Bangalore District Court
Ccb F And M Squad vs Mohammed Idress on 5 March, 2025
1 Spl.C.No.458/2015
KABC010233282015
IN THE COURT OF XLVII ADDITIONAL CITY CIVIL &
SESSIONS JUDGE AND SPECIAL JUDGE FOR CBI
CASES, BENGALURU (CCH-48)
DATED THIS THE 5th DAY OF MARCH 2025
PRESENT
Sri Satish J.Bali, B.Com., LL.M.,
XLVII Addl. City Civil and Sessions Judge and Spl. Judge
for CBI Cases, Bengaluru (CCH-48)
SPL.CC.NO.458/2015
COMPLAINANT: State by -
Pulakeshinagar Police Station,
CCB (F & M) Squad,
Bengaluru.
(By Spl. Public Prosecutor)
Vs.
ACCUSED: 1. Mohamed Idhrees
S/o Ameer Basha,
Aged 30 y ears,
R/at No.16, 5th Cross,
Arograyamma Layout,
Venkateshapura,
Bengaluru-45.
Office Address:
No. 151/1, 2nd Floor,
Landmark Towers,
2 Spl.C.No.458/2015
Frazer Town,
Bengaluru-05.
2. Mohamed Ameer Basha,
Aged about 60 years,
16, 5th Cross,
Arograyamma Layout,
Venkateshapura,
Bengaluru-45.
3. M/s Fosterfin Capital Management
-Firm, No. 151, 2nd Floor,
Landmark Towers,
Wheelers Road, Frazer Town,
Bengaluru -05.
Represented by its Partner
Sri Venkatachalam Ramachandram
S/o Ramachandram.
4. Sri Venkatachalam Ramachandram
S/o Ramachandram, Partner of
M/s Fosterfin Capital Management-
Firm, No. 151, 2nd Floor, Landmark
Towers, Wheelers Road, Frazer Town,
Bengaluru -05.
A1 & A2 - by Sri MSM, Advocate
A3 - Firm,
A4 - By Sri SR, Advocate
1.Date of Commission of Offence : During the
period from
7/10/2013 to
01/01/2015
2. Date of Report of Offence : 11/03/2015
3. Arrest of Accused : Accused 2 & 4 are on
bail, A3 is a firm,
A1 is in J.C.,
3 Spl.C.No.458/2015
4. Name of the complainant : Arun Kumar. N.
5. Date of recording of Evidence : 20/06/2022
6. Date of closing Evidence : 22/8/2024
7. Offences complained of : Sec.9 of the KPIDFE
Act, 2004 and Sec 420
of IPC.
8. Opinion of the Judge : As per the final order
(Satish J. Bali)
XLVII Addl. City Civil and Sessions
Judge and Judge for CBI Cases,
Bengaluru (CCH-48)
****
JUDGMENT
This is a charge-sheet filed by the Police
Inspector of CCB, Fraud and Misappropriation (F&M)
Squad, Bengaluru as against the accused for the
offence punishable under Section 420 of IPC and
Section 9 of Karnataka Protection of Interest of
Depositors in Financial Establishments Act, 2004
(herein afterwards referred as “KPIDFE” Act for the
purpose of brevity.)
4 Spl.C.No.458/2015
2. The record reveals that as per order dated
3/3/2023, Accused no.3 – firm represented by its
partner Accused no.4 were arraigned as accused.
3. It is the case of the prosecution that
Accused no.1 – Mohammed Idhrees and Accused
no.4 – Venkatachalam Ramachandram as partners
have floated a financial institution in the name and
style “M/s Fosterfin Capital Management – Firm”-
Accused no.3, at Landmark towers, 1 st Floor,
Wheelers Road, Bengaluru. The main object of the
accused no.3 – firm was to accept deposits from the
general public and return the same with interest at
the rate of 7% per month. Believing the words of the
accused no.1, complainant – Arunkumar.N made
investment of Rs.9,00,000/- on different dates by
way of cash and by transferring the remaining
balance amount to the account of accused no.2 –
Mohammed Ameer Basha held at ICICI Bank bearing
No. 025201532106 as per the instructions of
accused no.1 through his account bearing
5 Spl.C.No.458/2015
No.004701583332 on 7/10/2013 and 24/1/2013.
The above said investments were made under the
scheme “Wealth Management Scheme” thereunder it
is assured to return the deposited amount with
interest at the rate of 7% every month. As per the
case of the prosecution, the accused persons have
failed to keep up their promise and neither they
returned principal amount nor interest as agreed.
On the basis of the first information lodged by
Sri Arunkumar N, criminal law was set into motion.
The first information-Ex.P1 reveals that the accused
no.1 and 2 approached the complainant representing
accused no.3- firm with an offer to invest in equities
and commodities in the month of October 2013 with
assurance to return the same with interest at the
rate of 7% per month. They also assured that said
amount will be invested in equities and commodities
which would give return at the rate of 7% per month
on the invested amount. Believing the said words,
the complainant Sri Arunkumar N had transferred a
6 Spl.C.No.458/2015
sum of Rs.1,50,000/- on 7/10/2013, Rs.4,50,000/-
on 24/12/2013 and from the above said his account
to the above said account of accused no.2 as above
stated. The complainant has also paid a sum of
Rs.1,50,000/- by way of cash on 4/10/2013 at the
office of the accused no.3 – firm and in total, he has
invested a sum of Rs.9,00,000/- on the assurance of
the accused. But later the accused neither returned
principal amount nor interest as promised.
Subsequently they found absconding. Accordingly,
the first information came to be lodged on the basis
of which FIR as per Ex.P3 came to be lodged before
the Pulikeshinagar Police, Bengaluru in their Crime
No.92/2015 dated 11/3/2015 against the accused
no.1 and 2 for the offence punishable under Section
420 of IPC and Section 9 of KPIDFE Act. The PW.4-
Shri K.C. Giri has conducted the investigation by
summoning all material witnesses and recorded the
statement of all relevant witnesses. After completion
of the investigation, as prima facie it was found that
7 Spl.C.No.458/2015
accused have committed the alleged offences, charge-
sheet came to be filed before the court for the
aforesaid offenses.
4. On the basis of the above said charge-
sheet and other materials, as there were sufficient
materials to proceed against the accused, cognizance
was taken for the aforesaid offences and in
pursuance of the summons, the accused appeared
through their respective counsel and enlarged on
bail. The copies of prosecution papers furnished to
accused in compliance of section 207 of Cr.P.C,.
Initially charge was framed against accused no.1 and
2 only and subsequently after impleading accused
no.3 and 4 the charges were framed as against them
for the aforesaid offences. The substance of
accusation for the aforesaid offences was read over to
all the accused who by understanding the same did
not plead guilty and claims to be tried.
5. The prosecution in order to bring home
the guilt of the accused has in total examined 4
8 Spl.C.No.458/2015
witnesses as PWs. 1 to 4 and got marked documents
as per Ex.P1 to Ex.P7, and closed its side. The
incriminating circumstances appearing in the
evidence of the prosecution was read over to all the
accused as contemplated under Section 313 of
Cr.P.C., who denied the same and not chosen to lead
any defense evidence. The answers given by the
Accused in response to the said questions are noted.
6. Heard the arguments of learned Special
Public Prosecutor as well as learned counsels for t he
accused and perused the materials.
7. The learned counsel for the accused no.3
and 4 has pressed into service the following citations:
1. AIR 2001 SUPREME COURT 2960 in the
case between S.W. Palanitkar and others Vs.
State of Bihar and another.
2. 2007 AIR SCW 6332 in the case between
Anil Ritolla @ A.K. Ritolia Vs. State of Bihar
and another; and
3. 2007 AIR SCW 4816, Veer Prakash
Sharma Vs. Anil Kumar Agarwal and another.
9 Spl.C.No.458/2015
4. Judgment in Spl.C.C.124/2016 dated
14/5/2024 on the file of this court.
8. The learned Special Public Prosecutor has
pressed into service following decisions:
1. AIR 2013 SC 912, between Munish Mubar
Vs. State of Haryana.
2. 2011 Cr.R. 234 (Kant) between State Vs.
Kachatti Mahantesh and Others.
9. The following points arises for my
consideration:
1. Whether the prosecution proves beyond
reasonable doubt that accused no.1
and 4 being partners of “M/s Fosterfin
Capital Management” – Firm – accused
no.3 along with Accused no 2 induced
the complainant – Sri Arunkumar N to
make investments of Rs.9,00,000/- in
their firm by got transferring the said
amount to the account of accused no.2
as well as by receiving part of the
amount in cash, with dishonest
intention to cheat and defraud him and
had collected the said amount under
10 Spl.C.No.458/2015the guise of repaying the same with
higher interest and sharing profit and
later on refused to pay the amount, as
such they had committed the offence
punishable under Section 420 of IPC?
