Bridal Kuries Private Ltd. v. State of Kerala and M/s Dhanasree Service Society

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE K.HARIPAL** **TUESDAY, THE 1[ST] DAY OF FEBRUARY 2022 / 12TH MAGHA, 1943** **CRL.MC NO. 1049 OF 2015** **(AGAINST THE CRIME NO.779/2009 OF THRISSUR EAST POLICE STATION,** ## **THRISSUR)** ## **PETITIONERS/ACCUSED:** 1 BRIDAL KURIES PRIVATE LTD, THRISSUR REPRESENTED BY ITS MANAGING DIRECTOR HENRY JOSEPH, S/O.KOCHAOUSEPH, PELLISSERI HOUSE, AMMADADAM, TRISSUR 2 HENRY JOSEPH S/O.KOCHAOUSEPH PELLISSERI HOUSE, AMMADADAM, TRISSUR 3 RAVEENDRAN P.P. S/O.PARAMESWARAN CHAIRMAN, BRIDAL KURIES PRIVATE LTD, TRISSUR, PUTHUPARAMBIL HOUSE, KANARA TRISSUR DISTRICT 4 JOY JOSEPH, S/O JOSEPH, VICE CHAIRMAN BRIDAL KURIE PRIVATE LTD THRISSUR, CHOWAKKARAN HOUSE, PULLAZHI TRISSUR DISTRICT BY ADVS. SRI.K.MOHANAKANNAN SMT.A.R.PRAVITHA ## **RESPONDENTS/STATE AND COMPLAINANT:** - 1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERAL, KOCHI 682 031. - 2 M/S. DHANASREE SERVICE SOCIETY CO.PHOTOWIVDE K.P.3502 A KUMARANELLUR PO KOTTAYAM REPRESENTED BY ITS SECRETARY, B.UNNIKRISHNAN, S/O BALAKRISHNA PILLAI S/O.BALAKRISHNA PILLAI, ERAVIPURAM VILLAGE, MANGANAM PO, KOTTAYAM - 686018 SR.PP - SMT. M.K.PUSHPALATHA THIS CRIMINAL MISC. CASE HAVING COME UP FOR HEARING ON - 04.12.2021, THE COURT ON 01.02.2022 PASSED THE FOLLOWING: Crl.M.C.No.1049 of 2015 2 ## ORDER Petitioners are accused in C.C.No.192/2014 pending before the Chief Judicial Magistrate’s Court, Thrissur, which arose from the final report in Crime No.779/2009 of Thrissur East police station. That crime was registered on the basis of a private complaint preferred by the 2[nd] respondent M/s Dhanasree Service Society represented by its Secretary, a person belonging to Mannanam in Kottayam where he alleged offences punishable under Section 294A read with Section 34 of the IPC and Sections 3, 4 and 5 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, hereinafter referred to as the Act. It has come out that, after investigation, at first the crime was referred as false. But that refer report was not accepted by the Magistrate and a further investigation was directed, basing on which the final report was laid alleging offence under Section 294A read with Section 34 of the IPC and Sections 3, 4 and 5 of the Act. The petitioners are the accused in the case. According to them, the allegations against them are baseless, they have not committed any offence, no offence is made out against them. The petitioners are the Foremen of a Private Ltd company and they were conducting chitty by name Bridal Kurees with a branch in Fareedabad. The allegations in Crl.M.C.No.1049 of 2015 3 the complaint or the FIR do not disclose any offence. They had run a kuri transaction by which no prize was offered to the subscriber. There is no distribution of prize as alleged, after making any collection from the subscriber. There is no doubling scheme or otherwise to attract provisions of the Act. It is a scheme of six and a half years and in every three years, amounts have to be deposited in 50 instalments. There is absolutely no merit in the allegations that the petitioners have committed any offence. Therefore, they contend that it is really an abuse of the process of Court. The 2[nd] respondent is not at all aggrieved. He is neither a subscriber to the chitty conducted by the petitioners nor had any transaction with the petitioners and he is not an affected person. Chitty transactions were conducted in a very transparent manner after publicising the scheme. The 2[nd] respondent is a bogus society and therefore, entire proceedings are sought to be quashed. 2. I heard the learned counsel for the petitioners and also the learned Senior Public Prosecutor. 3. According to the learned counsel for the petitioners, the complaint was first referred as false and it was under the influence of Crl.M.C.No.1049 of 2015 4 the 2[nd] respondent that a charge sheet was laid after further investigation. According to him, bonus prize only is given and the said act of the petitioners does not fall under the provisions of Sections 4, 5 and 6 of the Act. None of the subscribers had any complaint; even the defacto complainant has no grievance that the offered prizes were not distributed. The learned counsel also relied on the decision reported in **T.Hamsa Haji and others v. State of Kerala [1999 (1) KLJ 598].** 4. On the other hand, the learned Senior Public Prosecutor has submitted that the charge witnesses have spoken about the prizes distributed by the petitioners. Now the present contention that there is no basis in the allegations, cannot be accepted in right earnest. 