Mrs. Sumana Paruchuri vs Jakka Vinod Kumar Reddy

Both these petitions are filed by the petitioners under Section 482 of

the Code of Criminal Procedure to quash the proceedings in C.C. No. 31 of

2021 on the file of VIII Additional Metropolitan Sessions Judge-cum-

Special Judge for Economic Offences, City Criminal Courts at Nampally,

Hyderabad. The petitioners are accused No. 1 and 2 in C.C. No. 31 of

2021 and they are none other than father and daughter respectively by

relation. Since the subject matter in both the petitions is one and the same,

I am inclined to dispose of both the petitions by this Common Order.

2. The case of the petitioners in brief was that, the petitioner in

Criminal Petition No.8025 of 2021 was the estranged wife of respondent

No.1 and daughter of respondent No.2. The respondent No.1, through his

General Power of Attorney Holder, lodged a private complaint against her

and the respondent No.2 before the VIII Additional Metropolitan Sessions

Judge-cum-Special Judge for Economic Offences, City Criminal Courts at

Nampally, Hyderabad, for the offences under Sections 447, 448 and 451 of Dr.GRR,J 2 Crl. P No.8025 & 8024 of 2021

the Companies Act 2013, and Sections 628 and 629A of the Companies

Act 1956 and Sections 405, 415, 420, 425, 464, 468, 471 and 120(B) of the

Indian Penal Code.

2.1 As per the complaint, the complainant i.e. respondent No.1 and his

brother late Mr. Jakka Venkatram Reddy incorporated a Company under

the name and style of M/s Peregrine Agro Private Ltd., on 17.01.1997

under the provisions of the Companies Act. At the time of incorporation,

the Company had an authorized share capital of Rs.10,00,000/- divided

into 1,00,000 shares of Rs.10/- each. The complainant and his brother late

Mr. Jakka Venkatram Reddy were promoters/directors and each of them

held 99% equity shares of the Company. On 13.03.1997, a huge tract of

land was purchased in the name of the Company at Bonthavaripalli

revenue village through three registered sale deeds. The complainant and

his brother contributed an amount of Rs.6,30,000/- from their family

savings towards purchase of the said land, which was reflected in the

books of account as Share Capital Money of the Company for the financial

year 1996-97. The complainant's brother late Mr. Jakka Venkatram Reddy

was looking after the affairs of the Company. The name of the Company

thereafter was changed to Peregrine Aids Remedies Private Ltd., Accused

No.1 was having a marital discord with her husband Mr. Srinivas Dr.GRR,J 3 Crl. P No.8025 & 8024 of 2021

Paruchuri right from the time they were living together in USA, which

culminated in several legal proceedings between them in India, and

eventually on 14.08.2007, she got divorce from Mr. Srinivas Parchuri.

2.2 In June 2002, accused No.1 came back from USA and stayed as a

tenant in a portion of the building constructed in plot No.974, road No.49,

Jubilee Hills, Hyderabad, which was owned by the family of the

complainant. The complainant was divorced and living in the same

building with his mother and minor daughter from his first marriage.

Around 2010, the complainant's brother Mr. Jakka Venkatram Reddy was

diagnosed with colon cancer and started undergoing treatment. Since the

brother of the complainant was critically ill, and the complainant was busy,

the affairs of the Company were getting neglected. Accused No.1 induced

the complainant to induct her as a Director in the Company and promised

to look after the Company. Believing her representation, the complainant

agreed to induct her as an additional director in the Company. For the said

purpose, accused No.1 asked the complainant to sign on various

documents including blank sheets of papers on the ground that several

documents might need his signature and she did not want complainant to

be disturbed frequently. Believing her representation, the complainant and

his brother signed on all the documents presented before them by accused Dr.GRR,J 4 Crl. P No.8025 & 8024 of 2021

No.1 in good faith. On false representation accused No.1 also obtained

digital signature of the complainant.

2.3 Since the brother of the complainant was totally bed ridden due to

cancer, he resigned as a Director of the Company on 22.10.2010. In the

meanwhile, the complainant and accused No.1 got married on 25.06.2011.

Accused No.1 was appointed as Director of the Company on 30.09.2011.

The complainant's brother expired on 13.11.2013 due to cancer. The

marriage between the complainant and accused No.1 never worked out and

totally broke down irreparably. Since 2014, the complainant and accused

No.1 were living separately. The complainant on observing that original

title deeds of his properties at Bangalore were missing, filed a police

complaint before the Police Station Jubilee Hills, Hyderabad, on

03.01.2015 and got a public notice published in the Newspapers dated

05.01.2015. The accused No.1, the brother of accused No.1 Mr. Nekkanti

Madhukar and three others made an illegal attempt to trespass into the

property of the complainant at Bangalore on 01.04.2015. As such, the

complainant filed a complaint vide Crime No.121 of 2015 for criminal

trespass on 01.04.2015. The complainant filed a civil suit for injunction

vide O.S. No.499 of 2015 before the III Additional Civil Judge, Bangalore

Rural, against accused No.1, her brother and three others. Accused No.1 in Dr.GRR,J 5 Crl. P No.8025 & 8024 of 2021