2. Whether the prosecution proves beyond
reasonable doubt that accused no.1
and 4 being the partners of “M/s
Fosterfin Capital Management” – Firm,
Bengaluru, along with Accused No.2
induced the complainant – Arunkumar
to make investments of Rs.9,00,000/-
in their firm with dishonest intention to
cheat and defraud him and collected
the said amount through the account of
accused no.2 as well as by way of cash
under the guise of payment of higher
rate of interests and sharing of profit
and later on refused to pay the amount,
as such they had committed the offence
punishable under Section 9 of KPIDFE
Act?
3. What Order ?
10. My answer to the above points are as
under:
11 Spl.C.No.458/2015
Point No.1: Partly in the Affirmative so far
as Accused No.1 & 2 is
concerned, and In the Negative
as against Accused No.3 & 4.
Point No.2: In the Affirmative;
Point No.3: As per final order; for the
following:
REASONS
11. POINT NO.1 : The prosecution in order
to prove its case has examined in total 4 witnesses
and got marked documents at Ex.P1 to Ex.P7.
12. PW.1 is none other than the first
informant who has set the law into motion. PW.2 is
the then PSI of Pulakeshinagar P.S. Bengaluru who
received the First Information lodged by the
Arunkumar N and registered the same in Crime
No.92/2015 for the offence punishable under
Section 420 of IPC and Section 9 of Karnataka
Protection of Interest of Depositors in Financial
Establishments Act as per Ex.P3. PW.3 is an
independent witness and common friend of
12 Spl.C.No.458/2015
complainant as well as accused who has deposed as
to investments made by the complainant.
13. PW.4 – Sri K.C.Giri s/o C.G.Krishna
Murthy is the investigating officer who has
conducted the investigation and filed the charge-
sheet against the accused.
14. The prosecution has got marked the first
information as per Ex.P1 dated 11/3/2015. Ex.P2 is
the statement of account of complainant in respect
of his Savings Bank Account bearing No.
004701583332 at ICICI Bank for the period from
1/10/2013 to 31/12/2013. Ex.P3 is the first
information report lodged before Pulakeshinagar
Police Station as against the accused for the offences
punishable under Section 9 of Karnataka Protection
of Interest of Depositors in Financial Establishments
Act and Section 420 of IPC dated 11/3/2015.
Ex.P4 is the statement of account of accused no.2
bearing Savings Bank Account No. 02520152106
held with ICICI Bank for the period from 1/10/2013
13 Spl.C.No.458/2015
to 30/4/2014. Ex.P5 is the letter addressed by
office of the Deputy Police Inspector, F & M Branch,
CCB, Bengaluru dated 25/5/2015 to the Manager of
ICICI Bank seeking particulars of account bearing
No. 004701583332. Ex.P6 is the Registration
Certificate issued by Registrar of Firms dated
19/12/2013 in respect of accused no.3 M/s
Fosterfin Capital Management Firm. Ex.P7 is the
Deed of Partnership dated 14/12/2013 entered into
between accused no.1 and 4 in respect of business
of accused no.3 – Firm.
15. The learned Special Public Prosecutor in
his arguments submitted that the accused no.1 and
4 being the partners of accused no.3 firm along with
accused no.2 have induced the complainant/First
Informant to make investment of Rs.9,00,000/- with
assurance to return the same with interest at the
rate of 7% every month, but failed which made the
complainant to lodge the first Information as per
Ex.P1. It is submitted that only suggestions are
14 Spl.C.No.458/2015
made to PW.1 to PW.4 and nothing has been elicited
from their mouth which falsifies the case of the
prosecution and pressed into service the Judgment
of our Hon’ble High Court of Karnataka in the matter
between State Vs. Kachatti Mahantesh and others
wherein it is held that mere suggestions would not
partake characteristics of substantial evidence. It is
further submitted that, the accused no.2 during the
course of recording his statement under Section 313
of Cr.P.C., has not offered any explanation as to why
the above said amount of Rs.9,00,000/- was
transferred by the complainant to his account and
as an ordinary prudent man, the accused no.2 ought
to have made enquirers as soon as the above said
amount was credited to his account. It is further
canvassed that accused no.4 has not produced any
documents to show that he was not the partner of
accused no.3 firm and the accused persons have
failed to rebut the presumption, and thereby prayed
to convict the accused.
15 Spl.C.No.458/2015
16. To counter the said arguments, the
learned counsel for the accused no.1 and 2
submitted that at the time of making investment, the
accused no.3 – firm was not in existence and as per
Ex.P6 Registration Certificate, the accused no.3 firm
was registered on 19/12/2013, whereas the amount
was transferred on 7/10/2013. It is submitted that
the said amount was not transferred to the account
of accused no.3 – firm as such accused no.1 and 2
are no way concerned to the said transaction. It is
submitted that, accused no.2 was neither partner
nor in management of accused no.3 – firm and the
complainant ought to have made enquirers as to who
are the partners and in management of accused no.3
firm before transferring the amount to the account of
accused no.2. He argued that the principle of
‘Caveat-Emptor’ is applicable to the case on hand
and complainant only at the behest of PW.3 has filed
false complaint. It is submitted that, the prosecution
has not produced any documents to prove that on
16 Spl.C.No.458/2015
the say of accused no.1, the above said amount was
transferred by the complainant to the account of
accused no.2. Hence, no offence was committed by
the accused persons and accused no. 3 – firm was
not in existence at the time of alleged investment, as
such Section 9 of KPIDFE Act is not attracted.
17. In reply, the learned Special Public
Prosecutor submitted that, as per Explanation-3 of
Section 9 of KPIDFE Act, every person who at the
time of commission of offence was in conduct of
business of financial establishment shall be deemed
to be guilty of the offence and liable to be punished.
She submitted that, the necessary charges were
framed against accused no.2 and 3 which is not at
all challenged and accused no.2 not returned the
invested money after he got knowledge of credit of
the same to his account as such, Section 115 of
Evidence Act comes into play. It is submitted that, in
an answer to questions posed under Section 313 of
Cr.P.C., the accused no.2 has not offered any
17 Spl.C.No.458/2015
explanation as to why he kept quite inspite of the
above said amount was credited to his account and
thereby prosecution has proved that the accused
no.1, 2 and 4 only with an intention to cheat the
complainant and public at large have floated the
accused no.3 – firm and by not returning the
deposited amount as assured committed the alleged
offences.
18. In reply, the learned counsel for the
accused no.1 and 2 submitted that, the amount
which was credited to the account of accused no.2
cannot be returned as it was credited to his account
and mahazar was not drawn to establish the
existence of accused no.3 – firm. Hence, the
prosecution has utterly failed to establish its case
beyond reasonable doubt, and thereby prayed to
acquit the accused no.1 and 2.
19. The learned counsel for the accused no.3
and 4 by pressing into service the decision as stated
supra argued that when the the complainant had
18 Spl.C.No.458/2015
transferred the amount to the account of accused
no.2, the accused no.3 – firm was not in existence
and accused no.4 was not at all its partner and he
had no transactions with the complainant at that
point of time. It is submitted that accused no.1 has
forged the signature of accused no.4 on the
partnership deed and same was relied upon by the
prosecution to rope accused no.4. It is submitted
that the accused no.4 has no role to play in the
alleged transaction as he was no way concerned to
the accused no. 3 – firm and thereby prayed to
acquit the accused no.3 and 4.
20. I have tested the above said arguments
canvassed by learned counsels with materials on
record.
21. The prosecution in order to prove its case
has examined the complainant PW.1 – N.Arunkumar
who has deposed that in the year 2013, he met
accused no.1 who explained him about the accused
no.3 – firm and its business. Further, assured that if
19 Spl.C.No.458/2015
investment is made in the firm, he will get return at
the rate of 7% per month, after re-investing the same
in equities and commodities. Further, PW.1 deposed
that, he has paid Rs.1.50 lakhs in cash to the
accused no.1 on 7/10/2013 and Rs. 3,00,000/-,
Rs.4,50,000/- was transferred on 7/10/2013 and
24/12/2013 to the account of accused no.2 as per
the instructions of accused no.1 and in total, he has
paid Rs.9,00,000/- to the accused. Further, he
deposed that, accused no.1 in the month of
December 2013 has paid Rs.30,000/- as an interest
on the above said deposited amount, but did not
respond from the next month which made him to
lodge complaint as per Ex.P1. He also got marked
his statement of account held with ICICI Bank as
Ex.P2.