5. The source of the criminal prosecution is Annexure A1 complaint preferred by the 2[nd] respondent before the Chief Judicial Magistrate’s Court, Thrissur. In the complaint, the 2[nd] respondent claimed that he is representing a society registered under the Travancore Cochin Literary Scientific and Charitable Societies Act, which is interested in upholding the interests of the general public who is dealing with and also who is investing money in various financial Crl.M.C.No.1049 of 2015 5 institutions and also to give appropriate advices to such persons and that it seems that such a complaint was preferred in public interest. It is alleged that there are 13 accused who are the company as well as Directors of M/s Bridal Kurees Pvt.Ltd which is a non-banking financial company running in Thrissur. The immediate provocation in laying the complaint is a scheme advertised by the first respondent by name Bridal Manikyam. According to the complaint, a colourful brochure was printed and published and advertisements were made intimating the commencement of a Kuri from 10.11.2009 onwards. The advertisements indicate that they are running a conventional chit fund with prize chits, which is in violation of the Act. The specific allegation of the complainant is that it is a prize chit scheme falling under the mischief of the Act and therefore, the petitioners are guilty of the alleged offences. As stated earlier, Crime No.779/2009 registered in East police station, Thrissur was at first referred as false. But the learned Chief Judicial Magistrate did not accept the refer report and directed to conduct a further investigation, basing on which Annexure A3 final report was filed and now, aggrieved by the same, the petitioners have approached this Court. Crl.M.C.No.1049 of 2015 6 6. Along with the petition, the said brochure, which was admittedly issued by the petitioners, has been produced. The brochure indicates that they have launched a novel investment scheme by name Bridal Manikyam with prize amount of Rs.5,30,000/-. It is stated that the subscribers need to pay only Rs.3,10,000/- in 50 instalments and they will get Rs.5,30,000/-. Similarly, it is stated that bonus prizes are also given. Lots are made from each 50 numbers and that each 21 persons from every 50 will get bonus prizes including three Maruti cars and 11 motorcycles, gold lockets worth Rs.5,000/-, gold ring worth Rs.2,500/-, Maruti Swift car worth Rs.4,00,000/-; offering these prizes advertisements were made and on that basis the scheme was launched. According to the learned counsel for the petitioners, it was only a scheme and such prizes were offered for attracting subscriptions and therefore according to him, the mischiefs under the Act are not attracted. 7. But, after going through the provisions of the Act, I find it difficult to subscribe to the arguments raised by the learned counsel for the petitioners. Firstly, prize chit has been defined under the Act; Section 2(e) of the Act reads thus:- Crl.M.C.No.1049 of 2015 7 “ "prize chit" includes any transaction or arrangement by whatever name called under which a person collects whether as a promoter, foreman, agent or in any other capacity, monies in one lump sum or in instalments by way of contributions or subscriptions or by sale of units, certificates or other instruments or in any other manner or as membership fees or admission fees or service charges to or in respect of any savings, mutual benefit, thrift, or any other scheme or arrangement by whatever name called, and utilises the monies so collected or any part thereof or the income accruing from investment or other use of such monies for all or any of the following purposes, namely:- (i) giving or awarding periodically or otherwise to a specified number of subscribers as determined by lot, draw or in any other manner, prizes or gifts in cash or in kind, whether or not the recipient of the prize or gift is under a liability to make any further payment in respect of such scheme or arrangement; (ii) refunding to the subscribers or such of them as have not won any prize or gift, the whole or part of the subscriptions, contributions or other monies collected, with or without any bonus, premium, interest or other advantage by whatever name called, on the termination of the scheme or arrangement, or on or after the Crl.M.C.No.1049 of 2015 8 expiry of the period stipulated therein, but does not include a conventional chit; ” Section 3 bans conduct of such prize chits or money circulation schemes or enrolment as members or participation therein. Sections 4 and 5 are penalty clauses. Section 6 deals with offences by companies. 