her written statement claimed that the original documents of title

pertaining to the complainant's property were in her custody. The

complainant came to know that accused No.1 had intentionally stolen the

important documents from the custody of the complainant. For the

purpose of building up sports career of his daughter Miss J. Vaishnavi

Reddy (from his previous marriage) in Badminton, who was World No.2 in

Junior Badminton representing India, on 17.02.2016 the complainant

shifted to Thailand with his daughter and mother. He came to India to

depose his evidence as PW.4 in O.S. No.499 of 2015 on 17.10.2019. The

matter was adjourned to 18.11.2019 for his cross-examination. In

anticipation that the complainant would come back for cross-examination,

accused No.1 on 14.11.2019, filed a false criminal complaint against the

complainant, his mother and his sister-in-law before the Police Station,

Jubilee Hills, Hyderabad. The police registered the same as Crime No.742

of 2019 under Sections 406, 420 and 120-B IPC.

2.4 The relationship between the complainant and accused No.1 got

worsened. The complainant was out of India most of the time. To his

shock, he learned that accused No.1 illegally made major changes in the

management and shareholding of the Company. On enquiry with the

Registrar of the Companies, the complainant came to know that accused Dr.GRR,J 6 Crl. P No.8025 & 8024 of 2021

No.1 in active conspiracy and in collusion with her father i.e. accused No.2

(petitioner in Criminal petition No.8024 of 2021) had forged, fabricated

and manipulated documents, Forms, Annual Reports and various other

financial documents of the Company. Accused Nos. 1 and 2 forged and

fabricated the Board Resolutions and various other statutory documents

and Forms and uploaded the same on the website of the ROC. The website

was showing that accused No.1 was issued 63,000 shares of the Company

way back in the year 2000, when she was not even in India, to render the

complainant a minority shareholder and to illegally usurp the management

of the Company. Accused No.1 illegally appointed her father as an

Additional Director on 09.10.2014 and thereafter as a Director of the

Company on 30.09.2015.

2.5 The complainant initiated divorce proceedings vide O.P. No.202 of

2020 against accused No.1 before the Family Court, Hyderabad. The

complainant had not attended Annual General Body Meetings and alleged

Board Meetings held on 22.06.2016, 06.09.2016, 22.11.2016, 15.01.2017,

24.03.2017, 25.06.2017, 05.09.2017, 12.12.2017 and 03.03.2018. He was

not in India on all the said dates. However, in the Annual Returns, it was

shown that he had attended the aforesaid Board Meetings, which were ex

facie false. The said documents and returns were only signed by accused Dr.GRR,J 7 Crl. P No.8025 & 8024 of 2021

No.1. The complainant was not even sent a notice with regard to the said

meetings. Accused Nos. 1 and 2 falsified records and played fraud not

only with the complainant but also with the Registrar of the Companies.

They were involved in various irregularities and violated statutory

provisions and committed the offences of cheating, forgery, criminal

breach of trust, criminal misappropriation, fraud using forged documents

as genuine etc. The entire exercise was undertaken by accused Nos. 1 and

2 to usurp the property.

2.6 The petitioner in Criminal Petition No.8025 of 2021 filed a

complaint which was registered as Crime No.488 of 2020 in Police Station,

Jubilee Hills, against the respondent No.1 for the offences under Sections

498-A and 506 IPC, SectionSs4 and 6 of Dowry Prohibition Act 1961, and

Section 30 of Arms Act alleging that the respondent No.1 had threatened

her with a gun. She further contended that the complaint against her would

amount to an abuse of the process of the Court, which was evident from

the multiple proceedings initiated by respondent No.1 before multiple

forums for the same cause of action. She contended that the respondent

No.1 filed O.S. No. 499 of 2015 before the III Additional Civil Judge,

Bangalore Rural and he got registered Crime No.131 of 2015 dated

01.04.2015 making allegations of trespass into the property. He filed Dr.GRR,J 8 Crl. P No.8025 & 8024 of 2021

Company Petition No.431/HDB/2020 before the National Company Law

Tribunal, Hyderabad, under Sections 59, 241, 242 and 245 of Companies

Act 2013, seeking declaration that allotment of 63,000 equity shares in

favour of the petitioner as void, illegal and arbitrary; and to direct the

Registrar of Companies to prosecute the petitioner and respondent No.2 for

"fraud and cheating."

3. The learned counsel for the petitioners contended that the

Company (PARPL) was not arrayed as an accused though the allegations

were made against the Company that the Company had forged, fabricated

and manipulated the documents, forms, Annual Reports of PARPL and

uploaded in the ROC website and was alleged that 63,000 shares of

PARPL were issued illegally to render the respondent No.1 a minority

shareholder and to usurp the management of PARPL.

3.1 He further contended that as respondent No.1 failed to array

PARPL as a party to the proceedings, as such, the Economic Offences

Court could not pass any orders in relation to allegations of forgery and

fabricated documents being uploaded to the ROC website.

3.2 He further contended that Economic Offences Court was barred

from taking cognizance of complaint under Section 447 of the Companies Dr.GRR,J 9 Crl. P No.8025 & 8024 of 2021

Act 2013, in view of section 212(6) of the Companies Act, as the

complaint was to be made in writing by the Director, Serious Fraud

Investigation Office or any officer of the Central Government authorized

by a general or special order in writing in that behalf by that Government,

as per the above provision.

