, Rjvm conspired with other accused made false representations, dishonestly induced the victims to part with money and thereby, cheated them.

v)Oral evidence adduced by the prosecution coupled with the documentary evidence clearly establishes the conspiracy, inducement, collection of huge amount from thousands of people and misappropriation.

vi)Having worked in other financial institutions like Sahara India and having gained knowledge to escape from the liability intentionally issued receipts and bonds with other company names with a criminal conspiracy to cheat the general public.

vii)Though some of the accused are resigned from the post, they are also liable as they were present at the time of collection of deposit.

viii)Accused failed to adduce any evidence to show animosity between them and the prosecution witnesses.

b) Defence:

Having mentioned the material portion of evidence of all the witnesses, learned counsel for the accused argued through the written arguments as follows:-

i)Prosecution failed to secure certificate of registration of accused

No.2 company, registered a false case, and after lapse of nine years, filed certified copy of certificate of registration.

15 C.C.No.2/2016 PDJC, Rjvm ii)Prosecution failed to furnish all the documents as required under

Section 207 of Code of Criminal Procedure.

iii)Without any competency, Inspector of police/PW.21 registered seven crimes and without verifying the same on correct lines,

PW.22/Deputy Superintendent of Police conducted further investigation, filed charge sheets and both the officers are not competent persons to conduct investigation and file charge sheets.

iv)Investigating Officers prepared 161 Code of Criminal Procedure statements of all the witnesses in a copy and paste method.

v)The bonds and receipts which are relied upon by the prosecution do not contain the signatures of any of the accused.

vi)There are several inconsistencies in the evidence of prosecution witnesses. Most of the witnesses are not identified accused Nos.3 to 9.

vii)There is neither oral nor documentary evidence to show that the accused committed any offence of the offences with which they are charged.

viii)Accused Nos.3 to 9 are also no way concerned with the commission of offence. With the help of stock mediators and some other persons, prosecution prepared documents in Amalapuram Town Police

Station.

16 C.C.No.2/2016 PDJC, Rjvm xi)Prosecution utterly failed to produce documents showing assets of the accused and finally, relied upon following judgments:

1. Yousuf Bin Awad @ Yousauf Vs. State through Inspector of Police 1

2. Arnol Samadhan Nikam Vs. The state of Maharashtra 2

3. J.P.S. Enterprises and another Vs. State 3

13. Point:

a)Admitted facts are that basing on the reports of different persons seven crimes are registered for the same offences. Defacto complainants and victims in all the cases are different. Transactions are also different.

In all seven crimes vide C.C.Nos.1/2016, 3/2016 to 7/2016 and this case,

PW.23 laid charge sheets of the same offences. Cognizance is taken for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and under Section 5 of the Act, 1999 and along with this case, five other cases vide C.C.Nos.3/2016 to 7/2016 are pending and one more case vide C.C.No.1/2016 is ended in acquittal as there was no material evidence in that case to prove the guilt of the accused. Generally, all the cases have to be tried and disposed of together, to avoid multiplicity of verdicts. But, one of the case in C.C.No.1/2016 was disposed in the year 2019 itself. So, all the remaining six cases including this case are taken up together for examination of witnesses, arguments etc. C.C.Nos.3/2016 to 7/2016 are also posted today for judgments.

1. 2015 (3) ALT (CRL.) 171 (AP)

2. Crl. Petition No.1091/2025 of Hon’ble High Court of Judicature at Bombay bench at Aurangabad.

3. C.A.No.1048/2000, dt.27.7.2005 of Hon’ble High Court of Madras.

17 C.C.No.2/2016 PDJC, Rjvm

b)Having considered the material placed by the prosecution, Charge under Section 5 of the the Act, 1999 and under Sections 120-B, 417, 420, 201, 411 r/w.34 of the code is framed. Now, it is to be seen that whether prosecution proved all the ingredients of the offences with which accused Nos.1 to 9 are charged. Since charge is framed under several sections, it is apposite to consider the following ancillary points, for better appreciation, to avoid repetition and clear findings.

14.Ancillary points:

i). Establishment of accused No.2 company and its directors?

ii). Whether miscarriage of justice is done to the accused for

conducting investigation by PWs.21 and 22 and launch

prosecution by PW.22?

iii). Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

iv). Wether charge under Section 120B, 201, 417 and 420 of Indian

Penal Code is sustainable in addition to the charge under

Section 5 of the Act?

v). Any laches on the part of the investigating officers i.e., Pws.21

and 22? If so, would they affect total case to disbelieve the

version of prosecution as well as oral and documentary

evidence?

vi). Final out come of the case?

i) Ancillary point No.(i): Establishment of accused No.2 company and its directors.

a)To prove the origin of crime i.e., establishment of accused No.2 company and other companies, prosecution relied upon the evidence of 18 C.C.No.2/2016 PDJC, Rjvm Pws.18, 21 to 23. Prosecution case reveals that accused Nos.1, 3 to 8 established accused No.2 company. Accused No.1 is Managing Director and others are directors of the said company and further, accused Nos.1 and 3 are established four other companies and under the guise of establishment of several companies, they lured general public, collected investments, misappropriated that amounts, cheated the general public and failed to repay any amounts to the victims. Before appreciation of ocular evidence, it is appropriate to mention the details of companies, its details and directors and they are as follows:-

Sl. Exhibit Name of Issued by Date of Directors Whether

No. numbe the incorporatio any

r document n & other director

details. resigned

1.Ex.P21Company Ministry of 09.11.20111.Busim -- information Corporate Venkata CIN.No.U454 relating to AffairsNaga Venu 00AP2011PL Suvarna (A1) C077328 India 2.Rajya Projects Registered lakshmi Limited Address: Busim (A3) D.No.3-1-98,

3. Busim Ganapati Gowthami Plaza, Main (A6) Road, Amalapuram- 533201.

2Ex.P22Certificate Registrar of09.11.2011-- of Companies, CIN.No.U454 IncorporatioAndhra 19 C.C.No.2/2016 PDJC, Rjvm n relating toPradesh00AP2011PL Survarna C077328 India Infra Registered Projects Address: India Limited. D.No.3-1-98, Ganapati Plaza, Main Road, Amalapuram- 533201.

3Ex.P23Fresh Registrar of23.04.2013-- certificate ofCompanies, incorporatioAndhra n, Pradesh CIN.No.U454 consequent 00AP2011PL upon C077328 change of name Registered relating to Address: Survarna D.No.3-1-98, Infra Ganapati Projects Plaza, Main India Road, Limited Amalapuram- 533201.

4Ex.P24List of Registrar --1.Busim directors of Companies,Venkata M/s.SurvarnAndhra Naga Venu a India Pradesh(A1), ProjectsManaging Director,

2. Rajya Lakshmi Busim (A3), Director 20 C.C.No.2/2016 PDJC, Rjvm 3.PhanendrYes, On a Desai 15.5.2014 Kaneti (A4), Director Yes, On 4.Vinod 30.11.12 Battu (A7), Director 5.Busim Gowthami (A6), Director

5.Ex.P25Company Ministry of 31.10.20121.Busim -- Information Corporate Venkata CIN.No.U271 relating to affairsNaga Venu 00AP2012PT Survarna (A1) C083909 India Iron Registered 2.Rajya and Steel Address:lakshmi Manufacturi Busim (A3) ng Private D.No.3-1-98, Limited Ganapati Plaza, Main Road, Amalapuram- 533201.

6Ex.P26Certificate Registrar of31.10.2012-- of Companies, CIN.No.U271 incorporatioAndhra 00AP2012PT n relating toPradesh C083909 Survarna India Iron Registered and Steel Address: Manufacturi ng Private D.No.3-1-98, Limited Ganapati Plaza, Main Road, Amalapuram- 21 C.C.No.2/2016 PDJC, Rjvm 533201.

7Ex.P27List of Registrar of1.Busim -- directors of Companies,Venkata Survarna Andhra Naga Venu India Iron Pradesh(A1), and Steel Director. Manufacturi 2.Rajyalaks ng Private hmi Busim Limited (A2), Director.

8.Ex.P28Company Ministry of 22.1.20131.Busim -- information Corporate Venkata CIN.No.U403 relating to affairsNaga Venu 00AP2013PT Prakash (A1), C085447 India PowerDirector. Registered Projects Address:2.Rajyalaks Private hmi Busim LimitedD.No.1-98, (A2), Near Director. Hanuman Theater, Edarapalli Guntur, Amalapuram- 533201.

9.Ex.P29Certificate Registrar of22.1.2013-- of Companies, CIN.No.U403 IncorporatioAndhra 00AP2013PT n relating toPradesh C085447 Prakash India Power Registered Projects Address:D.N Private o.1-98, Near Limited Hanuman Theater, Edarapalli, Amalapuram- 22 C.C.No.2/2016 PDJC, Rjvm 533201.

10. Ex.P30List of Registrar of1.Busim -- Directors Companies,Venkata relating to Andhra Naga Venu Prakash Pradesh(A1) India Power 2.Rajyalaks Projects hmi Busim Private (A3), Limited Director 11Ex.P31Company Ministry of 15.11.20121.Busim -- information Corporate Venkata CIN.No.U923 relating to affairsNaga Venu 00AP2012PT Supreme (A1) C084161 India TV

2. Rajya channel Registered Lakshmi Private Address: Busim (A3) Limited D.No.3-1-98, Ganapathi Plaza, Main Road,Amalap uram- 533201.

12Ex.P32Certificate Registrar of15.11.2012-- of Companies, CIN.No.U923 IncorporatioAndhra 00AP2012PT n relating toPradesh C084161 Supreme India TV Registered channel Address: Private LimitedD.No.3-1-98, Ganapathi Plaza, Main 23 C.C.No.2/2016 PDJC, Rjvm

Road,Amalap uram- 533201.

13Ex.P33List of Registrar of1.Busim -- Directors Companies,Venkata relating Andhra Naga Venu Supreme Pradesh(A1) India TV 2.Rajya channel Lakshmi Private Busim (A3) Limited 14Ex.P34Company Ministry of 28.1.20131.Busim -- information Corporate Venkata CIN.No.U401 relating to affairsNaga Venu 02AP2013PT Survarna (A1) C085476 India Vidyut Registered 2. Rajya Plant Address:Lakshmi Private Busim (A3) LimitedD.No.1-98, NEAR Hanuman Theater, Edrapalli, Amalapuram 533201.

15Ex.P35Certificate Registrar of28.1.2013-- of Companies, CIN.No.U401 IncorporatioAndhra 02AP2013PT n relating toPradesh C085476 Survarna India Vidyut Registered Plant Address: Private LimitedD.No.1-98, NEAR Hanuman 24 C.C.No.2/2016 PDJC, Rjvm

Theater, Edrapalli, Amalapuram 533201.

