Cr.P.C. cannot lie in view of the decision of this Court in Criminal vs RajamanickamT, orders of High Court of Jabalpur between Dr.(Mrs.)

Petition under Section 528 of BNSS praying that in the circumstances stated in the affidavit filed in support of the petition, the, High Court may be pleased to stay all further proceedings including the perscnal presence oi the Petitioner in c.c. No. 51 1 of 2015 on the file of the chief Metropolitan Magistrate at Hyderabad, during the pendency of the present Criminal Ftevision petition. Counsel for the Petitioners in all CRLRCs :Sri E Umamaheswar Rao Counsel for the Respondents in all CRLRCs : Sri Palle Nageshwar Rao, Public Prosecutor The Court made the following: COMMON ORDER THE HON'BLE SRI JUSTICE E.V.VENUGOPAL CRIMINAL REVISION CASE Nos.851 853 and a54 OF 2o24 COMMON ORDER : All these criminal revision cases are filed by the petitioner, who is accused No.9 in CC No.651 of 2015 and accused No. 13 in CC Nos.648 of 2016 CC No.511 of 2O15, al1 on the hle of the learned Chief Metropolitan Magistrate at Hyderabad, under Sections 438 and 442 of BNSS aggrieved by the common order dated 19.O4.2O24 passed by the trial Court in Crl,M.P.Nos.826, 832 and 833 of 2Ol3 in the calendar cases referred above, wherein his prayer under Section 239 Cr.P.C. seeking his discharge from the offences under Sections 42O, 120(8) of IPC and Sections 2(C),3,4, 5 and 6 ol Prize Chis and Money Circulation Schemes (Banning) Act, 1978, was rejected

2. In all these criminal revision cases, this Court heard Sri E.Umamaheshwar Rao, learned counsel for the petitioners and Sri Palle Nageshwar Rao, learned Public Prosecutor for the respondents-

3. Since the parties in all these three criminal revision cases are one and the same and the facts and the points to be adjudicated are interrelated, this Court disposes of all these criminal revision cases through this common order. 2

4. Before ploing into the facts of the case, the particulars of the three cases, registered against the petitioners herein, as; described in the charge-sheets, are tabulated hereunder for Lrevi$ and easy understanding : Crl.RC No. 8s t I 2024 Ii'iled against or<lers in Crl. M.P.No 83at /2023 CC No.65 1 of 2015 on the hle of trial Court 83t).I 2023 irr CC No.648 of 201(r on the file of trial C:ourt 82(t 12023 in CC No.S1 1 of 201li on the frle of the triaL Court Crime No. / Nos rs l2ooe s8 /2OO9 . Case registered in PS De-lacto complainant Nacharam Gojireddy Koti Reddy Chikkadpally Mankr:na Srinivasa Reddv t29l2OtO RC Puram Mati m Venkata Syam Sun,:lar 232 /20 t 4 Jangaon Md.Sad.iq Ali 16t /2014 3O2l20t4 Crime No. 161/2014 lvas clubbed i\iti, Crime No.3O2l2Ol4 GolLapudi Ilama Rao A-Anurag I Torvn Khammam Subedari CCS, DD, H erabad t3o /2ot4 Panjagutta Matam Venkata Syam Sunrlar The allegatiorls levelled against the petitioner ar'.d 'other accused persons, succr,nctly, are that the accused entered int,l an agreement to do an illegal business of money circulation under l.he guise of direct selling of the goods of accused No.1 company with a malafide irrtention to cheat the general gullible public of India and in execution of such conspiracy, tbey have promoted money circulation rscheme by way of joining or enroliing the members in the form of distt'ibutor-s called as ABOs but the said act is nothing but enrollment of new rr.embers into the scheme so as to enrich 41 company alone. In thir; process, some of 3 the accused have extended their co-operation in aggressively propagating the scheme by conducting seminars and meetings so as to attract the gullible public to become members of the money circulation scheme with the intention of becoming rich quickly and easily within a short span of time without any effort. In this process, the accused were successful in iuring the public by false representations that anybody can make easy money and become rich in a short time and induced the public to join as members on enrollment under the guise of marketing lhe goods directly to the public and thereby they have committed offences with which, they were charge-sheeted. (a) More precisely, the modus operandi of the accused in this process is that accused No. 1/Amway India Enterprises Ptt. Ltd., is a company registered under the Companies Act and its scheme is 6-4-3 means the hrst person has to sponsor 6 persons and these 6 lersons have to sponsor 4 persons each totaling to 24 persons and in turn these 24 persons have to sponsor/enroll 3 persons each totaling to 72 persons. These 1O3 persons are called as one leg for income calculation purpose and this chain keeps on going unchecked. The persons should be enrolled by an already enrolled member so as to maintain chain. The initial entrance fee of Rs.4,400/- was waived off and subsequently, the new entrants have to purchase products worth Rs.4,4OO/- or otherwise the membership will expire. After payment of some amount, an identity E. 4 card and some products will be delivered by the company zrt thr: time of joining in the name of business kit. Joining a member into the scheme is treated as sale of product. The new person, who jo ned in the scheme 1S called Amrvay Business Owner ADA or ABO or down liner. The person who jc,ins a new member in the scheme under him is called up- line member. Commissions are given not only on the event ol person efforts their direct enrollment/ sponsoring but also ()n the contingency to sponsoring of nerv members by their down-line merobers (b) The allegation against the petitioner in all thesc cases is that he is the employee of A 1 company and was responsible for day to day business affairs of the company besides respons:ble for spreading multi-level marketing schemes designed by the cbml:>any. Further, he was the hea,f of information technologr and rva s responsible for preparation o1'website of the company and publishir rgf ancl advertising the company trusiness and receiving on-line orders frcrm ABOs.

