Madras High Court
Kumaran Muthu @ Muthukumaran vs The State Of Tamil Nadu on 27 February, 2026
Crl.O.P(MD)No.19923 of 2025
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED 27.02.2026
CORAM
THE HONOURABLE MRS.JUSTICE L.VICTORIA GOWRI
Crl.O.P.(MD).Nos.19923 and 20655 of 2025
and
Crl.M.P.(MD)Nos.16763, 16764 and 17519 of 2025
Crl.O.P.(MD)No.19923 of 2025
Kumaran Muthu @ Muthukumaran ... Petitioner/Accused No.8
Vs.
1. The State of Tamil Nadu,
Rep . by The Inspector of Police,
Economic Offence Wing,
Madurai and another.
Crime No.1/2025 ... 1st Respondent / Complainant
2. T.Sangeetha ... 2nd Respondent /
De-facto Complainant
3.Ramanathan
4.Manikandan ... Respondents
(Respondents 3 and 4 are impleaded as per order of
this Court dated 11.12.2025 in Crl.M.P.(MD)No.19092
of 2025 and Crl.M.P.(MD)NO.19896 of 2025 in
Crl.OP(MD)No.19923 of 2025)
Prayer: Criminal Original Petition is filed under Section 528 of
BNSS, 2023, to call for the records culminating into the impugned
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Crl.O.P(MD)No.19923 of 2025
FIR No.1/2025 dated 05.11.2025 on the file of the 1st respondent
police and quash the same as against the petitioners.
For Petitioner : Mr.M.Dinesh Hari Sudarsan,
For Mr.J.Sivanandary,
For Mr.T.Karthik Raja
For R-1 : Mr.S.Ravi
Additional Public Prosecutor
For R-2 : Mr.R.Swarnavel
For R-4 : Mr.Anantha Padmanaban,
Senior counsel
Crl.O.P.(MD)No.20655 of 2025
1.S.Kamalakannan ... Petitioner No.1/Accused No.7
2.S.Balasubramanian ... Petitioner No.2/Accused No.6
Vs.
1. The State of Tamil Nadu,
Rep . by The Deputy Superintendent of Police,
Economic Offence Wing,
Madurai and another.
(Crime No.1/2025) ... 1st Respondent / Complainant
2. T.Sangeetha ... 2nd Respondent /
De-facto Complainant
3.Ramanathan
4.Manikandan ... Respondents
(Respondents 3 and 4 are impleaded as per order of
this Court dated 11.12.2025 in Crl.M.P.(MD)No.19089
of 2025 and Crl.M.P.(MD)NO.19895 of 2025 in
Crl.OP(MD)No.20655 of 2025)
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Crl.O.P(MD)No.19923 of 2025
Prayer: Criminal Original Petition is filed under Section 528 of
BNSS, 2023, to call for the records of the impugned FIR No.1/2025
dated 05.11.2025 on the file of the 1st respondent police and quash
the same as qua the petitioners.
For Petitioners : Mr.M.Yogesh Kanna
For R-1 : Mr.S.Ravi
Additional Public Prosecutor
For R-2 : Mr.R.Swarnavel
For R-3 : Mr.Rajini
For R-4 : Mr.Anantha Padmanaban,
Senior counsel
COMMON ORDER
Preface:
These two petitions arise out of the very same F.I.R., viz.,
Crime No.1 of 2025 dated 05.11.2025 on the file of the Economic
Offences Wing, Madurai, registered for offences under Sections
294(b), 506(1), 406, 420, 120-B IPC, Section 5 of the Tamil Nadu
Protection of Interests of Depositors Act, 1997, (hereinafter to be
mentioned as “TNPID ACT”) and Sections 3, 4, 5, 21, 22 and 23 of
the Banning of Unregulated Deposit Schemes Act, 2019, hereinafter
to be mentioned as “BUDS Act, 2019”).
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Crl.O.P(MD)No.19923 of 2025
2. Crl.O.P.(MD) No.19923 of 2025 is pressed substantially on
the footing of a settlement/compromise between A8 (Muthukumaran)
and the defacto complainant, coupled with deposit of monies.