16Ex.P36List of Registrar of1.Busim -- Directors Companies,Venkata relating Andhra Naga Venu Survarna Pradesh(A1) India Vidyut 2.Rajya Plant Lakshmi Private Busim (A3) Limited

b)Admittedly, during the course of investigation, neither PW.21 nor

PW.22 collected single piece of document regarding establishment of accused No.2 company and laches on the part of the investigating officers would be discussed at a little later in ancillary point No.V. And, to show the establishment of accused No.2 company and other companies, during trial, prosecution took steps and after securing the documents vide

Exs.P21 to 36, filed the same through PW.22. In this regard, it is to be noted that it is not disputed by the accused about establishment of accused No.2 company and no where it is suggested that it was not established. Exs.P21, P25, P28, P31 and P34 are the proceedings issued by the Ministry of Corporate affairs and as per Ex.P21, initially accused

No.2 company is established under the name and style of Survana India

Projects Limited/accused No.2 on 9.11.2011 and Ex.P22 is its certificate 25 C.C.No.2/2016 PDJC, Rjvm of incorporation with Corporation Identity Number (CIN)-U45400AP 2011PLC077328 and its paid up capital is Rs.5,00,000/-. As per Ex.P23, name of accused No.2 company is slightly changed as Suvarna India

Infra Projects Limited with same CIN number and accordingly, Ministry of

Corporate Affairs, Registrar of Companies, Andhra Pradesh issued proceedings vide Ex.P23 dated 23.4.2013 and when accused No.2 company was established, the directors were accused Nos.3, 4, 6 and 7 besides Managing Director i.e., Accused No.1 vide Ex.P24, whereas, accused No.7 resigned as director on 30.11.2012 and accused No.4 resigned as director on 15.5.2014. In this regard, learned counsel for the accused submitted that having taken advantage of relationship of accused No.7 with accused No.1, name of accused No.7 is shown in the list of directors and immediately after coming to know about the same, he resigned as director on 30.11.2012 and the same is recorded vide

Ex.P24. The same argument is advanced on behalf of accused No.4 also.

Ex.P24 reveals that accused No.4 also resigned as director on 15.5.02014 i.e., almost prior to one year of giving complaint in this case and in the connected matters. So, record clearly reveals that though the names of accused Nos.4 and 7 are shown in the list of directors, they resigned even very long prior to giving reports and registration of first information report vide Ex.P18. As per Ex.P24, accused Nos.1, 3 and 6 26 C.C.No.2/2016 PDJC, Rjvm continued as directors, out of which, accused No.1 is Managing Director of accused No.2 company. Accused Nos.3 and 6 are wife and daughters of accused No.1. Neither in the certificate of incorporation nor in the list of directors, names and other details of accused Nos.5 and 8 are find place and PW.22 also admitted the same. PW.22 who secured Exs.P20 to P36 also categorically stated that initially accused No.1 was Managing

Director and accused Nos.3, 4, 6 and 7 were the directors of accused

No.2 company and accused No.7 and 4 resigned as directors on 30.11.2012 and 15.5.2014 respectively, and all the five companies registered office is at H.No.3-1-98, Ganapathi Plaza, Main Road,

Amalapuram. So, it can safely be concluded that accused No.5 and 8 are no way concerned with the company. It is not the case of prosecution that accused No.9 either director or induced the general public and absolutely no evidence to that affect also. With regard to the liability of the resigned directors, discussion would be made in the forth coming ancillary point

No.iii.

c)In addition to the accused No.2 company, accused Nos.1 and 3 also established four other nominal companies with nominal paid up capital under the names and styles of Survarna India Iron and Steel

Manufacturing Private Limited, Prakash India Power Projects Private

Limited, Supreme India TV Channel Private Limited and Survarna India 27 C.C.No.2/2016 PDJC, Rjvm Vidyut Plant private Limited on 31.10.2012, 22.1.2013, 15.11.2012 and 28.1.2013 respectively. To that effect, certificates of incorporation also obtained vide Exs.P26, 29, 32 and 35 and further, Exs.P27, 30, 33 and 36 reveal that the accused Nos.1 and 3 are directors of the said company.

d)For the foregoing reasons, this court came to conclusion that on 9.11.2011, initially accused No.2 company was established in the name and style of Suvarna India Projects Limited vide Ex.P21 and subsequently, the name of the said company is changed as Suvarna India

Infra Projects India Limited vide Ex.P23 and originally, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were the directors of accused No.2 company and subsequently, accused Nos.4 and 7 resigned as directors and the same is accepted by the Registrar of Companies vide Ex.P24 and further, accused Nos.5, 8 and 9 are no way concerned with the accused No.2 company. Hence, this ancillary point is answered accordingly.

ii) Ancillary point No.(ii): Whether miscarriage of justice is done to the accused for conducting investigation by PWs.21 and 22 and launch prosecution by PW.22?

a)Admittedly, Ex.P1 report is registered by PW.21/Inspector of Police for the offences under Sections 120-B, 411, 417, 420, 201 r/w.34 and 411 of the Code r/w. Sections 168 (2), 339 (3), 447, 448 and 94 of Companies

Act, 2013 and Section 5 of the Act, 1999 vide Ex.P18. The same 28 C.C.No.2/2016 PDJC, Rjvm investigating officer i.e., PW.21 conducted investigation including examination of witnesses and collection of documents. PW.22/Deputy

Superintendent of Police conducted further investigation and laid charge sheet. Learned defence counsel argued that PWs.21 and 22 violated the mandatory requirement under Rule 5 (2) of Andhra Pradesh Depositors of

Financial Establishment Rules and they are not competent persons to conduct investigation and launch prosecution and further, all the documents relating to the case are not furnished to the accused as required under Section 207 of Code of Criminal Procedure and as such, investigation done by PWs.21 and 22 is illegal and to substantiate their version relied upon judgment of Hon’ble High Court of Andhra Pradesh in

Yousuf Bin Award @ Yousauf (supra). For better understanding section 4 of the Act, 1999 and Rule 5 are set out below:-

Section 4: Competent Authority: (1) The Government may, by notification, appoint an authority hereinafter called "the competent authority" to exercise control over the properties attached by the Government under section 3. (2) The Competent authority shall have such other powers and discharge such other functions as may be prescribed, in addition to the powers and functions specified under this Act. (3) Upon receipt of the orders of the Government under section 3, the Competent authority shall apply within fifteen days to the Special Court constituted under this Act for making the ad-interim order of attachment absolute. (4) An application under sub-section (3) shall be accompanied by one or more affidavits, stating the grounds on which the belief that the financial establishment has committed any default or is likely to defraud, is founded, the amount of money or value of other property believed to have been procured by means of the deposits, and the 29 C.C.No.2/2016 PDJC, Rjvm details, if any, of persons in whose names such property is believed to have been invested or purchased out of the deposits or any other property attached under section 3

Rule 5 (2):-Where the competent authority satisfied or has reason to believe that the financial establishment has committed a default punishable under Section 5 of the Act, the Competent Authority shall be competent to launch prosecution before the Special Court against the Financial Establishment and any person responsible for the management of the affairs of the Financial Establishment including the promoter, manager or member of the Financial Establishment for levy of penalty under Section 5 of the Act.

b)Having considered G.O.Ms.No.346, Home (Gen.B), dated 14.11.2000, sub Rule 2 is added to Rule 5 and as per this rule, competent authority has to launch prosecution before the Special Court, against the financial establishment or the persons responsible for the management of its affairs. In this regard, Additional Director General of police, C.I.D. is appointed as competent authority vide G.O.Ms.No.193,

Home (Gen.B), dated 23.8.2001 issued under Section 4 of the Act, 1999.

In the judgment relied upon by the learned defence counsel in Yousuf

Bin Award @ Yousauf (supra), having considered both the government orders dated 14.11.2000 and 23.8.2001 and also having considered the facts and circumstances of that case, Hon’ble High Court of Andhra

Pradesh set aside the conviction and sentence passed by the trial court for the offence under Section 5 of the Act, 1999. Facts of the said case are, originally first information report was not registered of the offence under Section 5 of the Act, 1999 and charge sheet was also not laid for 30 C.C.No.2/2016 PDJC, Rjvm the said offence and subsequently, that too, after framing charge, the

Inspector of Police, WCO Team-III, Hyderabad had filed memo requesting the court to add Section 5 of the Act, 1999.

c)As it is stated above, in the present case at hand, first information report was registered for the offence under Section 5 of the Act, 1999 along with the provisions under Indian Penal Code and other offences and charge sheet also laid for the same offences. It is not in dispute that neither PW.21 nor PW.22 nor the police officer in the cadre of Inspector of

Police or Deputy Superintendent of Police are appointed as competent authority to conduct investigation or launch prosecution. In the aforementioned case relied upon by the accused, prosecution suddenly introduced Section 5 of the Act, 1999 and in that case, it seems, accused not admitted about establishment of company and as such, absolutely, it was surprise to them and since miscarriage of justice is caused, Hon’ble

High Court set aside the conviction. But, in this case, it is the admitted case of accused that accused No.2 company is established by accused

No.1 and others. Charge sheet also laid for the offence under Section 201 of Indian Penal Code on the allegation that the accused caused disappearance of the documentary evidence including the certificate of incorporation, list of directors, account books etc. from the place where the accused No.2 company is established vide Ex.P22. So, the argument 31 C.C.No.2/2016 PDJC, Rjvm of the learned counsel for the accused that for non supply of relevant documents regarding establishment of company vitiates the trial cannot be taken into consideration. Added to it, during trial when Exs.P21 to 36 filed and admitted in the evidence, accused did not dispute the said documents and moreover, categorically admitted the same in the evidence of investigating officers and other witnesses.

d)To consider the core point that whether total case vitiates for conducting investigation and launching prosecution by a person who is not competent, it is appropriate to refer to that before bifurcation of both the states of Andhra Pradesh and Telangana, the aforementioned

Government Orders dated 14.11.2000 and 23.8.2001 are issued in respect of competent authority and appointing Additional Director General of Police, C.I.D. as competent authority. After bifurcation, Government of

Telangana issued G.O.Ms.No.99 dated 5.9.2018 amending Rule 5(2) of the Telangana Protection of Depositors of Financial Establishment Act, 1999 to the effect empowering any police officer not below the rank of

Inspector of Police to launch prosecution under the Act 17/1999 and the

Rules framed thereunder with retrospective affect. When the said

G.O.Ms.No.99 is challenged, Hon’ble Division Bench of Hon’ble 32 C.C.No.2/2016 PDJC, Rjvm Telangana High Court while deciding the writ petition in Mr.Syed Yousuf

Abbas Vs. State of Telangana 4 held that:- “The intention of the legislature by amending Rules with retrospective effect no way intends to regularize any flaw in respect of the trial. The Special Courts keeping in view the statutory provisions under the Act No.17 of 1999 and the Rules framed thereunder are proceeding ahead with the trial on the basis of the material brought before the Special Courts by the competent authority or by any police officer and merely because investigation has been carried by any police officer not below the rank of Inspector of Police prior to 05.09.2018, it does not mean that all the misdeeds of the petitioners can be wiped out as prayed by the petitioners. The petitioners' contention is that the amendment and the Rules has been done only with a view to object to nullify the Judgment delivered by this Court in Criminal Appeal No.1576 of 2005 and batch decided on 01.04.2015. In the considered opinion of this Court, the plea canvassed by the petitioners is ill-founded.

