Case Note & Summary
The judgment pertains to two criminal revision applications filed by the accused persons against the order dated 21.04.2018 passed by the learned District Judge-7 and Additional Sessions Judge, Nagpur in Special MPID Case No. 22 of 2005, whereby their applications for discharge (Exhs. 28 and 35) were rejected. The applicants in Criminal Revision Application No. 156 of 2018 are Krishnakant Chaganlalji Chandak (accused No.1) and Manoj Chaganlalji Chandak (accused No.2), who are the director and managing director respectively of a public limited company named 'Care Take Marketing Limited'. The applicants in Criminal Revision Application No. 191 of 2018 are Vivek Vijaykumar Thakre (accused No.3) and Yogesh Vijaykumar Thakre (accused No.4). The complainant lodged a complaint alleging that the company and its directors received amounts from customers and agreed to pay a commission of Rs.12,000 and 25% royalty every month after completion of a pyramid of 31 customers. It was alleged that the company failed to perform its promises and cheated the complainant and other investors. On the basis of the complaint, offences punishable under Sections 420, 406 of the Indian Penal Code, provisions of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (MPID Act), and Section 58 of the RBI Act were registered. The accused filed applications for discharge, which were rejected by the trial court. The High Court, after hearing the parties, held that at the stage of framing of charge, the court is not required to meticulously appreciate the evidence and the test of prima facie case is to be applied. The court found that the allegations in the complaint and the material on record prima facie disclose the commission of offences, and therefore, the discharge applications were rightly rejected. The court dismissed both revision applications.
Headnote
A) Criminal Procedure - Discharge - Prima Facie Case - At the stage of framing of charge, the court is not required to meticulously appreciate evidence and the test of prima facie case is to be applied - The court held that the allegations in the complaint and the material on record prima facie disclose the commission of offences, and therefore, the discharge applications were rightly rejected (Paras 10-12). B) MPID Act - Financial Establishment - Pyramid Scheme - The company collected deposits from the public promising high returns and commission, which prima facie amounts to a pyramid scheme - The court noted that the company is a financial establishment under the MPID Act and the allegations attract the provisions of the Act (Paras 3-5). C) Indian Penal Code - Cheating and Criminal Breach of Trust - Sections 420, 406 IPC - The accused, as directors, allegedly induced the complainant to invest money on false promises and failed to return the amount - The court found that the ingredients of cheating and criminal breach of trust are prima facie made out (Paras 3-5).
Issue of Consideration
Whether the applicants/accused are entitled to be discharged under the provisions of the Code of Criminal Procedure, 1973, in a case involving offences under Sections 420, 406 of IPC, MPID Act, and Section 58 of RBI Act.
Final Decision
Both criminal revision applications are dismissed. The order dated 21.04.2018 passed by the learned District Judge-7 and Additional Sessions Judge, Nagpur in Special MPID Case No. 22 of 2005 is confirmed.
Law Points
- Prima facie case
- discharge
- framing of charge
- MPID Act
- Section 420 IPC
- Section 406 IPC
- Section 58 RBI Act
- pyramid scheme
- financial establishment