5. The investigating ofhcer concerned upon condu:ting rnvestigation basing on the above allegations laid charge-sheets aed thr: same were assigned calerdar case numbers by the trial Court by taking cognizance against the accused for the offences with which they vzere charge- sheeted. 5

6. Challenging his array as accused in the above calendar cases, the petitioner filed the above referred applications seeking his discharge from the above cases before the trial Court mainly contending that he is innocent, falsely and in a casual manner he was implicated in the cases; neither the charge-sheets nor the statements of witnesses recorded during investigation disclose any facts to attribute the petitioner that he committed the offences; no attributions can be made against the petitioner only for his attending the employment of creating a website or promoting the multi-1eve1 marketing on behalf of his employer; no employee can be prosecuted by virtue of allegations levelled against his employer as laid down by Hon'ble Apex Court in catena of decisions.

7. The learned public prosecutor, representing the respondent/ State vehemently opposed the said discharge applications ml"i"ty contending that the accused have criminally conspired to conduct a banned and illegal business under the guise of direct selling resulting in wrongful gain to themselves and wrongful loss to the public; the High Court, as per orders in WP Nos.20470 of 2006 and 20471 of 2OO6 has categorically held that the business activities carried out by the accused in the present cases clearly attract the provisions of Prize Chits and Money Scheme (Banning) Act, 1978 and that the petitioner was 6 instrumental in creating the website for the purpose of canvassing the business and attracting the innocent public

8. The trial Court dismissed the said applications holding that there are grounds and material to frame charges againsl the irccused and hence, the petitioners cannot be discharged from the respective cases.