It does not nullify any Judgment. The act of the petitioners was certainly an offence earlier also and it is an offence under the amendment also and it is nobody's case that the act committed by the petitioners has been made an offence by amending the Act retrospectively”.

e)The said Government order is challenged before the common High

Court by duly issuing notice to the State Government. Admittedly, either after bifurcation of both the states of Andhra Pradesh and Telangana or after establishment of our Hon’ble High Court of Andhra Pradesh, State

Government of Andhra Pradesh has not issued similar Government order authorizing the Inspector of Police to launch prosecution for the reasons best known to it. In this regard, it is to be noted that in R.A.H. Siguran vs.

Shankare Gowda @ Shankara & Anr 5in which,Hon’ble Apex Court

4. Writ petition No.40775 & 40962/2018 5. (2017) 16 SCC 126 33 C.C.No.2/2016 PDJC, Rjvm categorically held that unless accused proves that miscarriage of justice is done to him, the trial should not be vitiated. Though the said case relates to the Immoral Traffic Act, by referring several precedents from 1955, Hon’ble Apex Court held the said principle.

f)In H.N. Rishbud and Anr. Vs. State of Delhi 6 the question considered by the Hon’ble Apex Court was whether after the court takes cognizance, trial can be held to be initiated merely on the ground that investigation was invalid and answering in the negative, it was held that if the plea of invalidity of investigation is raised at sufficiently early stage, the court, instead of taking cognizance direct reinvestigation by competent investigating officer. But, after cognizance is taken the trial cannot be quashed for invalidity of investigation.

The observations in the said judgment are as follows:- “9. The question then requires to be considered whether and to what extent the trial which follows such investigation is vitiated. Now, trial follows cognizance and cognizance is preceded by investigation. This is undoubtedly the basic scheme of the Code in respect of cognizable cases. But it does not necessarily follow that an invalid investigation nullifies the cognizance or trial based thereon. Here we are not concerned with the effect of the breach of a mandatory provision regulating the competence or procedure of the Court as regards cognizance or trial. It is only with reference to such a breach that the question as to whether it constitutes an illegality vitiating the proceedings or a mere irregularity arises. A defect or illegality in investigation, however serious, has no direct bearing on the competence or the procedure relating to cognizance or trial. No doubt a police report which results from an investigation is provided in Section 190 of the Code of 6 AIR 1955 SC 196 34 C.C.No.2/2016 PDJC, Rjvm Criminal Procedure as the material on which cognizance is taken. But it cannot be maintained that a valid and legal police report is the foundation of the jurisdiction of the Court to take cognizance.

While no doubt, in one sense, clauses (a), (b) and (c) of Section 190(1) are conditions requisite for taking of cognizance, it is not possible to say that cognizance on an invalid police report is prohibited and is therefore a nullity. Such an invalid report may still fall either under clause (a) or (b) of Section 190(1), (whether it is the one or the other we need not pause to consider) and in any case cognizance so taken is only in the nature of error in a proceeding antecedent to the trial. To such a situation Section 537 of the Code of Criminal Procedure which is in the following terms is attracted:

“Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered on appeal or revision on account of any error, omission or irregularity in the complaint, summons, warrant, charge, proclamation, order, judgment or other proceedings before or during trial or in any enquiry or other proceedings under this Code, unless such error, omission or irregularity, has in fact occasioned a failure of justice.” “If, therefore, cognizance is in fact taken, on a police report vitiated by the breach of a mandatory provision relating to investigation, there can be no doubt that the result of the trial which follows it cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice. That an illegality committed in the course of investigation does not affect the competence and the jurisdiction of the Court for trial is well settled as appears from the cases in Prabhu v. Emperor (AIR 1944 PC 73) and Lumbhardar Zutshi v. King (AIR 1950 PC 26). These no doubt relate to the illegality of arrest in the course of investigation while we are concerned in the present cases with the illegality with reference to the machinery for the collection of the evidence. This distinction may have a bearing on the question of prejudice or miscarriage of justice, but both the cases clearly show that invalidity of the investigation has no relation to the competence of the Court. We are, therefore, clearly, also, of the opinion that where the cognizance of the case has in fact been taken and the case has proceeded to termination, the invalidity of the precedent investigation 35 C.C.No.2/2016 PDJC, Rjvm does not vitiate the result, unless miscarriage of justice has been caused thereby”.

g)Further, in State of Haryana v. Bhajan Lal 7, Hon’ble Apex Court held as under:

“119. It has been ruled by this Court in several decisions that Section 5-A of the Act is mandatory and not directory and the investigation conducted in violation thereof bears the stamp of illegality but that illegality committed in the course of an investigation does not affect the competence and the jurisdiction of the court for trial and where the cognizance of the case has in fact been taken and the case is proceeded to termination, the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. See (1) H.N. Rishbud v. State of Delhi [AIR 1955 SC 196], (2) Major E.G. Barsay v. State of Bombay [AIR 1961 SC 1762], (3) Munnalal v. State of U.P [AIR 1964 SC 28], (4) Sailendranath Bose v. State of Bihar [AIR 1968 SC 1292], (5) Muni Lal v. Delhi Admn. [(1971) 2 SCC 48] and (6) Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. However, in Rishbud case [AIR 1955 SC 196] and Muni Lal case [(1971) 2 SCC 48], it has been ruled that if any breach of the said mandatory proviso relating to investigation is brought to the notice of the court at an early stage of the trial, the court will have to consider the nature and extent of the violation and pass appropriate orders as may be called for to rectify the illegality and cure the defects in the investigation.

h)And, in A.C. Sharma v. Delhi Admn 8, provision of Section 5-A again considered and held as under:

“15. As the foregoing discussion shows the investigation in the present case by the Deputy Superintendent of Police cannot be considered to be in any way unauthorised or contrary to law. In this connection it may not be out of place also to point out that the function of investigation is merely to collect evidence and any irregularity or even illegality in the course of collection of evidence can scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated. In H.N. Rishbud v. State of Delhi [AIR 1955 SC 7. [1992 Supp (1) SCC 335]

8. (1973) 1 SCC 726 36 C.C.No.2/2016 PDJC, Rjvm 196], it was held that an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. When any breach of the mandatory provisions relating to investigation is brought to the notice of the court at an early stage of the trial the Court will have to consider the nature and extent of the violation and pass appropriate orders for such reinvestigation as may be called for, wholly or partly, and by such officer as it considers appropriate with reference to the requirements of Section 5-A of the Prevention of Corruption Act, 1947. This decision was followed in Munnalal v. State of U.P. [AIR 1964 SC 28] where the decision in State of M.P. v. Mubarak Ali [AIR 1959 SC 707], was distinguished. The same view was taken in State of A.P. v. N. Venugopal [AIR 1964 SC 33] and more recently in Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786]. The decisions of the Calcutta, Punjab and Saurashtra High Courts relied upon by Mr Anthony deal with different points: in any event to the extent they contain any observations against the view expressed by this Court in the decisions just cited those observations cannot be considered good law.

i)Added to it, this case comes under the purview of Section 460 (c) of

Code of Criminal Procedure, but not under Section 461 of Code of

Criminal Procedure. Further, except posing questions in respect of Rule 5(2) to PWs.21 and 22 that they have to obtain permission from the

Superintendent of Police to register first information report and investigate the case and launch prosecution by following G.O.Ms.No.346, that too, by recalling them. Accused did not raise any objection after registration of first information report, during investigation, before or after taking cognizance, before framing charge or during trial at the time of initial examination of PWs.21 and 22. Added to it, for the same offences, State 37 C.C.No.2/2016 PDJC, Rjvm Government of Telangana which is bifurcated from the state of Andhra

Pradesh had issued G.O.Ms.No.99 authorizing the Inspector of Police to launch prosecution with retrospective affect. So, even other wise it can be inferred that the same cadre police official have competent to launch prosecution and moreover, in this case, Deputy Superintendent of Police filed charge sheet.

j)To sum up, having given thoughtful consideration to the aforementioned propositions, an illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial and where cognizance of the case has in fact been taken and the case has proceeded to termination of the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby and further, function of investigation is merely to collect evidence and any irregularity or even illegality in the course of collection of evidence can be scarcely be considered by itself to affect the legality of the trial by an otherwise competent court of the offence so investigated.

[k)For the foregoing reasons, this court came to conclusion absolutely miscarriage of justice is not done to the accused for conducting investigation by PWs.21 and 22 and launching prosecution by PW.22 who is none other than Deputy Superintendent of Police.

38 C.C.No.2/2016 PDJC, Rjvm iii) Ancillary point No.(iii): Is the offence under Section 5 of the Act, 1999 is proved? If so, against whom?

a)It is already stated above that there is no dispute about establishment of accused No.2 company and it is also not in dispute that accused No.1 was Managing Director and accused Nos.3, 4, 6 and 7 were directors at the time of establishment of accused No.2 company.

Further, Exs.P21, 22 and 24 reveal the same and further, name of accused No.2 is changed as Suverna India Projects Limited vide Ex.P23.

Before taking up appreciation in respect of this point, it is pertinent to refer

to the relevant provisions under the Act, 1999, which are extracted hereunder for the sake of reference:

Section 2(b) and (c) of the Act reads as follows: “2-Definition:- In this Act, unless the context otherwise remains:

(a) xxxxxx

(b)‘Deposit’ means the deposit of a sum of money either in lumpsum or instalments made with a financial establishment for a fixed period, for interest or return in any kind;

(c)"Financial Establishment" means any person or group of individuals accepting deposit under any scheme or arrangement or in any other manner but does not include a corporation or a co-operative society owned or controlled by any State Government or the Central Government or a banking company as defined under clause (c) of section 5 of the Banking Regulation Act, 1949 (Central Act 10 of 1949).

Section 5 of the Act reads as follows:-

Penalty for default - Where any financial establishment defaults in the return of the deposit either in cash or kind or defaults in the payment of interest on the deposit as agreed upon, every person responsible for the management of the affairs of the financial establishment including the promoter, Manager or Member of the financial establishment shall be punished with imprisonment for a term which may extend to ten years and with fine which may extend to rupees one lakh and such financial establishment shall also be liable for fine which may extend to rupees five lakh.

