Helios & Matheson Information Technology Ltd, short Note on WP order

WP No. 14664 / 2015 & WP No. 14229 /2015

It is a combine order in two writ petition against two companies.

SHORT NOTE:

1.  W.P.No.14664 of 2015 has been filed by M/s Helios and Matheson Information Technology Ltd. [hereinafter would be referred to as Helios] for quashing the FIR in Cr.No.5 of 2015 that was registered on 01.04.2015 against the petitioner for an offence under Section 420 IPC and Section 5 of the Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Act, 1997 [hereinafter would be referred to as TNPID Act].

2. W.P.No.14229 of 2015 has been filed by Viswapriya (India) Limited, formerly known as Viswapriya Financial Services and Securities Ltd., [hereinafter would be referred to as Viswapriya] for quashing the FIR in Cr.No.5 of 2013 that was registered on 21.10.2013 by the Deputy Superintendent of Police, Economic Offences Wing, for offences under Sections 120B, 406, 420 IPC and Section 5 of the TNPID Act.

3. It is indeed a sheer coincidence that, though Helios and Viswapriya have no relationship with each other, yet, they share a common Cr.No.5, but of course registered in different years. It is the specific case of the prosecution that, Helios and Viswapriya had collected deposits from public and on maturity, they failed to repay them, pursuant to which, on the complaint lodged by depositors, the aforesaid cases were registered against them for the offence under the TNPID Act along with IPC offences. At the outset, it is contended on behalf of Helios and Viswapriya that, the Deputy Superintendent of Police, Economic Offences Wing has no authority to conduct investigation under the TNPID Act and therefore, the very FIR deserves to be quashed.

 4.  Steps taken under Criminal law for bringing the offender to book is an action in personam and steps taken to appropriate the properties of an offender is an action in rem. Section 5 of the TNPID Act describes the "offence" and the "punishment". Section 3 of TNPID Act provides for a procedure, similar to the one provided under Criminal Law Amendment Ordinance, 1944 for attaching the properties of a financial institution that had defaulted in repaying the depositors. A Competent Authority is appointed by the Government for safeguarding the financial interests of the depositors. If the argument of the learned counsel for the accused is accepted, in a given case, if a financial establishment does not have any assets for the Government to proceed under Sections 3 and 4, the result will be that, the offender will have to be left scot-free. This will defeat the very purpose of the TNPID Act. Section 6(3) of the Rule merely casts a duty on the Police to assist the Competent Authority for the purpose of identifying the properties stashed by the offender. To say that, only the Competent Authority will have power to conduct investigation and prosecute the offender, would mean conferring police powers on a Revenue Official for which there is no provision either in the Act or in the Code. Section 5 of TNPID Act creates an offence made punishable upto 10 years. TNPID Act will fall within Classification II of the First Schedule of the Code of Criminal Procedure, 1973 and the offence under Section 5 will be cognizable and non bailable, thereby empowering the Police by virtue of Sections 4 and 5 the Code of Criminal Procedure, 1973 to take up the investigation and register FIR under Section 154 of the Code. Hence, this contention is rejected.

5. In response to this submission, it is contended by the learned Public Prosecutor that, Cr.No.2 of 2015 and Cr.No.5 of 2015 are in respect of two different transactions on complaints given by two different persons in respect of deposits made by them separately with Helios and therefore,

"The complaint in Crime no.5 of 2015 was received on 01.04.2015. During enquiry in Crime No.2 of 2015, it came to the knowledge of the Investigating Agency that the amount involved in Crime No.2 of 2015 being a sum of Rs.2,19,020, a relatively smaller sum when compared to the present crime no.5 of 2015, was settled to the de facto complainant therein. The course, when amounts involved are settled subsequent to initiation of prosecution, is the area reserved by the TNPID Act for action by the competent authority in consultation with the special court. Since, Crime No.2 of 2015 was not taken charge of by the competent authority as on that date and the status of the said crime no was uncertain and since the deposits and dates of default in the two FIRs were separated by time, on receipt of complaints regarding defaults running to several crores of rupees involving more than 6500 depositors, the investigation agency has registered a separate FIR in Crime No.5 of 2015 on 01.04.2015. Hence, it is submitted that the registration of FIR in Crime No.5 of 2015 is justified and valid in law."

6. The sum and substance of his submission is that, Cr.No.2 of 2015 was registered and Helios settled with the complainant and the case could not be closed because the Competent Authority was not appointed to compound the case. Subsequently, when hundreds of complaints started pouring in, the police registered a fresh FIR based on a complaint given by one Dr.Ranjith Chittoori in Cr.No.5 of 2015 and arrested the accused. This explanation appears more plausible and acceptable to sustain the FIR in Cr.No.5 of 2015. As observed by the Supreme Court in T.T.Antony's case, "the objection is merely one of a form and not of substance and it makes no difference so far as the Final Report is concerned." Therefore, this Court directs the respondent police not to register any fresh FIR and treat all further complaints as 161 Cr.P.C. statements and proceed with the investigation of the case.

7. In the result, the petitions are dismissed. Anything observed on the facts of the case is confined to the decision in these writ petitions and it is always open to the parties to agitate factual questions before the appropriate forum. Consequently, connected miscellaneous petition is closed.

It is my personal short notes from the order copy for easy understanding in short.

Thanks & Regards

Dr. Zulfiqar Ali Khan, M.A., M.L.,M.Phil(Law),Ph.D

Advocate & Commissioner of Oaths

No. 462,  Addl law Chambers

High Court of Madras

Chennai- 600 104

Blog: http://zulfiqarlegal.blogspot.com

MB: 9884102961 / 9444412961