3.3 He further contended that respondent No.1 was merely a private

party, and no complaint was made by the Serious Fraud Investigation

Office or any officer of the Central Government. He further contended

that the dispute in the present complaint was being dealt with by the

National Company Law Tribunal in Company Petition No.431/HDB/2020,

and the Economic Offences Court by taking cognizance and initiating

parallel investigation on the same issue, gave rise to concurrent

proceedings in different forums.

3.4 He further contended that the allegations made out in the

complaint even if taken on their face value, would not prima facie

constitute any offence or make out a case against the petitioners and

prayed to quash the proceedings in C.C.No. 31 of 2021 on the file of VIII

Additional Metropolitan Sessions Judge-cum-Special Judge for Economic

Offences, City Criminal Courts at Nampally, Hyderabad.

Dr.GRR,J 10 Crl. P No.8025 & 8024 of 2021

4. The respondent No.1 filed counter affidavit contending that the

petitioner had concealed the fact that the cognizance of the complaint was

taken as per the orders of this Court in Criminal Petition No.222 of 2021

though it was well within his knowledge as the copy of the order was

served on the advocate on record on 22.10.2021, which was on record.

The doctrine of comity or amity of Courts would demand that Courts

would take a consistent and uniform approach towards administration of

justice by taking adequate care to ensure elimination of conflicting orders.

He contended that as per Section 439(2) of the Companies Act 2013, the

complaint could be made by the Registrar, a shareholder (or a member) of

the Company, or of a person authorized by the Central Government. The

complaint was made by the respondent No.1 in the capacity of a

shareholder as per the Companies (Amendment) Act 2017, which came

into force vide Gazette Notification dated 03.01.2018. The petitioner in

Criminal Petition No.8025 of 2021 was taking contradictory stands before

different Courts/Forums for her self-serving purposes. On one occasion, in

the police complaint lodged by the petitioner against the respondent No.1,

and his mother, the petitioner levelled grave allegations and claimed that

their relationship was very bad and that she was beaten up, threatened, ill-

treated, and all the said atrocities were committed upon her for dowry, Dr.GRR,J 11 Crl. P No.8025 & 8024 of 2021

which her father was forced to arrange. However, on the other hand,

before the National Company Law Tribunal she claimed that their mutual

relationship was so good and the respondent No.1 was so benevolent to

make her father a Director of the Company. The stands taken by the

petitioner were diagonally opposite to each other. On oath before a Court

of Law, the petitioner deposed that she came to India in June 2002 and met

respondent No.1 for the first time in August 2002, which would

completely falsify her claim of having purchased 63,000 equity shares in

the Company on 01.03.2000 by paying cash of Rs.6,30,000/-, which would

show that her entire claim was bogus and fraudulent.

4.1 The respondent No.1 further contended that he was not acquainted

with the petitioner or any of her family members before August 2002. The

petitioner had not filed any document or any communication (e-mail or

phone) or any receipt of cash payment for having purchased a Company by

paying cash in the year 2000. She was estopped by principle of election

from blowing hot and cold before different Courts. The petitioner and

respondent No.2 (petitioner in Criminal Petition No. 8024 of 2021)

colluded together to cause undue gain to themselves at the cost of

respondent No.1 and the Company and resorted to criminal acts of forgery,

fabrication, cheating, fraud etc. They mismanaged the affairs of the Dr.GRR,J 12 Crl. P No.8025 & 8024 of 2021

Company and uploaded Board Resolutions on the website of Ministry of

Corporate Affairs. She issued 63,000 shares of the Company to herself to

render the respondent No.1 a minority shareholder and to illegally usurp

the management and properties of the Company. She illegally appointed

her father as an Additional Director on 09.10.2014 and thereafter as a

Director on 30.09.2015. The entire conspiracy was engineered with the

sole purpose of ousting the respondent No.1 from any involvement in the

affairs of the Company.

4.2 The respondent No.1 further contended that the petitioner illegally

and dishonestly misused the blank signed papers obtained by her from him

and his late brother to show that she had bought 63,000 shares of the

Company in the year 2000 in an alleged Board Meeting on 01.03.2000.

The petitioner got created an agreement of sale dated 14.08.2004 as

executed between M/s. Peregrine Aids Remedies Private Ltd., and M/s.

Tanushree Enterprises Private Ltd., (the petitioner and her former husband

Mr. Srinivas Paruchuri were Directors of the said Company) pertaining to

purchase of property admeasuring Ac.186.46 cents of dry land owned by

M/s Peregrine Agro Private Ltd., for a sum of Rs.3,74,00,000/-. Indeed if

the petitioner had become 99% shareholder in M/s Peregrine Agro Private

Ltd., on 01.03.2000, there was no reason or occasion to purchase the same Dr.GRR,J 13 Crl. P No.8025 & 8024 of 2021

land in which she was Director, which would expose falsity of her claim.