39 C.C.No.2/2016 PDJC, Rjvm

b)Now, coming to the facts and evidence of the case, it is already stated above that there are six categories of witnesses and two categories of documents. Out of which, first category of witnesses are victims, they are Pws.1 to 5, 8 to 11, 13, 17 and 19 and second category of witness is agent.

c) Evidence of Victims: (Pws.1 to 5, 8 to 11, 13, 17 and 19)

i)All the witnesses testified consistently that upon believing the words of accused No.1 about establishment of accused No.2 company at

Gapanapthi Plaza, Cinema road, Amalapuram and if they deposit amounts in their company, accused No.2 company would pay interest at 20%, they all deposited amounts in their names and in the names of their family members vide Exs.P2, 4, 6, 8, 10 to 19, and in the cross examination of all the witnesses, all the suggestions posed by the learned defence counsel are denied, however, learned defence counsel elicited formal inconsistencies and omissions in respect of the statements which are not specifically given before the investigating officer with regard to the presence of either of the accused at the time of making payments, names of agents and further, all the witnesses are also admitted that that none of the bonds/receipts contain the name of accused No.2 company and they contain the name of Suvarna Real Estate company and the details of the witnesses, deposit amounts, documents etc., are stated as follows:

40 C.C.No.2/2016 PDJC, Rjvm

WitnessDepositRelevantThrough whom amount is deposited or (rupees)documentany other reference. PW.14,70,000/-Ex.P2 Accused No.1 PW.250,000/-Ex.P4 Accused No.1 PW.33,00,000/-Ex.P6 -- PW.41,00,000/-Ex.P8-- PW.516,000/-Ex.P10-- PW.86,000/-Ex.P11PW.5 and accused No.1 PW.98,000/---Accused No.1 PW.1012,500/-Ex.P12Accused No.1 PW.111,50,000/-Ex.P13Accused No.1 and his staff door to door campaign. PW.135,000/-Ex.P15Accused No.1

PW.176,000/-Ex.P16PW.1 and accused No.1 PW.197,000/-Ex.P17Accused No.1 ii)So, as per the version of the victims, they deposited an amount of

Rs.15,80,500/- by believing the words of accused No.1 and others, either through agents or co-victims or directly. Some of the witnesses stated that they know accused Nos.1 and 2, some stated that they know other accused also. Further, some of the victims stated that accused No.1 went to their houses along with agents and some of the victims testified that they approached accused No.2 company situated at Ganapathi Plaza along with agents and deposited amounts and except eliciting the material that the name of Suvarna real estate company is mentioned on the bonds and receipts, nothing more useful is elicited to disbelieve the version of victims. Learned counsel for the accused also elicited some 41 C.C.No.2/2016 PDJC, Rjvm formal inconsistencies in the evidence of PWs.1 to 5, 8 to 11, 13, 17 and 19 which do not thrown away the version of the prosecution. Exs.P2, 4, 6 and 8/bonds and receipts are marked subject to proof and relevancy and they are originals and absolutely they are relevant documents. Further, ocular evidence of PWs.1 to 5 coupled with the evidence of victims i.e.,

PWs.8 to 11, 13, 17 and 19 and Exs.P10 to 17 clearly reveals that having believed the words of accused No.1, they deposited amount and accused

No.2 company failed to repay the same.

d) Evidence of Agent: (Pw.6)

i)PW.6 stated that accused No.1 who is none other than Managing

Director of Suvarna India Infra Projects Limited/accused No.2 company which is situated at Ganapathi Plaza, Cinema Road, Amalapuram informed to them that they established accused No.2 company with an intention to collect recurring deposits from the general public to pay interest at 20% on the deposit amount and also to pay 4% of commission to the agents and further, their company has license and also obtained permission from the Reserve Bank of India and made believe them that accused No.2 is well established company and accordingly, he joined as agent. PW.1 collected amounts from the victims and in turn, accused

No.2 company issued bonds, pass books and receipts vide Exs.P2, 4, 6, 8, 10 to 17 and also issued bonds in the name of customers.

42 C.C.No.2/2016 PDJC, Rjvm ii)PW.6 has categorically stated that he was appointed by the accused No.1 as agent so as to collect amounts from the general public and deposit the same in the accused No.2 company and further, he know all the directors and Managing Director, they promised to pay 20% interest to the customers and accordingly, bonds/receipts/pass books are issued to them, to some of the agents as well as victims.

iii)Learned counsel for the accused would argue that there is no proof to show that PW.6 is appointed as agent, collected amounts on behalf of accused No.2 company and deposited the same and further, neither accused No.1 nor accused No.2 appointed him as agent and as such, accused No.2 company is not committed any offence. But, PW.6 has consistently stated that he was appointed as agent by accused No.1 and he collected amounts, handed over to accused No.1 and in this regard, it is to be noted that a charge under Section 120-B of Indian Penal Code is also framed against the accused alleging that they conspired together, established accused No.2 company, collected amounts directly and through the agents.

iv)Further, it is already stated above that along with accused No.2 company, accused Nos.1 and 3 who are none other than husband and wife also established four other nominal companies which are referred above. So, it shows that from the inception of establishment of accused 43 C.C.No.2/2016 PDJC, Rjvm No.2 company and other companies, they violated the provisions of the

Act, 1999 and further, another charge under Section 201 of the Code is also framed for causing disappearance of the evidence by removing of all the documents in respect of accused No.2 company and as per the version of prosecution, they could not secure single piece of document in the office of accused No.2 company. In the cross examination, learned counsel for the accused elicited that Exs.P2, 4, 6, 8, 10 to 19 do not contain signature of accused No.1, seal in the name of Survarna Real estate is there on all the documents and some other formal omissions regarding assets of company, details of directors etc., But, it is nowhere suggested that accused No.2 company is not at all established and their defence is that they never collected any amounts from any of the person and all the documents are fabricated. Learned counsel for the accused also elicited some formal inconsistencies in the evidence of PW.6 which do not thrown away the version of the prosecution and dislodge his testimony. Learned defence counsel marked Ex.D1/deposition of this witness and its veracity would be discussed along with Exs.D2 to D8 at the time of appreciating the evidence of the employees.

e) Evidence of employees of accused No.2 (Pws.7, 12, 14, 15):

i)PW.7 testified that he worked as branch manager in accused No.2 company, PW.6 worked as sales manager, accused No.2 company 44 C.C.No.2/2016 PDJC, Rjvm collected deposits on the promise of paying 20% interest, it has branches, accused Nos.1, 7 and others are directors, accused No.2 company not even paid his salary, assured to pay by selling lands, accused No.2 company altogether collected 14 crores and through Amalapuram Branch collected Rs.1,22,81,800/-, failed to repay the amounts, postponed on the ground of selling properties, it has immovable properties at several places, on 5.1.2015, accused Nos.1 and 9 assured of repaying the amount, but failed to pay, and in the cross examination, he had stated that he handed over his appointment letter to police, denied suggestion that he never worked as Branch Manager, admitted Ex.D2/deposition, pleaded ignorance about survey numbers of the properties and elicited some other formal omissions.

ii) PW.12 stated that he joined as accountant in accused No.2 company, accused No.1 is managing director of Suvarna India Infra

Project Limited, Ganapathi Plaza, Amalapuram, accused Nos.3 to 8 are directors of the said company, the Branch Manager and agents used to collect deposits from the general public and issued pass books and bonds and after maturity period, company failed to repay the amounts, purchased lands at several places out of the amounts collected from the public and finally, company is closed without leaving any evidence and by 45 C.C.No.2/2016 PDJC, Rjvm removing total records and furniture from Ganapathi Plaza and finally, victims gave report to the police.

iii)In the cross examination, he had admitted that he gave evidence in in C.C.Nos.1/2016 vide Ex.D3 and he denied other suggestions posed by the learned defence counsel stating that he never worked as accountant, company never collected amounts, elicited formal omissions regarding presence of all directors, assurance of accused No.1, assets, conducting meeting, believed the words of accused No.1, they deposited amounts and accused No.2 company failed to repay the same and some other formal material which is not useful to disbelieve the version of PW.12 is elicited in his cross examination.

iv)PW.14 testified that in the month of April, 2012 he joined as accountant in Suvarna India Infra Project Limited and initially, he worked at Kothapeta, accused Nos.1, 3 to 8 are directors of the company, accused No.2 company used to collect deposits through branch managers, agents or directors from the customers, objectives of the company are to collect deposits from poor public, invest the same in the real estate business and pay deposit amount with 20% interest. Further, after completion of maturity period also, accused No.1 failed to repay the amount, postponed the same on the ground that he has to avail loan from the Reserve Bank of India, further, company purchased lands, accused 46 C.C.No.2/2016 PDJC, Rjvm No.9 convened meeting and finally, the company is closed and PW.1 gave report to the police. He also admitted in his cross examination that he gave evidence in C.C.No.1/2016 vide Ex.D6 and denied the suggestions that she never worked in accused No.2 company, she had no acquaintance with accused No.1 and learned defence counsel elicited formal omissions regarding maturity of bonds, assurance of accused

No.1, conducting meeting by accused No.9 and existence of properties.

v)As per the version of PW.15, on 10.4.2012, she joined as accountant in accused No.2 company at Rajamahendravaram Branch, accused No.1 is managing director, accused Nos.3 to 8 are directors of the said company, objectives of the company are to run other business like real estate etc., and collect deposits from the general public and pay deposit amount with 20% interest, general public deposited amounts through agents and branch managers, company used to issue deposit bonds and receipts to the depositors, after completion of maturity period also, company failed to repay, accused No.1 used to postpone the payment on the ground that he has to avail loan and finally, company is closed. Accused No.9 conducted meeting and though company had properties, they did not repay. She also admitted in his cross examination that she gave evidence in C.C.No.1/2016 vide Ex.D5 and denied the suggestions that she never worked in accused No.2 company, she had no 47 C.C.No.2/2016 PDJC, Rjvm acquaintance with accused No.1 and learned defence counsel elicited formal omissions regarding maturity of bonds, assurance of accused

No.1, conducting meeting by accused No.9 and existence of properties.

vi)In the cross examination of PWs.6, 7, 12, 14 to 16 and 18, learned counsel for accused marked their depositions which are given in

C.C.No.1/2016 vide Exs.D1 to 6 and 8. As per Section 145 of the Indian

Evidence Act, a witness may be questioned about their statements in writing or reduced to writing to impeach the credibility of any witness and further, the specific part of the document may be brought to their attention

before the document is proven. In this regard, it is to be mentioned that in

Telanakula Kasi Viswanadham Vs. Pokuri Maruthi Prasad 9 , Hon’ble

High Court of Andhra Pradesh has held thus:

“...When the witness is very much alive, it is impermissible to mark his entire previous deposition. When a witness makes a statement in the present deposition, which is contrary to his statement made in his previous deposition, he can be confronted with the relevant portion of his statement in the previous deposition, which runs contrary to his statement in his present deposition. If he still maintains a contradictory stand, the confronted contradictory portion in the earlier deposition can be marked as an exhibit. However, if he admits that in his previous deposition he deposed contrary to the present deposition, the said admission can be recorded and it becomes part of the present deposition”.