22. In the cross-examination it has been
elicited from his mouth that he visited the accused
no.3 – firm along with PW.3 – Althaf Khan and Anish
Kumar. In the entire cross-examination, nothing has
20 Spl.C.No.458/2015
been elicited which falsifies the transfer of amount
on 7/10/2013 and 24/12/2013 to the account of
accused no.2. PW.1 has deposed that the accused
no.3 – firm gave him an agreement for Rs.4,50,000/-
only which was lost during the construction of his
house. PW.1 further deposed that, the accused no.4
was also the partner of accused no.3 – firm and
identified him before the court. Apart from denying,
nothing was elicited from the mouth of this witness.
In the cross-examination conducted by learned
counsel for accused no.4 also, PW.1 stood to his
case by re-iterating the transfer of sum of
Rs.7,50,000/- through online. No suggestions were
made denying that accused no.4 was not the partner
of the accused no.3 – firm.
23. PW.2 – Sri Narayanaswamy G is the police
official who registered the complaint lodged by the
Arun Kumar as FIR No. 92/2015 for the charge-
sheeted offences. He identified his signature
appearing on the complaint as Ex.P1(b) and also got
21 Spl.C.No.458/2015
marked FIR and his signature appearing on it as
Ex.P3 and Ex.P3(a). In the cross-examination,
suggestion was put to PW.2 that accused no.3 – firm
consists of two partners which is admitted. Apart
from denying, nothing was elicited from this witness
so as to falsify the registration of the FIR against the
accused. Even in the cross-examination of learned
counsel for the accused no.4, no single suggestion
was made denying that accused no.4 was not the
partner of the accused no.3 – firm.
24. The PW.3 – Althaf Khan who is the friend
of CW.1 deposed that he along with CW.1 went to
the accused no.3 – firm office, there they met the
accused who assured that if they invest the amount
in the firm, they will get 7% return every month, and
accordingly CW.1 has paid Rs.9,00,000/- to the
accused. He further deposed that, Rs.3,00,000/- and
Rs.4,50,000/- was transferred to the account of
accused no.2 and remaining Rs.1,50,000/- was paid
in cash to the accused no.1. PW.3 stood to his case
22 Spl.C.No.458/2015
by reiterating the facts deposed by him in his chief
examination. PW.3 specifically to a suggestion that
no amount was transferred to the accused no.1
deposed that the amount was transferred to the
account of accused no.2 upon the instructions of
accused no.1. Nothing worthwhile has been elicited
from the mouth of this witness also to disbelieve his
version. Even in the cross-examination conducted by
the learned counsel for accused no.4, no suggestion
was made denying that accused no.4 was not the
partner of the accused no.3 – firm.
25. PW.4 is the Investigating Officer who has
filed the charge-sheet against the accused and he
deposed that, on 26/6/2015, he has recorded the
confession statement of the accused no.1 and also
collecting of statements of accounts of complainant
as well as accused no.2. He further deposed as to
the collection of registration certificate, deed of
partnership of accused no.3 – firm and got marked
the relevant entry dated 7/10/2013 and
23 Spl.C.No.458/2015
24/12/2013 as to transfer of the above said amount
as Ex.P2(a) and Ex.P2(b). He got marked the
statement of account of accused no.2 as Ex.P4 and
relevant entries as Ex.P4(a) and Ex.P4(b). Further,
he got marked the registration certificate and
partnership deed of M/s Fosterfin Capital
Management as Ex.P6 and Ex.P7 and deposed that,
as per deed of partnership, accused no.4 is also one
of the partner of the firm.
26. In the cross-examination, it is elicited
from his mouth that name of the accused no.2 is not
forthcoming in Ex.P6 and Ex.P7 and denied a
suggestion that accused no.4 was not the partner of
the firm. He deposed that, the amount was credited
to the account of accused no.1 and 2. In the cross-
examination of accused no.4, PW.4 deposed that, as
the address of the accused no.4 was not traced out
during investigation, he could not sent notice to him
so as to secure him for enquiry.
24 Spl.C.No.458/2015
27. On careful appreciation of entire materials
on record, the court has to appreciate whether
ingredients of Section 420 of IPC are made out or not
as the point for consideration on hand is as to
commission of offence punishable under Section 420
of IPC by the accused persons.
28. In order to appreciate the ingredients of
Section 420 of IPC, it is necessary to extract the said
provision which reads as under:
“420. Cheating and dishonestly inducing
delivery of property,- Whoever cheats and
thereby dishonestly induces the person
deceived to deliver any property to any person,
or to make, alter or destroy the whole or any
part of a valuable security, or anything which is
signed or sealed, and which is capable of being
converted into a valuable security, shall be
punished with imprisonment of either
description for a term which may extend to
seven years, and shall also be liable to fine.”
29. When the above said provision is carefully
perused, the essential ingredients which are required
25 Spl.C.No.458/2015
to be proved in order to punish the accused persons
for the offence under Section 420 of IPC are as
follows:
(i) There shall be an act of cheating by the
accused person;
(ii) In furtherance of the said act, a person
should be dishonestly induced to;
a) to deliver any property to any person;
or
b) to make other or destroy the whole or
any part of valuable security or anything which
is signed or sealed and which is capable of
being converted into a valuable security.
30. The essential ingredients as extracted
above, reveal that there should deception played by a
person fraudulently or dishonestly inducing any
person to deliver any property.
31. It is specific case of the prosecution that,
the accused being the partners of the M/s Fosterfin
Capital Management Firm induced the complainant
to make investment and accordingly the complainant
invested the amount, but has not received interest
26 Spl.C.No.458/2015
as assured nor principal amount. It is not in dispute
that, as per the documents which have been
furnished by the prosecution at Ex.P7 the deed of
partnership, it is quite clear that, same was entered
into between accused no.1 and 4 on 14/12/2013.
The said partnership deed resulted in registration of
accused no.3 – firm before the Registrar of Firms on
19/12/2013 as per Ex.P6. These two documents
makes it very clear that the accused no.1 and 4 were
the partners of the accused no.3 – firm. Apart from
it, the prosecution has to prove that the accused
had entertained an intention to cheat and defraud
right from inception. In order to attract the
provisions of Section 420 of IPC, the prosecution has
to necessarily prove that accused had entertained
the dishonest intention right from the beginning. In
this regard, it is useful to refer to a decision of
Hon’ble Apex Court reported in (2005) 9 SCC 15
between Devender Kumar Singla Vs. Baldev Krishna
Singla wherein it is held as under:
27 Spl.C.No.458/2015
“7. In order to appreciate the rival
submissions, it would be necessary to consider
on the background of the factual position as to
whether offence punishable under Section 420
IPC is made out. Section 420 deals with certain
specified classes of cheating. It deals with the
cases whereby the deceived person is
dishonestly induced to deliver any property to
any person or to make, alter or destroy, the
whole or any part of a valuable security or
anything which is signed or sealed and which is
capable of being converted into a valuable
security. Section 415 defines “cheating”. The
said provision requires, (i) deception of any
person (ii) whereby fraudulently or dishonestly
inducing that person to deliver any property to
any person or to consent that any person shall
retain any property or (iii) intentionally
inducing that person to do or omit to do
anything which he would not do or omit if he
were not so deceived, and which act or
omission causes or is likely to cause damage or
harm to that person in body, mind, reputation
or property. Deception of any person is
common to the second and third requirements
of the provision. The said requirements are
28 Spl.C.No.458/2015alternative to each other and this is made
significantly clear by use of disjunctive
conjunction ‘or’. The definition of the offence of
cheating embraces some cases in which no
transfer of property is occasioned by the
deception and some in which no transfer
occurs. Deception is the quintessence of the
offence. The essential ingredients to attract
Section 420 are: (i) cheating; (ii) dishonest
inducement to deliver property or to make, alter
or destroy any valuable security or anything
which is sealed or signed or is capable of being
converted into a valuable security and the (iii)
mens rea of the accused at the time of making
the inducement. The making of a false
representation is one of the ingredients for the
offence of cheating under Section 420. (See
Bashirbhai Mohamedbhai v. State of Bombay,
AIR (1960) SC 979: 1960 Cri L.J. 1383]
8. As was observed by this Court in
Shivanarayan Kabra v. State of Madras, AIR
(1967) SC 986 it is not necessary that a false
pretence should be made in express words by
the accused. It may be inferred from all the
circumstances including the conduct of the
accused in obtaining the property. In the true
29 Spl.C.No.458/2015nature of things it is not always possible to
prove dishonest intention by any direct
evidence. It can be proved by number of
circumstances from which a reasonable
inference can be drawn.”