The said transaction was subject of Crime No.143 of 2006 dated

06.10.2006 at Police Station, Central Crime Station, Hyderabad, lodged by

Mr. Srinivas Paruchuri (former husband of the petitioner) for the offences

under Sections 409, 420, 506, 120-B IPC. The police after investigation

filed a final report before the XII Additional Chief Metropolitan

Magistrate, Hyderabad, on 29.09.2006 as civil in nature. The final report

was accepted by the Court and closed the case.

4.3 The respondent No.1 further contended that he filed a complaint

against the petitioner with the Registrar of Companies, upon which, a

notice was issued to the petitioner and in her reply to the said complaint,

the petitioner admitted that she had no knowledge of E-filing various forms

pertaining to the statutory compliances of the Company and her Secretary

and staff had filed the returns and committed error. Thus, the petitioner

attributed all the shortcomings, falsifications etc., upon her Auditors, while

the Chartered Accountant claimed otherwise. He finally prayed to dismiss

the petition.

Dr.GRR,J 14 Crl. P No.8025 & 8024 of 2021

5. Heard learned Counsel for the petitioner Sri T. Jayant Jaisurya,

and Sri Diljit Singh Ahluwalia representing Smt. Avula Krishnaveni,

Counsel on record for respondent No.1.

6. The petitioner was alleged to have committed the offences under

Sections 447, 448 and 451 of the Companies Act, 2013, Sections 628 and

629-A of the Companies Act, 1956 and Sections 405, 415, 420, 425, 464,

468, 471 and 120-B IPC. The Economic Offences Court had not taken

cognizance of the offences under Sections 628 and 629A of the Companies

Act, 1956. Hence, the said offences are not a matter of consideration in

these petitions.

7. Section 447 of the Companies Act, 2013 deals with punishment

for fraud. It reads as follows:

"447. Punishment for fraud:--

Without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in force, any person who is found to be guilty of fraud involving an amount of at least ten lakh rupees or one per cent. of the turnover of the company, whichever is lower, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud:

Dr.GRR,J 15 Crl. P No.8025 & 8024 of 2021

Provided that where the fraud in question involves public interest, the term of imprisonment shall not be less than three years.

Provided further that where the fraud involves an amount less than ten lakh rupees or one per cent. of the turnover of the company, whichever is lower, and does not involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to five years or with fine which may extend to fifty lakh rupees or with both."

Section 448 of the Companies Act, 2013 is punishment for false

statement. It reads as follows:

"448. Punishment for false statement:-

Save as otherwise provided in this Act, if in any return, report, certificate, financial statement , prospectus , statement or other document required by, or for, the purposes of any of the provisions of this Act or the rules made thereunder, any person makes a statement,--

(a) which is false in any material particulars, knowing it to be false; or

(b) which omits any material fact, knowing it to be material,

he shall be liable under section 447."

Likewise Section 451 of the Companies Act, 2013 deals with

punishment in case of repeated default. It reads as follows:

"Section 451. Punishment in case of repeated default:

If a company or an officer of a company commits an offence punishable either with fine or with imprisonment and where the same offence is committed for the second or subsequent occasions within a period of three years, then, that company and every officer thereof who is in default shall be punishable with twice the amount of fine Dr.GRR,J 16 Crl. P No.8025 & 8024 of 2021

for such offence in addition to any imprisonment provided for that offence."

8. A reading of the provisions of the Companies Act, 2013 would

show that Chapter XXIX prescribes punishment for offences such as fraud,

false statement, false evidence and withholding of property under Sections

447, 448, 449 and 452. The punishment for fraud involving an amount of

atleast Rs.10,00,000/- or 1% of the turnover of the company, is

imprisonment for a term which may extend to 10 years. The offence of

fraud in relation to the affairs of a company is considered to be a grave

offence.

9. Chapter XIV of the Companies Act, 2013 deals with inspection,

enquiry and investigation. Under Section 210 of the Companies Act, 2013

investigation into the affairs of the company can be undertaken. Section

211 contemplates establishment of Serious Fraud Investigation Office

(SFIO), which is to be headed by a Director and consists of experts with

ability, integrity and experience in fields like Banking, corporate affairs,

taxation, forensic audit, capital market, information technology, law or

such other fields. Section 212 of the Companies Act, 2013 empowers the

Central Government to assign the investigation into the affairs of a

company to SFIO. Upon such assignment, the Director of SFIO may Dr.GRR,J 17 Crl. P No.8025 & 8024 of 2021

designate such number of Inspectors under Sub-section (1) and shall cause

the affairs of the company be investigated by an Investigating Officer

under sub-Section (4). On completion of investigation, the SFIO is to

submit the investigation report to the Central Government. The report

under Sub-Section (12) may lead to further follow up actions. On receipt

of the said Investigation Report, the Central Government may direct SFIO

to initiate prosecution against the company.

10. The contention of the learned counsel for the petitioner was that

there was a bar of taking cognizance of the offence under Section 212 (6)

of the Companies Act, 2013 in the absence of complaint from the Central

Government. Under Section 212 (6) of the Companies Act, 2013, the

Economic Offences Court could take cognizance of the offences under

Section 447 of the Companies Act, 2013 only by a complaint filed in

writing by the Director, SFIO or to any of the Officer of the Central

Government authorized in writing in that behalf by that Government. The

Economic Offences Court took cognizance of the complaint even though it

was not made by the categories of persons prescribed under Section 212

(6) of the Companies Act, 2013 hence, the same was not maintainable.