In the present case at hand, without specifically confronting particular portions, the learned defence counsel simply marked the entire depositions without specifically eliciting or confronting particular portion of 9 AIR 2019 AP 79 48 C.C.No.2/2016 PDJC, Rjvm the statement of the witnesses. Mere marking of the entire deposition, without eliciting specific contradictions intended to be relied upon, does not carry any evidentiary value and such marking does not serve any purpose. Even otherwise, crux of the of the aforementioned witnesses vide Exs.D1 to D6 and D8, case of the prosecution and version of all the witnesses in this case is one and the same.

f) Evidence of independent witnesses (Pw.16):

i)It came in the evidence of PW.16 that he has been working as lodge boy in Ganapathi Plaza for the last 15 years, he know accused

No.1 who is managing director of accused No.2 company, which is established in the first floor of Ganapathi Plaza by accused No.1, it run business from 2011 to 2014, company used to collect amounts and finally, in the year 2014, accused No.2 company is closed, and in the cross examination, he has stated that in C.C.No.1/2016, he gave evidence vide

Ex.D7, and he has further stated that he has no evidence to show that he has been working lodge boy in Ganapathi Plaza and denied other suggestions.

ii)PW.16 is independent witness and one cannot except document from him to prove his business and avocation. There is no reason to disbelieve the version of this witness. No animosity also attributed between him and the accused. It is not in dispute about establishment of 49 C.C.No.2/2016 PDJC, Rjvm accused No.2 company at D.No.3-1-98, Ganapathi Plaza, main road,

Amalapuram in the year 2011. Nothing useful material is elicited in his evidence. To sum up their evidence, accused No.2 company is established in Ganapathi Plaza, main road, Amalapuram, several persons came there, deposited amounts and when they demanded for repayment, accused No.2 company failed to pay the same, closed the company, removed all documentary evidence and furniture.

g) Evidence of mediator (Pw.18):

As per the version of Pw.18, PW.21 called him and other mediators, to act as mediators and in their presence, PW.21 arrested accused and there is no dispute about the arrests of all the accused. Admittedly, nothing is seized from either of the accused. PW.21 also stated on the same lines of evidence of Pw.18. Formal suggestions are posed by the learned defence counsel regarding preparation of documents in the police station and they are denied by Pw.18.

h) Evidence of official witnesses (Pws.20 to 23):

i)It is already stated above that the present station house officer i.e.,

PW.22 took steps, during trial, secured documents vide Exs.P20 to 36 regarding establishment of the accused No.2 company and other companies at bearing D.No.3-1-98, Ganapathi Plaza, main road, 50 C.C.No.2/2016 PDJC, Rjvm Amalapuram. PW.21 is very crucial witness who registered Ex.P1 report of Pws.1 to 5 vide Ex.P18 for the offences under Sections 120-B, 417, 420, 201, 411 r/w.34 of the Code and Section 5 of the the Act, 1999 and in his chief examination, he stated supporting the case of prosecution and in the cross examination, he has categorically admitted that he has not collected any document showing registration of accused No.2 company, he tried to get registered document of accused No.2 company, basing on the statements of victims, he came to conclusion that accused Nos.1, 3 to 8 are directors of accused No.2 company and that he has not produced any document to show that he tried to secure documents showing registration of accused No.2 company and part-I case dairy shows that none of the victims have handed over documents to show that the accused are directors of accused No.2 company. He has further admitted that he has not shown other companies as accused in this case, though several bonds are issued in that name, he has not done investigation relating to Survarna Real estate, none of the victims have handed over documents issued in the name of accused No.2 company, he has not verified whether the bonds contain the signature of any of the accused, he has not collected any documents from the accused, after submitting resignation by accused No.1 to Sahara India private Limited, accused

Nos.1, 3 and 6 established accused No.2 company. Further, in the part-I 51 C.C.No.2/2016 PDJC, Rjvm case diary there is no specification that accused No.9 is legal advisor and friend of accused No.1, accused No.4 is advocate from Visakhapatnam, accused No.8 is resident of Samisrigudem of Nidadavolu and accused

No.10 is resident of Sivakodu village of Razole Mandal. Further, he has not produced any document to show movable and immovable properties transferred in the name of accused No.10 and except the case diary file, he has not handed over any document showing registration of accused

No.2 company and that PW.1 has not stated about involvement of accused No.9 in settling the matter. Further, he has not secured any document to show the agents and managers of accused No.2 company and after going through the provisions of Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999, he registered the report of defacto complainants.

ii)It is already stated above, being participated in the investigation including the registration of report of PWs.1 to 5 vide Ex.P18. PW.21 failed to secure single piece of document in respect of accused No.2 company and deposit amounts made by the victims. After registration of

Ex.P18/first information report, he simply recorded the statements of the witnesses in this case and in the connected cases. Even as per his categorical admissions, he has not even take steps to obtain the documents relating to accused No.2 company.

52 C.C.No.2/2016 PDJC, Rjvm iii)Learned counsel for the accused argued that none of the documents i.e., deposit/bond/pass book contain the name or seal of accused No.2 company and as such, accused are no way concerned with

Exs.P2, 4, 6, 8, 10 to 17. Admittedly, neither the directors nor any concerned person of accused No.2 company signed on Exs.P2, 4, 6, 8, 10 to 17 and seal of Suvarna Real Estate is mentioned on the documents.

In this regard, it is to be noted that name of accused No.2 company is

Suvarna India Projects Limited and accused Nos.1 and 3 are also established two other companies in the same name of Suvarna i.e.,

Suvarna India Iron and steel Manufacturing Private Limited and Suvarna

India Vidyut Plant Private Limited besides two other companies i.e.,

Prakash India Power Projects Private Limited and Supreme India TV

Channel Private Limited. Further, several victims could not even say full name of the accused No.2 company and they simply stated as Suvarna

Company, Suvarna India Limited Company etc., Most of the victims studied 10th class or below 10th class, some are illiterates and some victims have completed graduation. In this regard, it is to be noted that had the victims really had that much of knowledge and wisdom, they should not have believed the words of the accused who agreed to give very higher rate of interest at 20% which is not at all believable. So, it shows that the accused No.2 company lured all the victims in such a way 53 C.C.No.2/2016 PDJC, Rjvm to believe their words. Assuming for the sake of arguments that the accused No.2 company not at all issued any bonds/receipts/pass books to the victims also, their oral testimonies cannot be ruled out, without any proper defence. Having admitted establishment of accused No.2 company, accused simply denied collection of amounts from the victims.

Had they really had good intention of running company, they should have been filed documents showing their business. Added to it, there is no explanation from the accused why they established accused No.2 company and other companies, if they had no intention of collecting investments.

h)Learned defence counsel relied upon the following judgments:

a)J.P.S.Enterprises and another Vs. State 10 , hon’ble High Court of Madras has held that:

“A careful reading of the judgment of the learned Special Judge would also indicate his finding that even though none of the documents produced by the prosecution bear either the name of the second accused or his signature, yet the other circumstances would indicate that both the accused are guilty of the offence. A careful scrutiny of the entire evidence let in by the prosecution would in my opinion indicate that such finding has no basis at all for the reason that in none of the documents, the second accused has subscribed his signature” The facts of the said case are entirely different. In view of the establishment of three companies in the same name i.e., Suvarna, there is every possibility of getting confused and moreover facts and circumstances of this case clearly indicate that from the inception of

10. C.A.NO.1048/2000, dt.27.7.2005 of Hon’le High Court of Judicature at Madras 54 C.C.No.2/2016 PDJC, Rjvm establishment of accused No.2 company, Managing Director and directors of the said company inducing general public.

b)Arnol Samadhan Nikam Vs. The State of Maharashtra 11 in which is held that:- “….we have noticed that even in serious offence, the investigating officer who had recorded the statements of the witnesses under Section 161 of the Code of Criminal Procedure, has literally made copy-paste of the statements. Even the paragraphs start with the same words and end with the same words. The culture of copy-paste statements is dangerous and may, in certain cases unnecessarily, give advantage to the accused persons. In such circumstances, the seriousness of the genuine case may get vanished….”.

In this case, charge sheet laid for the offences under Sections 306, 352, 504, 506 r/w. Section 34 of the Code, whereas, in the present case at hand, there are 35 witnesses and out of which, prosecution examined

Pws.1 to 23 and as per the version of all the victims, agents, employees and independent witness either accused No.1 or accused Nos.1 and 3 or other accused lured the victims to invest amounts in the accused No.2 company and promised to pay interest at 20% and further, they also made believe all the victims that the accused have several other companies, made investments in the Reserve Bank of India and as such, similar statements are given by all the victims before the police and also stated before this court. So, it cannot be said that they are copy paste

11.Criminal Application No.1091/2025, dated.29.4.2025 55 C.C.No.2/2016 PDJC, Rjvm statements and there is no substance in the evidence of prosecution witnesses.

i)So far as default committed by the accused No.2 company, evidence of Pws.1 to 5, 8 to 11. 13 and 19 clearly reveals that having collected amounts by way of deposits/investments, accused No.2 company committed default in return of deposits either in cash or kind and also committed default in payment of interest on the deposit as agreed upon and as such, Section 5 of the Act, 1999 applies to the present case at hand. So, it can safely be held that prosecution proved its case for the offence under Section 5 of the Act.

j)So far as liability of accused Nos.1, 3 to 8 is concerned, no doubt a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second 56 C.C.No.2/2016 PDJC, Rjvm situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision. In this regard, it is to be noted that as per Section 5 of the Act, 1999 every person responsible for the management of the affairs of the financial establishment including the promoter, manager or member of the financial establishment shall be punished with imprisonment.

k)It is already stated above that initially at the time of establishment of company, accused No.1 was managing director and accused Nos.3, 4, 6 and 7 were directors and subsequently, accused Nos.4 and 7 resigned as directors on 15.5.2014 and 30.11.2012 respectively. It is also not in dispute that accused No.4 submitted resignation within one year of establishment of accused No.2 company and accused No.7 submitted his resignation long prior to registration of Ex.P18/first information report. In this regard, learned defence counsel argued that having taken advantage of relationship with accused No.7 and friendship with accused No.4, accused No.1 included their names in the list of directors and immediately after coming know the said fact, they submitted resignation and the same is acknowledged by the Registrar of Companies vide Ex.P24. Added to it, none of the witnesses have specifically stated about the inducement made by accused No.4 and 7 and their involvement in collection of 57 C.C.No.2/2016 PDJC, Rjvm amounts from them. It shows that though their names are initially shown in the list of directors vide Ex.P24, they resigned very long prior to the registration of Ex.P24. Pws.21 and 22 also admitted that accused Nos.1, 3 and 6 are responsible as they continued as directors. Added to it, accused Nos.3 and 6 are wife and daughters of accused No.1. And, absolutely there is no material to show that accused Nos.5 and 8 are directors of accused No.2 company and PW.22 also categorically admitted the same and it is not the case of prosecution that accused No.9 either director or induced the victims.

l)For the foregoing reasons, this court came to conclusion that the prosecution proved its case to direct punishment under Section 5 of the

Act, 1999 against accused Nos.1, 2, 3 and 6 as the accused No.2 company committed default in return of investments made by the victims and that accused Nos.4 and 7 are not at all participated in the affairs of accused No.2 company. Further, without there being any material, accused Nos.5 and 8 shown as directors of accused No.2 company.

iv) Ancillary point No.(iv) Wether charge under Section 120B, 201, 417 and 420 of Indian Penal Code is sustainable in addition to the charge under Section 5 of

the Act?

a)Absolutely charge under Section 120-B, 201 and 420 of the Code is sustainable in addition to the charge under Section 5 of the Act, 1999.

