Authority: High Court of Judicature at Madras

Order Date: 22 June 2026

Case Overview

  • Petitioner: Y.G. Rajendraa (A2), former Whole‑Time Director of Synergy Financial Exchange Ltd (SFEL) from 01‑04‑1992 to 01‑05‑1998.
  • Respondent: The State, represented by Inspector of Police, Special Police Establishment/CBI Economic Offences Wing, Chennai.
  • Criminal Original Petition (Crl.O.P.No.21795 of 2025) filed under Section 482 Cr.P.C./528, BNSS, seeking quash of charge sheet and proceedings in C.C.No.9825 of 2005 pending before Additional Chief Metropolitan Magistrate Court, Egmore, Chennai.
  • Background: Two complaints in 1999 (X Cr.No.277/1999 and X Cr.No.1216/1999) led to FIRs against SFEL’s Managing Director Venkatraman and Director Narasimhan for alleged non‑repayment of deposits (Rs.9.25 lakhs and Rs.30 lakhs respectively). SFEL was ordered wound up on 11‑09‑2000; an arbitrator was appointed on 20‑06‑2001; CBI took over investigation on 31‑08‑2001 and filed a combined charge sheet on 14‑05‑2004 against nine accused including Y.G. Rajendraa.
  • Allegations in charge sheet: conspiracy, cheating, misappropriation of deposits, diversion of funds to Srivari Investments Pvt. Ltd., causing loss of Rs.13.10 crores to depositors; specific allegation that petitioner collected Rs.2,56,000 from Engenius Erectors Pvt. Ltd. and mis‑used it.
  • Petitioner’s submissions: argued SFEL, not he, was the accused; he was not involved in deposit canvassing; he resigned before deposit maturity; no evidence of his signing cheques or promising repayment; cited Karnataka High Court quash of similar case; claimed settlement of Rs.12.25 lakhs and loan Rs.4.00 lakhs as full and final settlement upon resignation.
  • Prosecution’s submissions (Special Public Prosecutor B. Mohan): argued petitioner’s role could not be excluded; assets of SFEL were diverted to his personal account; the Rs.2,56,000 collection constituted conversion for undue gain; petition filed after two decades is dilatory.

Final Outcome

  • The Court held that the prosecution failed to demonstrate that petitioner was involved in canvassing deposits or induced delivery of deposits for conversion, a necessary ingredient for offence under Section 420 IPC.
  • Noted that the Trial Court, after re‑framing charges per the Venkataraman judgment, found no sufficient cause to frame a charge under Section 406 IPC, and this finding was not challenged.
  • Consequently, the proceedings against petitioner Y.G. Rajendraa in C.C.No.9825 of 2005 were quashed.
  • The order is limited to the instant quash petition; all connected criminal miscellaneous petitions were closed.

Topics: Court Quash Order, Financial Fraud Litigation