1

IN THE COURT OF THE SPECIAL COURT UNDER THE TAMILNADU

PROTECTION OF INTEREST OF DEPOSITORS (In Financial Establishment)
ACT 1997, MADURAI.
PRESENT: Thiru.T.V. Hemanandakumar, B.A., L.L.B.,
  Special Judge, Special Court under TNPID Act Cases, Madurai.
Wednesday this the 31st day of March 2021
Calender Case No. 29/2013
State represented by the Deputy Superintendent of Police,
Economic Offences Wing,
Kanyakumari District,
Nagercoil.
Cr.No.3/2007 … Complainant
/vs/
1) Akilam Bankers,
Represented by the proprietors
A2 Thulasi @ Ramakrishnan
and A3 Krishnadhas,
Vadasery.

2) Thulasi @ Ramakrishnan (Age 53) (died) (charge abated)

S/o. Velayuthan Pillai,
P.WD Road, Nagercoil.

3) Krishnadhas (Age 42)

S/o. Neelakandapillai,
East Car street,
Krishnancoil,
Nagercoil. … Accused

Offence : u/s. 5 of TNPID Act, 420 IPC.

Finding : Not Found guilty

Sentence :

In the result, the prosecution failed to prove the offences u/s 420 IPC and section 5 of
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TNPID Act, beyond reasonable doubt. Hence the 3 rd accused is not found guilty u/s

420 IPC and 5 of TNPID Act and acquitted u/s 248(1) Cr.P.C. Charge against 2 nd

accused abated. The 1st accused is not a legal person.

The registers produced in R.P.R.No.40/13 are ordered to be kept with

records.

Seri Description of the accused

al Name Father's name Caste Occupat Residence Age
Nu or ion
mb race
er
(1) (2) (3) (4) (5) (6) (7)
1 Akilam Bankers Vadasery

2. Thulasi @ Velayuthan P.WD Road, 53/2008

Ramakrishnan Pillai Nagercoil.
2 Krishnadhas Neelakandapi West car street, 42/2008
llai.
Krishnankoil,
Nagercoil.
Date of
Occurr Complai Apprehensi Release on Commenc Close of Sentence Expla
ence nt on or bail ement of trial or order nation
appearance trial of
delay
(8) (9) (10) (11) (12) (13) (14) (15)

22.10.07 12.02.2008 12.02.2008 19.11.2020 16.03.202 31.3.2021

1

This case up on 30.3.2021 for final hearing before me, in the presence of

Thiru K. Ramani, Special Public Prosecutor for the Complainant and of

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Thiru S. Sureshkumar, Advocate for the accused and upon hearing the arguments of

the Prosecutor and after perusing the records, and having stood over till this day for

consideration, this Court passed the following:

JUDGMENT

The Deputy Superintendent of Police, E.O.W-II, Kanniyakumari district, at

Nagercoil filed the final report against the accused on the allegation that the 2 nd and

3rd accused who are the proprietors of the 1st accused financial establishment with

malafide intention to cheat the depositors, collected deposits in the name of A1

Akilam Bankers, Vadaseri branch, collected total sum of Rs.23,81,956/- and defaulted

to return the depositors, thereby all the accused committed offences punishable u/s

420 IPC and section 5 of TNPID Act.

2) On appearance of the accused before the court, copies of records were

furnished to the accused u/s 207 Cr.P.C. and upon perusing the records and hearing

arguments on both sides and having satisfied that prima facie case made out against

the accused and from the available records, this court has framed charge against the

3rd accused u/s.5 of TNPID Act, 420 IPC. When the said charge was read over and

explained to the accused in Tamil he denied the charges. Hence this court has ordered

the prosecution to let in evidence.

3) To prove the guilt of the accused, the prosecution has examined P.W.1 to

P.W.34 and marked Exhibits P1 to P48.

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4) It is the case of prosecution that A2 Thulasi @ Ramakrishnan (since

deceased) and A3 Krishnadass were the proprietors of the 1 st accused financial

establishment Akilam Bankers, Vadasery. The accused obtained pawn broker licence

No.14/1999-2000 and Money lending licence No.6/1999-2000 from the Thasildhar

concerned. The 1st accused financial establishment was not registered before

Registrar of companies. The accused promised to return the deposit amount to the

depositors with interest at the rate of 24% per annum. They collected totally a sum

of Rs.23,81,956/- from 47 depositors and converted it for their own use and cheated

the depositors without returning the above deposit amount. The following witnesses

deposited the following amount with the 1st accused financial establishment:

SNo. Name of the Depositors Deposit

amount
1 Krishnan 1800
3500
3000
647
2400
9000
11000
10000
20000
10000
2 Sivaraman 10800
8400
20000
20000
18000
19999
19999

3 Nagarajan 17500
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19000
17000
18500
19000
20000
20000
20000
15000
18000
19000
15000
4 Rajan 14175
6600
14000
5 Sathasivam 18000
15000
17000
6 S. Vellamal 19999
7 S. Sathanathan 19000
8 B. Pragtheeswaran 19000
9 S. Sreevidya 18000
10 A. Jay Ganesh 19000
11 M. Suvakkeen 20000
20000
12 Raju 14300
6000
13 S. Pandava Vadivoo 19000
19000
20000
20000
19000
18000
20000
14000
15000
15000
14 Shanthi 18000
19000
19000
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18000
20000
20000
19000
15 S. Poonkodi 15000
15000
19000
10000
16 Ananthakumar 15000
20000
17 K. Ajitha 19999
18000
17000
15000
18 C. Sheeba 15000
19 S. Bai 16000
20 A. Chellam 19000
21 C. Shatheesh 16000
22 C. Chandra sheela rani 18000
15000
16000
23 J. Gopu 19999
24 R. Jeyananthan 19999
25 J. Chitra 19999
26 J. Sutha 19999
27 M.Prabakaran 19000
17000
15000
15000
17000
28 L. Bai 18250
29 Neelaraj Krishnan @ 17000
Neelaraj kumar 17000
17000
19000
30 Regupathi 15000
31 Chinnaswamy 17000
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17000
32 Krishnan 17000
17000
33 R. T. Maheswari 19000
19000
34 N. Ravichandran 19999
35 C. Dhanapaul 19999
19999
36 P. Subash 19000
37 N. Chellathurai 18000
38 C. Rajasekar 15000
39 R. Rajeswari 10800
40 Pachamal Nadar 17000
18000
41 C. Suja Hema Rani 19000
18000
15000
42 Narayana Perumal 19999
17000
43 R. Neela Rajakumar 19000
21000
23700
Total 23,81,956

5) Since the deposit amount was not refunded, one Subramaniya Pillai

S/o.Lakshmana pilai (not examined before this court since he died), on 22.10.2007

gave a complaint before E.O.W-II, Nagercoil. On receipt of the complaint, P.W33 Mr.

Natarajan, Sub Inspector of Police on 22.10.2007 at 18.00 hours, registered a case in

Cr.No.3/2007 u/s 420 IPC and section 5 of TNPID Act. Ex.P48 is the First

Information report. Then Deputy Superintendent of Police Mr. Kanagaraj took up

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investigation and he examined the witnesses, received complaints and recorded their

statements. Ex.P1, P3, P6, P9, P10, P14, P16, P18, P20, P21, P28, P31, P33, P35,

P40, P43, P44, and P46 are the pass books and fixed deposit receipts. Ex.P2, P4, P5,

P7, P8, P11, P13, P15, P17, P19, P22, P23, P24, P25, P26, P27, P29, P30, P32, P34,

P36, P37, P38, P39, P41, P43, P45 and P47 are the complaints given by the

depositors. Then the Deputy Superintendent of Police Mr. Maraimalai took up further

investigation and on complaint of his investigation, he laid charge sheet against the

accused.

6) The third accused was examined under section 313(1)(b) Cr.P.C. in

respect of the incriminating circumstances found against him in the prosecution

evidence. The accused denied them as false. On the side of 3 rd accused, no witnesses

were examined.

7) Point for consideration is whether prosecution proved the offences

against 3rd accused beyond reasonable doubt?

8) In this case, the 1st accused is admittedly a proprietorship concern and so

not a legal person. The 2nd accused Thulasi @ Ramakrishnan died and so charge

against him abated. Now the trial was conducted as against the 3rd accused

Krishnadass and the case against him is dealt with in this judgment.

9) It is a specific case of prosecution that the 3 rd accused is also a proprietor

along with the 2nd accused of the 1st accused financial establishment and they

collected deposit amount from depositors and defaulted to return it and cheated them.
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P.W1 to P.W31 are the examined depositors. The informant in this case who is also a

depositor namely Subramania Pillai was not cited as witness in this case. It is the

defence case that the 3rd accused is not at all connected with financial establishment

and the financial establishment was run only by the sole proprietor Thulasi @

Ramakrishnan.

