Judgment : 1. The accused in Crime No.479 of 1991 on the file of respondent police station has filed this petition under Sec.482, Cr.P.C, praying to call for the records in the aforesaid Crime No.479 of 1991 and quash the same. 2. The respondent has registered case in Crime No.479of 1991. The First Information Report was given by one P.Dhanasekaran. The allegations in that First Information Report are briefly as follows: The financial enterprises under the name and style of Vazhge Vaiyagam Enterprises and Vazhge Valamudan Enterprises are in existence in Salem for six months. They are bringing the idea to the public that if they deposit Rs.2,000 it will be refunded on 15th day with an interest of Rs.600. They would have given Rs.60 crores by way of interest and Rs.150 crores by way of principal. They should have deducted tax at the source at the time of disbursement as per the provisions of Income Tax Act. But they have not done it. So they are punishable under Sec.269-SS and 269-1 of Income Tax Act, 1961. These financial enterprises are run by government employees and public sector employees without getting necessary permissions from the Government. They have neither obtained permission from Reserve Bank of India. This scheme is banned under Sec.2(c) of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978. The persons running the financial enterprises have purchased lot of properties. If action is not taken day by day more people will start investing in it and at one stage, the financial enterprises will not be in a position to repay the principal. Lakhs and lakhs of people will be cheated by that time. From recently they have started similar money circulation schemes under various names. Hence he had prayed action. This First Information Report was registered in Crime No.479 of 1991 under Sec.4 of the Prize Chits Funds and Money Circulation Scheme (Banning) Act, 1978 and under Sec.420, Indian Indian Indian Penal Code. 3. Mr.S.Chellaswamy, the learned counsel appearing for the petitioner would contend that even if the allegations made in the complaint preferred by P.Dhanasekaran areall taken as true, offences under Sec.420, I.P.C. and under Sec.4 of Prize ‘Chits Funds and Money Circulation Scheme (Banning) Act, 1978, are not made out and hence the proceedings in Crime No.479 of 1991 should be quashed. 4. 4. To appreciate the contention of the learned counsel, Sec.2(c) of the above act need extraction. Sec.2(c) defines money circulation scheme. It reads as follows: “2(c) money circulation scheme” means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions;” Sec.3 of the said Act reads as follows: “3. Banning of prize chits and money circulation schemes or enrolment as members or participation therein: No person shall promote or conduct any prize chits or money circulation scheme, or enroll as a member to any such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chit or scheme.” Sec.4 of the Act, provides for penalty for contravening the provisions of Sec.3. 5. I shall now extract the relevant portions in the First Information Report which are as follows: “They are bringing the idea before the public if they deposit Rs.2,000 it will be refunded on 15th day with an interest of Rs.600……above enterprises have collected and operated more then Rs.200crores from the public to the effect……Moreover the scheme in operation is banned by under Sec.2(c) of the Prize Chit Funds and Money Circulation Scheme (Banning) Act, 1978…. If you do not take any action, day by day more people will start investing in it. At one stage the financial enterprises will not be in a position to repay the public. Lakh and lakh of people will be cheated by that time.” The above allegations would make it clear that these financial enterprises are bringing an idea before the public that if they deposit Rs.2,000 it will be refunded on 15th day with an interest of Rs.600 and in this manner they have collected more than Rs.200 crores. The First Information Report also reads that unless action is taken, more people will invest in the above manner and that at one stage the financial enterprises will not be in a position to repay the public. The First Information Report also reads that unless action is taken, more people will invest in the above manner and that at one stage the financial enterprises will not be in a position to repay the public. Payment of Rs.600 as interest in 15 days for a sum of Rs.2,000 works out interest at the rate of 720% p.a. It amounts to almost”doubling the investment within a period about 50 days. This scheme would prima facie fall within the definition of “money circulation scheme” as defined in Sec.2(c) of the Act in as much as this scheme if for making quick and as well easy money. The other apprehension expressed in this First Information Report is that unless action is taken. lakhs and lakhs of people would be cheated since at one stage, they would not be able to pay the interest, as aforesaid. The learned counsel would contend that it was only an apprehension and there was not any actual cheating and hence registering the case of for offence under Sec.420, I.P.C. is untenable. He would further contend that there was no dishonest representation and parting of money on such representation and practice of deception. If Rs.2,000 was received on a representation that he would repay with interest of Rs.600 and if that was not done, if the dishonest intention can be inferred at the inception, offence under Sec.420, I.P.C. is made out. Any attempt for cheating can also be proceeded with, when a case is registered under Sec.420, I.P.C. Simply because the case is