Dr.GRR,J 18 Crl. P No.8025 & 8024 of 2021

11. The contention of the learned counsel for the respondent No.1 was

that Section 212 of the Companies Act, 2013 was applicable only to the

investigation into the affairs of the company by SFIO and the assignment

of the same by the Central Government. Under Section 439 of the

Companies Act, 2013, the Court could take cognizance of any offence

including Section 447 so long as the SFIO had not been assigned the

investigation by the Central Government under Section 212 of the

Companies Act, 2013.

12. In view of the rival contentions of the learned counsel for both the

parties, it is considered necessary to extract the provisions under Section

212 and 439 of the Companies Act, 2013.

13. Section 212 of the Companies Act, 2013 reads as under:

"Section 212: Investigation into affairs of Company by Serious Fraud Investigation Office:- (1) Without prejudice to the provisions of section 210, where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company by the Serious Fraud Investigation Office--

(a) on receipt of a report of the Registrar or inspector under section 208;

(b) on intimation of a special resolution passed by a company that its affairs are required to be investigated;

(c) in the public interest; or Dr.GRR,J 19 Crl. P No.8025 & 8024 of 2021

(d) on request from any Department of the Central Government or a State Government, the Central Government may, by order, assign the investigation into the affairs of the said company to the Serious Fraud Investigation Office and its Director, may designate such number of inspectors, as he may consider necessary for the purpose of such investigation.

(2) Where any case has been assigned by the Central Government to the Serious Fraud Investigation Office for investigation under this Act, no other investigating agency of Central Government or any State Government shall proceed with investigation in such case in respect of any offence under this Act and in case any such investigation has already been initiated, it shall not be proceeded further with and the concerned agency shall transfer the relevant documents and records in respect of such offences under this Act to Serious Fraud Investigation Office.

(3) Where the investigation into the affairs of a company has been assigned by the Central Government to Serious Fraud Investigation Office, it shall conduct the investigation in the manner and follow the procedure provided in this Chapter; and submit its report to the Central Government within such period as may be specified in the order.

(4) The Director, Serious Fraud Investigation Office shall cause the affairs of the company to be investigated by an Investigating Officer who shall have the power of the inspector under section 217.

(5) The company and its officers and employees, who are or have been in employment of the company shall be responsible to provide all information, explanation, documents and assistance to the Investigating Officer as he may require for conduct of the investigation.

(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, offence covered under section 447 of this Act shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless--

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and Dr.GRR,J 20 Crl. P No.8025 & 8024 of 2021

(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail:

Provided that a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs:

Provided further that the Special Court shall not take cognizance of any offence referred to this sub-section except upon a complaint in writing made by--

(i) the Director, Serious Fraud Investigation Office; or

(ii) any officer of the Central Government authorised, by a general or special order in writing in this behalf by that Government.

(7) The limitation on granting of bail specified in sub-

section (6) is in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail.

(8) If any officer not below the rank of Assistant Director of Serious Fraud Investigation Office authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of any offence punishable under sections referred to in sub- section (6), he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(9) The officer authorised under sub-section (8) shall, immediately after arrest of such person under such sub- section], forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Serious Fraud Investigation Office in a sealed envelope, in such manner as may be prescribed and the Serious Fraud Investigation Office shall keep such order and material for such period as may be prescribed.

(10) Every person arrested under sub-section (8) shall within twenty-four hours, be taken to a Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction:

Dr.GRR,J 21 Crl. P No.8025 & 8024 of 2021

Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Special Court or Magistrate's court.

(11) The Central Government if so directs, the Serious Fraud Investigation Office shall submit an interim report to the Central Government.

(12) On completion of the investigation, the Serious Fraud Investigation Office shall submit the investigation report to the Central Government.

(13) Notwithstanding anything contained in this Act or in any other law for the time being in force, a copy of the investigation report may be obtained by any person concerned by making an application in this regard to the court.

(14) On receipt of the investigation report, the Central Government may, after examination of the report (and after taking such legal advice, as it may think fit), direct the Serious Fraud Investigation Office to initiate prosecution against the company and its officers or employees, who are or have been in employment of the company or any other person directly or indirectly connected with the affairs of the company.

(14A) Where the report under sub-section (11) or sub-

section (12) states that fraud has taken place in a company and due to such fraud any director, key managerial personnel, other officer of the company or any other person or entity, has taken undue advantage or benefit, whether in the form of any asset, property or cash or in any other manner, the Central Government may file an application before the Tribunal for appropriate orders with regard to disgorgement of such asset, property or cash and also for holding such director, key managerial personnel, other officer or any other person liable personally without any limitation of liability.

(15) Notwithstanding anything contained in this Act or in any other law for the time being in force, the investigation report filed with the Special Court for framing of charges shall be deemed to be a report filed by a police officer under section 173 of the Code of Criminal Procedure, 1973.

Dr.GRR,J 22 Crl. P No.8025 & 8024 of 2021

(16) Notwithstanding anything contained in this Act, any investigation or other action taken or initiated by Serious Fraud Investigation Office under the provisions of the Companies Act, 1956 shall continue to be proceeded with under that Act as if this Act had not been passed.

