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2014 (11) TMI 1252 - HC - Companies LawProtection of deposits made by the public in the Financial Establishments and matters connected therewith or incidental thereto - Madhya Pradesh Nikshepakon Ke Hiton Ka Sanrakshan Adhiniyam, 2000 - scope of jurisdiction and interference under Section 482 of Cr.P.C. - HELD THAT:- The agreement allegedly executed between the applicant and respondent/complainant appears to be a camouflage exercise intended to solicit deposits in the name of franchisee royalty and security deposits with the promise to pay with interest. There is no explanation as to why customers are required to be registered and for what purpose. It is not deducible from the agreement, as to what is the nature of franchisee been given to the respondent/complainant for which royalty is charged. Upon perusal of different clauses of the agreement, it appears that the entire agreement is misleading in nature prepared only to cover the deposits received from the customers in the form of so-called franchisee royalty and security deposits with the promise of payment with interest - While investigation is in progress and the applicant remained absconding, he has filed the instant petition under Section 482 of the Code of Criminal Procedure seeking quashment of the FIR on the ground that on the face of the FIR no offence is made out against any Act much less the Act of 2000. The Court has noticed various clauses of the agreement executed by the parties only to ascertain the nature of activities of the applicant's company with due advertence to what has been averred in the petition. Various clauses of the agreement do not suggest that the company is a mere financial consultant, as claimed in the petition. Allegations have been made by the complainant in the FIR that under the garb of aforesaid franchisee agreement the applicant has fraudulently taken deposit of ₹ 2.5 Lakh as franchisee royalty and Rs. Two Lakh towards expenses and Rs. One Lakh as security deposit through cheques and cash with the assurance of 40% dividend - Considering the definition of deposit as contained under Section 2 (b), financial establishment under Section 2 (c) and the penal provisions under Section 6 of the Act, this Court is of the view that in the backdrop of facts and circumstances narrated above as regards the complaint made and registered as FIR, it cannot be said that the dispute between the parties is of the nature of civil liability only arising out of financial transaction simplicitor. In fact under the cover of the said agreement prima facie there appears to be a systematic activity of the applicant/company to solicit deposits from investors with the promise of payment of dividend/interest camouflaged by execution of agreement. Thus, there is sufficient scope of investigation in the matter. Petition dismissed.
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