Mahesh Rajendran v. The State of Telangana

petition under section 482 0f cr.p.c praying that in.the circumstances stated in the Memorandum of Grounds Ii dt',,.'i"'''iptiiiiJn' tn".Hign court mav be pleased to -p.titioner/Accused No 10 in stav al further proceedings, ,^;i;i; ;;o;;iance ot ttre cC No.9 ot 2022 Pn sunlo' iiull'isJbum Assistant Sessions Judge' at Malkajgiri against tne petitioner/Accused No' 1 0 This petition coming on for hearing, upon perusing the Memorandum of Grounds i"'"''"n"ii'i-"gl;"ntt ot sri K Raiashekar' Advocate of Criminal Petition and '0"" Reddy'.learned Additional Public for the Petitioner and srr il*W"*;;"il Prosecutor on behalf ot iltJ' n"ttiill"^i-r'r" i and none appeared for the Respondent No.2. The Court made the following: ORDER ,.1':tF":lFE'g'Ey' --E /,/ o IN THE HIGH COURT FOR THE STATE OF TELI NGANA AT HYDERABAD THE HONOURABLE SRI JUSTICE N.TUKA IAMJI CRIMINAL PETITION No.4275 OF 2C'. '4 DATE: 27.02.2026 Between: Mahesh Rajendran ...Petitioner/ lr, :cused No. lO. The State of Telangana and another. AND ORDER: . .Respondents This Criminal Petition is filed under Section t 82 of the Code of Criminal Procedure, 1973, seeking quasl rnent of the proceedings against the petitioner-accused No. I O in C.C.No.9 of 2022 on the file of Principal Senior Civil Judg: cum-Assistant Sessions Judge at Malkajgiri

#2. Heard learned counsel for --:titioner and Mr.M.Vivekananda Reddy, learned Additional P- olic Prosecutor appearing for respondent No. 1-State.

3.1. Briefly stated, the relevant facts are that Lccused Nos. 1 and 2 established a Company by name Apex ) eb Seruice and OnLine Education Priuate Limited. It is allege,l that the said 2 Company, Presenting itself as approved by the Ministry of Corporate Affairs, published various promotional materials and social media posts offering investment schemes promising returns up to four times the invested alnount within twenty months under different packages such as "Micro," "Mini," "Basic"' "Gold,"and"Diamond."Onthebasisofsuchrepresentatlons' several persons invested money'

3.2. It is further alleged that, contrary to the assurance of 2Oo/o monthly returns, the promised amounts were not paid' lt is also alleged that investors were subsequently inforrned that' in order to withdraw their investments, they were required to refer four additiona-l persons to invest in the scheme, where after declined repayments. On these allegations, the Company and its - promoters are stated to have cheated the investors'

3.3. The specific allegation against the petitioner is that he was one of the promoters of the Company and that he deceptively induced investors and collected money on behalf of the company.

4.1 . l.earned counsel lor the petitioner submits that the petitioner has no connection whatsoever with the said Company' It is contended that, even after completion of investigation' the prosecution has failed to place any material demonstrating his role either as a promoter or as a person in charge of the affairs of o the Company. On the contrary, it is asserted that the petitioner and his wife had themselves invested amounts in t l e scheme and had made representations to the concerned polic I authorities to treat them as victims. However, no steps were [aken in that rega, rd and, instead, the petitioner has been r rraved as an accused.

4.2. It is further submitted that the statements, of the victims recorded under Section 161 Cr.P.C. do not attnt,r lte al-)y role to the petitioner, nor do they state that he induced t,r :m to invest or received arty amount from them. It is also conrt nded that the Company itself has not been shown as an :< cused, which, according to the petitioner, constitutes a seriolrs legal infirmitv. In the absence of arry material establishing h r ; involvement, continuation of the proceedings is stated to t ), an abuse of process of law. Hence, quashment of the proceedir ls is sought.

#5. Learned Additional Public Prosecutor, on : re othcr hand, lairly submits that a perusal of the charge sheet (l ,es not disclose any substantive material against the petitioner (.. cept a passing reference describing him as a promoter of the )ompany. It is further stated that the charge sheet specificall\ attributes the formation and operation of the Company to accl_l; .d Nos. I and 2 q,ith the alleged intention to cheat investors. [t i ; also admitted \ 4 that the statements of the witnesses do not refer to the petitioner's role in inducing investments or receiving funds' The Company itself has not been arrayed as an accused. Appropriate orders are therefore sought from this Court.

