Telangana High Court
Vuppala Pavan Kumar vs The State Of Telangana on 18 June, 2025
Author: N.Tukaramji
Bench: N.Tukaramji
1
NTR,J
CRLPs_5516,5466&5504_2025
THE HONOURABLE SRI JUSTICE N.TUKARAMJI
CRIMINAL PETITION NO.5466 of 2025,
CRIMINAL PETITION NO.5516 of 2025,
AND
CRIMINAL PETITION NO.5504 of 2025,
COMMON ORDER:
1. (a). Criminal Petition No. 5466 of 2024 has been filed under
Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023
(hereinafter ‘BNSS, 2023’), seeking to quash the proceedings
against Petitioners 1 to 4 (Accused Nos. 1, 3 to 5) in Calendar Case
No. 20 of 2024, pending before the Metropolitan Sessions Judge,
Nampally, Hyderabad.
(b). Criminal Petition No. 5516 of 2024, also under Section 528 of
BNSS, 2023, seeks similar relief for Petitioners 1 to 4 (Accused Nos.
1 to 4) in Calendar Case No. 22 of 2024 before the same court.
(c). Criminal Petition No. 5504 of 2024, again under Section 528 of
BNSS, 2023, seeks quashing of proceedings against Petitioners 1
to 4 (Accused Nos. 1 to 4) in Calendar Case No. 24 of 2024, also
before the Metropolitan Sessions Judge, Nampally, Hyderabad.
2. In each of these cases, the petitioners are charged with
offences under Sections 406 and 420 read with Section 34 of the
Indian Penal Code, 1860 (‘IPC‘), Section 76 of the Chit Funds Act,
2
NTR,J
CRLPs_5516,5466&5504_2025
1982, and Section 5 of the Telangana State Protection of Depositors
of Financial Establishments Act, 1999 (‘TSPDFE Act’).
3. I have heard arguments of Mr. N. Naveen Kumar, learned
counsel for the petitioners, and Mr. Jithender Rao Veeramalla,
learned Additional Public Prosecutor for Respondent No. 1.
Summary of Prosecution Cases:
4. (a). Calendar Case No. 20 of 2024 (Criminal Petition No. 5466 of
2024):
Petitioner No. 1 approached the de facto complainant,
representing that he operated a registered chit fund business with
Vuppala Naveen Kumar under the name Sree Nagarjuna
Enterprises, and requested the complainant to refer subscribers.
The complainant got enrolled his wife and others as subscribers.
After paying the required instalments, when the complainant’s wife
sought to collect the prize amount, Petitioner No. 1 evaded
payment. The complainant later learnt that other subscribers were
similarly denied repayment, resulting in a collective financial loss
exceeding Rs. 1 crore. Based on the police report, Crime No. 103 of
2022 was registered.
(b). Calendar Case No. 22 of 2024 (Criminal Petition No. 5516 of
2024):
3
NTR,J
CRLPs_5516,5466&5504_2025The complainant, a Director of Coruscant Systems Private
Limited, Hyderabad, participated in a chit operated by Nagarjuna
Enterprises Chit and Finance Company. After making the necessary
payments, he became the successful bidder in January 2021 and
was entitled to Rs. 18,59,625/-. However, when he approached
Pavan Kumar Vuppala for payment, the amount was not paid and
the latter absconded. Crime No. 90 of 2022 was registered by
Mahankali Police Station, later re-registered as Crime No. 263 of
2022 by District Hyderabad Police Station CCS, EOW Team-VIII.
(c). Calendar Case No. 24 of 2024 (Criminal Petition No. 5504 of
2024):
The complainant alleged that Petitioner No. 1, Vuppala
Ramesh, introduced Petitioner No. 2, Vuppala Pavan Kumar, and
solicited investments in Sree Nagarjuna Enterprises, promising
1.5% monthly interest. The complainant and his wife deposited Rs.
