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289 paragraphs · 6,248 wordsM. Jeyapaul, J.—Crl.O.P. No. 21711 of 2007 is filed praying to quash the entire criminal proceedings in C.C. No. 31 of 2001 on the file of
the Sub Court (TNPID Act) at Chennai. Crl.O.P. No. 35339 of 2007 is filed to quash the entire proceedings at the stage of investigation in Crime
No. 5 of 2007 on the file of the Inspector of Police, District Crime Branch, Thiruvannamalai.
The petitioners in Crl.O.P. No. 21711 of 2007 have contended in the petition as follows:
One V.S. Velliyangiri lodged a police complaint dated 29.2.2000, alleging non payment of fixed deposit amount of Rs. 25,000/= on its maturity.
Following the said complaint, numerous other depositors started lodging similar complaints before the Inspector of Police EOW-II. The
respondent, Deputy Superintendent of Police, EOW-II registered the complaints for the offence u/s 5 of the Tamil Nadu Protection of Interests of
Depositors (in Financial Establishments) (for short TNPID) Act, 1997 and u/s 120(B), 406 and 420 of the Indian Penal Code. The properties of
the petitioners ranked as A3, A4 and A6 and that of the other family members were attached by way of interim attachment order dated 7.8.2001.
The respondent laid a charge sheet before the Special Court constituted in terms of Section 6 of the said Act at Chennai and the same was taken
on file in C.S. No. 31 of 2001 for the aforementioned offences. Now, the case stands posted to 25.7.2007 for framing of charges. The petitioners
challenged the validity of the TNPID Act, but, the same was dismissed by a common order made in a batch of cases in W.P. No. 7755 of 2006
by the Full Bench of this Court on 2.3.2007. The entire investigation culminated in filing of final report by the respondent and the cognizance taken
based thereon by the Special Court are ex facie illegal. The Deputy Superintendent of Police, EOW-II, Coimbatore is not the competent authority.
The institution of prosecution is contrary to the scheme, procedure and mandatory requirements contained in the TNPID Act, 1997. The said Act
enacted for the purpose of protecting the deposits made by the public in the financial institutions has overriding effect on other laws, customs or
usage which are in force in terms of Section 14 of the Act. The Government is the competent authority to find out prima facie whether any offence
was committed to attract the mischief of the Special Act. The competent authority contemplated under the TNPID Act has been empowered to
effect compounding of offences either at pre-prosecution stage or after institution of prosecution case. The competent authority has been directed
to render assistance to the Special Public Prosecutor in conducting the case in the Special Court. Therefore, the competent authority alone has got
power to institute prosecution and to play the role of prosecutor in trying the offences under the Special Act. There is no express or implied
provision in the TNPID Act conferring power on the police official either to investigate or to institute prosecution. By G.O. Ms. No. 250 Home
Department dated 21.3.2002, the Additional Commissioner for Land Administration was appointed as competent authority. The respondent,
without having any jurisdiction or power under the Special Act, has registered the First Information Report and investigated the case and submitted
final report before the Special Court. Therefore, the petitioners in Crl.O.P. No. 21711 of 2007 pray for quashing the criminal proceedings in C.C.
No. 31 of 2001 on the file of the Special Court, TNPID Act at Chennai.
No counter was filed on the side of the respondent.
The petitioners in Crl.O.P. No. 35339 of 2007 ranked as A13 and A14 in Crime No. 5 of 2007 on the file of the Inspector of Police, District
Crime Branch, Thiruvannamalai, has contended as follows:
The respondent has initiated criminal proceedings against the petitioners under Sections 420, 409 and 120B of the Indian Penal Code read with
Section 5 of the TNPID Act, 1997. The petitioners were partners of Shri. Dhanalakshmi Financiers during 1981-84 and 1981-85 respectively.
Thereafter, they retired from the partnership firm. The petitioners had no knowledge about the affairs of the financial establishment after their
retirement from the partnership firm. The respondent police have acted contrary to the provisions of the TNPID Act without any jurisdiction. The
competent authority constituted under the TNPID Act alone could initiate prosecution. The Additional Commissioner of Land Administration
appointed as competent authority in G.O.Ms. No. 1484 dated 9.10.1997 alone has got the competency to launch prosecution under the Special
Act. Therefore, the petitioners in Crl.O.P. No. 35339 of 2007 seeks for quashment of the case in Crime No. 5 of 2007 on the file of the
respondent.
The respondent in Crl.O.P. No. 35339 of 2007 filed counter stating that the complaint received by the Superintendent of Police,
Thiruvannamalai District was entrusted to the respondent for the purpose of registration of the case and investigation of the matter. The witnesses
examined by the respondent have stated that they deposited their money in Shri. Dhanalakshmi Finance. The District Registrar of the Registration
Department has given statement to the effect that the petitioners herein also were partners of Shri. Dhanalakshmi Finance. The investigation would
further reveal that the petitioners continued to be partners in the said Finance Company. No record is available to show that the petitioners
resigned from the partnership firm. Therefore, the respondent has prayed for dismissal of the petition in Crl.O.P. No. 35339 of 2007 seeking
quashment.
Learned Senior Counsel appearing for the petitioners in both the matters would submit that Section 14 of the TNPID Act starts with non
obstante clause and it has got overriding effect over other laws including the provisions under Sections 4 and 5 of the Code of Criminal Procedure.
The main purpose of the TNPID Act is to protect the investors. Only in cases where the Special Court feels that any financial institution dishonestly
intended to defraud the investors, they may be prosecuted u/s 5 of the TNPID Act. The court cannot enlarge the scope of legislation, when the
language of the provision is plain and unambiguous. A joint reading of Sections 13 and 14 of the TNPID Act would exclude the applicability of the
Code of Criminal Procedure with respect to the registration of the case and investigation of the matter. Section 4(2) of the TNPID Act makes it
clear that the competent authority is empowered to carry out the performances of the Government. If the Special Court satisfies that any particular
financial establishment has indulged in defrauding the investors, the Special Court has got suo motu power on the basis of the materials placed by
the competent authority to order prosecution against all those persons. Conspicuously, the legislature did not specify that the investigation under
Rules 3 to 5 is only for the purpose of attachment of the property of the defrauding financial establishment. Only when the Special Act provides for
initiation of prosecution by taking cognizance on the basis of police report, does the police have power to investigate the offences following the
procedure under the Special Act and not otherwise. The police would get jurisdiction under Sections 4 and 5 of the Code of Criminal Procedure
only when there is absence of provision in the Special Act restricting the applicability of the investigation procedure contemplated under the Code
of Criminal Procedure. Even assuming without admitting that the provision of the Code of Criminal Procedure is applicable, the police has no role
in regard to investigation, enquiry and also in conducting trial. There is express exclusion of the role of police in the TNPID Act. If the intention of
legislature is to give power to police in the matter of investigation, there is no need for conferring such power of investigation upon the competent
authority in the Special Act. The competent authority has been empowered under the TNPID Act to assist the prosecution. The scheme of the
TNPID Act is to safeguard the interest of the depositors and not to punish the erring financial institution indiscriminately. Absence of express
provision authorising the police officer to investigate the offences would disentitle the police to investigate the offence under the Special Act. The
learned Senior Counsel appearing for the petitioners would submit that the respondents have taken upon the investigation without any jurisdiction
and therefore, quashment of the entire criminal proceedings in both the matters is warranted.
Learned Government Advocate (Criminal Side) appearing for the respondent would submit that there is no specific provision under the TNPID
Act relating to the investigation of the case. The TNPID Act also does not specifically debar the application of the Code of Criminal Procedure in
the matter of registration of the crime and investigation of the case. Sections 4 and 5 of the Code of Criminal Procedure, in the absence of any
express provision in the Special Act restricting the applicability of the Code of Criminal Procedure, confer ample power on the respondent
investigating agency based on the complaint they received from the public. The role of the competent authority appointed under the Special Act is
not extended to the investigation of the case. A total misreading is given to the provisions of the TNPID Act to make it appear as though there is a
clear exclusion of the applicability of the Code of Criminal Procedure in the matter of investigation of the offence u/s 5 of the TNPID Act. It is his
last submission that when there is no provision under the TNPID Act to deal with the investigation of the case and there is no express provision
excluding the applicability of the provisions under Sections 4 and 5 of the Code of Criminal Procedure, the investigation taken upon by the
respondents in the respective cases for the offences under the TNPID Act is lawful.
Abilash Auto Finance Matrum Subaswathi Investment Muthaleetalargal Sangam has been impleaded as second respondent in Crl. O.P. No.
21711 of 2007 as per the orders of this Court in M.P. No. 3 of 2007.
Learned Counsel appearing for the second respondent therein would also contend that the police authority has every power to receive the
complaint, register the case, investigate the matter and file final report before the Special Court constituted under the TNPID Act. It is his further
submission that even after the validity of the TNPID Act was upheld by the Full Bench of this Court, the present petition has been filed just to drag
on the criminal prosecution. Therefore, he would submit that there is no valid challenge to the investigation taken upon by the respondents as
against the petitioners.
The object of the enactment of the TNPID Act, 1997:
It came to the notice of the government that many of the financial establishments, not covered by the Reserve Bank of India Act, 1934,
received deposits from the innocent public on the promise of giving exorbitant interest and deceived the depositors without discharging their
obligation to make payment of the deposit on maturity. On account of which, public resentment ran high which culminated in law and order
problem in the State. Therefore, the Government thought it fit to come out with this public interest legislation to regulate the activities of such
financial establishments. As there was no provision in the original Act for attaching the properties of the persons who borrowed money from the
financial establishments and for sale of the properties in public auction and for equitable distribution of the sale proceeds to the depositors, an
amendment was brought in by the Government of Tamil Nadu by Tamil Nadu Act 30 of 2003 so as to attach the properties of such person,
appoint more than one competent authority, constitute Special Courts for different areas, appoint Special Public Prosecutors for each of the
Special Courts, compound the offences punishable under the Act, sell the attached properties in public auction and distribute the sale proceeds
among the depositors.
It is found that the primary object of the Act is to secure the interest of the depositors by attaching the properties on default to make payment
on maturity and selling away the attached properties for the purpose of distribution of the sale proceeds among the depositors. Consequentially, the
offence committed u/s 5 of the Act is directed to be tried by the Special Court. The competent authority has been given the power to go in for
compounding the offence with or without permission of the Special Court as the case may be. Punishing the defrauding financial institution is not the
main object of the Government. But, the law has to take its own course if the default in repayment of deposits has culminated in the offence
detailed u/s 5 of the TNPID Act.
Salient features of the TNPID Act, 1997:
On receipt of complaints from a number of depositors alleging that a financial establishment has defaulted in returning the deposits even after
the period of maturity or defaulted in paying the interest on the deposits made by the investors, the Government would take serious note of such a
complaint and would deal with the affairs of the financial institution to find whether the grievance of such depositors matches with the intention on
the part of the financial establishment to defraud them. In case the Government comes to a decision that there is no likelihood of return of the
deposit or non payment of the interest by the financial establishment concerned, the Government has power to pass an ad-interim order of
attachment not only of the money but also of other properties procured either in the name of the financial institution or in the name of any other
person from out of the corpus of the deposit made by the aggrieved investors. The Government has taken upon the responsibility by the special
legislation to protect the interest of the depositors. Such a power of the Government to go in for ad-interim attachment of the properties of the
defaulting financial establishments is provided u/s 3 of the TNPID Act.
u/s 4 of the TNPID Act, the Government is empowered to appoint the competent authority to exercise control over the properties attached by
the Government and transfer to the custody of the competent authority in terms of Section 3 of the Act. It is true that Section 4(2) of the Act reads
that the competent authority shall have such other power as may be necessary for carrying out the purposes of the Act. The said provision does
not mean that the competent authority shall have all the powers necessary for carrying out the purposes of this Act. The phrase ""such other
powers"" has been purposely employed by the legislature to mean that he has authority to exercise his powers for equitable distribution of the
proceeds of the properties attached and brought to auction. By no stretch of imagination, Section 4(2) would mean that the competent authority,
who is not versed in the nuances of investigation process, has been vested with the power to investigate the matter. As already pointed out, the
main purpose of the Act is not to punish the defaulters in making repayment of the deposit on maturity. Section 5 is a necessary consequential evil
arising out of the default made by the financial institutions.
The competent authority shall apply within thirty days on receipt of the ad-interim order of attachment passed by the Government to the
Special Court for making the ad-interim order absolute. All the details of the default made and the properties procured by means of the deposits
and the names of the persons in whose names such properties have been invested or purchased will have to be submitted to the Special Court in
the application that is filed by the competent authority for making the ad-interim order of attachment absolute. Even if such matters are dealt with
by another court, the competent authority has been empowered to make such application before such court.
Though Section 4(4) of the Act empowers the competent authority to deal with the defaulting financial institution and unearth the fraud
committed by them, the powers of the competent authority has been restricted to deal only with the properties attached to the Government.
Lodging of complaint by the competent authority or investigation of the case by the competent authority has not been spoken to under the relevant
provision viz., Section 4 of the TNPID Act. Therefore, it can be concluded effortlessly that the phrase ""such other powers"" employed in Section
4(2) of the Act is restricted to the action to be taken over the properties attached by the Government.
Where any financial establishment makes default in returning the deposit or fails to pay interest on the deposit, every person responsible for the
management of the financial establishment is punishable with imprisonment for a term which may extent to 10 years and with fine which may extend
to one lakh rupees and such financial establishment is also liable for fine which may extend to one lakh rupees. Section 5 not only speaks about the
nature of offence which is punishable under the special statute but also the nature of punishment that is awarded to the defaulters. It is to be noted
that Section 5 does not speak about the mode of giving complaint and the agency which would take up the complaint for investigation.
u/s 5A of the Act, the competent authority has every right to compound the offence even before the institution of the prosecution. But, in a case
where prosecution has been instituted, the competent authority, of course, is empowered to compound the offence, but, it should be done with the
permission of the Special Court. The pre-condition to compound the offence is payment of entire amount due to the depositors with or without
interest. The criminal prosecution case comes to an end the moment the offence is compounded by the competent authority.
The Special Court manned by the District and Sessions Judge, has been constituted by the Government with the concurrence of the Chief
Justice u/s 6 of the Act. The Special Court has been empowered to try the offences under the Code of Criminal Procedure also while trying the
offence specified in Section 5 of the Act. Section 7 deals with the powers of the Special Court in regard to the attachment, sale, realisation and
distribution of sale proceeds of the property attached. The Government has appointed Special Public Prosecutors for the purpose of conducting
the case in the Special Court constituted u/s 6 of the Act.
The committal proceedings usually taken up by the learned Judicial Magistrate concerned under the scheme of the Code of Criminal
Procedure, 1973 has been dispensed with u/s 13(1) of the Act. The Special Court has been empowered to take cognizance of the offence without
the accused being committed to it for trial. The Special Court shall resort to the procedure prescribed in the Code of Criminal Procedure, 1973 for
the trial of warrant cases by Magistrates while trying the accused.
Section 13(2) of the Act would read that the provisions of the Code of Criminal Procedure 1973 shall, so far as may be, apply to the
proceedings before a Special Court and for the purpose of the said provisions, a Special Court shall be deemed to be a Magistrate Court. As far
as the trial before the Special Court is concerned, the Code of Criminal Procedure has been made applicable specifically for the trial of the
accused before it.
Section 14 of the TNPID Act reads as follows:
Act to override other laws - Save as otherwise provided in this Act, the provisions of this Act shall have effect notwithstanding anything
inconsistent therewith contained in any other law for the time being in force or any custom or usage or any instrument having effect by virtue of any
such law.
The provisions of the TNPID Act shall have overriding effect despite the fact that there is some inconsistent provision found in the Code of
Criminal Procedure or in any other law. It is to be noted that the mode of setting the law in motion and the agency who will take up the process of
investigation have not been specifically spelt out in any of the provisions in the TNPID Act. In case a special provision has been made in the
TNPID Act with reference thereof, Section 14 of the Act will operate and the provisions in the Code of Criminal Procedure with respect to the
mode of giving complaint and the agency which shall investigate the matter shall not have the effect on the special provisions of the TNPID Act.
When there is no such specific provision under the Act, as far as mode of lodging the complaint and investigation of the matter is concerned, the
Code of Criminal Procedure will have to be resorted to.
Sections 4 and 5 of the Code of Criminal Procedure:
For better appreciation, provisions under Sections 4 and 5 of the Code of Criminal Procedure are incorporated:
Trial of offences under the Indian Penal Code and other laws - (1) All offences under the Indian Penal Code (45 of 1860) shall be investigated,
inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but
subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with
such offences.
Saving - Nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time
being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in
force.
The investigation, enquiry and trial of all the offences under the Indian Penal Code shall be only in accordance with the Code of Criminal
Procedure. But, in respect of the offences under any other law, such investigation, enquiry and trial shall also be only in accordance with the
provisions of the Code of Criminal Procedure unless the same has been regulated in any special enactment. The provisions found in the Code of
Criminal Procedure will not affect the special jurisdiction or special form of procedure prescribed in any other special enactment as per Section 5
of the Code of Criminal Procedure.
The entire reading of the TNPID Act would go to show that no procedure has been contemplated with respect to the investigation and enquiry
of the complaint arising hereunder. As far as the trial of the case is concerned, the Special Court has been directed to follow the procedure
prescribed under the Code of Criminal Procedure u/s 13 of the TNPID Act. When no special procedure with regard to the investigation and
enquiry is prescribed by the special law, the general procedure laid down in the Code of Criminal Procedure should be necessarily followed. The
application of the Code of Criminal Procedure to the investigation and enquiry has not been specifically restricted under the TNPID Act. Unless
the special enactment covers the field of investigation and enquiry and lay down a different procedure to be adhered to, the applicability of the
provision u/s 4(2) of the Code of Criminal Procedure, 1973 with reference thereto cannot be restricted.
Unacceptable submissions made on the side of the petitioners:
It is true that Section 14 of the TNPID Act contains a non obstante clause. The non obstante clause will save only the specific provision made
in the TNPID Act limiting the applicability of the other law to the TNPID Act even if such a provision is inconsistent with the special enactment.
But, it is a far fetched argument to say that Section 14 of the TNPID Act has a overriding effect on the applicability of Sections 4 and 5 of the
Code of Criminal Procedure when no provision has been made as to the investigation and enquiry of the complaints in TNPID Act. Section 4(2) of
the Code of Criminal Procedure automatically applies to the investigation and enquiries with respect to the complaints under TNPID Act. The
sweep of Sections 4 and 5 of the Code of Criminal Procedure is not affected by the non obstante clause found in Section 14 of the TNPID Act.
Learned Senior Counsel appearing for the petitioners submitted a ratio laid down in Prakash Kumar @ Prakash Bhutto Vs. State of Gujarat,
wherein it has been held as follows:
Before we proceed to consider the rigours of Sections 15 and 12 we may at this stage point out that it is a trite law that the jurisdiction of the
Court to interpret a statute can be invoked only in case of ambiguity. The Court cannot enlarge the scope of legislation or intention when the
language of the statute is plain and unambiguous. Narrow and pedantic construction may not always be given effect to. Courts should avoid a
construction which would reduce the legislation to futility. It is also well settled that every statute is to be interpreted without any violence to its
language. It is also trite that when an expression is capable of more than one meaning, the Court would attempt to resolve the ambiguity in a
manner consistent with the purpose of the provision, having regard to the consequences of the alternative constructions.
Firstly, there is no ambiguity with respect to the investigation and enquiry into the complaint under the TNPID Act. Secondly, the legislature
has intended not to provide a special machinery for investigation and enquiry of the complaints arising out of the default made by the financial
establishments under the TNPID Act. The language employed in the special statute is found to be very plain and totally unambiguous. No
inconsistent provision is also found in the subject enactment. In view of the above, the aforesaid authority does not come to the rescue of the
petitioners.
A conjoint reading of Sections 13 and 14 of the TNPID Act does not oust the jurisdiction of the Code of Criminal Procedure in the field of
investigation and enquiry with reference to the offences alleged to have been committed u/s 5 of the Act.
There are four modes of taking cognizance of offences u/s 190 of the Code of Criminal Procedure. Any Judicial Magistrate may take
cognizance of an offence on receipt of a complaint of facts which constitute such offence or upon a police report of such acts or upon information
received from any person other than the police officer or upon his own knowledge that such offence has been committed. Of course, the Special
Judge manning the Special Court u/s 6 of the TNPID Act can take cognizance of the offence under the TNPID Act upon information received
either from the competent authority or from any other persons or upon his own knowledge, but, that is not the innocuous question which has arisen
for determination in this matter. The larger question which has arisen for consideration is whether the police authorities have the power to register a
case based on the complaint received from the aggrieved depositor, investigate the matter and file a police report. When Section 190 of the Code
of Criminal Procedure gives ample power to the Judicial Magistrate concerned to take cognizance of any offence under any of the modes
adumbrated thereunder, no restriction can be put on the Special Court which has got the power of the Judicial Magistrate to take cognizance of
any offence under the TNPID Act.
The Special Court u/s 6 of the TNPID Act has been empowered to deal not only with the offences u/s 5 of the Act but also with the offences
under the other laws. When there is no specific provision under the TNPID Act with respect to lodging of the complaint, taking up the investigation
of the matter and enquiry relating thereto, the respondent police is empowered under Chapter 12 of the Code of Criminal Procedure to register the
case, investigate the matter and file final report before the Special Court. The role of the competent authority under the TNPID Act has been
restricted to deal with the attached property, distribution of the same equally amongst the aggrieved depositors, compounding of the offences and
assisting the Special Public Prosecutor. He has not been empowered to investigate the case under the TNPID Act.
Rule 5 of the TNPID Rules 1997 mandates the competent authority to make a report to the Special Court as to the abscondence of the
person in respect of whom action is contemplated under the Special Act. Rule 6 thereof directs the police officer to assist the competent authority
to track down the properties acquired from out of the deposits. These rules do not give any power to the competent authority to investigate the
complaint against the defaulting financial establishment.
Foreign Exchange (Regulation) Act, (FERA) 1973, a special law contains comprehensive provision with respect to investigation, enquiry and
trial for offences under the said Act. In such circumstances, when the question came up before the Supreme Court in Central Bureau of
Investigation Vs. State of Rajasthan and others, , the Supreme Court answered that Sections 4 and 5 of the Code of Criminal Procedure, 1973
are not applicable to offences under the FERA.
In the instant case, as already pointed out by this Court, there is no provision relating to investigation and enquiry with respect to the offences
u/s 5 of the TNPID Act. Therefore, the aforesaid case is quite distinguishable in the light of the facts and circumstances of this case.
Section 17 of the Prevention of Corruption Act, 1988 specifically provides for investigation by a person authorised in that behalf. It makes it
clear that the offence referred to in Clause (e) of Sub-section (1) of Section 13 shall not be investigated without the order of a police officer not
below the rank of a Superintendent of Police.
The learned Senior Counsel appearing for the petitioners cited the decision in State Inspector of Police Vs. Surya Sankaram Karri, wherein it
has been held that the authorisation by a Superintendent of Police in favour of an officer to carry out the investigation in terms of Section 17 of the
Prevention of Corruption Act, 1988 is a statutory mandate. When the authority of a person to carry out the investigation is questioned on the
ground that he did not fulfil the statutory requirements, the burden lies on the prosecution to prove the same. The question that has arisen for
determination in the present case is whether the respondent police has authority to investigate the offences u/s 5 of the TNPID Act on receipt of
complaint from an aggrieved depositor. No authorisation by any of the superior police officer to conduct the investigation has been contemplated
under the TNPID Act. Therefore, the aforesaid authority has no application to the case on hand.
In State, by Nilratan Sircar, Enforcement Officer Vs. Lakshmi Narain Ram Niwas, , it has been held as follows:
It was also urged for the appellant that the provisions of Section 5(2) of the Code apply to the present case in matters which are not provided by
the Act. This contention too has no basis. Section 5 provides that all offences under any law other than the Indian Penal Code shall be investigated,
inquired into, tried and otherwise dealt with according to the provisions contained in the Code of Criminal Procedure, but subject to any enactment
for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. The Act is a
special Act and it provides u/s 19-A for the necessary investigation into the alleged suspected commission of an offence under the Act, by the
Director of Enforcement. The provisions of the Code of Criminal Procedure therefore will not apply to such investigation by him, assuming that the
expression ''investigation'' includes the retaining of the documents for the purposes of the investigation.
Section 19A of the FERA, 1947 makes provision for investigation into the alleged offences under the said Act by the Director of Enforcement.
When such special provision with respect to the investigation of the matter has been provided in the special enactment, the Supreme Court
observed that Section 5(2) of the Code of Criminal Procedure does not apply. In the instant case, there is no provision regulating the manner of
investigation and enquiry into the offences. Therefore, the aforesaid ratio is distinguishable on facts.
u/s 22 of the Mines and Minerals (Regulation and Development) Act, the District Officer is the competent authority to lodge a complaint
before the learned Judicial Magistrate. The court has been directed to take cognizance of the offences only on the complaint given by such
authorised person. In K. Subramani and Ors. v. State by Inspector of Police, Nallorer Police Station, Salem District (2007) 1 MLJ (Crl.) 392, this
Court, having come to know on facts that the Assistant Director of Mines has lodged a complaint for the offences under the Mines and Minerals
(Regulation and Development) Act when the District Officer has been notified as an authorised person to lodge a complaint as per the mandates of
Section 22 of the said Act, held that the whole proceedings culminated based on the complaint given by an officer not authorised specifically under
the said Act are not sustainable. In TNPID Act, the competent authority has been assigned specific role to be performed. The Act does not say
that the competent authority under the TNPID Act shall be the sole authority to lodge a complaint to the Special Court. He may lodge a complaint
based on the information he received from the defaulting depositors. But, it does not preclude any other person including the aggrieved depositors
to lodge a complaint with the police. Therefore, the above authority has no application to the facts and circumstances of this case.
u/s 7(1) of the West Bengal Sales Tax Act, 1994, a Bureau of Investigation has been empowered to carry on the investigation and hold
enquiry into any case of evasion of tax or malpractice committed and send a report of it to the Commissioner of Sales Tax. The Supreme Court in
State of West Bengal Vs. Narayan K. Patodia, has held as follows:
Section 7(1) of the Sales Tax Act empowers the State Government to constitute a Bureau of Investigation for discharging the functions referred to
in Sub-section (3) thereof. It empowers the Bureau to carry on the investigation or hold enquiry into any case or alleged or suspected case of
evasion of tax or malpractice created thereof and send a report of it to the Commissioner. A reading of Section 7 makes it clear that creation of
Bureau of Investigation for the purpose of discharging the function envisaged in Sub-section (3) which, of course, includes investigation also. But
there is nothing in Section 7 that such investigation can be carried on ""only"" by the Bureau and not any other investigating agency. It is open to the
Bureau to get the assistance of any other legally constituted investigating agency for effectively inquiring into all the ramifications of the offence. As
in this case if offences falling under the Indian Penal Code or any other enactment are also detected during the course of investigation conducted by
the Bureau there is no inhibition to pass over the investigation to the regular police.
The Supreme Court has observed that there is no provision u/s 7 of the West Bengal Sales Tax Act that the Bureau of Investigation shall be
the only investigation agency. Therefore, it does not preclude a better investigating agency to take up the investigation more especially when other
offences under the Indian Penal Code have been allegedly committed.
Under the TNPID Act, the competent authority has not been empowered to embark upon investigation into the offences contemplated u/s 5 of
the TNPID Act. Even assuming for the worst case, without conceding, that the competent authority has been empowered to investigate the
offences u/s 5 of the TNPID Act, there is no embargo for the respondent police who received complaint from the aggrieved depositors to
investigate the offence under the TNPID Act along with other offences alleged to have been committed under the Indian Penal Code as per the
above verdict of the Supreme Court.
As regards Crl.O.P. No. 35339 of 2007, no material was produced by the petitioners therein to show that the petitioners had retired from the
partnership form Shri. Dhanalakshmi Finance during 1981-84 and 1981-85 respectively. The Inspector of Police, District Crime Branch,
Thiruvannamalai has examined the District Registrar of Registration Department who has spoken during the course of investigation that the
petitioners therein were also partners of the said partnership firm on the relevant date of commission of the offence and that they continued to be
partners even thereafter. Therefore, there is no merit in the submission made by the petitioners in Crl.O.P. No. 35339 of 2007.
I find that the petitioners have filed these frivolous petitions without any substance seeking quashment of the criminal proceedings. Therefore,
both the Criminal Original Petitions stand dismissed. The connected Miscellaneous Petitions are also dismissed.