IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH

HON'BLE SRI JUSTICE RAJA ELANGO

CRL.M.P.Nos.6459 and 7016 of 2011 and CRIMINAL PETITION No.5626 of 2011

SPEAKASIA ONLINE PTE.LTD.,OFFICE AT SINGAPORE, REP.BY AU.REP

VS HYDERABAD & ANOTHER, REP PP.

THE STATE OF A.P., THROUGH CID,

ORDER: This Criminal Petition is filed by the petitioner company namely Speakasia Online Pvt. Ltd. represented by its Authorised Representative Mr. Charan Kumar, under Section 482 Cr.P.C., seeking to quash the proceedings in F.I.R.No.30 of 2011 on the file of the Station House Officer, C.B.C.I.D., Hyderabad, registered on the basis of the complaint given by the 2nd respondent. The petitioner company was arrayed as an accused in F.I.R.No.30 of 2011 for the offences under Sections 420 of I.P.C. and 4, 5 and 6 r/w 2(c) and 3 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (for short “the Act”). The contents in the complaint are as follows: i) The business of the company is told as Online survey. The joining fee of the company is Rs.11,000/-. One must get enrolled into the scheme to join others into the scheme for commissions. Huge income is promised by the company within a short span of time. The scheme of the company is Binary scheme. Binary scheme means one person has to enrol two persons and again these two persons have to enrol two persons each and again these four persons have to enrol two persons each and this chain continues endlessly. As the network and chain of members get extended, the upline members will get more commissions. ii) It is promised by the company that the commission is paid not only on the personal efforts of joining members into its scheme but also on the efforts of joining new members into the scheme. iii) The promoters of the scheme very well knew that it is certain that the scheme was impracticable and unworkable making tall promises and for the benefit of very few who have joined the scheme at the initial stage. If each person keep on enrolling two persons, at the 15th or 18th level all the Indian population and at the 24th level all the World population will become the members of the company and there would be no member left to join/enrol into the scheme of new members by the already existing members. This will result in heavy loss of money of the enrolled members. The scheme will collapse under its own weight. iv) Because of misrepresentation and deceptive words, nearly 19 lakh people have joined into the scheme of the petitioner company all over India and the company got quick and easy money of Rs.5000 crore by cheating and looting all these 19 lakh people. This Court on 13.07.2011 passed the following order:

A. when cognizable offence is not committed. with a prayer to vacate the interim stay granted by this Court on 13. the learned Senior Counsel has drawn the attention of this Court regarding his first contention that there cannot be any First Information Report.7. appearing for the petitioner company are as follows: 1) 1) First Information Report can be registered only for commission of an offence. the following ingredients should be there: A.P.1 and 2 filed petitions in Crl. He further submitted that in the said case. even prior to commission of any offence.C. The learned Senior Counsel also relied on a decision in “Indian Oil Corpn. there must be members of the scheme. the Apex Court held that to attract an offence under the provisions of the Money Circulation Scheme. B. NEPC India Ltd. . The learned Senior Counsel. the scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrolment of members into the scheme or there must be a scheme for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or contingency relative or applicable to the enrolment of members into the scheme. 5) 5) Section 511 of IPC is also not registered in the First Information Report. Vs. C. but investigation can go on.P. there cannot be any registration of First Information Report. there must be a scheme. Senior Counsel.Nos. 3) 3) The complainant lodged the complaint in expectation of loss of money to the public. C.” Respondent Nos. The complaint does not disclose about the manner in which the subscribers are cheated and also the modus operandi of the petitioner company. In the absence of any commission of offence. 4) 4) The allegations made in the complaint do not attract an offence under Section 420 of IPC. to substantiate his contentions.P.2011. Hence. The First Information Report should state the manner in which the offence committed. D. relied on a decision in “State of West Bangal and others Vs. In the said judgment. The learned Senior Counsel further relied on a decision in “Abhayanand Mishra Vs. 2) 2) The entire complaint does not disclose any offence as stated in the First Information Report. B. the event of contingency relative or applicable to the enrolment of members into the scheme will however not be in any way affected by the fact whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription. and others”[2][2] wherein the principles of exercise of jurisdiction under Section 482 of Cr.6459 of 2011 and 7016 of 2011 respectively. State of Bihar”[3][3] to substantiate his arguments with regard to preparation and an attempt to commit an offence.M. The main contentions raised by Sri Vedula Venkata Ramana. are reiterated by the Apex Court on the basis of its earlier judgment. D. Sanchaita Investments and others”[1][1].“There shall be interim stay of arrest of Officials/Employees belonging to the petitioner company. the prosecution cannot claim that an attempt was made to commit the offence.