32. The above said position of law is also
reiterated in the decisions relied upon by he learned
counsel for Accused no 3 and 4.
33. In the light of the above said dictum of
Hon’ble Apex Court, when the complaint at Ex.P1
and evidence of PW.1 if carefully perused, it is quite
clear that Accused no and 2 approached him
representing a fictitious firm called Fosterifn Capital
management and lured him to invest in the said
firm,accordingly having believed their words
complainant transferred the amount to the account
of Accused no 2 and the accused have assured for
return of 7% if investment is made in the firm. The
complaint averments makes it very clear that, on the
basis of assurance given by accused no.1 and 2, he
30 Spl.C.No.458/2015
had invested Rs.9,00,000/- in the Accused no 3-
firm. To substantiate the same, the prosecution has
got marked the statement of account of the
complainant as well as that of accused no.2 as per
Ex.P2 and Ex.P4 which reveals that, on 7/10/2013
and 24/12/2013, a sum of Rs.3,00,000/- and
Rs.4,50,000/- respectively was transferred from the
account of complainant and credited to the account
of accused no.2. The relevant entries were also got
marked as Ex.P2(a), Ex.P2(b), and Ex.P4(a) and
Ex.P4(b). Apart from that, the PW.3 has also
specifically stated as to transfer of the above said
amount from the account of complainant to the
account of accused no.2. When cross-examination of
PW.1 and PW.3 is carefully perused, it is quite clear
that nothing worthwhile has been elicited from their
mouth denying the said transaction. No suggestions
were made denying the transfer of the said amount
to the account of accused no.2. It is also pertinent to
note that even when the accused were examined
31 Spl.C.No.458/2015
under Section 313 of Cr.P.C., by posing the
incriminating evidence appearing against them, the
accused no.2 has not denied the transfer of said
amount to his account and when he was specifically
posed Question no.2, 5 and 23, as to the transfer of
the above said amount to his account, he stated that
he availed loan from the complainant and same was
returned to him. But, the accused, particularly the
accused no.2 has not led any evidence nor produced
any material to prove that, he had loan transactions
with the complainant at any point of time and same
has been repaid by him. If the same is to be accepted
in its face value, then the burden will be shifted
upon the accused no.2 to give necessary explanation
in this regard. The provisions of Section 106 of
Indian Evidence Act, it is very clear that the fact
which is within the special knowledge of a particular
person is required to be explained by him. For the
sake of convenience, the provisions of Section 106 of
Indian Evidence Act is extracted below:
32 Spl.C.No.458/2015
“Section 106 – When any fact is especially
within the knowledge of any person, the burden
of proving that fact is upon him.”
34. The provision would clearly indicate that
when a fact is within the special knowledge of
accused person, he is required to offer an
explanation. But, in this case, the accused no.2 has
not offered any explanation and not made any efforts
to prove that he had a loan transactions with
complainant. The answers given by the accused no.2
when he was questioned under Section 313 of
Cr.P.C., makes it very clear that, the transfer of the
amount to his account by the complainant is not
disputed by him. The evidenciary value of the
statement recorded under Section 313 of Cr.P.C., is
elaborately discussed by the Hon’ble Apex Court in
the Judgment rendered in (2016) 15 SCC 572
(Edmund S. Lyngdoh Vs. State of Meghalaya)
wherein it is held as under:
33 Spl.C.No.458/2015
“21. Where the accused gives evasive answers
in his cross-examination under Section 313
Cr.P.C., an adverse inference can be drawn
against him. But such inference cannot be a
substitute for the evidence which the
prosecution must adduce to bring home the
offence of the accused. The statement under
Section 313 Cr.P.C. is not an evidence. In
Balwant vs. State of U.P. (2008) 9 SCC 974,
this Court held that conviction of the accused
cannot be based merely on his statement
recorded under Section 313 Cr.P.C. which
cannot be regarded as evidence. It is only the
stand or version of the accused by way of
explanation explaining the incriminating
evidence/circumstances appearing against him.
The statement made in defence by the accused
under Section 313 Cr.P.C. can certainly be
taken aid of to lend credence to other evidence
led by the prosecution. Statements made under
Section 313 Cr.P.C. must be considered not in
isolation but in conjunction with the other
prosecution evidence.
22. In the present case, it is not as if the High
Court arrived at the conclusion and based
conviction only on the statement made by the
34 Spl.C.No.458/2015first accused under Section 313 Cr.P.C. As seen
from the reasonings of the High Court extracted
above, the statement of first accused under
Section 313 Cr.P.C. was taken with the
evidences of PW-6 and PW-13 and items 7(17)
of Ext. P5 as a link to complete the chain of
circumstances against A-1. As elaborated
earlier, the answers given by the first accused
were considered not in isolation but in
conjunction with other oral and documentary
evidence. We find no substance in the
contention that the High Court erred in taking
the statement of first accused under Section
313 Cr.P.C. as a link to complete the chain of
circumstances.”
35. Applying the above said dictum of Hon’ble
Apex court to the present case on hand, the
prosecution with the help of ocular evidence of
PWs.1 and 3 and with the assistance of statement of
Accounts at Ex.P2 and Ex.P4 proved that
complainant had transferred a sum of Rs.
3,00,000/- and 4,50,000/- on 7.10.2013 and on
24.12.2013 respectively to the account of Accused
35 Spl.C.No.458/2015
no 2 who has not offered any explanation as to why
the above said amounts had been transferred to his
account. If really, there was a monetary transaction
between accused no.2 and complainant, he ought to
had produced certain materials to substantiate the
same. But, the accused no.2 has not produced any
materials nor led any evidence to prove he had loan
transaction with complainant and above said
transfer of the amount was in connection with the
same.
36. It is pertinent to note that, as per
statement of account of complainant Ex.P2 on
24/12/2013, a sum of Rs.4,50,000/- was
transferred to the account of accused no.2, and as
per the partnership deed and registration certificate
Ex.P6 and Ex.P7, the accused no.3 – firm was came
into existence from 14/12/2013. The registration of
the firm is not a sine quo non, as such when the
above said amount was transferred to the account of
36 Spl.C.No.458/2015
accused no.2, the accused 3 – firm consisting of
accused no.1 and 4 was in existence. The careful
perusal of entries of the statement of account of
accused no.2 Ex.P4 makes it very clear that on
14/11/2013, 18/11/2013 and on 19/11/2013, the
accused no.1 Mohammed Idhrees had credited a
sum of Rs.5,94,000/-, Rs.10,00,000/-,
Rs.9,69,281.60 and Rs.1,27,000/- respectively
which makes it very clear that, the accused no.1
after collecting the investments amount from the
depositors used to transfer the said amount to the
account of accused no.2 -Mohammed Ameer Basha.
The modus operandi of accused no.1 and 2 was to
collect the amount from the investors in the name of
accused no.3 – firm and transfer the same to the
account of accused no.2. It is pertinent to note that
as per the terms of deed of partnership Ex.P7, it was
agreed between the accused no.1 and 4 that the
current account is to be opened in the name of M/s
Fosterfin Capital Management i.e., accused no.3
37 Spl.C.No.458/2015
from the date of deed of partnership i.e.,
14/12/2013. But, the accused no.1 and 4 have not
adhered to the said condition and continued to
receive the amount from the investors which was
subsequently transferred to the account of accused
no.2 which could be seen from his statement of
account at Ex.P4. Hence, the accused no.1 and 2
had dishonest intention right from inception to
deceive the investors and by not opening current
account in the name of accused no.3 – firm have
defrauded the investors. The accused no.1 and 4
ought to have opened current account in the name of
accused no.3 – firm in order to receive the
investments of the investors. But, such account has
not been opened and used to credit the amount of
the investors to the account of accused no.2 which
could be seen from his statement of account Ex.P4.
Therefore, accused no.1 and 2 with dishonest
intention right from inception have cheated the
investors by accepting investments in the name of
38 Spl.C.No.458/2015
accused no.3 – firm even though it was not in
existence at that time.
