THE HONOURABLE DR JUSTICE Y. LAKSHMANA RAO CRIMINAL PETITION NO: 6585/2025 ORDER: The Criminal Petition has been filed under Sections 438 and 482 of Bharatiya Nagarik Suraksha Sanhita, 2023 (for brevity „the BNSS‟) by the Petitioner/Accused No.3 for seeking to grant pre-arrest bail in connection with Crime No.85 of 2025 dated 01.05.2025 of Dwaraka Police Station, Visakhapatnam, registered for the alleged offences punishable under Sections 420, 406, 411, 414, 120B of IPC, 21(1)(2)(3), 23 of The Banning of Unregulated Deposit Schemes (TBUDS) Act, 2019 (for short „the TBUDS Act‟), 3,4 Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (for short „the PC and MCSBA Act‟) read with 34 of the Indian Penal Code, 1860 (for short „the I.P.C‟). 2. The material averments stemming from the petition of the prosecution are that SNEHA MACS (Mutually Aided Cooperative Society Ltd.), Rajendranagar, Seethampeta, Visakhapatnam, was established by Accused No.1 as Founder-Chairman and Director, and his wife/Accused No.2, as the President. Accused Nos. 1 and 2 established the Society under the ideology of Dr. B.R. Ambedkar, promoting the slogan “Pay back to Society”, which had actively induced the depositors, particularly the Scheduled Caste community, to deposit their money in the Society. 3. The deposits were collected through agents of the Society, namely Accused Nos.12 and 17, who visited the house of de-facto complainant and persuaded him to deposit Rs.37,70,000/-(Rupees Thirty Seven Laksh Seventy 2 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 Thousand Only). Similarly, several other individuals were induced to deposit a total sum of approximately Rs.6,32,00,000/- (Rupees Six Crores Thirty-two Lakhs Only). 4. Ultimately, the Accused Nos.1 and 2 failed to repay the deposited amounts either to the de-facto complainant or to other depositors, thereby cheated them. Based on the report lodged by the de-facto complainant, the police registered an FIR, and took up the investigation. 5. Heard learned counsel for the petitioner and the learned Assistant Public Prosecutor. 6. Sri K.S. Murthy, the learned Senior Counsel appearing for Sri G.R. Sudhakar, the learned counsel for the petitioner/Accused No.3, submitted that the Investigating Officer issued a notice under Section 41-A of „the Cr.P.C.,‟ on 13.05.2025, and the Petitioner/Accused No.3 duly complied with the conditions and cooperated with the investigation. It is contended that the Petitioner/Accused No.3 has been falsely implicated in the case and is, in fact, a victim at the hands of Accused Nos.1 and 2, having deposited his own saving as well as those of his family members, amounting to approximately Rs.2,00,000,000/- (Rupees Two Crores Only), in the Society. 7. The Petitioner/Accused No.3, aged about 71 years, is a retired Canara ban employee and is suffering from various health issues, including kidney problems, thyroid disorder, diabetes, and other old-related ailments. Though 3 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 the Accused Nos.1 and 2 projected the Petitioner/Accused No.3 as the Chief Executive Officer/Director of the Society, he did not actively participate in its affairs due to his advanced age. The Society was wholly managed and controlled by Accused Nos.1, 2 and 5, who are husband, wife, and Nephew, respectively. They carried out the transactions of the Society from year 2008 to 2022, during which the majority of deposits were made. 8. The Petitioner/Accused No.3 joined as the Director only in the month of April 2022 and continued till October 2024. From the month of June 2024 onwards, the transactions were stopped, and no further payments were made to the depositors. The Petitioner/Accused No.3 himself deposited a sum of Rs.2 crores from his retirement benefits and also made his children deposit their hard-earned income. Therefore, the Petitioner/Accused No.3 is also a victim of the deception orchestrated by Accused Nos.1, 2 and A5. 9. Sri K.S.Murthy, the learned Senior Counsel, further submits that the petitioner has been cooperating with the Investigating Officer in all respects. The Investigating Officer has already seized the CPU and other materials of the Society for the purpose of investigation. Hence, the arrest of the Petitioner/Accused No.3 may not be warranted. The Petitioner/Accused No.3 belongs to Scheduled Caste community, and the allegation that he may influence the witnesses or depositors belonging to the SC or ST community, as alleged by the police, does not arise. 4 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 10. It is further submitted that the police have also seized the deposit bonds and receipts of the Society. Thus, the police have almost concluded the investigation by collecting the material evidence and examination of witnesses. The learned Senior Counsel also submits that the Petitioner/Accused No.3 has a permanent residence, fixed abode, and landed properties. Therefore, there is no possibility of him absconding or evading the process of law. It is further submitted that a learned Single Judge of this Court, in Crl.P.No.6861 of 2025 on 04.07.2025, directed the police not to take any coercive steps against the Petitioners/Accused Nos.1, 2 and 3 in a petition filed for quashing the entire proceedings. Hence, it is urged to grant pre-arrest bail to the Petitioner/Accused No.3. 