3. Crl.O.P.(MD) No.20655 of 2025 is pressed by A6 and A7
(Directors of Neomax Group) mainly on the contention that the
impugned F.I.R., insofar as they are concerned, is impermissible as a
“second F.I.R.” / a prohibited fragmentation of the same transaction,
hit by the law in T.T. Antony v. State of Kerala1, and that no
independent material is disclosed against them qua the “Premium
Villa Plot” transaction.
4. Since the issues overlap, both petitions are disposed of by
this common order.
Case of the prosecution:
5. The prosecution case, as reflected in the complaint, F.I.R.
and counter, is that the defacto complainant and her husband had
earlier investments in sister concerns of Neomax, and that the
accused persons induced her not to pursue complaints, promised
1 2001 (6) SCC 181
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return of money, and thereafter induced her to pay Rs.30,00,000/-
in April 2025 into accounts styled as “Premium Villa Plot”, promising
a doubled return, allotment of land, and return of earlier
investments.
6. It is alleged that the accused refused to register the property
or return the money and threatened/abused her. The counter further
asserts that the investigation has indicated a broader pattern, with
multiple persons allegedly cheated, and suspicious bank
transactions requiring forensic and financial trail analysis.
Submissions on behalf of Accused No.8:
7. The learned counsel appearing for Accused No.8 would
submit that the entire prosecution case, when stripped of
embellishments, is fundamentally simple. The de facto complainant,
Sangeetha, had allegedly paid a sum of Rs.30 lakhs to Accused No.8
for the purchase of a plot in a real estate project run under the name
“Premium Villa Plots.” It is alleged that the petitioner failed either to
execute the sale deed or to refund the amount within the expected
time, and on that basis FIR No.1 of 2025 has been registered
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Crl.O.P(MD)No.19923 of 2025
invoking Sections 406 and 420 IPC along with provisions under the
8. The learned counsel would emphasize that this is, at best, a
commercial real estate dispute arising from delay in performance of a
sale transaction. There was no dishonest intention at inception. The
petitioner had participated in the enquiry and had clearly stated that
he was willing either to execute the sale deed or to refund the
amount, subject to reasonable time. Thus, the essential ingredients
of cheating, namely deception at the inception and dishonest
inducement are absent.
9. The learned counsel for Accused No.8 would submit that at
the time of remand, a sum of Rs.21 lakhs was deposited. Thereafter,
pursuant to the bail order passed by the TNPID Court, an additional
Rs.25 lakhs was deposited. In total, Rs.46 lakhs stands deposited
before the competent Court.
10. The de facto complainant has now appeared in person
before this Court and has filed a joint compromise memo. She has
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categorically stated that she does not wish to pursue the complaint
and seeks permission to withdraw the amount deposited. It is
contended that when the aggrieved party herself states that the
dispute stands settled and that she has no grievance, continuation of
criminal proceedings would serve no purpose.
11. Reliance is placed on the decision in Gian Singh v. State
of Punjab2, wherein the Hon’ble Supreme Court recognized the
inherent power of the Hon’ble High Court to quash criminal
proceedings even in non-compoundable offences, provided the
dispute is predominantly civil in nature and continuation would
result in injustice.
12. The learned counsel would argue that this case falls
squarely within that category. The dispute arises from a financial
transaction of a commercial character. It does not involve moral
turpitude, violence, or public office. There is hardly any likelihood of
conviction when the complainant has withdrawn support. Therefore,
2 2012 10 SCC 303
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in exercise of powers under Section 482 Cr.P.C., 1973 / Section 528
BNSS, 2023, this FIR deserves to be quashed.
13. It is strongly urged that Premium Villa Plots is an
independent business entity and not an extension of Neomax. The
petitioner has produced Udyam registration dated 01.06.2023. Sale
deeds executed in 2025 relating to 180+ acres have also been
produced. It is contended that business turnover cannot be equated
with illegal collection.
14. Regarding the allegation of Rs.82 crores transaction, the
learned counsel clarifies that this figure represents gross business
turnover and transfers to Accused No.82 and Accused No.62
(accused in FIR 3/2023) were only brokerage payments amounting to
a few lakhs. Bank statements have been extracted and produced.