10) There is no serious dispute on the side of the 3 rd accused to the fact that

P.W1 to P.W31 who are the alleged depositors deposited money in Akilam Bankers

and the 1st accused financial establishment defaulted to return the above said deposit

amount. But it is the contention of the 3 rd accused that he has no connection with the

1st accused financial establishment. He never received any deposit and never issued

any deposit receipt to any of the depositors. So in this case, the point to be decided is

whether this 3rd accused was a proprietor of the 1 st accused financial establishment

Akilam Bankers.

11) To prove the case of the prosecution, P.W1 to P.W31 are the witnesses

who are the depositors in the financial establishment. Out of the above said

witnessws P.W2, Nagarajan, P.W3, Sathasivam, P.W4 Velammal, P.W17

Ravichandran, P.W20 Pragadeeswaran, P.W34 Gopu have stated that they did not

know the 3rd accused Krishnadass and they did not see him. Some of the witnesses

P.W5, Sathanathan, P.W6 Santhi, P.W7 Ananthakumar turned hostile and stated that

some other persons deposited money in their name and so they did not know directly

about the involvement of the accused. P.W21 Sheeba also stated that her father
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deposited money in her name. P.W25 Maheswari, P.W26 Subash, P.W27 Rajeswari

also stated that their brother NeelaRajkumar deposited money in their name. So all

the above discussed witnesses stated that they did not know the 3 rd accused and they

never saw the 3rd accused in the financial establishment.

12) P.W29 Narayanaperumal who is also a depositor stated that he knew

the accused and he used to go to the temple of the accused. He has categorically

stated that he did not know whether the accused is having any connection with

Akilam Bankers. So the above said witnesses did not support the case of prosecution

regarding the involvement of the 3rd accused in the financial establishment Akilam

Bankers.

13) When we analyse the evidence of other witnesses, P.W1 has stated

about the deposit made by him in Akilam Bankers. He has clearly stated that Thulasi

@ Ramakrishnan is the proprietor of the above said financial establishment and the

accused Krishnadass signed only as authorized officer. P.W8 Ajitha has stated that the

3rd accused was the Manager in Akilam Bankers and he signed in Ex.P9 Fixed deposit

receipts. According to P.W9, Sathish, the proprietor of Akilam Bankers (Thulasi @

Ramakrishnan / the 2nd accused) told him that 3rd accused Krishnadass is the Manager

of the bank. P.W10 Jeyanathan has stated that 3 rd accused Krishnadass is the Manager

and he issued the bond. P.W13 Bai has stated that the accused was sitting inside

Akilam Bankers office and so she said that he is the Manager. PW15 Ragupathy has

stated that in the year 2004, he handed over Rs.1500/- to the 3 rd accused and
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deposited in Akilam Bankers, Vadasery Branch. Though he has stated that this

accused issued bond, it was not produced by him. P.W16 Chinnasamy stated that he

gave Rs.34000/- to the 3rd accused and deposited in Akilam Bankers. According to

P.W19, Rajasekar, he deposited Rs.16000/- in Akilam Bankers, Vadasery branch

through P.W14 Neelarajkumar. He has stated that A3 Krishnandass was the Manager

of that bank. So on analysing the evidence of above witnesses, they have stated that

the 3rd accused Krishnadass was the Manager of the 1st accused financial

establishment. But contrary to that evidence, P.W30 Kala, has stated that A3 was

working as a clerk in that bank. So there is discrepancy in the evidence of witnesses

as to whether the 3rd accused was a clerk or Manager?

14) In this case, A3 has clearly denied the fact that he has signed any of the

fixed deposit receipts. On such denial, it is the duty of prosecution to prove the

signature of the accused. But no steps have been taken by prosecution to compare the

signature in the Fixed Deposit receipts with the signature of the 3 rd accused. It is also

not proved that the accused has written the registers pertaining to the deposits to

show that he was acting as manager.

15) Further in this case, the Deputy Superintendent of Police, Kanagaraj

and Maraimalai were the investigating officers. Since both of them died during trial,

they were not examined to prove as to how they came to a conclusion that 3 rd

accused was the manager and was managing the affairs of the financial establishment.

Another witness P.W34 Inspector of Police Mr. Muthukumar who was also cited as
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investigating officer has stated that he has not conducted any investigation in this

case.

16) In the final report filed by police, it is stated that A1, Akilam Bankers,

Vadaseri Branch was running with money lending licence No.6/1999-2000 and Pawn

broking licence No.14/1999-2000 issued by Thasildhar concerned. Those licences are

material documents to prove, in whose name the licence was issued. But prosecution

did not produce those documents and suppressed it. Thasildhar who issued that

licence was also not examined. Hence to the facts of this case except the evidence of

some of the witnesses that A3 was manager of 1 st accused financial establishment, no

other documentary evidence available to prove it. It is worthnoting that P.W2, P.W3,

P.W4, P.W17, P.W20, and P.W23 have clearly stated that they did not know the

accused. So there is insufficient evidence to hold that the accused was the manager.

