Vuppala Pavan Kumar, S/o v. Ramesh, age

Judgment

2. T.he Stakr (,f --r) angana, Represenled by Public Prosr:cutor, H gh Court at Hyderaberd M. Rama Krishra. S/o M. Venkatesham, Age. 50 year.s Or;c. L rector of 9oruscart liy;:r:m Pvt. Ltd, Rio H. No. 14-A, Ramiy f)earl, HIVT Shatavahana Nagar, O:p KF'llB. Hyderabad. ...RESPONDENTS/DEFAC Io ( :oMPLAINANT Petition unrJe" Siection 528 of BNSS, 2023 praying that irr the circumstances staled in the Merrorardum of Grounds of criminal petition the Hig.r court may be pleased to call fc,r r,-.:ords relating to C. C. No. 22 of 2,024 oi the File of the session Judge, Nanr lally, Hyderabad and quash the samer againsl the petitioners herein; l.A. NO: 2OF 2(t2 5 Petition under section 528 of BNSS, 2023 praying fl-rat irr the circumstances stated in the Merrorandum of Grounds of criminal petition,the Higl court may be pleased to grant sta'r crf all further proceedings in the c. c. No. zi t f 2o24. oi the File of the Sessicn J;dge, Nampally. Hyderabad against thr: petitior.ers herein; CRIMINAL PETITI Between: Ol,J NO: 5504OF 2o25 t. t/qOgql.q Flanr:r;h, S/o Chittaiah, Aged about 78 yrs, Occ. Elusir.ess, R/o H No. 1-8-9111, Pot \o 126, Jawahar Nagar Colony, i:C RoaO, ;e"rnOer"Uai, Telangana. 2. Vuppala^F,ava.n Kumar,^S/o.V. Ramesh, age 45 yrs, Occ. Br. siness, Fi/o 11 No. 1-8-9'/', I).t No. 126, Jawahar Nagar"Colony, pr; ncaJ i".r*i"rr6"O, Telanganer 3. Vuppala^h.arne I tra, W/o Ramesh, aged about 67 yrs, (Jcc. HoUse Wife, Rio H No. 1-8-9 1/1 , [) c t No. 126, Jawahai Nagar Colony, pf] noad, ,iecui Orirl6"rO, Telanganar. 4. V. Swapna, W/t Pavan Kumar, aged about 43 yrs, Occ. Hor- se Wife Rl/o H No. 1-B-91/1 F)ict No. 126, Jawahir Nagar Coloriy, irC RoaO, ;;"ft;;"b;; Telangana. AND ...PETITIONERYACCUSE D NOS.1 TO 4

1. The State of Telangana, Represented by Public Prosecutor High Court at Hyderabad

2. T6llapuram Jaganadham Premnath, S/o. T.B Jaganatham, Aged 58 years, Occ.'Private Service, Rio. Plot No.07, Archana Enclave, lndependent Houses, East Marredpally. Secunderabad. ...RESPONDENTS/DEFACTO COMPLAINANT Petition under Section 528 of BNSS, 2023 praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to call for records relating to c.c.No.24 oI 2024 on the file of the Sessions Judge, Nampally, Hyderabad and quash the same against the petitioners herein; l.A. NO: 2 OF 2025 Petition under Section 528 of BNSS, 2023 praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition,the High Court may be pleased to grant stay of all further proceedings in the C. C. No- 24 of 2024, On lhe File of the Session Judge, Nampally, Hyderabad against the Petitioners herein; These Petitions are coming on for hearing,upon perusing the Memorandum of Grounds of Criminal Petitions and upon hearing the argumentS of Sri N NAVEEN KUMAR, Advocate for the Petitioners in all criminal Petitions and sri Jithender Rao veeramalla, Addl. Public Prosecutor on behalf of the Respondent No. 1 all criminal petitions and none appear for the Respondent No.2 in all Crim ina lpetitio n s The Court made the following :COMMON ORDER ..1 1 NTR,J CRIF s s5. r.5466&5504_2025 THE HONOURABLE SRI JUSTICE N.TUKARA [,IJI INAL PET ON o CRIMINAL PETITION NO.546 6 of 202s q cRr 16 of 202 AND i3 RtMINAL pETtTlo-[NO.5504 of 202 5, COMMON Cl_llDER:

