IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF AUGUST, 2019 BEFORE THE HON’BLE MR.JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.6445 OF 2015 BETWEEN:
Balasaheb Takale S/o Dattu Namdev Takale, Aged about 44 years, Director, M/s. Pamosa Trade India Pvt. Ltd., No.405-408, Times Square Building, 4th Floor, Mukund Nagar, Pune Satara Road, Pune-411 037. …Petitioner (By Sri. M.J. Alva, Advocate) AND:
1. State of Karnataka, Represented by The sub-Inspector of Police, Mahalaxmi Layout Police Station, Mahalaxmi Layout, Bengaluru-560 086.
2. Manje Gowda B.H. S/o Bangarappa, Aged about 45 years, No.1147, 3rd main Road, Kamala Neharu Badavane, Yeshawanthpura, Bengaluru-560 022. ...Respondents (Sri. Vijayakumar Majage, Addl. SPP, for R-1, V/o dated 31.03.2016, petition is dismissed against R-2) This Criminal Petition is filed under Section 482 of Cr.P.C., praying to praying to quash the complaint in Crime No.08/2015 registered by respondent No.1 Police with the filing of the FIR before the learned VII Addl. Chief Metropolitan Magistrate, Bengaluru, which is produced at Annexure-‘A’.
This Criminal Petition coming on for Admission, this day, the Court made the following:
ORDER The Police Inspector, C.C.B. lodged a report before Mahalakshmipuram Police alleging commission of offences under Sections 3, 4 and 5 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and Sections 420, 114 read with Section 34 of Indian Penal Code (hereinafter for brevity referred to as the “Act and IPC” respectively 2. Petitioner herein is shown as accused No.2.
The allegations made in the complaint are that on the promise of giving a gas kit and pendant, complainant by name Manchegowda was enrolled in a scheme carried on by M/s. Pamosa Trade India Pvt. Ltd. collecting a sum of Rs.7,900/-, but he was given only a gas kit worth Rs.1,000/- and was not given the pendant as promised and thereby committed the above offences.
3. Learned counsel for the petitioner submits that the allegations made in the complaint even if accepted in its entirety, they do not make out the ingredients of the offences under the provisions of the Act. There are no allegations that the petitioner herein was involved in any money circulation scheme. It is also not the case of the petitioner that petitioner herein was a member of the prize chit. Under the said circumstances, registration of FIR against the petitioner and other accused under the provisions of the Act is without any basis and is a clear case of abuse of process of the Court. Insofar as the offences under the provisions of IPC are concerned, learned counsel submitted that the petitioner has not made any false representation to the petitioner. On the other hand, the allegations in this regard are directed against the Company and not against the petitioner herein. Even then, there is no material to show that the promised goods were refused to be supplied by the Company. Hence, there was no cause of action to proceed against the petitioner even for the alleged offences under the provisions of Indian Penal Code.
4. Learned Additional State Public prosecutor appearing for respondent No.1-State argued in support of the impugned action contending that prima facie materials are available which disclose the commission of alleged offences and the matter being under investigation, no case is made out for quashing the proceedings.
5. I have considered the submissions and perused the records.
6. The complaint was filed by the Inspector of CCB Police based on the information lodged by one Sri. Manchegowda with the Assistant Commissioner of Police, CCB. According to the informant, he was made to enroll in the scheme by M/s. Pamosa Trade India Pvt. Ltd. and on the basis of the promise made by the Company, he enrolled himself paying a sum of Rs.7,900/-. There are specific allegations in the complaint that the Company promised to supply a gas kit and a pendant. These averments in my view, do not attract the provisions of the Act. Section 2(C) of the Act defines the term “Money Circulation Scheme”, as under:
“2(c). “money circulation scheme” means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions.”
The gist of the said scheme is making of easy money or receipt of money or a valuable thing in return for a promise to pay money. It is not the case of the complainant or respondent that the petitioner herein or the M/s. Pamosa Trade India Pvt. Ltd has received any money from the complainant as consideration for return of money on any event or contingency applicable to the members. On the other hand the case of the respondents is that the money was received by the company on the promise of supplying a gas kit and a pendent. As such, the basic ingredients of Section 2(c) of the Act are not attracted to the facts of the case.
7. Section 2(e) of the Act defines “prize chit”, as under:
“2(e) “prize chit” includes any transaction or arrangement by whatever name called under which a person collects whether as a promoter, foreman, agent or in any other capacity, monies in one lumpsum or in instalments by way of contributions or subscriptions or by sale of units, certificates or other instruments or in any other manner or as membership fees or admission fees or service charges to or in respect of any savings, mutual benefit, thrift or any other scheme or in arrangement by whatever name called, and utilizes the monies so collected or any part thereof or the income accruing from investment or other use of such monies for all any of the following purposes, namely:-
(i) giving or awarding periodically or otherwise to a specified number of subscribers as determined by lot, draw or in any other manner, prizes or gifts in cash or in kind, whether or not the recipient of the prize or gift is under a liability to make any further payment in respect of such scheme or arrangement;
(ii) refunding to the subscribers or such of them as have not won any prize or gift, the whole or part of the subscriptions, contributions or other monies collected, with or without any bonus, premium, interest or other advantage by whatever name called on the termination of the scheme or arrangement, or on or after the expiry of the period stipulated therein.
It is not the case of the complainant that in respect of the aforesaid transaction he has paid any lumpsum money or has become a member of the prize chit. On the other hand, the allegation is that he enrolled himself as a member of the scheme floated by M/s. Pamosa Trade India Pvt. Ltd for supply of goods for a consideration of Rs.7,900/-. If for any reason the articles promised by the Company have not been delivered or the articles supplied by the Company are of substandard nature or not worth the amount collected from the party, the same may give rise to an offence under Section 420 of IPC and not under Sections 3, 4 and 5 of the Act. Therefore, in the absence of any material constituting the ingredients of the offences under the provisions of the Act, registration of the FIR for the above offences under Sections 3, 4 and 5 of the Act, in my view, is baseless and cannot be sustained. However, the allegations in the complaint prima facie disclose the ingredients of the offence under the provisions of Section 420 of Indian Penal Code. To this extent, I am not inclined to interfere into the matter.
Accordingly, the petition is allowed-in-part. The registration of FIR against the petitioners for the offences punishable under Sections 3, 4 and 5 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 stands quashed. The investigation shall proceed against the petitioner in respect of the offences under the provisions of Indian Penal Code.
Sd/- JUDGE BMC