9. Aggrieve:d by the said dismissal orders, the pres,:nt criminal revision cases are hled by the petitioner mainly contr:nding that except stating that the petitioner is the employee of .,\ I company and instrumental in creating website to canvass, publici;ze an<l attract the public no grave allegations are made against the petitroner and he being an employee of A1 company cannot be vicariously rrrade liable for the acts of the cornpany and his prosecution in his individual capacity only on the ground that his employer was made an accuse,l, unless he is the aiter ego of the company, cannot stand for legal scrutinrt' as held by the Hon'lcle Supreme Court in Sunil Barthi Mittal Vs. CBII. There is nothing on record to show that the petitioner acted as an alter-ego of A.1 company. Thre orders of the trial Court are made without properly appreciating the material placed before it and subr:-rissions made on behalf of the petitioner. The contents of the charge-stheet do not make out any offence against the petitioner. The scope of petitioner by virtue ' 1zots1 a scc oos 7 of his employment as Vice President (lnformation Technologr) is very limited in providing information related support to the company and he has nothing to do with the business model of A1 company and even according to the prosecution case, the petitioner did not participate in the business of ,{1 nor he interacted with any of the persons dealing with the business of A1 or he is a party to any of the documents relied upon by the prosecution or he is the recipient of crime proceeds from any of the customers o[ A1 company. No witness has referred the name of the petitioner. The trial Court without specifically mentioning the material which wouid lead the trial Court to frame charge against the petitioner in the subject crimes, has erroneously heid that thele is prima-facie material against the petitioner. The_ charge-sheets of the prosecution are filled with vague and omnibus allegations. There is no element of deception to be attributed to the Petitioner., The trial Court failed to take into consideration the findings of the High bourt of Kerala in the case between Anshu Budhraja and another vs. State of Kerala (Crl.MC No.251O of 2018, dated 07 .O2.2O221, wherein it has categorically held that activities of Amway are legal and are distinct from the activities sought to be prohibited under the Act. The trial Court further erred in ignoring the settled proposition of 1aw that the Court cannot blindly accept the assumption made by the prosecution in its investigation and that when two views are possible upon sifting and weighing of the evidence and the evidence produced before the Court gives rise to some suspicion and not grave suspicior, the accused has 8 to be discharged iO. Learned counsel for the petitioner, in suppo:-r of the grounds urged througLL these criminal revision cases, relied r pon the decisions rendered in Sunil Bharti Mittal Vs. Central Bureau of Investigation2, Sanjay Kumar Rai Vs. State of Uttar Pradesh and another3 and Amway India Enterprises and another Vs.Union of lndia and others (SLP [Civitf No. 13414 of 2OO7 of Hon'ble Supreme Court [from the judgment and order dated 19.O7.2OO7 in WP No.1lO47O of 2O06 of High Court of APf. The main crux of the decisions relied upon by the learned counsr:l for the petitioner, referred above, is tttnt thc corrrpany is only liable for the actions of its employees if the corrLllany's cotrtrolling group had criminal intent and that the principle of alt:r ego can only be applied to make a company liable for the actions of a rrdrson or group of people who control the company. Basing on the , above decisions learned counst:l for the petitioner also contended that wl-rik: considering the discharge applications the trial Court cannot a(.1 as a mere post ofhce and it has to sift through the evidence in order trr hnd out rvhether there are suffir:ient grounds to try the suspect and c,rnsiderr the broad probabilities, trrtal effect of evidence and documents pr oduced and basic information appearing in the case. It is further conterLded that the High '] 1201514 Supreme Court Cases 609 t 120221t5 supreme Court Cases 720 t.'1. 9 Court is imbued with inherent jurisdiction to prevent abuse of process of law or to secure the ends of justice having regard to the facts and circumstances of the individuar cases and when the contents of the complaint or the other purported material on record is a brazen attempt to persecute an innocent person, it becomes imperative upon the Court to prevent abuse of process of law. Stating thus, learned counsel for the petitioner prayed to allow these criminal revision cases by setting aside the impugned orders of the trial Court. 11 Per contra, learned public prosecutor, by {iling counter allidavit, mainly vehemently opposed the present criminal revision cases contending that the petitioner being the head of technologu of A1 company played a pivotal roie in the business of tlle company by way of publishing its products all over India and by taking on-rine orders through its website including delivery of products throrgh its agents at ABOs level starts from silver to founder,s crown ambas"r.io., *ho *".. engaged by A1 company to promote its products among the general and innocent people. The accused including the petitioner have involved in several cases with same modes operandi in promoting illegal money circuiation scheme under the guise of sale of goods by enrolment of members in chain system with the intent of getting rich quickly. With the main object to establish, develop a direct selling business to sell their products without involvement of middleman/distributors/ dealers 10 etc., the Government of India, upon the request ma<:.e by A1 company, on 26.O8.199.1, permitted A1 to do direct selling bur,,rness in India but A1 company vrith a dishonest intention colluded with other accused and started its business of multi-levei-marketing scheme t.hrough its Amway Business Owners (ABO), its top employees and other companies including lhe :etitioner, which model scheme is prohibited in India.