37. The averments of the complaint and the
ocular evidence of PWs.1 and 3 makes it very clear
that before coming into existence of the accused no.3
– firm, the accused no.1 and 2 have made a
complainant to believe as to the existence of accused
no.3 – firm and accepted the deposits from him
through the account of accused no.2. The complaint
averments makes it very clear that in the month of
October 2013 itself, the accused no.1 and 2 have
approached the complainant and represented the
accused no.3 – firm and accepted the deposits from
him in the name of accused no.3 – firm even though
at that time, it was not in existence. The PW.1 and
PW.3 have specifically deposed that, in the month of
October 2013, the accused no.1 and 2 have received
investments on the guise and in the name of accused
no.3 – firm. The PW.3 has specifically deposed that
39 Spl.C.No.458/2015
in the month of October 2013 itself, he along with
CW.1 went to the M/s Fosterfin Capital
Management office and met the accused who
assured that if investment is made in the firm, they
will get 7% returns every month. This evidence has
not been shaken in the cross-examination and that
PW.3 specifically stated that, in the month of
October 2013 itself, they went to the office of
accused no.3 – firm and met accused no.1 and 2 and
on the said day itself, CW.1 gave a sum of
Rs.1,50,000/- to the accused no.1 in cash. Further,
PW.3 in his cross-examination specifically deposed
that, in the month of October 2013, the complainant
CW.1 had transferred a sum of Rs.3,00,000/- to the
account of accused no.2. Therefore, when the ocular
evidence of PW.1 and PW.3 is read along with
statements of accounts of complainant as well as
accused no.2, it is quite clear that, before the
existence of accused no.3 – firm, accused no.1 and 2
have made complainant to believe as to the existence
40 Spl.C.No.458/2015
of accused no.3 – firm and induced him to make
investments in it and successfully got transferred a
sum of Rs.1,50,000/- and Rs.3,00,000/- in the
month of October 2013 itself before coming into
existence of accused no.3 – firm. The above said
evidence makes it very clear that the accused no.1
and 2 had entertained dishonest intention right from
inception to cheat the complainant, because the
accused no.1 and 2 had pretended the existence of
accused no.3 – firm much prior to its existence.
When the entries of statement of Account of Accused
no 2 -Ex.P4 is carefully perused it is quite clear that
he received huge amounts of money on several
occasions from investors and by doing so he was
managing and participated in the affairs of the
Accused no 3- firm.
38. So far as the role of accused no.4 is
concerned, it is no doubt as per the deed of
partnership Ex.P7, the accused no.4 was inducted
41 Spl.C.No.458/2015
as partner of accused no.3 – firm along with accused
no.1 on 14/12/2013, but as discussed supra, the
ingredients of offence punishable under Section 420
of IPC are not made out. Though PW.1 to PW.4 had
deposed that accused no.4 was also one of the
partner of accused no.3 – firm, there are no
allegations against him as to receiving the deposits
with an intention to cheat the complainant. Hence,
the prosecution has proved that, accused no.1 and 2
have committed offence punishable under Section
420 of IPC and on the other hand failed to prove the
said allegations as against accused no.3 and 4.
Accordingly, I answer this point partly in the
Affirmative only as against accused no.1 and 2 and
in the Negative as against accused no.3 and 4.
39. POINT NO 2: With respect to the
contentions urged by the prosecution under section
9 of the KPIDFE Act, the provisions of section 9 are
required to be construed. In order to better
42 Spl.C.No.458/2015
appreciate the same, the definition of ‘Deposit’ which
has been made under section 2 of the Act, is
required to be considered. As per section 2 of the
KPIDFE Act, the term ‘Deposit’ has been defined as
under;
(2) ” Deposit” includes and shall be deemed
always to have included any receipt of money or
acceptance of any valuable commodity by any
Financial Establishment to be returned after a
specified period or otherwise, either in cash or
in kind or in the form of a specified service with
or without any benefit in the form of interest,
bonus, profit or in any other form, but does
not include,-
(i) amount raised by way of share capital or
by way of debenture, bond or any other
instrument covered under the guidelines given
and regulations made, by the Security Board of
India, established under the Securities and
Exchange Board of India Act, 1992;
(ii) amounts contributed as capital by partners
of a firm;
(iii) amounts received from a scheduled bank
or a co-operative bank or any other banking
43 Spl.C.No.458/2015
company as defined in clause (c) of section 5 of
the Banking Regulation Act, 1949 (Central Act
15 of 1992);
(iv ) any amount received from, –
(a) the Industrial Development Bank of
India,
(b) a State Financial Corporation,
(c) any financial institution specified in
or under section 4A of the Companies Act, 1956
(Central Act 1 of 1956) or
(d) any other institution that may be
specified by the Government in this behalf;
(v) amounts received in the ordinary course
of business by way of, –
(a) security deposit,
(b) dealership deposit,
(c) earnest money,
(d) advanced against order for goods or
services;
(vi) any amount received from an individual or
a firm or an association of individuals,
registered under any enactment relating to
money lending which is for the time being in
force in the State: and
(vii) any amount received by way of
subscriptions in respect of a Chit.
44 Spl.C.No.458/2015
Explanation I, – “Chit” has the meaning as
assigned to it in clause (b) of section 2 of the
Chit Funds Act, 1982 (Central Act 40 of 1982);
Explanation II. – Any credit given by a
seller to a buyer on the sale of any property
(whether movable or immovable) shall not bee
deemed to be deposit for the purposes of this
clause;
(3) “Depositor” means a person who has
made deposits with Financial Establishment;
(4) “Financial Establishment” means any
person or a group of individuals accepting
deposit under any scheme or arrangement or in
any other manner but does not include a
corporation or a co-operative society owned or
controlled by any State Government or the
Central Government or a banking company as
defined under clause (c) of section 5 of the
Banking Regulation Act, 1949 (Central Act X of
1949);
40. As per the words which have been used,
the word ‘Deposit’ includes and shall even otherwise
to have included any receipt or money or expenses of
a valuable commodity. In the above case, the term
45 Spl.C.No.458/2015
‘Financial Establishment’ has also been defined as
any person or group of individuals accepting deposit
under any scheme or arrangement. By conjointly
reading the word ‘Deposit’ and also the ‘Financial
Establishment’, it would indicate that, if an amount
has been received by any person or a group of
individuals under any scheme or under an
arrangement, the same would amount to accepting
of deposit. That apart, the terminology used in the
aforesaid Section with respect to Financial
Establishment also indicates that, if a deposit has
been received by a person under any scheme or
under any arrangement, the same would attract the
rigors of KPIDFE Act.
41. In this case, as per the statement of
account of PW.1 – Sri N. Arunkumar Ex.P2 and
statement of account of accused no.2 – Sri
Mohammed Ameer Basha Ex.P4 on 7/10/2013, and
on 24/12/2013, a sum of Rs.3,00,000/- and
Rs.4,50,000/- respectively has been transferred and
46 Spl.C.No.458/2015
same has been credited to the account of accused
no.2. The accused no.2 by accepting deposit on
behalf of the accused no.3 – firm participated in its
management and by accepting deposit from the
PW.1, the definition of ‘Financial Establishment’ as
stated supra attracts as against the accused no.2.
The averments of the first information and evidence
of PWs. 1 to 4 makes it very clear that the accused
no.1 and 2 have induced the complainant Sri
N.Arunkumar to make investment in the accused
no.3 – firm much prior to its coming into existence
and assured to return interest at the rate of 7% per
month. Believing the said assurance, the
complainant invested the amount in the accused
no.3 – company. As per definition of ‘Financial
Establishment’ if deposit is accepted under any
scheme or arrangement or in any other manner, it
will suffice. Though there is no agreement called as
‘Wealth Management Agreement’ executed by
accused no.1 and 2, but the statements of accounts
47 Spl.C.No.458/2015
of complainant as well as accused no.2 Ex.P2 and
Ex.P4 makes it very clear that, PW.1 had invested
the amount believing the assurance of accused no.1
and 2. As per Deed of Partnership Ex.P7, only
accused no.1 and 4 are partners of the firm but
accused no.2 by accepting deposits from PW.1 has
participated in the management and conduct of
business of the firm i.e., Accused no.3, and thereby
provisions of Karnataka Protection of Interest of
Depositors in Financial Establishments Act are
attracted as against him also. The statement of
account of complainant as well as accused no.2
Ex.P2 and Ex.P4 reveals that a sum of Rs.4,50,000/-
was transferred and credited to the account of
accused no.2 on 24/12/2013. The Deed of
Partnership Ex.P7 was entered into between accused
no.1 and 4 on 14/12/2013. In other words, after
induction of accused no.4 as a partner in the
accused no.3 firm, the complainant had transferred
the above said sum of Rs.4,50,000/- to the account
48 Spl.C.No.458/2015
of accused no.2. As per deed of partnership at
condition no.8, the accused no.3- firm had to open
current account in its name at Nationalised,
Scheduled or any Co-operative Bank which was to be
operated by accused no.1 and 4, but even after
entering into the deed of partnership no such
account was opened in the name of accused no.3 –
firm. The entries of Ex.P2 and Ex.P4 makes it very
clear that, even after entering into deed of
partnership as per Ex.P7, huge sums of money was
transferred and credited to the account of accused
no.2. The careful perusal of statement of accused
no.2 Ex.P4 makes it very clear that after the
induction of accused no.4 into the firm, he had
transacted on two occasions with the account of
accused no.2. The accused no.4 had got transferred
a sum of Rs.82,000/- on 21/1/2014 from the
account of accused no.2, and on 7/4/2014, the
accused no.4 had deposited a sum of Rs.1,75,000/-
into the account of accused no.2. These entries
49 Spl.C.No.458/2015
makes it very clear that even after entering into
deed of partnership, the accused no.1 and 4 have
not opened current account in the name of accused
no.3 – firm and continued to accept the deposits
through the account of accused no.2 in the name of
accused no.3. Since the complainant had transferred
a sum of Rs.4,50,000/- on 24/12/2013 which is
after induction of accused no.4 as a partner of
accused no.3 – firm, the provisions of Karnataka
Protection of Interest of Depositors in Financial
Establishment Act are attracted as against accused
no.4 also as he falls within the definition of
‘Financial Establishment’ as stated supra. The
perusal of cross-examination of PWs. 1 to 4 makes it
very clear that no suggestion was made to the effect
that accused no.4 was not a partner of accused no.3
– firm as per Ex.P7. It is also pertinent to note that,
the accused have not disputed partnership deed as
per Ex.P7. The learned counsel for the accused no.3
and 4 though canvassed that, Ex.P7 deed of
50 Spl.C.No.458/2015
partnership is created one and the signature of the
accused no.4 is forged on the said document, but no
effort has been made to prove the said contention.