15. A significant portion of argument revolves around the
ongoing Neomax settlement before the Hon’ble Principal Bench in
Crl.O.P.(MD)No.15498/2024. The learned counsel submits that FIR
3/2023 concerns Neomax, where approximately 60,000 depositors
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are involved. Movable properties have been auctioned. IBBI-
appointed valuers have assessed immovable assets at Rs.2,600
crores (conservative valuation), though petitioners claim actual value
is around Rs.7,000 crores.
16. It is contended that FIR No.1 of 2025 was registered at a
critical stage in order to derail the settlement process. The directors
are required to give consent for auction and compromise under
Section 5A of TNPID Act. By keeping them under threat of arrest, the
process is allegedly being stalled.
Submissions on behalf of A6 & A7:
17. The learned Counsel submits that FIR 3/2023 was
registered under Sections 406, 420 IPC and Section 5 of TNPID Act.
Accused No.6 and Accused No.7 were arrested and subsequently
granted bail. Bail cancellation petitions led to a structured
settlement process under the supervision of the Hon’ble High Court.
The present FIR No.1 of 2025 alleges that Accused No.6 and Accused
No.7 enticed the complainant to pay additional money promising
return of earlier deposits.
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18. It is contended that there is no documentary evidence, no
money trail, and no independent witness linking Accused No.6 and
Accused No.7 to the Premium Villa transaction. The FIR is drafted in
a manner that effectively seeks cancellation of bail rather than
investigation of a fresh offence.
19. The learned counsel submits that if the present allegations
are a continuation of earlier Neomax transactions, then under the
doctrine laid down in T.T. Antony v. State of Kerala3, a second FIR
is impermissible and such statements must be treated under Section
161 Cr.P.C., 1973, in the original FIR. If it is claimed to be a separate
transaction, then there must be distinct material connecting Accused
No.6 and Accused No.7, which is absent.
20. The learned counsel further submits that the de facto
complainant and her husband were allegedly regional and centre
heads in Neomax, yet they have not been arrayed as accused. This
selective targeting of directors suggests mala fide intention.
3 2001 (6) SCC 181
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Submissions of learned Additional Public Prosecutor:
21. The learned Additional Public Prosecutor submits that FIR
3/2023 pertains to transactions up to 2023. The present FIR
concerns fresh collections in April 2025 under new entities such as
Premium Villa Plots and various federations. The accused list differs
and certain entities were not part of FIR 3/2023. Hence, it is not hit
by T.T. Antony v. State of Kerala4 and constitutes a separate
cause of action.
22. The learned Additional Public Prosecutor points out that
A8, who earlier claimed to be merely an IT professional in his 2024
complaint, did not mention any real estate business. Bank accounts
of Premium Villa were opened only in December 2024 and January
2025 and heavy transactions followed immediately thereafter. It is
alleged that Rs.82 crores flowed into these accounts and transfers
were made to accused in FIR 3/2023. This requires thorough
investigation. The investigation is at a nascent stage and quashing
would be premature.
4 2001 (6) SCC 181
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23. The learned Additional Public Prosecutor submits that
TNPID offences affect a large class of depositors. Compromise with
one complainant cannot nullify the investigation where public
interest is involved. Other depositors are yet come forward.
Submissions of impleading petitioners:
24. Victim associations argue that after FIR 3/2023, new
federations were formed and old depositors were induced to reinvest.
They claim Zoom meetings were conducted and fresh funds were
collected in 2025. Voucher dated March 2025 is produced to show
fresh transaction.
25. It is argued that 15,000–20,000 depositors are represented
by there associations and 60,411 complaints are on record.
Settlement is under judicial monitoring. They submit that arrest
would stall the settlement, but quashing would weaken prosecution
is leverage. It is argued that Rs.82 crores transaction cannot be
ignored and investigation must proceed to uncover the money trail.
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26. Points for consideration:
(i) Whether the compromise between Accused No.8 and the
defacto complainant warrants quash of Crime No.1 of 2025 in
Crl.O.P.(MD) No.19923 of 2025?