. he will get Rs. Mumbai.6. 399 of IPC and 7(1)(a) of the Criminal Law Amendment Act.In contra.O.2 and A. CEO. First Information Report can be registered. iii. The I.O. Regional Manager. and (3) Tulasiyat Tek Pvt.000/. some of the provisions in the law enable the Investigating Agency to register First Information Report for mere preparation alone.2011.S. for a cognizable offence. Further. Manoj Kumar. The I. the Investigating Agency proceeded with the investigation. CEO and Harendar Kour.2011 the I.07. On 08. (2) K. The subscription is valid for 12 months.3 lakh each. i. Once a cognizable offence is committed. visited the Registrar of Companies and caused enquiries about the registration of the alleged companies namely (1) Seamless Outsourcing LLP.06. The modus operandi of the company is if a person got registered in petitioner company. Global CEO of petitioner company through their advocate Sri S. they joined as franchises to the petitioner company in Andhra Pradesh by depositing Rs. Sections 120-B. the learned Public Prosecutor has submitted that the First Information Report discloses cognizable offences and in view of the order passed by this Court on 13.per annum. and (3) Harender Kour.3 and documents were seized pertaining to the bank accounts.O. ii.000/. The first contention raised by the learned Senior Counsel is that First Information Report can be registered only for commission of an offence. he should pay an amount of Rs.R. more particularly. Ltd. Andhra Pradesh.P. (2) Kritanz Management & Allied Services. agreements. got served notices U/s 91 & 160 Cr. to (1) Manoj Kumar. According to the confession of the statements of A. It is true that First Information Report is to be registered on commission of an offence. iii. Hyderabad in which he stated that no company in the name of “Speak Asia Online Pvt. ii. Mumbai and also addressed a letter to the Registrar of Companies for furnishing of certain information on registration of above firms. for example.C.for six months and Rs. the person required to furnish subscription code. cell phones and laptop from their possession and sent them for judicial custody. When he becomes panellist. During the course of investigation on 25. Ltd. The method of survey is that the petitioner company will put a questionnaire to the subscriber about a product and its performance. iv.08. iv.500/. Charan Kumar.O.2 and A. once he completes the surveys.3 that on attracting the advertisements of the petitioner company. But at the same time. Murthy to attend before him on or before 25th July 2011.2011 two franchises of Vijayawada by names (1) Devireddy Srinivasa Reddy and (2) Lanka Venkata Ayyappa Swamy were arrested as A.11.. received the information from the Assistant Registrar of Companies. personal details including bank account details. with a view to earn more money in easy way by attending online simple surveys and also to enrol panellists. Mumbai. He stated the following facts before this Court for consideration: i.” is found to be registered in the Ministry of Corporate Affairs Registry. Global CEO have not attended so far before the I.for each survey. Further.

for the making of quick or easy money. Further. the preparation itself is commission of offence. The view of this Court is fortified by the decision rendered by the Apex Court in Kuriachan Chacko and others Vs. As far as the offence under Section 420 of IPC is concerned. whether an offence is disclosed or not must necessarily depend on the facts and circumstances of each particular case and in considering whether an offence. the Court has to come to the conclusion whether an offence is disclosed or not. On a consideration of all the relevant materials. the offences alleged are under Sections 420 of I. Such high rate of interest was being paid. It is true. State of Kerala[4][4]. But. and 4. . indicate that there is no need of any loss or misappropriation of funds to attract an offence. Some provisions in the penal laws made the preparation also as an offence. The learned Senior Counsel further contended that the complainant failed to inform as to how he gathered the material. or for the receipt of any money or valuable thing as the consideration for a promise to pay money. whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions. It is also observed in the said judgment. which covered under the money circulation scheme and enrolling members as subscribers. the facts in the present case are totally different and the invitation made by the petitioner company in the name of “surveys” discloses an offence under the provisions of the said Act.No person shall promote or conduct any prize chit or money circulation scheme. or participate in it otherwise. Wrong mentioning of any provision in the First Information Report itself is not a ground to quash the First Information Report and to stay the investigation. at this stage. the firm namely Sanchaita Investments offered fabulous interest at 48% per annum to its members and later reduced it to 36% per annum. The facts and circumstances in the 1st cited case (supra) are totally different from the facts and circumstances of the case on hand. the Court has mainly to take into consideration the complaint or the F. The Apex Court felt that the said facts do not disclose any offence under the provisions of the Act. is disclosed or not.I. In the present case. Mere informing a scheme.whether an offence committed or not always depends upon the ingredients mentioned in the provision of law. since the Sections are unambiguous and clearly indicate the acts which attract an offence. even though the loan certificates receipts show that the interest was liable to be paid at 12% p. in the said case.a. Section 3 of the Act . The Apex Court also elaborately discussed the said fact and opined that acceptance of money and periodical interest paid by a company do not come within the purview of Section 3 of the Act. Further.C. It is not necessary to further elaborate on the same.Banning of prize chits and money circulation scheme or enrolment as members or participation therein:. or enrol as a member to any such chit or scheme. the investigation will disclose whether an offence is committed under Section 420 of IPC.” The said provisions. and the Court may in appropriate cases take into consideration the relevant facts and circumstances of the case. the essential ingredients of Section 2(c) of the Act are totally missing. itself is an offence. The same need not be proved. Sections 2(c) and 3 of the Act are reproduced hereunder: “2(c) of the Act: “money circulation scheme” means any scheme by whatever name called. on any event or contingency relative or applicable to the enrolment of members into the scheme. For the sake of convenience. or receive or remit any money in pursuance of such chit or scheme. into which investigation is made or to be made. in the said facts and circumstances of the case. on a mere reading. When the provision deals the preparation as an offence.R.P. 5 and 6 r/w 2(c) and 3 of the Act. this Court is of the view that the said case is registered along with other provisions of the Act.

30000 persons were enrolled in the State of Andhra Pradesh. C.M.M. Accordingly.2276 crore.2011 is hereby vacated and the Criminal Petition is also dismissed.I.07.P. Page No.467. Miscellaneous petitions.C. This Court is not inclined to go into all those things. and so many other incriminating materials are collected.5698 of 2011 on 13. 561 [2][2] (2006) 6 S.30 of 2011 on the file of the Station House Officer.708 . Hyderabad. The investigation further reveals that 24 lakh members were enlisted. 737 [3][3] AIR 1961 SC 1698 [4][4] (2008) X S. __________________ RAJA ELANGO. the investigation so far conducted by the Investigating Agency discloses that 21 witnesses were examined and two persons were arrested. 2011 cbs [1][1] (1982)1 S.C.Since there was no stay of investigation.C. Rs. CRL. this Court is not inclined to quash the First Information Report No. and the interim stay granted by this Court on 13.. if any. J 30th August.C.P.C. In view of the foregoing discussion. filed shall stand closed. because the question before this Court is whether the investigation to be proceeded or not and hence.P.17 crore was transferred to Singapore. the money transacted is Rs.D.C.07.B.No.2011 is liable to be vacated. more particularly. it is not necessary to record the manner in which the investigation proceeded in this case which will cause prejudice to either parties.6459 and 7016 of 2011 are allowed and the interim stay granted by this Court in Crl.Nos.C.

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