#6. I have perused the materia,l available on record

#7. The petitioner has been arrayed as accused No. 10 for offences under Sectio ns 420 and 406 of the Indian Penal Code' The essential ingredients of Sectio n 42O IPC (cheating and dishonestly inducing delivery of property) are: (i) deception of any person; (ii) fraudulent or dishonest inducement to deliver property or to consent to retention of property; and (iii) mens rea existing from the inception of the tralsaction. For an offence under Section 4O6 IPC (criminal breach of trust), it must be shown that there was entrustment of property and that the accused dishonestly misappropriated or converted the same to his own use.

#8. It is well settled that the existence of dishonest intention at the inception of the transaction is a sine qua non for constituting the oflence of cheating, as held in several decisions of the Hon'ble Supreme Court. Likewise, for criminal breach of trust, specihc entrustment and subsequent misappropriation must be established. I Y ) g. In the present case, a careful perusal of the charge sheet reveais that, apart from a bald statement ::scribing the petitioner as a promoter of the Company, no mat :ria[ has been collected to substantiate such assertion. "here is no documentary evidence indicating his status as I promoter or of{ice-bearer. There is a-lso no material demon: t -ating that he participated in the formulation or implementatior of the alleged investment schemes.

#10. Significantly, none of the witnesses e>:, rnined during investigation ha',,e stated that the petitioner irr luced them to invest, collected money from them, or was entr lsted with any amount. There is no specification as to which inr rstor dealt with the petitioner, how much amount was allegedlv r eceived by him, or how he dishonestly misappropriated the same. 1 1 . In the absence of such foundationa-l fac 1 r, the essential rngredients of Sections 42o and 406 IPC are not t'rima facie made out against the petitioner. Mere association by v I 1' of a general or omnibus allegation, without supporting materizr . cannot sustain criminal prosecution. 1 i

#12. It is a settled principle, as laid down in St ie of Haryana u. Bhajan Lal, 1992 Supp (1) SCC 335, hat u'here the uncontroverted allegations and the materi:rl <:ollected during Eln e#8E4ffi!i!*''-- - - -. 6 investigation do not disclose the commission of al1' offence' and continuation of the proceedings would amount to abuse o[ the process of court, the High Court would be justified in exercising its inherent jurisdiction under Section 482 Cr'P'C to quash the proceedings.

#13. Applying the said principles to the present case, this Court I-rnds that the material on record, even if taken at face value, does not establish a prima facie material for prosecution against the petitioner. The prosecution has made out even a pleading to demonstrate entrustment, inducement, or dishonest intention attributable to him.

#14. Inviewoftheabove, thisCourtisoftheconsideredopinion that continuation of criminal proceedings against the petitioner would amount to abuse of the process of law'

#15. Accordingly, this Criminal Petition is allou'ed, and the proceedings against the petitioner/ accused No' 10 in C'C' No' 9 of 2022 on the file of the Principal Senior Civil Judge-cum Assistant Sessions Judge at Ma-lkajgiri are hereby quashed' Miscellaneous Petitions, pending if any , shall stand closed. Sd,. NAYANI CHANDRA SEKHAR RAO ISTRAR DEPUTY R tt 1P]0L c-ofY u sEc OFFICER To,

#1. The Principal Senicr Civil JurJge Curn Assistant Sessions Judge' at Malkaigiri' 2. The XIX Additional Metropolitin N'lagistrate, Cyberabad' At Malkaigiri' S. fh" St"tion House Officer, Neredm6t Police Station' Rachakonda District' qrwoccstothePublicProseci-rtor, HlglrCourtofTelanganaatHyderabad &z SJta to sri K. Rajashekar, A(ivocate [oPUCl Two CD CoPies -r*.--?"+g€! HIGH COURT DATED: 2710212026 r- SiA r. o( o l(J l]t') 7n)[ t f ^14. -z C)x .ltt t ORDER CRLP.No.4275 ot 2024 ALLOWING THE CRIMINAL PETITION 1{ it7L