Section 5 of the Act, 1999 specifically deals with the situation when there 58 C.C.No.2/2016 PDJC, Rjvm is failure of financial establishment to return or pay interest and Section 420 of the Code deals with broader initial fraudulent inducement to make the victim to part with their money.

b)It is settled law by catena of decisions that for establishing the offence of cheating, prosecution is required to show that the accused had fraudulent or dishonest intention at the time of making promise of representation. From his making failure to keep up promise subsequently, such a culpable intention right at the beginning i.e., at the time when the promise was made cannot be presumed. If there was absence of dishonest and fraudulent intention, the question of punishment under

Section 420 of the Code does not arise. Further, a bare perusal of

Section 415 r/w Section 420 of the Code would clearly lead to the conclusion that fraudulent or dishonest inducement on the part of the accused must be at the inception and not at a subsequent stage. Section 415 of the Code defines ‘cheating’ that whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property. So, as per 59 C.C.No.2/2016 PDJC, Rjvm Section 415 of the Code, cheating can be by deception inducing any person fraudulently or dishonestly to do things or by inducing a person intentionally to do or omit to do things mentioned in Section 415 of the

Act. Deception has in it the element of misleading, of a making a person believe something which is not real. It implies causing a person to believe as true something that is false. According to the Webster’s New international dictionary the word ‘deceive’ indicates ‘inculcating of one so that he takes the false as true, the unreal as existent, the spurious as genuine’. It is immaterial whether the deception has the capability of imposing upon ordinary minds. What is required is that it must impose upon the mind of the person deceived. To hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise. Such a dishonest intention cannot be inferred from the mere fact that he could not subsequently fulfill the promise.

c)It is already stated above that charge under Section 417 and 420 of the Code is framed, on the ground of cheating. It is needless to say that

Section 420 of the Code is aggravated form of Section 417. Section 120A of the Code defines the offence of criminal conspiracy and punishment is provided under Section 120B of the Code. Criminal conspiracy under the

Code is an agreement between two or more persons to commit an illegal 60 C.C.No.2/2016 PDJC, Rjvm act or to commit a lawful act by illegal means and in other words, it is a criminal offence where two or more individuals agree to plan and execute a criminal act. It is needless to say that all conspirators share common liability for the offence, regardless of their individual roles in the execution of crime. Further, seriousness of the intended offence, the degree of planing involved, the role of each conspirator, and any mitigating circumstances such as the conspirator’s age or mental health have also to be taken into consideration. Section 201 of the Code deals with causing the disappearance of evidence.

d)To avoid repetition, evidence of Pws.1 to 19 who are victims, agents, employees and independent witnesses is not mentioning as it is already discussed in the aforementioned ancillary point and upon over all scrutinization of oral evidence coupled with Exs.P2, 4, 6, 8, 10 to 17, accused No.1 directly or through agents or friends and relatives made believe all the victims and agents that they established accused No.2 company with an objective to collect investments/deposits with a promise to pay interest at 20%, they have business affairs, established other companies, made investments in the Reserve Bank of India and accordingly, PW.6 joined as agent and further, PWs.1 to 5, 8 to 11, 13, 17 and 19 invested/deposited an amount of Rs.15,80,500/- directly or 61 C.C.No.2/2016 PDJC, Rjvm through agents or through relatives and without paying any amount, accused No.2 company is closed.

e)Further, employees/Pws.7, 12, 14 and 15 and independent witness/PW.16 also categorically stated about the inducement made by the accused Nos.1, accused No.2 company, accused Nos.3 and 6. The evidence clearly established the fraudulent and dishonest intention of the said accused before investing/depositing amounts by the victims. Facts and circumstances coupled with the evidence of witnesses clearly reveal that accused Nos.1, 3 and 6 who are none other than same family members conspired together, established accused No.2 company with an intention to cheat general public by collecting investments to get wrongful gain. Added to it, with the same conspiracy, accused Nos.1 and 3 also established nominal companies vide Exs.P24 to 36, so as to easily induce the general public.

f)So far as liability of accused Nos.4, 5, 7 and 8 is concerned, it is already stated that there is absolutely no positive material against the accused Nos.5 and 8 and a finding is already given in the first and third ancillary points that accused Nos.5 and 8 are neither directors nor participated in the affairs of accused Nos.2 company. With regard to the role of accused Nos.4 and 7 also, a finding is given that without their knowledge, their names are included in the list of directors and 62 C.C.No.2/2016 PDJC, Rjvm immediately after coming to know the same, they resigned and the same is acknowledged by the Registrar of companies vide Ex.P24. Further, evidence of agents, employees and independent witnesses clearly reveal that suddenly accused No.2 company is closed and they also caused disappearance of the evidence by removing total documents, furniture etc.

g)So far as material against accused No.9 for the offences under

Sections 420, 120B and 201 of the Code, nowhere it is mentioned that

before collecting deposits also, accused No.9 joined hands with other

accused, induced the victims, shared conspiracy and helped to cause disappearance of evidence. It is the specific case of prosecution that accused No.9 convened a meeting at Sivakodu village so as to settle the financial issues and he is none other than close friend of other accused.

During trial, it came in the evidence of PWs.12, 14 and 17 stated that accused No.9 convened a meeting at Sivakodu village and PW.6 stated that accused No.9 mediated the dispute, PW.2 stated that in the presence of accused No.9, accused No.1 convened meeting, PW.17 stated that accused No.9 assured about repayment. Except that no other material is available on record to come to conclusion with regard to the active participation and role played by the accused No.9 either to induce the victims to collect deposits or commit default. Moreover, PWs.12, 15 and 63 C.C.No.2/2016 PDJC, Rjvm 19 have categorically admitted that accused No.9 has not invited them for meeting, he is no way concerned with the accused No.2 company, he is not director, he has not assured of repayment and PW.15 never seen accused No.9.

h)It is already stated above that it is incumbent on the part of prosecution to show that the accused had fraudulent intention at the time of making promise or representation and if the accused had no fraudulent or dishonest intention to induce the victims, the question of punishment under Section 420 of Code does not arise. Added to it, except stating that accused No.9 is friend and legal advisor of accused Nos.1, PW.21 also stated nothing about participation and involvement of accused No.9 and further, PW.23 stated nothing against accused No.9.

i)So, record clearly reveals that accused No.9 is no way concerned with the offence under Section 120B, 201, 417 and 420 of the Code and absolutely ingredients of provisions are not attracted against accused

No.9. Assuming for the sake of arguments, accused No.9 either convened meeting or conducted meeting also, even as per the version of the aforementioned witnesses, accused No.9 tried to settle the financial issues and absolutely it does not come under the purview of the punishable offences with which he is charged. So far as charge under

Section 411 of the Code is concerned, it is already stated that the case 64 C.C.No.2/2016 PDJC, Rjvm against accused No.10 is abated, as he died. Even otherwise also, prosecution has not produced any material to attract the ingredients of

Section 411 of the Code. In this regard, it is to be noted that there is no possibility to cover any amount from the accused as the prosecution failed to take steps in respect of the properties of accused Nos.1 to 3 and 6. Having obtained ad-interim order in respect of the properties of accused No.2 company, failed to take steps on judicial side to made absolute the attachment order.

j)For the foregoing reasons, this court without any doubt came to conclusion that prosecution has successfully established its case of the offences under Section 120B, 201, 420 of the Code, against accused

Nos.1, 2, 3 and 6 and failed to establish its case against accused Nos.4, 5, 7 to 9. Hence, this ancillary point is answered accordingly.

v)Ancillary point No.(v): Any laches on the part of the investigating officers i.e., Pws.21 and 22? If so, would they affect total case to disbelieve the version of prosecution as well as oral and documentary evidence?

i)At the cost of repetition, it is to be mentioned here that either at the time of registration of Ex.P18/first information report or during investigation or at the time of filing charge sheet or atleast before framing charge, either PW.21 or PW.22 secured documents showing 65 C.C.No.2/2016 PDJC, Rjvm establishment of accused No.2 company and deposits made by the victims as well as appointment orders issued in the name of Pws.7, 12, 14 and 15/employees and for which, after completion of trial, the present learned Public Prosecutor took much strain to secure the said documents through the present investigating officer/PW.23 with great difficulty and faced challenges to file the said documents before this court and admit the same in the evidence of prosecution witnesses, by reopening the prosecution evidence. Having stated that he had gone through the provisions of the Act, 1999, PW.21 gathered nothing and even as per his admission that except case diary file, he had not handed over any document to the Deputy Superintendent of Police/PW.22, who filed charge sheet, and PW.22 also being senior police officer, did not properly verify the investigation conducted by PW.21 and simply filed charge sheet, without appending any supportive documents. It is nothing but absolute dereliction of duties and negligence on the part of PWs.21 and 22.

ii)To attract the offence under Section 5 of the Act, 1999, the ingredients of the said provision have to be fulfilled and having knowledge about the ingredients, without any documentary proof regarding establishment of accused No.2 company, simply relied upon very informal material, PW.21 showed accused Nos.5 and 8 as directors of accused 66 C.C.No.2/2016 PDJC, Rjvm No.2 company. PWs. 21 and 22 have categorically admitted in their cross examination that at the time of establishment of accused No.2 company, only accused Nos.1, 3, 4 and 7 were directors, but not accused Nos.5 and 8. Before relying upon the statements of some of the witnesses, who have stated the names of accused Nos.5 and 8 that they are directors of accused No.2 company, PW.22 should have been cross checked the same by obtaining relevant documents from the Registrar of Companies.

If he had no knowledge about the same, he should have been obtained legal opinion from the learned Public Prosecutor. Without there being any documentary proof, especially certificate of incorporation and list of directors, Pws.21 and 22 roped accused Nos.5 and 8 to this case for the offence under Section 5 of the Act, 1999.

iii)At the cost of repetition, it is mentioned that in the cross examination, PW.21 had categorically admitted that he has not collected any of documents showing registration of accused No.2 company and basing on the statements of victims, he came to conclusion that accused

No.1 is Managing Director and accused Nos.3 to 8 are directors of accused No.2 company, he has not tried to secure document showing registration of accused No.2 company, none of the victims have handed over documents to show that accused are directors of accused No.2 company. The aforementioned aspects clearly reveal the laches on the 67 C.C.No.2/2016 PDJC, Rjvm part of both the investigating officers/Pws.21 and 22 and while doing investigation, they should have been very cautious enough as criminal jurisprudence gives more stress over avoiding of false implication of an innocent to the extent where hundred guilty may go scot-free and the spirit behind the same is very pious and even otherwise, by one case of false implication of an innocent, rule of law loses one exponent (supporter) and a rebel with defiance towards rule of law is ready and futther, poor investigation with tainted prosecution is perfect recipe for such eventuality, as held in Nandu @ Nandakishore Vs. State of

Madha Pradesh 12 .

iv) Further, though there is no material against accused No.9 and though he is no way concerned with the affairs of the company, PW.23 filed charge sheet for the offence under Section 5 of the Act, 1999 against accused No.9 also, which is nothing but abuse the process of law. Had really both the Investigating Officers had that much of concern towards the crime and victims, they should have been taken every care at each and every stage of investigation. The interest shown by Pws.21 and 23 in registering the case and filing charge sheet is not there in conducting qualitative investigation. They have also not collected original bonds/ receipts/passbooks from the victims. During arguments, by showing sufficient cause, the learned Public Prosecutors filed the same by

12. C.A.NO.812/2008 & 866/2008, Dt.6.7.2018 OF Hon’ble Madya Pradesh High Court at Gwalior.

68 C.C.No.2/2016 PDJC, Rjvm obtaining the same through the present Station House Officer i.e., PW.23.

Because of the negligent attitude of Pws.21 and 22, this court also took much strain to unearth the truth regarding competency of officer to launch prosecution, receiving documents and giving detailed findings on all aspects. Record reveals that neither PW.21 nor PW.22 were not at all concern about the provisions and Rules of the Act, 1999 and Rules 2000.