(17) (a) In case Serious Fraud Investigation Office has been investigating any offence under this Act, any other investigating agency, State Government, police authority, income-tax authorities having any information or documents in respect of such offence shall provide all such information or documents available with it to the Serious Fraud Investigation Office;

(b) The Serious Fraud Investigation Office shall share any information or documents available with it, with any investigating agency, State Government, police authority or income tax authorities, which may be relevant or useful for such investigating agency, State Government, police authority or income-tax authorities in respect of any offence or matter being investigated or examined by it under any other law."

14. Section 439 of the Companies Act, 2013 reads as under:

"Section 439. Offences to be non-cognizable:-

(1) Notwithstanding anything in the Code of Criminal Procedure, 1973, every offence under this Act except the offences referred to in sub-section (6) of section 212 shall be deemed to be non-cognizable within the meaning of the said Code.

(2) No court shall take cognizance of any offence under this Act which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, a shareholder, or a member of the company, or of a person authorised by the Central Government in that behalf:

Provided that the court may take cognizance of offences relating to issue and transfer of securities and non- payment of dividend, on a complaint in writing, by a person authorised by the Securities and Exchange Board of India:

Dr.GRR,J 23 Crl. P No.8025 & 8024 of 2021

Provided further that nothing in this sub-section shall apply to a prosecution by a company of any of its officers.

(3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, where the complainant under sub-section (2) is the Registrar or a person authorised by the Central Government, the presence of such officer before the Court trying the offences shall not be necessary unless the court requires his personal attendance at the trial.

(4) The provisions of sub-section (2) shall not apply to any action taken by the liquidator of a company in respect of any offence alleged to have been committed in respect of any of the matters in Chapter XX or in any other provision of this Act relating to winding up of companies.

Explanation.--The liquidator of a company shall not be deemed to be an officer of the company within the meaning of sub-section (2)."

15. Under Chapter XXVIII of the Companies Act, 2013 establishment

of Special Courts and the offences triable by Special Courts are prescribed

under Sections 435 and 436 of the Companies Act, 2013. The act gives a

comprehensive procedure as to who has to conduct the investigation and

how the investigation has to be conducted and deal with the procedure,

powers as well as form. A specialized Investigating Agency is established

which is empowered to investigate the offences. The offences under

Companies Act, 2013 are deemed to be cognizable, except the offences

covered under Section 447 (punishment for fraud). The complainants

under the Companies Act are restricted to include only Registrar of Dr.GRR,J 24 Crl. P No.8025 & 8024 of 2021

Companies, a shareholder/member of the company or any person

authorized by the Central Government or any person authorized by the

Securities and Exchange Board of India. The Special Court shall take

cognizance only on the complaint of persons/authorities mentioned under

Section 439 of the Companies Act, 2013.

16. As seen from Section 212 (6) of the Companies Act, 2013, it

provides a safeguard against frivolous complaints and ensures that a

prosecution for fraud can only be launched after due investigation.

Learned counsel for the respondent No.1 contended that the respondent

No.1 was entitled to file complaint as a shareholder of the company under

Section 439 (2) of the Companies Act, 2013. But, an exception is carved

out under Section 439 (1) itself that every offence under the Act except the

offences referred to in sub-section (6) of Section 212 of the Act shall be

deemed to be non-cognizable. As such, Section 439 of the Companies Act,

2013 is not applicable to offences covered under Section 447 of the said

Act. The contention of the learned counsel for the respondent No.1 was

that under Section 439 of the Companies Act, 2013, the Court can take

cognizance of any offence including Section 447 of the Act so long as the

SFIO had not been assigned investigation by the Central Government

under Section 212 of the Act. But the heading of Section 439 of the Act Dr.GRR,J 25 Crl. P No.8025 & 8024 of 2021

itself would read as "offences to be non-cognizable". Hence, cognizance of

the offence under Section 447 of the Act could not have been taken by the

trial Court on a private complaint, as it is a cognizable offence.

17. Under Section 206 of the Companies Act, 2013, the Registrar of

Companies based on the information received by him, seek for

explanation, call for production of document and conduct enquiry. If the

Registrar is satisfied on the basis of information available with him, or

furnished to him or on a representation made to him by any person that the

business of a company is being carried out not in compliance with the

provisions of the Act, he can proceed with enquiry. If the enquiry

conducted by the Registrar discloses material for further investigation, he,

under Section 210 of the Companies Act, 2013 can report to the Central

Government to conduct investigation into the affairs of the company. If

the Central Government considers the allegations as true and considering

the gravity of the offence that the matter was fit to be investigated by the

SFIO, directs the matter to be investigated by the SFIO under Section 212

of the Companies Act, 2013. The Investigating Officers who were having

better investigation skills in forensic auditing, corporate affairs and capital

market would conduct investigation. If the complainant is aggrieved, he

should have resorted to the procedure as contemplated under the Act. The Dr.GRR,J 26 Crl. P No.8025 & 8024 of 2021

Registrar of Companies is a competent person to call for the records,

conduct an enquiry and to arrive at an opinion. If there is any material, he

would submit a report to the Government for investigation by SFIO. If

SFIO is able to collect material sufficient to prosecute then it would file

charge sheet after taking necessary sanctions from the Central

Government. If the contention of the complainant that any shareholder can

file a complaint for fraud is accepted, it would open flood gates for any

person commencing criminal proceedings merely by filing a complaint.