17) Moreover the entire prosecution case was built up as if A3 is also a

proprietor. No documentary evidence was produced to prove that A3 is the proprietor

of the financial establishment.

18) Now let us assume that the 3rd accused is the manager and to analyse

whether the offence u/s 5 of TNPID Act is made out against 3 rd accused. Section 5 of

TNPID Act reads as follows"

"5. Default in repayment of deposits and interest honouring the

commitment. - Notwithstanding anything contained in Chapter II,

where any Financial Establishment defaults the return of the deposit

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or defaults the payment of interest on the deposit, or fails to return

in any kind, or fails to render service for which the deposit has been

made, every person responsible for the management of the affairs of

the Financial Establishment shall be punished with imprisonment

for a term which may extend to ten years and with fine which may

extend to one lakh of rupees and such Financial Establishment is

also liable for a fine which may extend to one lakh of rupees."

19) Here, there is no evidence to show that the accused was responsible for

the management of affairs of the 1st accused financial establishment. In this regard,

the learned counsel appearing for the accused relied on judgment of Hon'ble High

court of Madras in this case, Prasanna devi vs State of Tamil nadu reported in

2010(1) MLJ crl. 742.

"12. The fact remains that the petitioner was not a partner of

the partnership firm charged in this case under section 5 of

the TNPID Act. The only allegation levelled by the witnesses

examined on the side of the prosecuting agency is that the

petitioner canvassed for deposits for the financial institution.

To invoke the penal provision under section 5 of the TNPID

Act, one should shoulder the responsibility of managing the

affairs of the financial firm or company. I find that the

provision under section 5 of the TNPID Act has been drafted

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very carefully. A person who merely manages the affairs of a

firm or a company viz., Clerks, Accountants, Office

Assistants, who are just paid servants would not be

responsible for the management in the sense that they are not

answerable to the claim made against the financial firm. In

other words, a person, who simply manages the affairs of a

firm, cannot be said to have taken the responsibility of

answering the allegation of mis-management of the affairs of

the firm. The Clerks, Accountants and Office Assistants

come under the said category. They have been given a role to

manage the affairs of the partnership firm, but, they are not

responsible for the mis-management of the firm when the

same is under challenge by a third party. All the persons who

manage the affairs of the financial institution need not

necessarily be responsible for the management of the affairs

of the institution. What is required under section 5 of the

TNPID Act is that the person charged should have been

responsible for the management of the affairs of the

institution. The persons who simply manages the affairs of

the financial institution as paid servant fall out the ambit and

scope of the aforesaid provision of law.

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13. The canvassing agents, as such, cannot be held

responsible for the management of the affairs of the firm. A

canvassing agent may contribute his mite by mobilising

funds for the financial firm on contract basis for payment of

brokerage or service charges. But, by no stretch of

imagination, we can say that such a person shoulders the

responsibility of the management of the affairs of the firm. A

canvassing agent gives a rosy picture about the firm to

mobilise the deposit. It is only the depositors who shall

verify the veracity of such embellished version regarding the

performance of a firm and the financial soundness thereof

with the person who is responsible for the management of

the firm and offer his deposit.

14. Sometimes, all family members, who have nothing to do

with the financial bungling of the institution are roped in on

the mere allegation that they started canvassing for deposit

for the financial institution. Such a practice should be

stopped forthwith as otherwise innocent victims just because

they happened to be the relatives of the mis-managed

financial institution would be roped in and they have to

undergo the ordeal of criminal trial.

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The above judgment was followed in the case M/s. Jeevan Emu care

India Private Limited and others vs. State of Tamil nadu represented by Deputy

Superintendent of Police, E.O.W-II, Dindigul. (Crl.O.P.(MD) No.14978 of 2015)

In the above judgment, the Hon'ble High court in para 9 held as follows,

" Petitioners 7 and 8 had worked as Farm Manager and Office

Admin respectively. They had also signed in a number of such

invoices and documents. I am of the view that they have

discharged their role only as employees. They did not have any

control over the running of the establishments. Therefore, the

ratio laid down in Prasannadevi vs. State of Tamil Nadu

would come to their rescue also."

20) In the above cited case, petitioners therein 7 and 8 are firm managers

who signed number of invoices and documents. The Hon'ble High court held that

they did not have any control over running the establishment and only employees.