8. The said Act was enacted in 1978, after the Reserve Bank of India had constituted a study group for examining the depth of the provisions of Chapter III B of the Reserve Bank of India Act, 1934 and the directions issued thereunder in non banking companies in order to assess their adequacy in the context of ensuring the efficacy of the monitory and credit policies of the country and affording a degree of protection to the interest of the depositors who place their savings with such companies. The study groups in its report observed that the prize chits/benefits/saving schemes benefit primarily the promoters and do not serve any social purpose. They are rather prejudicial to the public interest and affect the efficacy of the fiscal and monitory policies. That was how the study group had recommended for banning the same and the Act had come into force. Crl.M.C.No.1049 of 2015 9 9. Prize chits would cover any kind of arrangement under which monies are collected by way of subscriptions, contributions etc and prizes, gifts etc are awarded. It is really a form of lottery, its basic feature is that foreman or promoter who ostensibly charges no commission collects regular subscriptions from the members. Once the members get the prize, he is very often not required to pay further instalment and his name is dropped from further lots. The institutions conducting prize chits are private limited companies with a very low capital base contributed by the promoters, directors or other close relatives. Such schemes confer monitory benefit only on a few members and on the promoters of the company. 10. Here the contention of the learned counsel for the petitioners is that no subscriber of the chit has complained against such schemes. As rightly pointed out by the learned Public Prosecutor, some of the witnesses have spoken about getting bonus prizes including Maruti cars, motorcycles etc. They have no complaint at all. But moot aspect is whether they are having complaints, but, running such prize chits schemes are against public policy and public interest and that was how the Act had come into Crl.M.C.No.1049 of 2015 10 force. Therefore, the contention of the learned counsel that no one else had raised any complaint against such prize chits is of no basis. 11. I have already referred to the definition of prize chits in Section 2(e) of the Act. The conduct of the petitioners, no doubt, falls within the four walls of Section 2(e) of the Act. They are running such schemes may be for the purpose of promoting the chit funds, but it being a matter against the public policy and against larger interest of the public, is a prohibited conduct and therefore, the acts of the petitioners fall within the prohibition of Section 3 of the Act. 12. It may be true that the 2[nd] respondent may not have any direct interest in the matter, he may not be a subscriber or a beneficiary. But that is not relevant, question of locus standi is alien to criminal jurisprudence. Therefore, the contention that he has no role in the matter is of little consequence. 13. The decision reported in **Hamsa Haji,** quoted supra, cannot be applied to the facts of this case. There, the Vyapari Vyavasayi Ekopana Samiti of Malappuram was conducting a scheme by name Bhagyadhara scheme. Going by the decision, as per that scheme, free coupons were supplied to the customers who purchased Crl.M.C.No.1049 of 2015 11 articles of different kinds above a specified amount from the merchants who are members of the scheme. Here it is not like that. Here, as mentioned earlier, the acts of the petitioners fall within the mischief of Section 2(e) of the Act and therefore the proceedings cannot be quashed invoking jurisdiction of this Court under Section 482 of the Cr.P.C. The Crl.M.C is devoid of merits and is liable to be dismissed. Dismissed. Sd/- **K. HARIPAL JUDGE** Jms/RMV/31.01/22 //True Copy// P.A to Judge Crl.M.C.No.1049 of 2015 12 ## **APPENDIX OF CRL.MC 1049/2015** PETITIONER EXHIBITS ANNEXURE A1TRUE COPY OF THE COMPLAINT FILED BY THE 2ND RESPONDENT BEFORE THE CHIEF JUDICIAL MAGISTRATE, TRISSUR AS CMP NO. 6041/2009 ANNEXURE A2TRUE COPY OF THE FIR OF TRISSUR EAST POLICE STATION DATE 03.10.2009. ANNEXURE A3TRUE COPY OF THE FINAL REPORT DATED 15.9.14 WITH STATEMENT OF WITNESSES ANNEXURE A4TRUE COPY OF THE BROCHURES OF BRIDAL KURIES PRIVATE LTD.