(ii) Whether Crime No.1 of 2025, insofar as Accused No.6 and
Accused No.7 are concerned, is hit by the doctrine against a second
F.I.R. / multiple investigations for substantially the same
transaction, in the light of T.T. Antony v. State of Kerala5 and
allied precedents?
(iii) What directions, if any, are required to ensure expedition
and clarity in investigation, particularly regarding identification of
further victims, if any, when the agency asserts that wide
publication/publicity has been given calling for complaints?
Analysis:
27. This Court is not unmindful of the compromise
memo/affidavit filed between Accused No.8 and the defacto
complainant, and the assertion that monies have been deposited
before the learned Special Court. However, the offences invoked are
not confined to a private wrong alone. The F.I.R. invokes TNPID Act
5 2001 (6) SCC 181
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and BUDS Act, which are special enactments aimed at protecting the
public against unregulated deposit-like collections and financial
deception. The gravamen projected by the prosecution is not merely
the individual grievance of the defacto complainant but an alleged
modus impacting a wider class of investors.
28. The law is settled that though the Hon’ble High Court
possesses inherent power to quash proceedings on settlement in
appropriate cases, as recognised in Gian Singh v. State of Punjab6
and restated in Parbatbhai Aahir v. State of Gujarat7, and that
such power is not to be exercised mechanically where the alleged
offence bears a public element, involves economic wrongdoing, or
where the allegations indicate a broader pattern affecting persons
beyond the immediate complainant.
29. In cases of this nature, a private compromise, howsoever
genuine inter se cannot automatically extinguish the State’s
obligation to investigate allegations of an organised or repeated
6 2012 10 SCC 303
7 (2017) 9 SCC 641
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fraudulent conduct, if the materials disclose a prima facie case
warranting probe. Therefore, Crl.O.P.(MD) No.19923 of 2025, insofar
as it seeks quash principally on the basis of compromise between
Accused No.8 and the defacto complainant, cannot be accepted, and
the compromise is not a legally sufficient foundation to terminate the
investigation at the threshold. Accordingly, the prayer in Crl.O.P.
(MD) No.19923 of 2025 is liable to be dismissed.
30. The contention of Accused No.6 and Accused No.7 is that
they are already accused in Crime No.3 of 2023 (EOW, Madurai)
concerning Neomax-related collections and defaults, and that the
present F.I.R. is, in substance, a re-packaging of the same grievance
narrative to multiply criminal proceedings, and to indirectly
pressurise/circumvent bail orders and the Court-supervised
settlement framework.
31. The doctrine in T.T. Antony v. State of Kerala8 lays down
that there cannot be a second F.I.R. in respect of the same
cognizable offence or the same occurrence/transaction, and any
further information should ordinarily be treated as statements in the
8 2001 (6) SCC 181
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course of investigation in the first crime. The later decisions,
including Amitbhai Anilchandra Shah v. CBI9, reiterate that the
criminal process cannot be permitted to be fragmented into multiple
F.I.R.s to the prejudice of the accused, where the subsequent F.I.R.
is founded on the same transaction.
32. At the same time, the law equally recognises that where the
later F.I.R. pertains to a distinct occurrence with a different
transaction constituting a separate cause of action, the bar may not
apply.
33. In the present case, the crucial feature is that, the very
complaint narrative ropes in Accused No.6 and Accused No.7 not on
the basis of an independent money trail to them in the “Premium
Villa Plot” account, but largely by alleging that they
“assured/induced” the complainant not to pursue the earlier Neomax
grievance and to part with documents/money, thereby showing the
“Premium Villa Plot” episode as an offshoot/continuation of the
earlier Neomax dispute.
9 2013 (6) SCC 348
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34. On the Court’s scrutiny of the pleaded materials, as
projected in the petition and even as fairly reflected in submissions,
no specific documentary trail is pointed out at this stage establishing
that the amount of Rs.30,00,000/- paid in April 2025 into the
“Premium Villa Plot” account was received by Accused No.6 and
Accused No.7, or that any allotment/registration obligation under
“Premium Villa Plot” was undertaken by them by a document
attributable to them.