There were several companies with millions of shareholders. The

condition prescribed under Section 212(6) of the Act is a safeguard against

frivolous criminal complaints. As such, I do not find any merit in the

contention of the learned counsel for the respondent No.1 that a private

complaint for fraud is maintainable before the Special Court.

17. The learned counsel for the petitioner contended that in similar

circumstances, where cognizance would require a prior procedure in the

form of a complaint in writing from the Government or the Court, the

Hon'ble Apex Court held that:

"Such a procedure was mandatory and if the Court takes cognizance without following the procedure, it would be without jurisdiction."

Dr.GRR,J 27 Crl. P No.8025 & 8024 of 2021

18. He further contended that a similar procedure was prescribed

under Section 195 Cr.P.C., which would require that certain offences under

IPC could only be taken cognizance of "on the complaint in writing by the

public servant concerned or of some other public servant to whom he is

administratively subordinate." The Hon'ble Apex Court in Bheema Razu

Prasad v. State, represented by DSP, CBI/SPE/ACU-II1 held that:

"It is well settled that Section 195(1)(b) creates a bar against taking cognizance of offences against the administration of justice for the purpose of guarding against baseless or vindictive prosecutions by private parties. The provisions of this Section imply that the Court is the only appropriate authority which is entitled to raise grievance in relation to perjury, forgery of documents produced before the Court, and other offences which interfere with the effective dispensation of justice by the Court. Hence, it for the Court to exercise its discretion and consider the suitability of making a complaint for such offences."

19. He also relied upon the judgment of the Hon'ble Apex Court in

Gopala Krishna Menon v. D. Raja Reddy and another2 on the same

aspect that in the absence of a complaint in writing by the Civil Court,

where the forged receipt had been produced, taking cognizance of the

offence would be bad in law and the prosecution not maintainable on the

basis of a private complaint.

1 2021 SCC OnLine 210 2 (1983) 4 SCC 240 Dr.GRR,J 28 Crl. P No.8025 & 8024 of 2021

20. Learned counsel for the respondent No.1 relied upon the judgment

of this Court in Crl.P. Nos.24634 and 24655 of 2017 dated 03.04.2019 and

contended that the Court did not find fault with the Special Court taking

cognizance of the offence under Section 447 on a private complaint. But a

perusal of the said judgment would disclose that the Court had not

considered the provisions under Section 212 (6) of the Companies Act,

2013 while considering the cognizance orders for the offences punishable

under Sections 447 and 448 of the Companies Act, 2013. Section 212(6)

of the Companies Act, 2013 does not appear to have been brought to the

notice of the Court.

21. Since the punishment for the offence under Section 448 of the

Companies Act, 2013 was also under Section 447 of the Act, it was

covered by the bar of taking cognizance under Section 212(6) of the Act.

22. Section 451 of the Companies Act, 2013 would reveal that it

would apply for repeated defaults and subsequent convictions. Since the

petitioner had not been convicted earlier, subsequent conviction under

Section 451 of the Companies Act, 2013 would not apply.

23. Thus, the petitioner could not be prosecuted for the offences

under Sections 447, 448 and 451 of the Companies Act, 2013 due to bar of Dr.GRR,J 29 Crl. P No.8025 & 8024 of 2021

cognizance under Section 212(6) of the Companies Act, when a complaint

was not given in writing by the Director, SFIO or any Officer of the

Central Government authorized in that behalf by the said Government.

24. The learned counsel for the petitioner contended that the

Economic Offences Court would not have jurisdiction to take cognizance

of the complaint if the offences under the Companies Act were not made

out and relied upon Section 436(2) of the Companies Act. Section 436(2)

of the Companies Act, 2013 reads as follows:

"436: Offences triable by Special Courts:--

(1) xxxx

(2) When trying an offence under this Act, a Special Court may also try an offence other than an offence under this Act with which the accused may, under the Code of Criminal Procedure, 1973 be charged at the same trial."

25. Section 436 (2) of the Act begins with the phrase "when trying an

offence under this Act". It would show that if no offence under the Act

was made out, the Economic Offences Court would not have the

jurisdiction to try the case with regard to other offences.

26. He further contended that the company PARPL not being arrayed

as an accused, was a sufficient ground for quashing the petition. He

contended that in the complaint, the complainant's main allegation was Dr.GRR,J 30 Crl. P No.8025 & 8024 of 2021

that PARPL made defective filings with the Registrar of Companies,

however, the complainant did not array the company PARPL as an accused

alongside the petitioners. Since the filings were made by the PARPL, the

failure of the complainant to make the company as a party was fatal to the

complaint. The prosecution for fraud under Section 447 of the Companies

Act, 2013 must relate to the Companies in the first instance and relied

upon the judgments of the High Court of Delhi in Vikas Agarwal v.