11. Per contra, Mr. Neelotphal Ganji, the learned Assistant Public Prosecutor, vehemently argued that the Petitioner/Accused No.3, being the Director of the Society, was actively involved in the commission of the offences alleged by the de-facto complainant, involving an amount exceeding Rs.80,00,000/- (Rupees Eighty Lakhs Only). He submitted that if the Petitioner/Accused No.3 is granted pre-arrest bail, there is a likelihood that he may tamper with the evidence and hamper the ongoing investigation. He would not cooperate with the investigation. Arrest of the Petitioner/Accused No.3 is necessary for the further progress of the investigation. He further submits that the Senior Inspector/Preliminary Inquiry Officer, Sub-Division, Visakhapatnam, conducted a preliminary enquiry and submitted a report 5 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 against all the accused including the present Petitioner\Accused No.3 that they had indulged in malpractices of collecting huge deposits from gullible depositors and avoided payments as promised in the deposit receipts. Hence, the grant of pre-arrest bail in favour of the Petitioner/Accused No.3 would affect the progress of the investigation and urged to dismiss the petition. 12. An application in I.A. No.1 of 2025 in the present Criminal Petition was filed by the de-facto complainant/victim seeking to implead himself as respondent No.2 in the Criminal Petition, and the said application was allowed." 13. Sri Posani Venkateswarlu, the learned Senior Counsel representing Sri P. Akash, the learned counsel for the respondent No.2 implead petitioner/de- facto complainant, submits that the petitioner played active role along with Accused Nos.1 and 2 in attracting the deposits from the gullible depositors and later did not pay the deposits along with assured amount. The petitioner, being the Chief Executive Officer of Sneha MACS, intentionally aided in collecting the deposits from the de-facto complainant and others. Even in the preliminary enquiry report submitted by the Inquiry Officer, specific overt acts were attributed against the petitioner. 14. Grant of pre-arrest bail to the Petitioner/Accused No.3 would pose a serious threat to the de-facto complainant and other witnesses, as the Petitioner/Accused No.3 is highly influential. The Petitioner/Accused No.3, along with Accused No.1 and other directors, conducted a meeting with 6 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 depositors of Sneha MACS on 28.09.2024 and assured them their deposited amounts, along with accrued interest and matured amounts, would definitely be paid by 30.11.2024. Hence, the petitioner is not entitled for grant of pre- arrest bail, and requested to dismiss the petition. 15. Thoughtful consideration is bestowed on the arguments advanced by the learned counsel for the petitioner and the learned Assistant Public Prosecutor. I have perused the record. 16. Even as seen from the report of the Enquiry Officer, produced by the learned Assistant Public Prosecutor, it is specifically mentioned in the report that the Senior Inspector/Preliminary Enquiry Officer, when conducted enquiry, any of the Directors accept the Petitioner/Accused No.3 had not attended, even the phone calls of the Inquiry Officer, and they responded arrogantly and they had gone to the extent of even warning Inquiry Officer with abusing words. However, it is mentioned clearly in the preliminary enquiry report by the Senior Inspector/Inquiry Officer that the Petitioner/Accused No.3 being the Director and CEO of the Society attended before the Inquiry Officer on 07.04.2025 and submitted written statements. In his statements, he pointed out that Accused No.1/K. Siva Bhagya Rao is the Founder and the Chairman of the Society and is responsible and he assured to pay total deposits to the petitioners within six months and also trying to pay deposits of the members by the Chairman for early payments. 7 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 17. Furthermore, as per the memo appending with the documents filed by the learned counsel for the petitioner, the de-facto complainant and other 16 members/depositors conducted a thorough enquiry and submitted a report to the Inspector of Police, Dwaraka Police Station, Visakhapatnam, on 01.05.2025 wherein they had clearly mentioned that Sneha MACS paid a loan of Rs.39.88 lakhs to M/s Prudhvi Constructions, whose Managing Partner Dhanunjay Sarat (A non-member of Sneha MACS), is a benami of Sri K. Siva Bhagya Rao/Accused No.1. With this amount, they purchased a land approximately 10.47 acres at nearer to Venkannapalem Village, Chodavaram Mandal, erstwhile Vizag District. 