12. A1 company paid commission/incentives to tl.c extc:nt of 49.7o/o to its chain ntembers. It has collected crores of n.tpees by cheating lakhs of consrrmers/ subscribers through the other rlccused including the petitioner by making false promise of getting quick money by putting menteil torture in the name of seminars. A I company by entering into agreements with abroad companies, illelrally sr:nt crores of rupees in violation of provisions of FEMA, 1999 and the g,uide lines of RBI. Thc High Court for the composite State of Andhr a lpraclesh vide its orders dated 19.O7.2OO7 in WP Nos.2047O and2O4Tt of 2006, hled by A 1 company, held that the business activities ce.rried out by A 1 company squarely attract the dehnition of Money Circr rlatiorL Scheme as provided under Section 2(c) of the prize Chits & I\,[oney Circulation Scheme (Banning) Act, 1978 and the same finding w:rs also confirmed by the Honble Apex Court in SLP No.13414 ol 2O1T dated |4.O8.2OOT while denying the prayer of A1 company to interfere with the above said findings of High Court. The accused including th:: petitioner have 11 violated the orders of the State Government in GOMs.No.178 dated i9.09.2008 restraining/advertising in newspapers and eiectronic media propagating the scheme, luring the gullible public to join their company as members and continuing issuance of advertisements.

13. The Hon'ble Apex Court as well as the erstwhile High Court for the composite State of Andhra Pradesh have categorically held that though there is no loss or misappropriation of funds, mere informing a scheme, which covered under the Money Circulation Scheme (Banning) Act, 7978 and enrolling members as subscribers itself is usurp offence leading to mathematical impossibility that amounts to cheating. The audit balance sheets of company for the period from 7999-2OOO Lo 2Ol2-13 revealed that it has been remitting dividend, royalty from their holding companies/ultimate holdings, amounts paid towards import of goods and other services etc., to their holding & associlte companies to an extent of Rs.2227 .28 crores against its share capital of Rs.21.39 crores during the period from 1999 to 2013. The investigation done so far revealed the complicity of the accused including the petitioner and that itself is suffrcient to frame charge against them for their criminal conspiracy to cheat the public and violation of provisions of money circulation scheme. The petitioner being the IT head of A1 company, prett5r well knows the objectives, nature of work and the way of business carried out by it and his role is inseparable when it is 72 commonly read with other material accused on account of their fraudulent act-ivities and their cheating the public by luring them to the rosy picture cut and in grabbing the hard-earned mo::rey of the innocent public. In that view of the matter, not only the cor:pany but also its administrators and other people prepared material and scheme for the cause of execution of the plan hatched are also liabl,, to be prosecuted. The petitioner knorving well al1 these aspects, indulge d in designing and preparation ol- fraud. Roving enquiry by the Court, while adjudicating the discharge petitions, cannot be expected. Once the charge-sheet is hled with sufficient material, the trial Court has to g ve opportunity for the prosecution to produce evidence during trial and the accused will have fair opportunity to prove his innocence during trial by cross- examining the rvitnesses and also to produce evidenc,: in support of his defence. The petitioner not only accused in these cases but also in SC No.803 of 2023, on the hle of the iearned Metropolite.n Sessions Judge, Hyderabad at Nampally (Special Court), which is a ,:ase registered by the ED under thc provisions of PMLA/FEMA, is an ac::used. Keeping all these aspects in mind, the trial Court, upon carefuliy analyzing the material avail.able on record, has rightly dismiss ed the discharge petitions filed by the petitioner and hence, the said well-considered findings cannc)t be interfered with under the present r,:visions 13