Hence, on the basis of Ex.P7, it can be safely come to
the conclusion that, the accused no.4 was also one
of the partner of the accused no.3 – firm. Adding to
it, the perusal of entries of statement of account of
accused no.2- Ex.P4 makes it very clear that after
induction of accused no.4 into the accused no.3 –
firm, he had transacted on two occasions through
the account of accused no.2. The accused no.4 had
got transferred a sum of Rs.82,000/- on 21/1/2014
from the account of accused no.2 and on 7/4/2014,
the accused no.4 had deposited a sum of
Rs.1,75,000/- into the account of accused no.2. The
accused no.4 has not made any efforts as to disprove
the above said transaction made through the
account of accused no.2. The accused no.1, 2 and 4
as promised have not returned the invested amount
to the complainant nor paid any interest to him, and
51 Spl.C.No.458/2015
thereby they failed to render service as contemplated
under Section 9 of Karnataka Protection of Interest
of Depositors in Financial Establishments Act and as
such liable to be punished under the said section. As
per section 9 of the KPIDFE Act, any ‘Financial
Establishment’ which fraudulently defaults any
repayment of deposit on maturity along with any
benefit in the form of interest, bonus, profit or in any
other form as promised, or fraudulently fails to
render service as assured against the deposit, every
person including the Promoter, Director, Partner,
Manager or any other person or an Employee
responsible for the management or conducting of the
business or affairs of such financial establishment
liable for punishment.
42. In this case, though accused no.2 is not a
partner as per Deed of Partnership but by accepting
deposits from the PW.1 and from other depositors as
could be seen from his statement of account Ex.P4
he participated in the management, conduct and
52 Spl.C.No.458/2015
affairs of the accused no.3 – firm, as such he is liable
to be punished. So far as accused no.1 is concerned,
he induced the complainant PW.1 to make
investments in the accused no.3 – firm before it
came into existence and the evidence of PWs.1 to 4,
the averments of first information and other
materials makes it very clear that, the accused no.1
has played vital role in raising the investments and
by not returning the same or interest as promised,
he also liable to be punished as per Section 9 of
KPIDFE Act, 2004. Further, the perusal of entries of
statement of account of accused no.2 – Ex.P4 makes
it very clear that huge sums of money credited to his
account from various depositors and in fact, the
accused no.1 also has credited huge sums of money
to the account of accused no.2, and thereby it
appears that, the modus operandi of accused no.1, 2
and 4 is to accept deposit from the depositors
through the account of accused no.2 in the name of
accused no.3 – firm and not to return the same to
53 Spl.C.No.458/2015
investors as assured. The accused no.3 represented
by accused no.1 and 4 as partners of accused no.3 –
firm are liable to be punished for the offence
punishable under Section 9 of Karnataka Protection of
Interest of Depositors in Financial Establishment Act .
Therefore, I answer the above said point In the
Affirmative.
43. POINT NO.3 : In view of my findings on
Point No.1 and 2 supra, I proceed to pass the
following :
ORDER
Acting under Section 248(2) of
Cr.P.C., the Accused no.1 – Mohammed
Idhrees and Accused no.2 -Mohammed
Ameer Basha are hereby convicted for the
offence punishable under Section 420 of
IPC.
Acting under Section 248(2) of
Cr.P.C., the accused no.2 – Mohammed
Ameer Basha is hereby convicted for the
offence punishable under Section 9 of
Karnataka Protection of Interest of
54 Spl.C.No.458/2015Depositors in Financial Establishment
Act.
Acting under Section 248(2) of
Cr.P.C., the accused no.3 – M/s Fosterfin
Capital Management Firm represented by
Accused No.1 -Mohammed Idhrees and
Accused No.4 Sri Venkatachalam
Ramachandram are hereby convicted for
the offences punishable under Section 9
of KPIDFE Act.
Acting under Section 248(1) of
Cr.P.C., Accused no. 4 – Venkatachalam
Ramachandram is hereby acquitted for
the offence punishable under Section 420
of IPC.
******
**
**(Dictated directly on Computer to the Judgment
Writer, transcribed by her, Script corrected and then
pronounced by me in open court this the 5th day of
March 2025.)
SATISH Digitally signed
by SATISH BALIBALI Date: 2025.03.05
16:47:51 +0530(Satish J. Bali)
XLVII Addl. City Civil & Sessions
Judge and Special Judge for CBI
Cases, Bengalulru.
*****
55 Spl.C.No.458/2015ORDER REGARDING SENTENCE
In the instant case, the accused No.1 & 2
Mohammed Idhrees, Mohammed Ameer Basha are
hereby convicted for the offences punishable under
Sec.9 of KPIDFE Act and also under Section 420 of
IPC.
The Accused No.3 -M/s Fosterfin Capital
Management Firm represented by the Accused No.1
– Mohammed Idhrees and Accused no.4 -Sri
Venkatachalam Ramachandram is hereby convicted
for the offence punishable under Section 9 of
Karnataka Protection of Interest of Depositors in
Financial Establishments Act.
The accused No.1 is secured from judicial
custody and is present before the Court.
The Learned Special Public Prosecutor
Smt. Anupama has vehemently argued that the
offences against the accused No.1 to 4 for the
56 Spl.C.No.458/2015provisions of law have been proved beyond
reasonable doubt. It has been submitted that
accused No.1 is involved in similar more than 9
cases and has been convicted in Spl CC 124/2016,
Spl.CC 459/2015, Spl.CC 463/2015, Spl.CC
461/2015, Spl.CC 462/2015 on the file of this Court
for similar offences. It is submitted the accused
No.2 has assisted accused No.1 in committing the
above said offences as the invested amount has been
transferred to his account. By pointing out all the
said aspects, it is her submission that the economic
offences are to be viewed very seriously and a
stringent view is required to be taken into account. It
is also been submitted that the intention of enacting
KPIDFE Act was with a sole intention to punish
snollygoster persons who are in the habit of cheating
and defrauding the general gullible public.
Accordingly, she has sought for imposing maximum
punishment as provided under the aforesaid
provision of law.
57 Spl.C.No.458/2015
The Learned Counsel for the accused No.1 to 4
present before the Court and has submitted that
accused No.1 is the sole bread earner in his family
and his father – accused No.2 and mother are
suffering from various ailments and they are to be
taken care by the present accused no.1 himself.
Further it is submitted that the accused No.1 and 2
were in custody for a period of more than 4 and 1½
years and the same may be taken into account. It is
further submitted that, the accused no.2 recently
underwent eye surgery, and advised to take rest.
Accordingly, he has submitted that the Court may
take into account of the aforesaid aspects and a
lenient view can be taken in imposing punishment to
the accused.
The learned counsel for the Accused no.4
submitted that, he is the only bread earner of the
family and entire family is depending upon him for
their livelihood and he has no criminal antecedents.
It is further submitted that, the wife of Accused No.4
58 Spl.C.No.458/2015is about to give birth to child within few days, as
such prayed to take lenient view while sentencing
him.
The Court has also heard the accused No.1, 2
and 4 who have also reiterated the submissions
made by their respective counsels and has further
submitted that accused no.1 has to take care of his
father accused no.2 who is aged about more than
71 years and his mother who is aged about 67 years
and also his father is a chronic diabetic person, who
has underwent open heart surgery recently and has
sought to take a lenient view.