18. It was further reported that Accused No.2/K. Swarna Latha, W/o. Accused No.1, K. Srikanth, S/o. Accused No.1 and Sneha Priya Financial Services together purchased 8.89 acres of land with Sneha Macs amount nearer to Venkannapalem, under Chodavarm SRO. It is further reported that an amount of Rs.2.12 crores was paid by Sneha Macs to United Publications, Managing Partner Dhanunjay Sarat, who is a benami to Accused No.1 with this amount they purchased a land admeasuring 0.50 acres at Sheela Nagar, near STBL threatre, Ayyappa Swamy temple road. It is further reported that a piece of land admeasuring 0.11 acres and 0.36 acres purchased at Atchupapuram area in the name of Sneha Financial Services Private Limited for whom the Managing Director is K. Swarma Latha/Accused No.2/wife of Accused No.1. Gummadi Manoranjan and K. Anusha, W/o. Manoranjan took a 8 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 loan of Rs.18.26 lakhs each from Sneha Macs, with this they purchased a flat at China Waltair, bearing Flat No.412, 3rd floor, Akshaya Satya Prasad Vista China Waltair, Vizag. 19. Thus, it is evident that from out of the amounts collected in kind of deposits from the gullible depositors Accused Nos.1 and 2 and his relatives purchased immovable properties. The investigation does not point out towards the Petitioner/Accused No.3 that he has siphoned the deposits to his selfish goals. The Petitioner/Accused No.3, aged about 71 years, is suffering from severe problems of kidney, thyroid, diabetes, and other age-related one. As mentioned supra, he fully cooperated with the Investigating Officer in seizure of documents and material from Sneha MACS and also cooperated with the Inquiry Officer. It is also pointed out that the Petitioner/Accused No.3 himself lost an amount of rupees Rs.2 crores, which he had invested from his retirement benefits, along with his children‟s hard-earned income. 20. The Petitioner/Accused No.3 is a permanent resident of Visakhapatnam, having a fixed abode and landed properties. Therefore, the question of Petitioner/Accused No.3 absconding clutches of law would not arise. The apprehension of the learned prosecutor that the Petitioner/Accused No.3, if enlarged on pre-arrest bail would not cooperate with the investigation and tamper the evidence, does not arise for the simple reason that the Petitioner/Accused No.3 is aged about 71 years, a retired Canara Bank officer, himself deposited huge amounts with Sneha MACS, and has already 9 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 cooperated with the police in seizing of CPU deposit bonds and receipts from the Society. As stated earlier, a favourable order was passed in Crl.P.No.6861 of 2025, dated 04.07.2025, wherein a learned single Judge of this Court, directed the police not to take any coercive steps against the Petitioners/Accused Nos.1 to 3 in the quash proceedings, pending disposal. 21. Considering the limited tenure of the Petitioner/Accused No.3 as the Chief Executive Officer/Director of Sneha MACS, and the fact that the entire deposits were received prior to his joining the Society, as well as taking into account his age, his cooperation with both the Investigating Officer and the Inquiry Officer, and the nature of allegations leveled against the petitioner and his alleged role played in this case, this Court deems it appropriate to grant pre-arrest bail to the Petitioner/Accused No.3, subject to the following stringent conditions: a) In the event of arrest of the petitioner/Accused No.3 the petitioner/Accused No.3 shall be enlarged on bail on executing a personal bond for a sum of Rs.50,000/- (Rupees Fifty Thousand only), with two sureties each for the like sum each to the satisfaction of the arresting police officials; b) The petitioner/Accused No.3 shall make himself available for investigation as and when required; c) The petitioner/Accused No.3 shall not cause any threat, inducement or promise to the prosecution witnesses; d) The petitioner/Accused No.3 shall appear before the Station House Officer concerned once in a week i.e., on every Saturday between 10.00 a.m. and 05.00 p.m., till filing of the charge sheet. 10 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 e) The petitioner/Accused No.3 shall not leave the district limits without the express permission from the Station House Officer concerned. f) The petitioner/Accused No.3 shall surrender his passport, if any, to the investigating officer. If he claims that he does not have a passport, he shall submit an affidavit to that effect to the Investigating Officer. 10. Accordingly, the Criminal Petition is allowed. _________________________ DR. Y. LAKSHMANA RAO, J Date: 24.07.2025 KMS 11 Dr.YLR, J Crl.P.No.6585 of 2025 Dated 24.07.2025 THE HONOURABLE DR JUSTICE Y. LAKSHMANA RAO CRIMINAL PETITION No.6585 of 2025 Date: 24.07.2025 KMS