Though there are laches on the part of investigating officers in not collecting the relevant documents at the appropriate time, not obtaining any written permission for conducting investigation and launching prosecution, in view of the reasons assigned in ancillary point No.2 and in this point, those laches do not affect the case of the prosecution.

vi) Ancillary point No.(vi): Final out come of the case?

a)It is to be noted that in catena of Judgments, Hon’ble Apex Court held that justice is nothing but a manifestation of the truth and the primary duty of a Court is to make a single-minded endeavour to unearth the truth hidden beneath the facts and thus, the Court is a search engine of truth, with procedural and substantive laws as its tools. Further, when procedural law stands in the way of the truth, the Court must find a way to circumvent it and similarly, when substantive law, as it appears, does not facilitate the emergence of the truth, it is the paramount duty of the Court to interpret the law in light of its teleos and such an exercise is warranted 69 C.C.No.2/2016 PDJC, Rjvm in a higher degree, particularly while considering a social welfare legislation. Further, in its journey, the Court must discern the truth, primarily from the material available on record in the form of pleadings, and arguments duly supported by documents and it must be kept in mind that the entire judicial system is meant for the discovery of the truth, it being the soul of a decision and for doing so, a Presiding Officer is expected to play an active role, rather than a passive one.

b)Further, in Maria Margarida Sequeria Fernandes v. Erasmo Jack

De Sequeira. 13 , hon’ble Apex Court has that:

“The truth should be the guiding star in the entire judicial process. Truth alone has to be the foundation of justice. The entire judicial system has been created only to discern and find out the real truth. Judges at all levels have to seriously engage themselves in the journey of discovering the truth. That is their mandate, obligation and bounden duty. Justice system will acquire credibility only when people will be convinced that justice is based on the foundation of the truth’.

c)And, In Munna Pandey v. State of Bihar 14 , Hon’ble Apex Court has held that:

“The role of a judge in dispensation of justice after ascertaining the true facts no doubt is very difficult one. In the pious process of unravelling the truth so as to achieve the ultimate goal of dispensing justice between the parties the judge cannot keep himself unconcerned and oblivious to the various happenings taking place during the progress of trial of any case. No doubt he has to remain very vigilant, cautious, fair and impartial, and not to give even a slightest of impression that he is biased or prejudiced either due to his own personal convictions or views in favour of one or the other party. This, however, would not mean that the Judge will simply 13(2012) 5 SCC 370

14. 2023 SCC online sc 1103 70 C.C.No.2/2016 PDJC, Rjvm shut his own eyes and be a mute spectator, acting like a robot or a recording machine to just deliver what stands feeded by the parties.

d)In this regard, it is to be noted that the incharge Additional Public

Prosecutor Sri K.Radhakrishnam Raju, who conducted trial in all the connected matters took every care of getting all relevant documents to connect all missing links to unearth the truth by this court. So, without any doubt it can be said that only because of his efforts, prosecution could place substantive material to attract the ingredients of the punishable Sections with which accused Nos.1, 2, 3 and 6 are charged.

e)On over all consideration of the material available on record and in view of the findings in ancillary point Nos(i) to (v), this court came to conclusion that prosecution successfully proved guilt of accused Nos.1, 2, 3 and 6 beyond reasonable doubt and as such, they are liable for punishment for the offences under Sections 120B, 201 and 420 of the

Code and under Section 5 of the Act, 1999 and they are not liable for punishment under Section 417 of the Code as they are liable for punishment which is aggravated form of cheating. Further, prosecution failed to prove guilt of accused Nos.4, 5, 7 to 9 and as such, they are not liable for punishment for the offences with which they are charged. This point is answered accordingly.

71 C.C.No.2/2016 PDJC, Rjvm Result:

15.(a) In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

(b)Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of

Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of

Criminal Procedure.

Partly dictated to the stenographer, transcribed by him and and partly typed to my dictation corrected and pronounced by me in open court on this 16 th day of March, 2026. Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 18:10:02 +0530

PRINCIPAL SESSIONS JUDGE

RAJHAMAHENDRAVARAM

72 C.C.No.2/2016 PDJC, Rjvm

i)Heard accused Nos.1, 3 and 6 under Section 248 (2) of Code of

Criminal Procedure on the quantum of sentence, to be imposed against accused Nos.1, 2, 3 and 6, for the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian

Penal Code and. Accused No.1 submitted that he has three children, presently he is not doing any job, attending private works, he has to perform marriage of his son and he has not committed any offence.

Accused No.3 who is wife of accused No.1 submitted the same.Further,

Accused No.6 who is daughter of accused No.1 submitted that she recently married, she does not know about the offence and she has not committed any offence.

(ii)Having considered the facts and circumstances, gravity of offence, nature of allegations levelled against the accused and submissions of all the accused, this court came to conclusion that this is a fit case to impose sentence of imprisonment against accused Nos.1, 2, 3 and 6 as follows:-

Accused No.1 issentenced to suffer rigorous imprisonment of

Seven (7) years of the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in 73 C.C.No.2/2016 PDJC, Rjvm default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months.

Being Managing Director Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial

Establishment Act, 1999 on behalf of accused No.2 company and in default of payment of fine, accused No.1 who is Managing Director of accused No.1 company shall suffer simple imprisonment of six (6) months.

Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

Accused No.6 issentenced to suffer rigorous imprisonment of

Three years (3) yearsof the offence under Section 5 of Andhra Pradesh

Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months.

74 C.C.No.2/2016 PDJC, Rjvm Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of

Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each.

(iii)Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 15 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to award compensation out of the fine amout, to all the victims who have deposited amount, though they are examined or not, who sustained loss and injury and accordingly,

15. 2013 AIR SCW 3153 75 C.C.No.2/2016 PDJC, Rjvm Rs.5,000/-(Rupees five thousand only) is awarded towards compensation to each victim irrespective of their deposit amounts to meet ends of justice. Further, at the time of filing petitions by the victims, to withdraw their compensation amounts, in due course of law and after attaining the finality of the case, learned Public Prosecutor must certify the said petition to rule out impersonation.

(iv)The accused Nos.1, 3 and 6 are not entitled to the benefit of the

Probation of Offenders Act, 1958, and this is not a fit case to invoke the provisions of the Probation of Offenders Act.

(v)All the sentence of imprisonment passed against the accused

Nos.1, 3 and 6 shall run concurrently.

(vi)Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos3/2016, 4/2016, 5/2016, 6/2016, and 7/2016 shall run concurrently.

(vii)The accused are informed about the right of appeal to the Hon’ble

High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative.

(viii) The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 13.11.2015 to 3.3.2016, accused No.3 from 11.12.2015 to 3.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure 76 C.C.No.2/2016 PDJC, Rjvm

(viii)Copy of judgment is furnished to the accused, as required under

Section 363 of Code of Criminal Procedure and Rule 72 of A.P. Criminal

Rules of Practice.

(ix) Copy of judgment is marked to the District Magistrate as required under Section 364 of Code of Criminal Procedure

(x)Copy of Judgment is marked to the Director of Prosecutions,

Andhra Pradesh, Vijayawada as required under Rule 72 of Criminal Rules of Practice.

Pronounced by me in open court on this 16th day of March, 2026.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 18:09:25 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.

LIST OF PROSECUTION/DEFENCE/COURT WITNESSES

1. PROSECUTION:

RankNameNature of Evidence PW.1Jalli Prasanna VaniComplainant and depositor in the accused No.2’s firm. PW.2Chavakula RajababuComplainant and depositor in the accused No.2’s firm. PW.3Vardhanapu SarojinideviComplainant and depositor in the accused No.2’s firm. PW.4Chavakula ChittibabuComplainant and depositor in the accused No.2’s firm. PW.5Chavakula Rechel JyothiComplainant and depositor in the accused No.2’s firm. PW.6Sape SatyanarayanaAgent of accused No.2 firm. PW.7Pulaparthi Vijaya KumarBranch Manager of accused No.2 firm 77 C.C.No.2/2016 PDJC, Rjvm

PW.8Chavakula HapsibaDepositor in accused No.2 firm PW.9Vardhanapu SumarechelDepositor in accused No.2 firm PW.10Jalli BhuvaneswariDepositor in accused No.2 firm PW.11Gutam Anitha JyothiDepositor in accused No.2 firm PW.12Nakka Srinivasa RaoAccountant of accused No.2 firm PW.13Nakka SwarnaDepositor in accused No.2 firm PW.14Kusuma Rajesh KumarAccountant of accused No.2 firm PW.15Kottoju AuradhaAccountant of accused No.2 firm PW.16Pinipe PrasadLodge boy in Ganapathi Lodge, Main Road, Amalapuram. PW.17Muthabathula Rama RaoDepositor in accused No.2 firm

PW.18Vithanala ViswanadhamMediator for arrest of accused. PW.19Nalla Ramalingeswara RaoDepositor in accused No.2 firm PW.20K.SrinivasaraoConstable, Typed the statements of Pws.6, 7, 9 and 13 in Telugu on the dictation of the Circle Inspector of police. PW.21Y.R.K.Srinivas, Inspector of Registration of FIR, examination of Policewitnesses, visiting of scene of offence, preparation of rough sketch, arrest of accused PW.22L.Ankaiah, Deputy Further investigation and filing of charge sheet. Superintendent of Police. PW.23P.Veera Babu, Obtainedcertifiedcopies documents from Registrar of Inspector of Police Companies relating to accused No.2’s firm.

2. Defence witnesses, if any:

RankNameNature of Evidence

NIL 78 C.C.No.2/2016 PDJC, Rjvm

3. Court witnesses if any:

RankNameNature of Evidence

NIL

LIST OF PROSECUTION/DEFENCE/COURT EXHIBITS

1. Prosecution:

Sr.NoSr.No.RankDescription 1Ex.P1/PW1Report 2Ex.P2/PW1Bonds 3Ex.P3/PW2Signature of PW2 in Ex.P1 4Ex.P4/PW2Bonds 5Ex.P5/PW3Signature of PW3 in Ex.P1 6Ex.P6/PW3Receipt. 7Ex.P7/PW4Signature on Ex.P1 8Ex.P8/PW4Receipt 9Ex.P9/PW5Signature on Ex.P1 10Ex.P10/PW5Receipt 11Ex.P11/PW8Bond 12Ex.P12/PW10Passbook 13Ex.P13/PW11Passbook 14Ex.P14/PW11Receipts 15Ex.P15/PW13Bond 16Ex.P16/PW17Passbook 17Ex.P17/PWPassbook 18Ex.P18/PWFirst Information report in Cr.No.376/2015 of Amalapuram Town PS 19Ex.P19/PWRough sketch 20Ex.P20/PW23Certified copy of Covering letter dt.07.03.2025 21Ex.P21/PW23CC of company info Suvarna India Projects Ltd 22Ex.P22/PW23CC of Certificate of incorporation Suvarna Infra Projects.