25,00,000/- and joined a chit group for Rs. 5,00,000/-. Promissory
notes were executed, but upon maturity, no payments were made.
Cheques issued by the petitioners were dishonoured, prompting the
complainant to file a police report. Crime No. 102 of 2022 was
registered by Mahankali Police Station, later re-registered as Crime
4
NTR,J
CRLPs_5516,5466&5504_2025
No. 262 of 2022 by District Hyderabad Police Station CCS, EOW
Team-VIII.
5. Following investigation and examination of witnesses and
documents, the prosecution concluded that the petitioners, with
criminal intent, operated an unauthorized chit fund business,
causing wrongful loss to the complainants and others by collecting
large sums and insisting on re-depositing the chit maturity amount.
Accordingly, charges were filed under Sections 406, 420 read with
120-B of IPC, Section 76 of the Chit Funds Act, 1982, and Section 5
of the TSPDFE Act.
Petitioners’ Contentions:
6. The petitioners argued that the other accused, not named in
the police report, are merely family members uninvolved in the
business; thus, proceedings against them are unjustified. They
further contend that the same investigating agency has registered
multiple FIRs and charge sheets based on identical facts and
transactions, which is impermissible and constitutes an abuse of
process, violating their fundamental rights under Articles 14, 19,
20(2), and 21 of the Constitution. The petitioners assert that only
one FIR should have been registered, with subsequent complaints
treated as statements under Section 161 CrPC, in line with Supreme
5
NTR,J
CRLPs_5516,5466&5504_2025
Court precedent. They also argue that the allegations pertain to
non-payment of prize money and that the Chit Funds Act, 1982,
provides appropriate remedies before the Registrar of Chits. They
claim no fraudulent or criminal intent is apparent to justify
prosecution under Sections 406 and 420 IPC, and that invoking
Section 5 of the TSPDFE Act is unwarranted, as the company is
registered with the Registrar of Chits, even if the chit groups
themselves are not.
Prosecution’s Response:
7. The Additional Public Prosecutor contends that multiple police
reports reflect the pattern of fraudulent conduct by the accused and
cannot be a ground for quashing proceedings. He asserts that the
petitioners operated unregistered chit groups, making them liable
under the Chit Funds Act. Furthermore, running a financial
establishment and collecting investments in instalments qualifies for
prosecution under the TSPDFE Act, as recognized in V. Revathi v.
State of Andhra Pradesh (2011 SCC OnLine AP 1161). He also
points out that the petitioners misrepresented their company as
active and compliant, while records show it has been inactive since
registration, indicating deliberate deception. Offering higher interest
rates to attract investors further demonstrates intentional cheating
6
NTR,J
CRLPs_5516,5466&5504_2025
and breach of trust. Finally, the investigation has revealed that
Petitioners 2, 3, and 4 are not merely family members but active
partners involved in decision-making and financial transactions.
Therefore, the prosecution asserts that triable issues exist, and the
petitions should be dismissed.
8. I have perused the materials on record.
9. The allegations clearly indicate that the petitioners were
engaged in the business of chit funds under the guise of operating
registered chit schemes. However, admittedly it was only the
company that was formally registered, not the specific chit
operations in question. It is further alleged that, after collecting funds
and upon the maturity of the chit schemes, the petitioners defaulted
on repayments, thereby causing financial loss to each of the de
facto complainants.
10. A principal contention raised by the petitioners is that the
registration of multiple First Information Reports (FIRs) amounts to
an abuse of legal process. In this regard, it is essential to highlight
the well-established legal principle that multiple FIRs are permissible
when each complaint pertains to distinct transactions or grievances
involving different victims. This legal position has been affirmed in
several authoritative judgments. In T.T. Antony v. State of Kerala &
7
NTR,J
CRLPs_5516,5466&5504_2025
Others, (2001) 6 SCC 181, the Hon’ble Supreme Court held that a
second FIR is impermissible in respect of the same incident or
occurrence. Nonetheless, the Court implicitly acknowledged that
separate FIRs are maintainable if they arise from independent and
unconnected acts, even if involving the same accused. Likewise, in
Surender Kaushik & Others v. State of U.P. & Others, (2013) 5 SCC
148, the Supreme Court upheld the maintainability of multiple FIRs
filed by different complainants based on distinct causes of action
and emphasized that complaints against a common accused do not
necessarily constitute a single offence merely because they involve
the same individual(s).