1. (a). Crlm irral Petition No 5466 of 2 024 ha:s beren lled under Section 528 ,rf the Bharatiya Nagarik Suraks;ha Sar hita, 2023 (hereinafter'RNSS, 2023,), seeking quasl-r th: p oceedings against Petitic,rrers 1 to 4 (Accused Nos 1, 3 to 5) in ,lale,ndar Case No 20 c'f 2C11,1, pending before the Metropolitan Serssir.ns Judge, Nampally', -ly ck>rabad. (b ). Crim indlletition N o. 5516 of 2024, also uncier liect on 52g of BNSS, 2023, sereks similar relief for petitioners 1 tc 4 (Acc tsed Nos. 1 to 4) in Ci:le,rrrJar Case No. 22 of 2024 before ther sarne ( ourt. (c). crimiryrl lletition No. 5504 of 202a, again uncrer siect :n 52g of BNSS, 2023, sx:eks quashing of proceedings against pe.;troners to 4 (Accused lrlos. 1 to 4) in Calendar Case No. 24 of 2)24, also before the [\lerrcpolitan Sessions Judge, Nampally, Hy<lerartad. 2. ln era,:h of these cases, the petitioners are r;har,;ed with offences unde. ljections 406 and 420 read with {jection i4 of the .lndian Pena C:orje, 1g60 (,lpC,), Sectph.76 of the Ch t Flnds Act, 1 I $ 2 NTR,J CRLPs-551 6,5466&55(x-202s 'J 'l 1982, and Section 5 of the Telangana State Protection of Depositors of Financial Establishments Act, 1999 ('TSPDFE Act). 3. I have heard arguments of Mr. N. Naveen Kumar, learned counsel for the petitioners, and Mr. Jithender Rao Veeramalla, learned Additional Public Prosecutor for Respondent No' 1' Summa rv of Prosecution Cases:

4. (a .Calendar Case No. 20 of 2024 (Crimina I Petition No. 5466 of 2024\: Petitioner No. 1 approached the de facto complainant, representingthatheoperatedaregisteredchitfundbusinesswith Vuppala Naveen Kumar under the name Sree Nagarjuna Enterprises'andrequestedthecomplainanttorefersubscribers. The complainant got enrolled his wife and others as subscribers' After paying the required instalments, when the complainant's wife sought to collect the prize amount, Petitioner No' 1 evaded payment. The complainant later learnt that other subscribers were similarly denied repayment, resulting in a collective financial loss exceeding Rs. 1 crore. Based on the police report, Crime No' 103 of 2022was registered. (b). Calendar Case No. 22 of 2024 (Criminal Petition No. 5516 of 2024\ 3 NTR,J CfLPs :i-':i I 166&5504 2025 Thr: :c,rnplainant, a Director of Coruscan: Syster,rs Private Limited, lr1flr]r;1[2d, participated in a chit operated by \agarjuna Enterpris,:s Ctrrt and Finance Company. After making the recessary & payments; h€) l)ecame the successful bidder in .lanr-rary 2021 and was entitled tc Rs. 18,59,6251. However, when h: a rproached Pavan Ktrnra' \/uppala for payment, the amount was no paid and the latter irbs:onded. Crime No. 90 of 2022 was reg stered by Mahanka i Pol;r;e Station, later re-registered as Crinre [rio. 263 of 2022by [)ir,;tnct Hyderabad Police Station CCS, E(]W Tea n-Vlll (c ). Calendar Case No. 24 of 2024 Criminal Petition N r. 5504 of 2024\: Ther corr plainant alleged that Petitioner No 1 Vuppala Ramesh. irtrorjuced Petitioner No.2, Vuppala Pavan Kr mar, and solicited in vestments in Sree Nagarjuna Enterprisr:s cro mising

1.5% monthly rrterest. The complainant and his vrife Jep rsited Rs. 25,00,000/- aro joined a chit group for Rs. 5,00,C00r- P 'omissory notes were ex,)luted, but upon maturity, no payntent:; w( re made. Cheques ssu:c1 by the petitioners were dishonoured, lror complainan tc file a police report. Crime No. '02 of ', rpting the 022 was registered by l\1;ahankali Police Station, later re-rer;iste,red as Crime I {R I 4 xNTR,J CRLPs_55'l 6,5466&5504_2025 No. 262 of 2022 by District Hyderabad Police Station CCS, EOW Team-Vlll.