79 C.C.No.2/2016 PDJC, Rjvm 23Ex.P23/PW23CC of fresh Certificate of incorporation of Suvarna Infra Pro. 24Ex.P24/PW23CC of List of Directors M/s Suvarna India Projects. 25Ex.P25/PW23CC of company information relating to Suvarna India Iron and steel manufacturing private limited. 26Ex.P26/PW23CC of Certificate of Incorporation Suvarna India Iron and steel manufacturing private limited. 27Ex.P27/PW23CC of List of Directors Suvarna India Iron and steel manufacturing private limited. 28Ex.P28/PW23CC of company info Prakash India Power Projects 29Ex.P29/PW23CC of Certificate of incorporation Prakash India Power Projects. 30Ex.P30/PW23CC of List of Directors Prakash India Power Projects 31Ex.P31/PW23CC of company info Supreme India TV Channel 32Ex.P32/PW23CC of certificate of incorporation Supreme India TV Channel 33Ex.P33/PW23CC of list of directors Supreme India TV Channel 34Ex.P34/PW23CC of company info Suvarna India Vidyut plant 35Ex.P35/PW23CC of certificate of incorporation Suvarna India Vidyut plant 36Ex.P36/PW23CC of list of Directors Suvarna India Vidyut plant

2. Defence:

Sr.NoSr.No.RankDescription

1.Ex.D1/PW.6Certified copy of deposition of PW.2 in CC.1/2016 2Ex.D2/PW7Certified copy of deposition of PW.3 in CC.1/2016 3Ex.D3/PW12Certified copy of deposition of PW.15 in CC.1/2016 4Ex.D4/PW13Relevant portion in section 161 Code of criminal procedure statement of PW.13 5Ex.D5/PW14Certified copy of deposition of PW.17 in CC.1/2016 6Ex.D6/PW15Certified copy of deposition of PW.18 in CC.1/2016 7Ex.D7/PW16Certified copy of deposition of PW.16 in CC.1/2016 8Ex.D8/PW18Certified copy of deposition of PW.19 in CC.1/2016 80 C.C.No.2/2016 PDJC, Rjvm

3. Court witnesses, if any:

Sr.NoSr.No.RankDescription

NIL

4. Material objects:

Sr.NoSr.No.RankDescription

NIL

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 18:03:29 +0530

PRINCIPAL SESSIONS JUDGE

RAJHAMAHENDRAVARAM

Copies to: 1.The Registrar (Judl.), High Court of A.P., Nelapadu, Guntur District. 2.The Director of Prosecution, Beside Sarada College, Durgapuram P.O., Vijayawada. 3.The District Collector, Dr.B.R.Ambedkar Konaseema District, Amalapuram. 4.The Superintendent of Police, Dr.B.R.Ambedkar Konaseema District, Amalapuram.

IN THE COURT OF THE SPECIAL JUDGE FOR ANDHRA PRADESH

PROTECTION OF DEPOSITORS OF FINANCIAL ESTABLISHMENTS

ACT–CUM-PRINCIPAL DISTRICT AND SESSIONS JUDGE, EAST

GODAVARI AT RAJAMAHENDRAVARAM.

Present: Sunitha Gandham

Principal Sessions Judge

Monday, the 16th day of March, 2026.

CALENDER CASE NO.02/2016

Complainant::State-Represented by The Inspector of Police, Amalapuram Town Police Station.

Represented by::Sri R.Prasad and Sri K.Radhakrinamraju, Public Prosecutors, East Godavari District, Rajamahendravaram.

Accused ::1.Busim Venkata Nagavenu @ Venu, S/o.Satyanarayana, 47 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

2.Suvarna India Project Limited, its registrar office at D.No.3-1-98, Ganapathi Plaza, Main Road, Amalapuram, represented by its ManagingDirector-BusimVenkata Nagavenu @ Venu.

3.BusimRajyalakshmi,W/o.Venkata Nagavenu @ Venu, S/o.Satyanayana, 40 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

4.Kaneti Phani Desai @ Phaneendra Desai, S/o.Narasimha Rao, 48 years, C/SC Mala, R/o.D.No.18-98/6, Near Registrar Office, Nagarampalem village, Madhurawada, Visakhapatnam.

5.BusimKavitha,W/o.Janakiram, D/o.Nageswara Rao, 30 years, SC-mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Madal.

6.Busim Gowthami, D/o.Venkata Nagavenu @ Venu, 23 years, SC Mala, R/o.Sivakodupalem, H/o.Sivakodu village, Razole Mandal.

82 C.C.No.2/2016 PDJC, Rjvm 7.Battu Vinod, S/o.Venkateswara Rao, D.No.3-73, Nehru Nagar, Pulletikurru village, Ambajipeta Mandal.

8.Pydi Solman Madhukumar, S/o.Venkata Ratnam, 49 years,C/SC Mala, Samisragudem village, Nidadavole Mandal, West Godavari District.

9.Kudupudi Prasadarao, S/o.Satyanarayana, 40 years, C/S.Balija, R/o.Ambedkar Colony, Isukathota, Visakhapatnam.

10.Mangalampalli Achyutha Suryanarayana @ Achyuta Surya Ramanatham, S/o.Kanaka Durga Varaprasada Rao, 65 years, C/Brahmin, Ponnamanda village, Razole Mandal (Died)

Represented by::Sri Ch.Venkateswararao, counsel for accused Nos.1 to 6 Sri S.S.Prakasarao, counsel for accused No.7 Sri I.Rambabu, counsel for accused No.9

Date of Offence :: Prior to 16.10.2015

Date of First Information Report:: 16.10.2015

Date of Charge sheet:: 22.05.2016

Date of framing of charges:: 15.02.2019

Date of commencement of :: 10.12.2024 evidence

Date of which judgment is :: 02.03.2026 reserved

Date of Judgment:: 16.03.2026

Plea of accused:: Not guilty

Finding of the Court:: Accused Nos.1, 2, 3 and 6 are convicted 83 C.C.No.2/2016 PDJC, Rjvm

Accused Nos.4, 5, 7 and 9 are acquitted.

Explanation for delay:: Along with this case, five other cases of similar nature of offences are also pending against the accused and there are several witnesses in each of the cases. In order to dispose of all the cases together and to avoid any conflict of judgments, after completion of trial in all the cases and upon hearing the arguments of both sides, all the cases were posted for judgment today.

Date of sentencing order, if any:: 16.03.2026

In the result, accused Nos.1, 2, 3 and 6 are found guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 201 and 420 of Indian Penal Code and and accordingly, they are convicted under Section 248(2) of Code of Criminal Procedure. Further, they are found not guilty for the offence under Section 417 of the Code and acquitted under Section 248 (1) of Code of Criminal Procedure.

Accused Nos.4, 5, 7 to 9 are found not guilty of the offences punishable under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and Sections 120-B, 417, 201 and 420 of Indian Penal Code and and thereby, they are acquitted under Section 248(1) of Code of Criminal Procedure and their bail bonds shall be continued for six months in view of Section 437A of Code of Criminal Procedure.

Accused No.1 issentenced to suffer rigorous imprisonment of Seven (7) years of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, he shall suffer simple imprisonment for a period of six (6) months. Being Managing Director Accused No.2 company, accused No.1 shall pay fine of Rs.5,00,000/- (Rupees five lakh only) of the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 on behalf of accused No.2 company and in 84 C.C.No.2/2016 PDJC, Rjvm default of payment of fine, accused No.1 who is Managing Director of accused No.1 company shall suffer simple imprisonment of six (6) months. Accused No.3 issentenced to suffer rigorous imprisonment of Five years (5) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.1,00,000/- (Rupees one lakh only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused No.6 issentenced to suffer rigorous imprisonment of Three years (3) yearsof the offence under Section 5 of Andhra Pradesh Protection of Depositors of Financial Establishment Act, 1999 and also sentenced to pay fine of Rs.50,000/- (Rupees fifty thousand only) and in default of payment of fine, she shall suffer simple imprisonment for a period of six (6) months. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Three (3) years each of the offence under Section 420 of Indian Penal Code and also sentenced to pay fine of Rs.10,000/- (Ten thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Six (6) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 201 of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Accused Nos.1, 3 and 6 are sentenced to suffer rigorous imprisonment of Two (2) years each of the offence under Section 120-B of Indian Penal Code and also sentenced to pay fine of Rs.5,000/- (Five thousand rupees) each and in default of payment of fine, they shall suffer simple imprisonment for a period of Three (3) months each. Having given thoughtful consideration to the Judgment of the

Hon’ble Apex Court in Ankush Sivaji Gaikward Vs. State of

Maharastra 16 , and subsequent catena of judgments, this court came to conclusion that this is a fit case to award compensation out of the fine amout, to all the victims who have deposited amount, though they are examined or not, who sustained loss and injury and accordingly, Rs.5,000/-(Rupees five thousand only) is awarded towards compensation to each victim irrespective of their deposit amounts to meet ends of justice. Further, at the time of filing petitions by the victims, to withdraw their compensation amounts, in due course of law and after attaining the finality of the case, learned Public Prosecutor

16. 2013 AIR SCW 3153 85 C.C.No.2/2016 PDJC, Rjvm must certify the said petition to rule out impersonation. The accused Nos.1, 3 and 6 are not entitled to the benefit of the Probation of Offenders Act, 1958, and this is not a fit case to invoke the provisions of the Probation of Offenders Act. All the sentence of imprisonment passed against the accused Nos.1, 3 and 6 shall run concurrently. Further, all the sentences of imprisonment passed in this case and in the connected cases i.e., C.C.Nos.3/2016, 4/2016, 5/2016, 6/2016, and 7/2016 shall run concurrently. The accused are informed about the right of appeal to the Hon’ble High Court of Andhra Pradesh and when questioned about their means to engage counsel, they answered in the affirmative. The accused Nos.1, 3 and 6 are entitled to set off the remand period i.e., accused Nos.1 from 13.11.2015 to 3.3.2016, accused No.3 from 11.12.2015 to 3.3.2016 and accused No.6 from 23.12.2015 to 3.3.2016 under Section 428 of Code of Criminal Procedure.

Digitally Signed by

GANDHAMGANDHAM SUNITHA

SUNITHADate: 2026.03.16 18:02:55 +0530

PRINCIPAL SESSIONS JUDGE,

RAJAMAHENDRAVARAM.