35. Therefore, to the limited extent the impugned F.I.R.
attempts to treat the later episode as a fresh crime against Accused
No.6 and Accused No.7, it substantially rests upon a continuation of
the earlier investor narrative and alleged inducement connected with
the earlier Neomax chain, which is already the subject matter of
Crime No.3 of 2023.
36. If the prosecution possesses materials showing complicity
of Accused No.6 and Accused No.7 in the later money trail, the
appropriate course, consistent with T.T. Antony v. State of
Kerala10, is to collect such material and proceed in accordance with
10 2001 (6) SCC 181
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law within the framework of the earlier investigation in a legally
permissible manner, rather than multiplying proceedings on
overlapping allegations which are, in substance, part of the same
transaction stream.
37. In such view of the matter, this Court is satisfied that
continuation of Crime No.1 of 2025 against Accused No.6 and
Accused No.7 would amount to abuse of process, to the extent it
presents itself as a fresh F.I.R. founded on the same transaction
continuum, and hence deserves interference under Section 528
BNSS.
38. Accordingly, Crl.O.P.(MD) No.20655 of 2025 is liable to be
allowed, and Crime No.1 of 2025 is quashed insofar as Accused No.6
and Accused No.7 alone are concerned. This quash is confined
strictly to Accused No.6 and Accused No.7. Investigation shall
continue against the other accused, including Accused No.8, in
accordance with law.
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39. The respondent police assert that wide
publication/publicity has been made calling upon investors, if any,
to come forward with complaints. Equally, it is brought to the notice
of this Court that despite such publication and publicity, no fresh
investors have come forward with new complaints so far. While this
Court cannot treat the absence of further complaints as a ground to
terminate investigation against remaining accused at the threshold,
the said factor is certainly relevant for the limited purpose of
ensuring that the investigation is conducted with focus, expedition,
and clarity and that the police place a definitive outcome before the
jurisdictional Court, instead of keeping the sword of investigation
hanging indefinitely.
40. Economic offences demand prompt collection of
documentary evidence, bank trail analysis, forensic extraction,
identification of victims (if any), and crystallisation of the prosecution
case. Therefore, this Court deems it appropriate to issue a time-
bound direction.
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41. In the light of the above, Crl.O.P.(MD) No.19923 of 2025
is disposed of. The compromise between Accused No.8 and the
defacto complainant, by itself, is not accepted as a ground to quash
Crime No.1 of 2025, having regard to the nature of offences invoked
and the public element asserted by the prosecution.
42. Crl.O.P.(MD) No.20655 of 2025 is allowed. The F.I.R. in
Crime No.1 of 2025 dated 05.11.2025 on the file of EOW, Madurai is
quashed insofar as Accused No.6 and Accused No.7 alone are
concerned.
43. The respondent police are directed to:
(i) conclude investigation expeditiously, specifically addressing
the aspect of identification of further victims, if any, including by
verifying the consequence of the stated wide publication/publicity
calling for complaints and
(ii) file a final report under Section 173 BNSS before the
competent jurisdictional Court within a period of THREE (3)
MONTHS from the date of receipt of a copy of this order.
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44. While filing the final report, the Investigating Officer shall
place on record a brief statement of steps taken to ascertain whether
any further victims exist, and the outcome of the call for complaints
through publication/publicity, noting that no fresh complaints have
come forward till date, if that remains the factual position.
45. It is made clear that if any further victims come forward
subsequently with materials disclosing cognizable offences, it is open
to the agency to proceed in accordance with law, including by
adopting such course as is legally permissible.
46. Observations herein are confined to the disposal of these
petitions and shall not prejudice investigation/trial on merits against
the remaining accused. Connected Miscellaneous Petitions are
closed.
27.02.2026
NCC : Yes / No
Index : Yes / No
Internet : Yes/ No
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To
1. The Inspector of Police,
Economic Offence Wing,
Madurai and another.
2. The Additional Public Prosecutor,
Madurai Bench of Madras High Court,
Madurai.
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Crl.O.P(MD)No.19923 of 2025
L.VICTORIA GOWRI, J.
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CRL OP(MD)No.19923 of 2025
27.02.2026
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