11. In the present case, the petitioners are facing allegations of
financial impropriety from multiple complainants, each of whom
claims to have suffered loss through separate and individual
transactions. Consequently, the registration of multiple FIRs is both
legally and procedurally justified.
12. Another argument advanced by the petitioners is that the
operation of chit fund businesses is governed exclusively by the Chit
Funds Act, 1982, and that any violation arising within the scope of
chit fund activities must be adjudicated solely under the provisions
of that enactment. They contend that, therefore, invoking penal
8
NTR,J
CRLPs_5516,5466&5504_2025
provisions under the Telangana State Protection of Depositors of
Financial Establishments Act, 1999 (TSPDFE Act) is legally
untenable in such cases.
13. However, the applicability of the TSPDFE Act to fraudulent chit
fund operations is no longer res integra. This issue has been
comprehensively addressed in V. Revathi v. The State of A.P., rep.
by Public Prosecutor, High Court of Hyderabad, 2011 SCC OnLine
AP 1025. In paragraphs 15 to 18 of that decision, the Court
elaborated on the legal compatibility between both enactments and
upheld the application of the TSPDFE Act in situations involving
deceitful or illegal chit fund schemes. For better appreciation, the
relevant paragraphs of the authority are extracted hereunder:
“15. It is contended for the Appellant that there are special enactments
regulating chit fund transactions and that therefore the provisions of the
1999 Act cannot be applied to a chit fund transaction. Though the
Andhra Pradesh Chit Funds Act 1971 (In short, the 1971 Act) and the
Chit Funds Act 1982 (In short, the 1982 Act) are there for regulation of
chit fund transactions, the 1999 Act is again a special enactment which
was enacted for protection of depositors of financial establishments.
Statement of objects and reasons appended to the 1999 Act reads as
follows:
“Instances have come to the notice of the State Government, wherein a
number of unscrupulous financial establishments in the State are
cheating innocent, gullible depositors by offering very attractive rates of
interest collecting huge deposits and then vanishing suddenly. The
depositors are being cheated and are put to grave hardship by losing
9
NTR,J
CRLPs_5516,5466&5504_2025their hard earned savings. To curb these malpractices, the State
Government have decided to bring a law for protecting the interests of
depositors of financial establishment in the State and for matters
connected therewith or incidental thereto. The above issue was also
discussed in a Conference of the State Chief Ministers and Finance
Ministers presided by the Union Finance Minister on 14-09-1998 at
Vignan Bhavan, New Delhi. The Union Finance Minister also desired
that States should take expeditious steps for enacting legislation on the
lines of “Tamilnadu Protection of Interests of Depositors (in Financial
Establishments) Act, 1997, “to restore the confidence amongst the
innocent depositors and also to serve as a deterrent against
malpractices by such establishments during the course of acceptance
of public deposits.
To achieve the above object, the Government have decided to make a
separate law by undertaking Legislation”.
16. There is no provision in the 1999 Act dealing with repeals and
savings. The 1999 Act was enacted by the State Legislature in addition
to and not in derogation of any existing law dealing with the subject.