registered for offence under Sec.420, I.P.C, with these allegations, straightaway it need not be quashed when prima facie there are allegations to show an attempt for cheating may already be affect. Regarding offence under Sec.4(1) of the Prize Chit Funds and Money Circulation Scheme (Banning) Act, 1978, as I have already indicated, prima facie the scheme would fall within the definition of Sec.2(c) of the Act and hence banning contemplated under Sec.3 of the Act would apply and violation of the same would incur penalty under Sec.4 of the Act. While so, this First Information Report cannot be quashed at the threshold. Only in such case, where the allegations made in the First Information Report not at all made out an offence for which case is registered, the First Information Report is to be quashed at the inception. While so, this First Information Report cannot be quashed at the threshold. Only in such case, where the allegations made in the First Information Report not at all made out an offence for which case is registered, the First Information Report is to be quashed at the inception. This is not a case like that. It is only in the investigation stage. For that purpose sufficient allegations are there in the First Information Report. Of course it is the pre-rogative of the investigating Officer toinvestigate the case thoroughly and fully and file a final report positive or negative, as the case may be, depending upon the materials collected during the course of investigation. 6. The learned counsel appearing for the petitioner relied upon the ruling reported in State of West Bengal v. Swapan Kumar 1982 MLJ. (Crl.) 358: A.I.R. 1982 S.C 949:1982 Crl.L.J 819: [1982] 1 S.C.C. 581:1982 S.C.C (Crl) 283. In that case, one Sanchaita Investments was carrying on business byoffering fabulous interest at 48% per annum to its members and then the rate of interest has been reduced at 36% per annum. Complaint was given alleging that the said Sanchaita Investments was carrying on business for prize chits and money circulation scheme in violation of Sec.3 of the Act and action may be taken against the promoters of that scheme. On that complaint, case was registered and investigation proceeded. That was sought to be quashed by the promoters of that investments. Their claim was upheld and that investigation was quashed. The facts of that case cannot be equated to the facts of the case before me. As I have already indicated, the offer of the interest was at 72% per annum in this case whereas in the case decided it was only 36% and 48%. In para 7 of the above ruling, the apex court has held as follows: “Two conditions must, therefore, be satisfied before a person can be held guilty of an offence under Sec.4 read with Sec.3 and 2(c) of the Act. In para 7 of the above ruling, the apex court has held as follows: “Two conditions must, therefore, be satisfied before a person can be held guilty of an offence under Sec.4 read with Sec.3 and 2(c) of the Act. In the first place, it must be proved that he is promoting or conducting a scheme for the making of quick or easy money and secondly, the chance or opportunity of making quick or easy money must be shown to depend upon an event or contingency relative or applicable to the enrolment of members into that scheme.” In the instant case, as I have already pointed out promise to pay interest at such a astronomical rate of interest would make quick and easy money. In the complaint, it is also alleged that the scheme is an idea of getting money from one person and gelling it shared to money other persons as interest and it is also alleged that at one stage the financial enterprises will not be in a position to repay to the public. Thus there are allegations to satisfy the condition No.2 also. In para 21, the apex court has held that it is wrong to suppose that the police have an unfettered discretion to commence investigation under Sec.157 of the Code and their right of inquiry is conditioned by the existence of reason to suspect the commission of a cognizable offence and they cannot, reasonably have reason, so to suspect, unless the F.I.R. prima facie discloses the commission of such offence. If that condition is satisfied, the investigation must go on and the court has then no power to stop the investigation, for to do so would be to trench upon the lawful power of the police to investigate into cognizable offences In the instant case, I am clear that they do prima facie disclose commission of the offence under Sec.4 of the Act and as well prima facie offence under Sec.420, I.P.C., or attempt for committing offence under Sec.420, I.P.C. In para. 77, the apex court has held as follows: “To be a money circulation scheme, a scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrolment of the members into the scheme. 77, the apex court has held as follows: “To be a money circulation scheme, a scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrolment of the members into the scheme. The scheme has necessarily to be judged as a whole, both from the view point of the promoters and also of the members”. The learned counsel also relied upon the ruling reported in S.D. Ashok Kumar v. State S.D. Ashok Kumar v. State, 1990 L.W.(Crl.) 10. In that case, it was held that if the First Information Report does not disclose cognizable offence, exercise of powers under Sec.482, Cr.P.C. is warranted. 7. As I have indicated above, the allegations in the complaint do prima facie make out allegations for the cognisable offences. 8. In view of the above, ‘he petition does not deserve admission and is dismissed. Hence it cannot be quashed at the threshold.