Heard the parties and the point that requires to
be considered is, what would be the appropriate
sentence that could be imposed on the accused No.1
to 4.
The Hon’ble Apex Court has time and again
reiterated that, in matters of awarding sentence, the
court should be cautious and has to consider all the
relevant factors to arrive at a just conclusion. It is a
59 Spl.C.No.458/2015
cardinal principle of law that the nature and gravity
of crime is to be appreciated and not the criminal
which are germane for consideration to impose
suitable punishment. Further, the Hon’ble Apex
Court has directed the trial courts to precisely
consider the aggravating and mitigating factors at
the time of awarding sentence. If the aggravating and
mitigating factors are appreciated, the same can be
culled out as follows:
Aggravating Factors:
1. The accused No.1, 2 & 4 have induced the
gullible general public and had made them to
invest money with a dishonest intention though
they were aware of the fact that the financial
institution was not in existence at the time of
receiving the amount.
2. The accused No.1, 2 & 4 had not bothered to
repay the amount and was fully aware that the
amount could not be repaid.
3. The acts of the accused No.1, 2 & 4 was
deliberate and intentional one, which would
amount to breach of trust amongst public at
large.
60 Spl.C.No.458/2015
4. If any lenient view is to be taken, the act would
further erode the faith and may lead to draw an
inference that the economic offences would be
dealt liberally.
5. The accused No.1 is already convicted in Spl. CC.
124/2016, Spl.CC. 459/2015 and Spl.CC.
463/2015, Spl.CC 461/2015, Spl.CC. 462/2015
for the similar offences on the file of this Court
and he is involved in nearly 10 similar cases
wherein a serious allegations of cheating and
defraud is leveled against him. Apart from that he
is also facing similar cases pending against him at
Tamil Nadu and record indicates that he was
arrested in another case pending at Ariyalur,
Tamil Nadu, which would point out that he is
facing volley of cases of cheating and taking a
lenient view would erode public faith and trust.
6. The accused no.2 who is the father of accused
no.1 has already been convicted in Spl.CC
459/2015, Spl.CC 463/2015, Spl.CC 461/2015
and Spl.CC 462/2015 on the file of this Court, as
such both accused are habitual offenders.
Mitigating Factors:
a. The accused No.1, 2 & 4 have to take care of their
family members and accused no.1 is the sole bread
61 Spl.C.No.458/2015earner, wherein his father and mother are suffering
from various health ailments.
b. The accused No.1, 2 & 4 are having deep roots in
the society.
c. The accused No.4 is not having criminal
antecedents.
On considering the aggravating and mitigating
factors, it is noticed that the offence which is
committed by the accused No.1, 2 & 4 could be
termed as white collared offence, which bleeds the
economy of the nation. Further, the maxim “Nullum
crimen sine lege” which means, the principle of
legality in the rule of construing criminal statute is
to be in favour of citizens and also the approach
should be towards the social welfare. The important
aspect of socio-economic offence is to be considered
from the point of view of the harm it has caused to
the society at large. Even though the gravity of
offence cannot be deciphered easily, the same
requires to be considered in a manner which would
62 Spl.C.No.458/2015indicate the mode in which its execution was carried
out by the accused. The Hon’ble Apex Court has also
specifically laid down the dictum that the Court has
to consider the cry of the victim at the time of
imposing punishment. It is also been held that the
society at large is the sufferer due to the commission
of white collared offence by the accused persons.
When the aforesaid aspect is applied to the case on
hand, it indicates that the accused have induced
the witnesses in the above case to part with huge
amount of money. It is to be appreciated that the
accused have chosen the persons who had got faith
and trust in them and had made necessary
investments in their Business.
The court has to take care of the right of the
victim and the accused. Under the circumstances,
the court has to consider imposing of maximum
punishment as contemplated under Section 9 of
KPIDFE Act. The provision of Sec.9 of KPIDFE Act,
would indicate that the accused can be imposed with
63 Spl.C.No.458/2015imprisonment for a term not less than 3 years and
which may extend to 6 years and with fine which
may extend to Rs.1.00 lakh and also he shall be
liable to fine to an amount equivalent to an amount
of Rs.5.00 lakhs or where such deposits are
quantifiable in terms of money the twice the amount
involved. The said provision was inserted by
amending the Act of 6 of 2021 which came into effect
from 19.02.2021. Prior to that, the provision of law
did not stipulate for imposing fine by quantifying the
twice the amount of aggregate funds. Under the
circumstances, the Court is inclined to award
imprisonment by imposing suitable fine both under
Sec.9 of KPIDFE Act and under Section 420 of IPC.
By considering the said aspects, I proceed to pass
the following;
ORDER
The Accused No.1 Mohammed
Idhrees, is hereby convicted for the
offence punishable under Sec.420 of IPC
64 Spl.C.No.458/2015and he is hereby sentenced to undergo
Rigorous Imprisonment for a period of
FIVE years and imposed with a fine of
Rs.3,00,000/- [Rupees Three lakhs only]
and in default of payment of fine, he shall
undergo a Simple Imprisonment for a
period of ONE year.
The Accused No.1 is also convicted
for the offence punishable under Section
9 of KPIDFE Act and he is sentenced to
undergo Rigorous Imprisonment for a
period of FIVE years and fine of
Rs.1,00,000/- [Rupees One lakhs only]
and in default of payment of fine, he shall
undergo Simple Imprisonment for a
period of ONE year.
The Accused No.2 Mohammed
Ameer Basha is hereby convicted for the
offence punishable under Sec.420 of IPC
and he is hereby sentenced to undergo
Rigorous Imprisonment for a period of
THREE years and imposed with a fine of
Rs.2,00,000/- [Rupees Two lakhs only]
and in default of payment of fine, he shall
65 Spl.C.No.458/2015undergo a Simple Imprisonment for a
period of ONE year.
The Accused No.2 is also convicted
for the offence punishable under Section
9 of KPIDFE Act and he is sentenced to
undergo Rigorous Imprisonment for a
period of THREE years and fine of
Rs.1,00,000/- [Rupees One lakh only]
and in default of payment of fine, he shall
undergo Simple Imprisonment for a
period of THREE months.
The accused No.3 – M/s Fosterfin
Capital Management Firm is sentenced to
pay a fine of Rs.2,00,000/- [Rupees Two
Lakhs only].
The Accused No.4 -Venkatachalam
Ramachandram – partner of Accused
No.3 – M/s Fosterfin Capital Management
– firm is convicted for the offence
punishable under Section 9 of KPIDFE
Act and he is sentenced to undergo
Rigorous Imprisonment for a period of
FIVE years and fine of Rs.1,00,000/-
[Rupees One lakhs only] and in default of
66 Spl.C.No.458/2015
payment of fine, he shall undergo Simple
Imprisonment for a period of ONE year.
The sentences ordered shall run
concurrently and accused No.1, 2 & 4
shall be entitled for the period of set off as
contemplated under Section 428 of
Cr.P.C., for the period of detention they
have already undergone, if any as Under
Trial Prisoner in the above case.
Acting under Section 357(A) of
Cr.P.C., suitable compensation requires
to be ordered to the victims out of the fine
amount i.e., PW.1 – N.Arunkumar.
Accordingly, PW.1 -N.Arunkumar is awarded with a compensation of
Rs.8,50,000/- (Rupees Eight Lakhs Fifty
Thousand only), and the remaining
amount is ordered to be forfeited to the
State.
In the event of deposit of fine
amount, the same shall be forfeited after
disbursing the compensation.
67 Spl.C.No.458/2015
Office is hereby directed to furnish
the free copy of the Judgment to the
accused no.1, 2 & 4 forthwith.
The bail bond and surety bonds
executed by the accused no.1, 2 & 4
stands cancelled.
***
(Dictated directly on Computer to the Judgment
Writer, Script corrected and then pronounced by me in
open court this the 5th day of March 2025.)
SATISH Digitally signed by
SATISH BALI
BALI Date: 2025.03.05
16:47:28 +0530
(Satish J. Bali)
XLVII Addl. City Civil & Sessions
Judgeand Special Judge for CBI
Cases, Bengalulru.
ANNEXURE
LIST OF WITNESSES EXAMINED ON BEHALF OF
PROSECUTION:
PW.1 : N. Arunkumar
PW.2 : Narayanaswamy. G
PW.3 : Altaf Khan
PW.4 : Giri. K.C.