14. The learned public prosecutor hled Form 32 stating that upon rvorking as Alternate Director in A 1 company, the petitioner resigned from the same with effect from 17.O7.2014 i.e. after registration of FIRs, as stated in the table supra (paragraph No.4 of this order), and hence, the petitioner's association with accused No.1 in such capacity during the period of commission of offence is established and in that view of the matler, he cannot plead ignorance with regard to the crime perpetrated by A1 company. Further, the petitioner was also one of the dircctors o[ A1 company and responsible for its day to day functioning. Learned public prosecutor further contended that against an order made in interlocutory application, the revision under section 397 of Cr.P.C. cannot lie in view of the decision of this Court in Criminal Revision Case (SR) No.319B of 2022

15. While submitting the above, the learned public frosecutor relied upon the decisions rendered in Adalat Prasad Vs. Rooplal Jindal and othersa, Sheo Nandan Paswan Vs. State of Bihar and otherss, State of Bihar Vs. PP Sharma and another6, Sethuraman Vs. RajamanickamT, orders of High Court of Jabalpur between Dr.(Mrs.) Neena V.Patel Vs. State of Madhya Pradesh and others (Criminal Revision No.219 of 2O2ll and Kuriachan Chacko and others Vs. o lzooa; z scc ::s ' ltR tgg; sc szz " atn t99t sc t26o 'zoos(r) nro (ca.)azr t4 State of Kerala8 and prayed to dismiss the presenl- criminal revision cases as quashing the criminal proceedings does nol- meet the ends of justice since there is prima-facie material collected a;;ainst the accused including the petitioner during the course of investiqation. and hence, the same reqtLires full-fledged trial to know the complicity or otherwise of the accused including the petilioner.

16. This Court heard the rival contentions advan,red on either side and perused the material available on record. The point to be adjudicated in thesc three criminal revision cases i:'i whether there is any prima-far:ie material existing against the pe.itioner eit,her for discharging him or directing the trial Court to procer:d with framing of charges against the accused including the petitiont:r in all the three calendar cases. 17 . So far as the petitioner's association with accused' No. 1 company during the period concerning to the present crimes is concerned, no doubt he work.ed as an IT head and in execution of his post. as such, he took responsibility of publicizing the advertisements with regard to the features, nature, benefits and money returns given .:ry A1 company to its subscribers. The main question herein is to what extent his acts contributed irL perpetrating the crime of luring the gu11ible public in joining as subscribers by paying subscription amour'.t and losing their 3 Supreme Court Cases (2008) 8 sCC 15 amounts in that process and in A1 companies proceeding with multi- level marketing wi[ be the key for coming to a conclusion with regard to his complicity or otherwise.

18. Section 3 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (Act No.43 of 1978) says circulation of banned prize chit and money circulation schemes or enrolment as members or participation therein in the said schemes are prohibited. Further, no person shall promote or conduct any prrze chit or money circulation scheme, or enroll as a member to any such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chi[ or scheme. Section 6 says that when an offence has been committed by a company, every person who, at thb time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well Is the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. However, it is made clear that the person who proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence cannot be prosecuted under this Act.

19. Copy of Form 32 fiied by the prosecution proves that the petitioner worked as Alternate Director in A 1 company and subsequently he resigned from the same with effect from 17.07.2014 16 that this itsell. is sufhcient to establish the petitioner's ass,rciation with accused No. 1. The allegations leveled against the petitioner are that he being one of the directors of A1 company and norked as head of technologr is responsible for its day to day functioning and played a pivotal role irL the business o[ Lhe company by wn],' of publishing its products all over lndia and by taking on-line orders through its website including delivery of products among the general anrl innocent. people. It is also alleged in the chargc-sheet that the accr:sed including the petitioner involved in various cases u,ith same n:.odes operandi in promoting illegal money circulation scheme under t.:re guise of sale of goods by enrolment of members in chain system rvith the intent of getting rich quickly. The High Court for the composi [e State of Andhra Pradesh vide :.ts orders dated 19.O7.2OO7 in WP Nos.2047O and 20477 of 2006 held that the business activities carried ou.t by .A.1 company comes under the dehni[ion of Money Circulation Sc:herhe as provided under Section 2(c) of the Prize Chits & Money Circulal-ion Scheme (Banning) Act, 1978. The said finding was confirm,:d by the Hon'ble Apex Court in SLP No. 13414 of 2Ol7 dated 14.08.2007. It is also the allegations against the petitioner that the accus ed including the petitioner by violating the orders of the State, Government in GOMs.No.178 dated 19.09.2O08 and continued in promc,ting the ,{1 companies br.rsiness in giving advertisements in newspapers and electronic med.ia and lured the gullible public. It is a.so alleged against the petitioner that havrng known well the fraud played by A1 company, the petitioner indulged in designing and preparation of fraud.

20. Proposition of 1avr. is very clear that review of a judgment is a serious step and reluctant resort to it is proper only where a glaring omission or patent mistal<e or like grave error has crept in earlier by judicial fallibility. The scope of interference and exercise ofjurisdiction under Section 397 Cr.P.C., is extremely limited and it should be exercised very sparingly and only where the decision under challenge is grossly erroneous, or there is non-compliance of the provisions of law, or the hnding recorded by the trial Court is based on no evidence, or materiai evidence is ignored or judicial discretion is exercised arbitrarily or perversely by framing the charge. When the-impugned orders are perused, there is nothing on record to set aside the same since this Court sees no apparent error warranting interferdnce under the revisional powers.

21. When the above facts and circumstances are evaluated, this Court is of the considered opinion that there is prima-facie material placed by the prosecution in the form of charge-sheet and the same requires full-fledged triai to decide the compiicity or otherwise of the accused and without letting the accused to face trial, he cannot be declared as innocent and it is premature to come to a conclusion with regard to the genuineness or otherwise of the prosecution case. 18 Keeping in view the above facts in mind, the trial Court has rightly rejected the prayer of the petitioner lor his discherge and the said findings, in rny considered view, do not u,arrant interferr:nce of this Court. Further, there is no force in the grounds urge(1 by the petitioner through these revisions to set aside the impugned c rders. In that view of the matter, this Court is not inclined inter;'ere with the well considered finclings of the trial Court. Accordingly, thr: present criminal revision cases are dismissed.

22. In the rr:sult,851 of 2024,853 of 2024 and 854 <tf 2024 are dismissed

23. As a sequei, the interlocutory applications, if ary pending, shall also stand disntissed. Sd/. M. RAMANA KRISHNA OEPUTY REGISTRAR Note: This Order is amended as per the court order dated 281O412025 made in l.A.No.2 ot 2025 in CRLRC.No.851,B53, and 854 of 2024 by correctilg the typographical error in Para No.1 at 2'0 line as "CC.No.64B of 2016" instead of CC.No.468 of 2016" and at 3'd line as "CC.No.S1 1 of 2015" instead of "CC.No.551 of 2015". This Amended order substitutes the earlier order dispatched on 1810312025. Sd/- M. RAMANA KRISHNA JOINT REGISTRAR /\\ //TRUE coPYtt I r\ \ ,,\t SECTION OFFICER The Chief lVletropolitan Magistrate at Hyderabad 'r The Station House Officer, C.l.D. Police Station, HyUera Two CCs to the Public Prosecutor, High Court for the Sl.ate of Telangana at Hyderabad |OUTI One CC to Sri E Umamaheswar Rao, Advocate tOpUCl Two CD Copies I To, 1 2 J 4 5 o Dl(nsk HIGH COURT DATED:2010212025 28t04t2025 1'li'vr, "i"r (-. ,,,',' 16 sEP 2026 i \ ,t \\'..-\._- r-, i r-'-ri :. AMENDED COMMON ORDER CRLRC.No.8S1, 853 AND 854 of 2024 t DISMISSING ALL THE CRLRCS {