The State Legislature enacted the 1971 Act for regulation of chit funds
in the state of Andhra Pradesh. The 1971 Act was repealed by Section
90 of the 1982 Act passed by the Parliament. As per Section 1(3) of the
1982 Act, that Act comes into force on such date as the Central
Government may by notification in the Official Gazette appoint and
different dates may be appointed for different States. Under Section 89
of the 1982 Act, the State Government in consultation with Reserve
Bank of India has to make rules by notification in the Official Gazette for
giving effect to the provisions of that Act. So far the Government of
Andhra Pradesh has not made any rules under Section 89 of the 1982
Act. Therefore, till coming into force of the 1982 Act by notifying rules
by the State Government, the 1971 Act is deemed to be in force.
17. Section 56 of the 1971 Act deals with penalties for contravention of
certain provisions of the said Act. Section 56 reads as follows:
10
NTR,J
CRLPs_5516,5466&5504_2025“Penalties:- (1) Whoever contravenes or abets the contravention of any
of the provisions of sub-section (1) of Section 3 or Section 4, sub-
section (1) of Section 7 shall be punishable with imprisonment for a
term which may extend to one year or with fine which may extend to
five hundred rupees or with both.
(2) Any foreman-
(a) who does not file the chit agreement under Section 9 or a copy of
any document under Section 11, sub-section 2 of Section 20, sub-
section (2) of Section 21, Section 29 or Section 32 within the period
specified for such filing or within the further time allowed under Section
55 for such filing; or
(b) who contravenes any of the provisions of Section 8, sub-sections
(1), (2) and (6) of Section 12, Section 14, Section 15, Section 16,
Section 18, Section 20, Section 21, Section 23, sub-section (4) of
Section 25, Section 29, Section 35, Section 36, Section 37 and sub-
section (4) of Section 51; or
(c) who fails to comply with the requirements of the chit agreement
regarding the date, time and place at which the chit is to be drawn;
shall be punishable with fine which may extend to one hundred rupees.
(3) Whoever in any document required by or for purposes of, any of the
provisions of this Act, wilfully makes a statement false, in any material
particulars knowing it to be false, shall be punishable with imprisonment
for a term which may extend to one year or with fine which may extend
to five hundred rupees or with both”.
18. There is no penal provision under the 1971 Act providing for
punishment in case of ‘default’ committed by organizer/foreman of the
chit by not paying prize amount to the successful highest bidder or in
case the organizer/foreman of the chit absconds by discontinuing the
chit during the course of its currency and by not repaying or refunding
the subscription amounts already collected from the members. The
1971 Act predominantly deals with regulatory measures for starting chit
fund business, for commencement of a chit and running of the chit till
11
NTR,J
CRLPs_5516,5466&5504_2025
the end of the chit period. In case, the organizer/foreman of the chit
commits ‘default’, no penal remedy is prescribed and no penal liability
is attached to such organizer/foreman of the chit under the 1971 Act.
Similarly, even if the 1982 Act comes into force, it also does not contain
any provision dealing with penal remedy against organizer/foreman of
the chit and attaching penal liability for ‘default’ committed by such
organizer/foreman of the chit. Therefore, I have no hesitation to
conclude that the 1999 Act is equally applicable in the case of a chit
fund transaction also in addition to applicability of the existing 1971 Act
and also the 1982 Act as and when it comes into force.”
14. The conclusions reached by this Court in the aforementioned
authority continue to remain good law and are binding precedents.
Accordingly, the contention advanced by the petitioners questioning
the imposition of penal liability for the alleged offences is without
merit and cannot be sustained.
15. In light of the foregoing analysis, and considering the existence
of specific allegations that disclose a prima facie case against the
petitioners, this Court finds no substance in the grounds urged for
quashing the proceedings. The contentions raised are, therefore,
untenable. In this position, this court is of the considered opinion
that the prayer for quashing the criminal proceedings is devoid of
merit.
16. Consequently, Criminal Petition Nos. 5516, 5466, and 5504 of
2025 are hereby dismissed.
Pending miscellaneous applications, if any, shall stand
closed.
_______________
N.TUKARAMJI, J
Date:18.06.2025
Ccm;