5. Following investigation and examination of witnesses and documents, the prosecution concluded that the petitioners, with criminal intent, operated an unauthorized chit fund business, causing wrongful loss to the complainants and others by collecting large sums and insisting on re-depositing the chit maturity amount. Accordingly, charges were filed under Sections 406, 420 read with 120-8 of lPC, Section 76 of the Chit Funds Act, '1982, and Section 5 of the TSPDFE Act. Petitioners' Contentions:

6. The petitioners argued that the other accused, not named in the police report, are merely family members uninvolved in the business, thus, proceedings against them are unjustified. They further contend that the same investigating agency has registered multiple FlRs and charge sheets based on identical facts and transactions, which is impermissible and constitutes an abuse of process, violating their fundamental rights under Articles 14, 19, 20(2), and 21 of the Constitution. The petitioners assert that only one FIR should have been registered, with subsequent complaints treated as statements under Section 161 CrPC, in line with Supreme ( t 5 NTR.J C RLP:;- 55-a. 466&5504 2025 Court prr-,ceclt:,rt. They also argue that the alle,gaticns perlain to non-paynre,nt cf prize money and that the Chit Funds \ct. 1982, provides anpr:priate remedies before the Registrar cf C hits. They claim no fr;r;dulent or criminal intent is apparent to justify prosecuticrr rtrder Sections 406 and 42O lpc, and the t invoking Section fi ,lf tl-,e TSPDFE Act is unwarranted, as il-e c rmpany is registered witr the Registrar of Chits, even i.. thr: c rit groups themselvr:s a 'o not- Prosecution's Resoonse:

7. Ther r'\dlitional Public Prosecutor contends that rult ple police reports reflect [he pattern of fraudulent conduct b1r the. acr used and cannot be ;r 1;r'r>und for quashing proceedings. He as,sed i that the petitioners; rpe,rated unregistered chit groups, making ti em liable under th{l C ttrt Funds Act. Furthermore, run ning a financial establishnrent rl'rd collecting investments in instalrnenls qr alifies for prosecutic,n urrJer the TSPDFE Act, as recognized in V i?evathi v. State of Ar,dlrra Pradesh (201 1 SCC OnLine Ap 1.,61) He also points ou1 -hirr the petitioners misrepresented flreir cor tpany as active and cornF,liant, while records show it has beren rnactive since registration, incir:ating deliberate deception. Offering highe r interest rates to aitract nvestors further demonstrates intentir>nar cheating (D t i,iit . :. ,';' 'i :'; ,:... \ar*r.-racx{'EiW a; 6 XNTR,J cRLPs-55 1 6,5466&5504-2025 and breach of trust. Finally, the investigation has revealed that Petitioners 2, 3, and 4 are not merely family members but active partners involved in decision-making and financial transactions' Therefore, the prosecution asserts that triable issues exist, and the petitions should be dismissed.

8. I have perused the materials on record.

9. The allegations clearly indicate that the petitioners were engaged in the business of chit funds under the guise of operating registered chit schemes. However, admittedly it was only the company that was formally registered' not the specific chit operations in question. lt is further alleged that, after collecting funds and upon the maturity of the chit schemes, the petitioners defaulted on repayments, thereby causing financial loss to each of the de facto complainants.

10. A principal contention raised by the petitioners is that the registration of multiple First lnformation Reports (FlRs) amounts to an abuse of legal process. ln this regard, it is essential to highlight the well-established legal principle that multiple FlRs are permissible when each complaint pertains to distinct transactions or grievances involving different victims. This legal position has been affirmed in several authoritative judgments. ln T.T. Antony v. State of Kerala & I \ -.=..ir!'....ry--.t..'- - I' I l 7 NTR J CRI P!! aa'll 466&5504 2025 Others, (200 l)6 SCC 181, the Hon'ble Supremt: Ccurt teld that a second [:lR i; impermissible in respect of the sarne rcident or occurrenite lrlr>netheless, the Court implicitly ackncwlt,dged that separate FlRs are maintainable if they arise fronr inclepe,ndent and unconner*;d ir,;ts, even if involving the same acr;used. L kewise, in Surender l^'.au;\ik & Others y. Stafe of U.P. & Otf,ers, (20 l3) 5 SCC 148, the Srpn..me Court upheld the maintainability o,'mr ltiple FlRs filed by diffelent complainants based on distinct causel of action and emplrasi z:d that complaints against a comm,)n accu,;ed do not necessarily ccnstitute a single offence merely becaus,e tl- ey involve the same indiv idual(s). 1 1 . ln the prrrs;ent case, the petitioners are facing alle,;ations of financial imp'r:criety from multiple complainant:;, each of whom claims to hilri: suffered loss through separate and individual transactic,n;. O,rnsequently, the registration of mLrltipl: Flrls is both legally and prccedurally justified.