LIST OF DOCUMENTS MARKED THROUGH
PROSECUTION:
Ex.P1 Complaint
Ex.P1(a) Signature
68 Spl.C.No.458/2015
Ex.P1(b) Signature
Ex.P2 Statement of accused
Ex.P2(a) Relevant transaction dated 7/10/2013
Ex.P2(b) Relevant transaction dated 24/12/2013
Ex.P3 FIR
Ex.P3(a) Signature
Ex.P4 Summary of accused no.1 maintained with
ICICI Bank.
Ex.P4(a) Relevant transaction
Ex.P4(b) Relevant transaction
Ex.P5 Letter
Ex.P6 True copy of the Registration Certificate of
Fosterfin Capital Management.
Ex.P7 Deed of Partnership.
LIST OF WITNESSES EXAMINED ON BEHALF OF
DEFENCE:
NIL.
LIST OF DOCUMENTS MARKED THROUGH DEFENCE
SIDE:
NIL.
SATISH Digitally signed
by SATISH BALIBALI Date: 2025.03.05
16:47:14 +0530(SATISH J. BALI)
XLVII Addl. City Civil & Sessions
Judge and Special Judge for CBI
Cases, Bengalulru.
69 Spl.C.No.458/2015
70 Spl.C.No.458/2015
..ORDER pronounced in
the Open Court (Vide Separate
detailed Judgment..)ORDER
Acting under Section 248(2) of
Cr.P.C., the Accused no.1 –
Mohammed Idhrees and Accused no.2 -Mohammed Ameer Basha are hereby convicted for the offence
punishable under Section 420 of IPC.
Acting under Section 248(2) of
Cr.P.C., the accused no.2 –
Mohammed Ameer Basha is hereby
convicted for the offence punishable
under Section 9 of Karnataka
Protection of Interest of Depositors in
Financial Establishment Act.
Acting under Section 248(2) of
Cr.P.C., the accused no.3 – M/s
Fosterfin Capital Management Firm
represented by Accused No.1 –
Mohammed Idhrees and Accused
No.4 Sri Venkatachalam
71 Spl.C.No.458/2015
Ramachandram are hereby convicted
for the offences punishable under
Section 9 of KPIDFE Act.
Acting under Section 248(1) of
Cr.P.C., Accused no. 4 -
Venkatachalam Ramachandram is
hereby acquitted for the offence
punishable under Section 420 of IPC.
(SATISH J. BALI)
XLVII Addl. City Civil & Sessions
Judge and Special Judge for CBI
Cases, Bengalulru.
Heard learned counsel for the Accused
No.1 to 4 and learned SPP on quantum
of sentence.
…..ORDER ON SENTENCE
pronounced in the Open Court
(Vide Separate detailed Judgment..)ORDER
The Accused No.1 Mohammed
Idhrees, is hereby convicted for the
offence punishable under Sec.420 of
IPC and he is hereby sentenced to
undergo Rigorous Imprisonment for
72 Spl.C.No.458/2015a period of FIVE years and imposed
with a fine of Rs.3,00,000/- [Rupees
Three lakhs only] and in default of
payment of fine, he shall undergo a
Simple Imprisonment for a period of
ONE year.
The Accused No.1 is also
convicted for the offence punishable
under Section 9 of KPIDFE Act and
he is sentenced to undergo Rigorous
Imprisonment for a period of FIVE
years and fine of Rs.1,00,000/-
[Rupees One lakhs only] and in
default of payment of fine, he shall
undergo Simple Imprisonment for a
period of ONE year.
The Accused No.2 Mohammed
Ameer Basha is hereby convicted for
the offence punishable under
Sec.420 of IPC and he is hereby
sentenced to undergo Rigorous
Imprisonment for a period of THREE
years and imposed with a fine of
Rs.2,00,000/- [Rupees Two lakhs
only] and in default of payment of
73 Spl.C.No.458/2015fine, he shall undergo a Simple
Imprisonment for a period of ONE
year.
The Accused No.2 is also
convicted for the offence punishable
under Section 9 of KPIDFE Act and
he is sentenced to undergo Rigorous
Imprisonment for a period of THREE
years and fine of Rs.1,00,000/-
[Rupees One lakh only] and in
default of payment of fine, he shall
undergo Simple Imprisonment for a
period of THREE months.
The accused No.3 – M/s
Fosterfin Capital Management Firm
is sentenced to pay a fine of
Rs.2,00,000/- [Rupees Two Lakhs
only].
The Accused No.4 - Venkatachalam Ramachandram - partner of Accused No.3 - M/s
Fosterfin Capital Management – firm
is convicted for the offence
punishable under Section 9 of
74 Spl.C.No.458/2015KPIDFE Act and he is sentenced to
undergo Rigorous Imprisonment for
a period of FIVE years and fine of
Rs.1,00,000/- [Rupees One lakhs
only] and in default of payment of
fine, he shall undergo Simple
Imprisonment for a period of ONE
year.
The sentences ordered shall run
concurrently and accused No.1, 2 &
4 shall be entitled for the period of
set off as contemplated under
Section 428 of Cr.P.C., for the period
of detention they have already
undergone, if any as Under Trial
Prisoner in the above case.
Acting under Section 357(A) of
Cr.P.C., suitable compensation
requires to be ordered to the victims
out of the fine amount i.e., PW.1 –
N.Arunkumar. Accordingly, PW.1 –
N.Arunkumar is awarded with a
compensation of Rs.8,50,000/-
(Rupees Eight Lakhs Fifty Thousand
75 Spl.C.No.458/2015
only), and the remaining amount is
ordered to be forfeited to the State.
In the event of deposit of fine
amount, the same shall be forfeited
after disbursing the compensation.
Office is hereby directed to furnish the free copy of the
Judgment to the accused no.1, 2 & 4
forthwith.
The bail bond and surety bonds
executed by the accused no.1, 2 & 4
stands cancelled.
(SATISH J. BALI)
XLVII Addl. City Civil & Sessions
Judge and Special Judge for CBI
Cases, Bengalulru.
The counsel for the accused
no.2 to 4 have filed application under
Section 389(3) of Cr.P.C., seeking for
suspension of sentence till expiry of
the appeal period. The counsel for
accused no.3 and 4 also filed memo
along with medical records of wife of
76 Spl.C.No.458/2015
accused no.4 and prayed for 15 days
time to surrender before this court.
The learned SPP orally objected
for the application filed by the
accused no.2 and prays time till
tomorrow to file objections to the
application filed by accused no.3 and
4.
The accused no.2 is convicted
for the offence punishable under
Section 420 of IPC and Section 9 of
KPIDFE Act. Further, the accused
no.4 is convicted for the offence
punishable under Section 9 of
KPIDFE Act.
Further, for the offence under
Section 420 of IPC accused no.2 is
directed to undergo Rigorous
Imprisonment for a period of THREE
years with a fine of Rs. 2,00,000/-
and in default of payment of fine to
undergo Simple Imprisonment for a
period of ONE year. Further, the
accused no.2 is also convicted for the
77 Spl.C.No.458/2015
offence punishable under Section 9
of KPIDFE Act and sentenced to
undergo Rigorous Imprisonment for
a period of THREE years and a fine
of Rs.1,00,000/- and in default of
payment of fine, he shall undergo
Simple Imprisonment for a period of
THREE months.
Further, for the offence punishable under Section 9 of KPIDFE Act, the accused No.4 was sentenced to undergo Rigorous
Imprisonment for a period of FIVE
years and to pay a fine of
Rs.1,00,000/- (Rupees One lakh
only), and in default of payment of
fine, to undergo Simple
Imprisonment for a period of ONE
year.
As accused no.2 intends to
prefer an appeal against the above said
order of conviction and in order to
provide an opportunity to prefer an
appeal, the above said sentence is
hereby suspended till expiry of the
78 Spl.C.No.458/2015
appeal period i.e., 60 days from today
on execution of personal bond of
Rs.2,00,000/- with likesum surety,
subject to following conditions:
1) The accused no.2 shall surrender
himself before this Court after expiry of
above period of appeal.
2) The accused no.2 shall not leave
the jurisdiction of this Court without
prior permission.
3) The accused no.2 shall appear
before the Appellate Court on receipt of
notice of the said Court.
The counsel for accused no.2
submitted that, the accused no.2 is not
in a position to furnish surety. Hence,
the above said condition of furnishing
surety is relaxed.
Office is directed to collect
personal bond from the accused no.2
and call on for objections by 6/3/2025.
Accused No.4 is remanded to
Judicial Custody.
79 Spl.C.No.458/2015
Issue conviction warrant as
against accused no.1 and 4.
(SATISH J. BALI)
XLVII Addl. City Civil & Sessions
Judge and Special Judge for CBI
Cases, Bengalulru.