The above decision is applicable to the facts of this case also. To prove that 3 rd

accused is having control over the management of the financial establishment, it has

to be shown that he has control over the deposit amount. In this case there is no such

evidence available. Hence prosecution failed to prove the offence alleged u/s 5 of

TNPID Act.

21) Regarding the offence u/s 420 IPC there is no evidence in the

deposition of witnesses that this accused induced them, received money and then
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cheated them with intention. So it has to be held that the prosecution failed to prove

the offence u/s 420 IPC also.

22) In the result, the prosecution failed to prove the offences u/s 420 IPC

and section 5 of TNPID Act, beyond reasonable doubt. Hence the 3rd accused is not

found guilty u/s 420 IPC and 5 of TNPID Act and acquitted u/s 248(1) Cr.P.C. Charge

against 2nd accused abated. The 1st accused is not a legal person.

23) The registers produced in R.P.R.No.40/13 are ordered to be kept with

records.

Dictated to stenographer, transcribed by her, corrected and pronounced by

me, in open court this the 31st day of March 2021.

Special Judge,
Special Court under TNPID Act Cases,
Madurai.
ANNEXURE

List of prosecution witnesses :-

P.W.1 Krishnan
P.W.2 Nagarajan
P.W.3 Sathasivam
P.W.4 Velammal
P.W.5 Sathananthan
P.W.6 Santhi
P.W.7 Ananthakumar
P.W.8 Ajitha
P.W9 Satheesh
P.W10 Jeyananthan
P.W11 Chithra
P.W12 Sudha
P.W13 Bai
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P.W14 NeelaRajkumar
P.W15 Ragupathi
P.W16 Chinnasamy
P.W17 Ravichandran
P.W18 Dhanapaul
P.W19 Rajasekar
P.W20 Pragdeeswaran
P.W21 Sheeba
P.W22 Chandrasheela Rani
P.W23 Gopu
P.W24 Prabhakaran
P.W25 Maheswari
P.W26 Subash
P.W27 Rajeswari
P.W28 Suja Hema Rani
P.W29 Narayanaperumal
P.W30 Kala
P.W31 John Chrithuraj
P.W32 Subbiah pillai
P.W33 Natarajan (Sub Inspector of Police)
P.W34 Muthukumar.(Deputy Superintendent of Police)

List of exhibits marked by prosecution :-

Ex.P1 Fixed deposit receipts.
Ex.P2 Complaint
Ex.P3 Fixed deposit receipts.
Ex.P4 29.12.07 Complaint
Ex.P5 26.6.08 Complaint
Ex.P6 Fixed deposit receipts.
Ex.P7 16.5.04 Complaint
Ex.P8 5.4.08 Complaint
Ex.P9 Fixed deposit receipt.
Ex.P10 Fixed deposit receipts.
Ex.P11 12.4.08 Complaint
Ex.P12 Fixed deposit receipts.
Ex.P13 29.12.07 Complaint
Ex.P14 Fixed deposit receipts.
Ex.P15 29.12.07 Complaint
Ex.P16 Fixed deposit receipts.
Ex.P17 29.12.07 Complaint
Ex.P18 Passbook
Ex.P19 16.8.08 Complaint
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Ex.P20 Fixed deposit receipt

Ex.P21 Passbook
Ex.P22 20.8.08 Complaint
Ex.P23 20.8.08 Complaint
Ex.P24 22.9.08 Complaint
Ex.P25 22.9.08 Complaint
Ex.P26 22.9.08 Complaint
Ex.P27 22.9.08 Complaint
Ex.P28 Fixed deposit receipt
Ex.P29 15.1.08 Complaint
Ex.P30 11.4.08 Complaint
Ex.P31 Fixed deposit receipt
Ex.P32 12.4.08 Complaint
Ex.P33 Fixed deposit receipt
Ex.P34 29.12.07 Complaint
Ex.P35 Fixed deposit receipt
Ex.P36 12.4.08 Complaint
Ex.P37 22.09.08 Complaint
Ex.P38 22.09.08 Complaint
Ex.P39 22.09.08 Complaint
Ex.P40 Fixed deposit receipt
Ex.P41 12.4.08 Complaint
Ex.P42 20.8.04 Complaint
Ex.P43 Fixed deposit receipt
Ex.P44 Passbook
Ex.P45 28.9.12 Complaint
Ex.P46 Fixed deposit receipt
Ex.P47 Complaint
Ex.P48 22.10.07 First Information report.
III. List of M.O. marked by prosecution: - Nil,
IV. List of Defence witnesses: Nil.
V. List of exhibits marked by defence :- Nil.

Special Judge,
Special Court under TNPID Act Cases,
Madurai.