12. Anotrre ,r ;l.gument advanced by the petitioners is that the operation of cl'i: fund businesses is governed exclusiv,:ly I y the Chit Funds Act, 1932, and that any violation arising vvithirr tht scope of chit fund arlirritres must be adjudicated solely unler the rtrovisions of that enactrrent. They contend that, therefor,:, invok ng penal ,', . .:-..: .i a: I ENTR,J cRLPs 5516,546ffi55(X-2025 provisions under the Telangana State Protection of Depositors of Financial Establishments Act, 7999 (TSPDFE Act) is legally untenable in such cases.

13. However, the applicability of the TSPDFE Act to fraudulent chit fund operations is no longer res integra. This issue has been comprehensively addressed in V. Revathi v. The State of A'P , rep' by Pubtic Prosecutor, High Court of Hyderabad, 201 '1 SCC Online AP 1025. ln paragraphs 15 to 18 of that decision, the Court elaborated on the legal compatibility between both enactments and upheld the application of the TSPDFE Act in situations involving deceitful or illegal chit fund schemes. For better appreciation, the relevant paragraphs of the authority are extracted hereunder: "15. lt is contended for the Appellant that there are special enactments regulating chit fund transactions and that therefore the provisions of the 1999 Act cannot be applied to a chit fund transaction Though the Andhra Pradesh Chit Funds Act 197'l (ln short, the .1971 Act) and the Chit Funds Act 1982 (ln short, the 1982 Act) are there for regulation of chit fund transactions, the 1999 Act is again a special enactment which was enacted for protection of depositors of financial establlshments' Statement of objects and reasons appended to the 1999 Act reads as follows: "lnstances have come to the notice of the State Government, wherein a number of unscrupulous financial establishments in the State are innocent, gullible depositors by offering very attractive rates of *&, inteE-st collecting huge deposits and then vanishing suddenly The dlositors are being cheated and are put to grave hardship by losing . a \ 7 q NTR J CIiLP.i,:: I l: .65&5504 2025 their t-e rl earned savings. To curb these malpractices the State Grverrrrnent have decided to bring a law for protecting the interests of depr)si (,rs of financial establishment in the Slate and for matters cc nrrer t: J therewith or incidental thereto. The above issr e was also dir;c -rsr;rxl 1n a Conference of the State Chief Ministr)rs z nd Finance N, nister; presided by the Union Finance [\ilinister on 14 09-1998 at Vi3ran 3havan, New Delhi. The Union Finance lrinis;ter;'lso desired th;:t Stires should take expeditious steps for enacting legisl )tion on the lines o' ' familnadu Protection of lnlerests of Depositcrs I n Financial Es,tablr ; r nents) Act, '1997, "to restore the conf iden,:e a nongst the innorerll depositors and also to serve as a dr:terrr nt against m;rlp r3; i;s5 by such establishments during the c;ourse of acceptance of pLrblrc (,eposits. Tc ach ere the above object, the Government hale dectde( to make a sepu'ra € aw by undertaking Legislation". 1 6. l he r: is no provision in the 1999 Act deali.'tg v1,ith r )peals and savings --he 1999 Act was enacted by the State Legislaturr in addition to arrd r c t in derogation of any existing law dealing with 1e subject. The Stirte Legislature enacted the 1971 Acl for relulation c'chit funds in thr] stirte of Andhra Pradesh. The 1971 Act was repealec by Section 90 or the 1982 Act passed by the Parliament. As p,:1 56 q1r., 1 (3) of the 1932 A:l that Act comes into force on such (late as re Central Gcvr,rnrrr:nt may by notification in the Official (iazette ;:point and difterent cates may be appointed for different Starcs. Under Section Bg of th -. 1 r)rl2 Act, the State Government in consultaticn wi h Reserve Bank of irdia has to make rules by notification in the Oflicial f azette for givin() otf.)ct to the provisions of that Act. So far the Gov:rnment of AnJhra F'radesh has not made any rules under Sectior 89 f the 1g82 Ac,. [-h,)'cfore. till coming into force of the 1982 l\ct b,/ not fying rules by th,, Sitate Government, the 1971 Act is deemed io be in fc ce. 17, Sec:i:r 56 of the 1971 Act deals with penalties for r;ontr rvention of certa n prc,visions of the said Act. Section 56 reads as fcllou k !t ;!,,i;; :\.' . ,.Y FEia?-e '. r...-.r , ir. --.. 10 NTR.J cRLPs 5516,966&5504-202s .- \ "Penalties:- (1) Whoever contravenes or abets the contravention of any of the provisions of sub-section (1) of Section 3 or Section 4' sub- section (1) of Section 7 shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to five hundred rupees or with both (2) Any foreman- (a) who does not file the chit agreement under Section 9 or a copy of any document under Section 11, sub-section 2 of Section 20' sub- section (2) of Section 21, Section 29 or Section 32 within the period specified for such filing or within the further time allowed under Section 55 for such filing; or (b) who contravenes any of the provisions of Seclion 8' sub-sections (1), (2) and (6) of Section 12, Section 14, Section 15' Section 16' Section '18, Section 20, Section -21, Section 23' sub-section (4) of Section 25, Section 29, Section 35, Section 36' Section 37 and sub- section (4) of Section 51 , .or (c) who fails to comply with the requirements of the chit agreement regarding the date, time and place at which the chit is to be drawn; shall be punishable with fine which may extend to one hundred rupees' (3) Whoever in any document required by or for purposes of' any of the provisions of this Act, wilfully makes a statement false' in any material particulars knowing it to be false, shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to five hundred rupees or with both"' 18. There is no penal provision under the 1971 Act providing for punishment in case of 'default' committed by organizer/foreman of the chit by not paying prize amount to the successful highest bidder or in case the organizer/foreman of the chit absconds by discontinuing the chitduringthecourseofitscurrencyandbynotrepayingorrefunding the subscription amounts already collected from the members- The 1971 Act predominantly deals with regulatory measures for starting chit fund business, for commencement of a chit and running of the chit till I - T l 7 lR-i.: :: ti 54tE&i504 2025 th€ e,rl of the chit period. ln case, the organt2:erlfc remi n of the chit oornnli:s,'default,, no penal remedy is prescribe(i an(i no tenal liability i; .rttit(rted to such organizer/foreman of the chit unJer I te l9Z1 Act. Siin.il; r \, even if the 19g2 Act comes into force, it als() do€ ; not contain anv p1)/tston dealing with penal remedy against organrzr r/foreman of the cllt and attaching penal liability for ,defau t, commi ied by such organ zerlforeman of the chit. Therefore, I have no lesitation to ccrcll (r€r that the .1999 Act is equally applicable jn tre c rse of a chit ftrn,j trersaction also in addition to applicability 01 the extst ng 1g71 Act a 1d al s ) the 1 992 Act as and when it comes tnto ibrce , 14' Th{? cor(;rusions reached by this court in t}re aforernentioned authority con:inue to remain good law and are brndirrg p ecedents. Accordingly,, 1l,e: contention advanced by the petitioners q,lestioning the impositiorr )f penar riabirity for the aileged offences is without merit and c,rnrot be Sustained.