Senior Fraud Investigation Office3, of the Hon'ble Apex Court in Sharat

Kumar Sanghi v. Sangita Rane4 and of the High Court of A.P. in

N. Gopinath v. The State of Andhra Pradesh and others5. The High

Court of Delhi in Vikas Agarwal's case (3 supra) held that:

"...the definition of fraud provided in the explanation to Section 447 of the Companies Act, 2013 makes it clear that the prosecution is to relate to the companies in the first instance and also to other persons who have in any manner connived in commission of the offence to gain undue advantage."

27. In Sharat Kumar Sanghi's case (4 supra), the Hon'ble Apex

Court held that:

"11. In the case at hand as the complainant's initial statement would reflect, the allegations are against the company, but the company has not been made arrayed as a party. Therefore, the allegations have to be restricted to the Managing Director. As we have noted earlier, allegations are vague and in fact, principally the 3 Crl.M.C. 647/2017 decided on 06.02.2019 4 2015 (12) SCC 781 5 Crl.P. No.315 of 2021 decided on 22.03.2022 Dr.GRR,J 31 Crl. P No.8025 & 8024 of 2021

allegations are against the company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no proceeding can be initiated against it even where vicarious liability is fastened on certain statutes."

28. In N. Gopinath's case (5 supra), the High Court of A.P. by

extracting the ratio of the judgment in Sharat Kumar Sanghi's case held

that:

"As per the ratio decided by the Hon'ble Apex Court reported in Sharad Kumar Sanghi vs Sangita Rane [2015 (12) SCC 781] it is clear that once a transaction is made with the company, the company being a legal entity, unless and until the company is made as co-accused, the complaint is not maintainable."

29. The contention of the learned counsel for the respondent No.1 was

that the accused were arrayed in their individual capacity and not in their

representative capacity. Only in cases wherein individuals were arrayed in

the representative capacity, the company was made as an accused and

during the course of enquiry or trial, if it appears from the evidence that the

company had committed offences, the Special Court had power under

Section 319 Cr.P.C. to proceed against it.

30. However, considering the allegations made by the complainant-

respondent No.1 about the annual reports of the company being uploaded

in the Registrar of Companies website by fabricating the documents and Dr.GRR,J 32 Crl. P No.8025 & 8024 of 2021

the allegations that about 63,000 shares of PARPL were issued illegally to

render the respondent No.1 a minority shareholder, to usurp the

management of PARPL, it is considered that the Company is a necessary

party to the proceedings and there is no merit in the contention of the

learned counsel for the respondent No.1 in the said regard.

31. The learned Counsel for the petitioner also contended that the

dispute in the present complaint was being dealt by the National Company

Law Tribunal in Company petition No.431/HDB/2020 and filed a copy of

the said petition. A reading of the said petition would disclose that the

respondent No.1 had filed a petition before the National Company Law

Tribunal on the same fact about allocating 63,000 equity shares to the

petitioner by the Company and contended that no Board Meeting was held

as alleged nor any consideration was passed towards alleged allotment of

shares to the petitioner, thus, Economic Offences Court taking cognizance

of the offence would amount to initiating parallel investigation on the same

issue and would give a scope of giving rise to concurrent findings in

different forums. The contention of the learned counsel for the respondent

No.1 was that pendency of civil proceedings was not a bar to initiate

criminal proceedings as long as the ingredients of the offence were made

out, even during the pendency of the case before NCLT, the Registrar of Dr.GRR,J 33 Crl. P No.8025 & 8024 of 2021

Companies itself advised respondent No.1 to approach the competent court

for seeking appropriate relief regarding allegations if forgery and

fabrication of documents, as such, the complainant filed to present the

complaint.

32. The jurisdiction of the Special Courts and NCLT are specific. The

cases in which imprisonment is provided for two years or more is to be

tried by a Special Court and contravention of provisions related to laws

guaranteed etc., for the purpose of subscriptions for any shares in the

company or in its holding company, matters pertaining to failure to

distribute dividends and matters related to fraud including repayment of

any debt comes under the jurisdiction of the Special Courts, whereas the

matters pertaining to mis-management and relating to compromise or

arrangements with creditors and members, calls action by members or

depositors, rectification of Register of Members, confirmation of reduction

of share capital by the company and calling of Annual General Meeting or

other meeting of the members in case of default in holding General

Meeting comes under the purview of the National Company Law Tribunal.

Pendency of civil proceedings is no bar to initiate criminal proceedings as

long as the ingredients of the offences were made out and the conditions

therein were also satisfied.

Dr.GRR,J 34 Crl. P No.8025 & 8024 of 2021

33. The learned counsel for the petitioner contended that the

allegations in the present complaint would reveal that it was civil dispute

being cloaked as a criminal offence only to abuse the process of Court and

relied upon the judgments of the Hon'ble Apex Court in R.K.

Vijayasarathy v. Sudha Seetharam6 and Indian Oil Corporation v.

NEPC India Ltd.7.

34. In R.K. Vijayasarathy's case (6 supra) it was held that:

"The jurisdiction under Section 482 of the Code of Criminal Procedure has to be exercised with care. In the exercise of its jurisdiction, a High Court can examine whether a matter which is essentially of a civil nature has been given a cloak of a criminal offence. