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Judgment
Malai Subramanian, J.—The petitioners in Crl. R.C. No. 1827 of 2002 are accused No. 1 & 2 in C.C. No. 2 of 2002 on the file of the
Special Judge under T.N.P.I.D. Act, Chennai. The petitioner in Crl. R.C. No. 1830 of 2002 is accused NO. 3 in the same case. They have filed
these revision petitions against the order of the Special Judge dismissing their petitions for discharge from the case. Since the petitioners in both the
petitions are accused in the same case, the following common order is passed.
The petitioners stand charged for offences u/s 420 I.P.C., Section 5 of the Tamil Nadu Protection of Interests of Depositors (in Financial
Establishments) Act, 1997 and Section 58B r/w 45S of the Reserve Bank of India Act. The learned Special Judge refused to discharge the
petitioners from the case on the ground that the materials furnished by the prosecution along with final report disclose the offences alleged and on
the further ground that the offence u/s 45S of the R.B.I. Act has been taken cognizance on a complaint given by the Police Officer, though there is
no complaint from the authorised officer concerned.
The case against the petitioners is that they themselves forming into an Association of individuals were carrying on the business of receiving
deposits in the name of the first accused inducing the witnesses to deposit the amount with the first accused financial establishment with intent to
deceive the depositors. According to the prosecution, they have collected deposits in violation of Section 45S of the R.B.I. Act, which is
punishable u/s 58B of the Act. The further allegation against them is that they have collected about Rs. 12 lakhs as deposit and subsequently
committed default in returning the same after maturity and thereby committed the offence u/s 5 of the T.N.P.I.D. Act.
The learned Senior Counsel Mr. K. Asokan appearing for the petitioners contends that though the allegations made out an offence u/s 420
I.P.C., as per the evidence collected during investigation and as per the final report filed by the police, offences u/s 5 of the T.N.P.I.D. Act and
Section 45S of the R.B.I. Act are not made out. His further submission is that though initially a final report was filed before the III Metropolitan
Magistrate, Chennai only for an offence u/s 420 I.P.C., there was further investigation resulting in the second final report as above said. He also
questions the power of the Special Judge to take cognizance of the offence u/s 45S of the R.B.I. Act saying that only an authorised officer is
entitled to lodge a complaint before a Metropolitan Magistrate or a Judicial Magistrate of the I Class, who alone is competent to take cognizance.
On these contentions, the learned Government Advocate has also been heard.
Since, it has been conceded by the learned Senior Counsel that as per the evidence collected during investigation, the offence u/s 420 I.P.C. is
made out, I do not propose to deal with the propriety of the investigating agency to launch the prosecution for the offence u/s 420 I.P.C. Insofar as
Section 45S of the R.B.I. Act is concerned, the contention of the learned senior counsel is two fold. The first one is that according to the proviso
to Section 58E of the Act, no Court shall take cognizance of the offence except upon a complaint in writing made by an officer of a bank generally
or specially authorised in this behalf by the bank. The second contention is that cognizance can be taken only by a Metropolitan Magistrate or a
Judicial Magistrate of the I Class and the Special Court being not a superior court to the former courts has no power to take cognizance of the
offence.
Insofar the first contention is concerned, the learned Government Advocate drew my attention to the proviso to Section 58E(1) of the Act,
wherein it has been provided that in respect of any offence punishable under Sub-section (5A) of Section 58B, a complaint in writing may also be
made by an officer of the State Government, generally or specially authorised in writing in this behalf by that Government. He also drew my
attention to G.O. Ms. No. 355 Home (Pol.IV) Dept., dated 25.2.1998, wherein the Government of Tamil Nadu has authorised police officers not
below the rank of Inspectors of Police to take action and to file complaints to the competent court for offences punishable under Sub-section 5A
of Section 58B for violation of Section 45(S) of the R.B.I. Act. Sub-section 5A of Section 58B provides that if any person contravenes any
provision of Section 45S, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to
twice the amount of deposit received by such person in contravention of that Section, or two thousand rupees, whichever is more, or with both.
From these provisions and the G.O. it can be safely held that the police officers are entitled to file complaint for the offence u/s 58B r/w 45S for
violation of Section 45S of the R.B.I. Act.
Insofar as the second contention that the Court competent to take cognizance is only a court of Metropolitan Magistrate or a Judicial Magistrate
of the First Class, I find that Section 58E also speaks about a court superior thereto. The contention of the learned Senior Counsel is that the
Special Court cannot be said to be a superior court to that of a Metropolitan Magistrate or a Judicial Magistrate Court and according to him only a
regular Sessions Court can be said to be a superior Court. I am unable to agree with this contention, because the Special Court under the TNPID
Act is presided over by a Sessions Judge. Section 6 of the TNPID Act says that the Government with the concurrence of the Chief Justice of the
High Court can constitute a Special Court in the cadre of a District and Sessions Judge. When a District and Sessions Judge is appointed as a
Special Judge, he does not cease to be a Sessions Judge. Therefore, the Special Judge cannot be said to be not superior in cadre to that of a
Metropolitan Magistrate or a Judicial Magistrate of the First Class. The word ""superior"" found in Section 58E does not mean a Court that has
supervisory powers over a Metropolitan Magistrate or a Judicial Magistrate of the I Class. What is meant was that the said Court should be
superior in cadre to that of a Magistrate. By no stretch of imagination can it be said that the Special Judge presiding over the cases filed under
T.N.P.I.D Act is not superior in cadre to that of the Magistrates concerned. Therefore, there is no impediment for the Special Judge from taking
cognizance of the offence u/s 58B for violation of Section 45S of the Reserve Bank of India Act.
The learned Senior Counsel also contends that the accused are not the financial institution to attract the penal provisions of the TNPID Act.
According to him, none of the accused can be said to be a financial establishment and therefore, the penal provision of Section 5 of the TNPID
Act is not attracted. His further contention is that there is no proof collected during investigation that deposits were collected from the witnesses so
as to attract the provisions of the Act. Regarding the first submission of the learned Senior Counsel, the definition of Subsection 3 to Clause (2) of
the Act reads that a financial establishment means an individual, an association of individuals or a firm carrying on the business of receiving the
deposits under any scheme or arrangement, etc. Even an individual can be called financial establishment; the only criterion is that he should carry on
the business of receiving deposits under a scheme or an arrangement.
According to the statement of the witnesses filed before the Court along with the final report, it is evident that there was a request from the
accused to make deposits with them and as promised and believing their words, cheques were issued for the purpose of deposits. The learned
Senior Counsel contends basing his arguments on two receipts filed by the prosecution that those receipts only indicate that repayment will be
made on demand and therefore, he says that it is only in the nature of promissory notes and it cannot be held to be deposits. His further contention
is that no receipts were collected during the course of the investigation to prove deposits. According to the statements of the witnesses especially a
witness by name Sunil H. Shah, the accused informed that they would send the deposit receipts; and until encashment of the cheques issued by
them, they have been conveying through phone that they would send deposit receipts for fixed deposits; but even after the encashment of the
amounts, they were only promising that the receipts of the deposits would reach them in due course. Further as per the scheme, the persons who
are well acquainted with the accused pay the amounts to the accused and the scheme seems to be from Deepavali to Deepavali each year. But
merely because no receipts were produced, it cannot be said that the petitioners have not received the deposits. Insofar as those receipts relied on
by the petitioners, no doubt, those receipts read that the amount will be paid back on demand with interest. But at this stage, without recording
evidence, this Court cannot hold that the offence u/s TNPID Act is not made out only on the ground of non furnishing of the receipts said to have
been issued by the accused.
During the course of hearing of the petitions, one of the witnesses by name Sunil H. Shah sought to be impleaded as a party and the petitions
were allowed and the learned counsel appearing for the above said person produces a letter stating that the cheque issued for a deposit of Rs. 2
lakhs on 10.10.1997 by cheque No. 188301 of Indian Bank to Dharamchand Sancheti has been shown in the assessment. These are all facts to
be decided by the trial Court. But at this stage on the sole ground of non production of receipts of deposit, I am unable to set aside the order
passed by the learned Sessions Judge.
The learned Government Advocate brings to my notice an order passed by this Court in Crl. O.P. Nos. 1129 to 1131 and 22189 to 22191 of
2001, wherein this Court has held that a reading of the complaint lodged by the petitioners, on the face of it, satisfies the ingredients of the offences
punishable u/s 420 I.P.C. r/w 45S of the R.B.I. Act and u/s 5 of the TNPID Act, 1997. According to the learned Government Advocate, since
this Court has held in quash proceedings that ingredients of the offences are made out, this Court cannot again be asked to hold that the offences
are not made out while considering revisions against refusal to discharge the petitioners from the case.
As against the argument of the learned Government Advocate, the learned Senior Counsel appearing for the petitioners contends that while
considering a revision against refusal to discharge, this Court can independently go into the question as to whether the offences are made out or
not. I have already in detail discussed and held that the offences u/s 45S of the R.B.I. Act and Section 5(1) of the TNPID Act were established on
the available materials on record. Therefore, I see no reason to interfere with the order passed by the Special Judge.
In the result, both the petitions stand dismissed.