15. ln light of the foregoing analysis, and considering the existence of specifir: ;lllr:gations that disclose a prima facie case a lainst the petitionersi th s. Court finds no substance in the -qrourds urged for quashing tl,e ;>r'oceedings. The contentions raiserd are. iherefore, untenable ln this position, this court is of the consirJere:j opinion that the prave r tor quashing the criminal proceedings is Jevoid of merit.

16. Conseqrrerfly, Criminal petition Nos 2025 are heretr,r drsmissed. 5516, 5466. anc 5504 of Pendirrg rniscellaneous applications, if any. sh:rll stand _ j+ , SD/-A.SREENIYASA REDDY ASSISTANI REGISTRAR //TRUE COPY// l l. ) d SECTI N OFFICER To,

1. The Metropolitan lessions Judge,Nampally, Hyderabad 2. The Xll Addl. Ch erf lttletropolitan Magistrate, Hyderabad 3. The Statior FloLr:;r: Officer, CCS, EOW Team - Vlll P.S , H,rder rbad 4. One CC to SRl. tl NAVEEN KUMAR Advocate [OPUC 5. Two CCs kr F'UlI lC PROSECUTOR, High Court at Hyrlera:ad OUT) 6. Two.CD Cc pies VSM/PSL 'F...1?!{f}.3:5* HIGH COURT DATED:18/061,2025 aa:=:= .{, r t; ., 16 ((( 01,ttt[ M z a\ -\\' J L) * r\:. ORDER CRLP.Nos.5466, 5516 & 5504 of 2025 DISMISSING -THE CRIMINAL PETITIONS 1 6\){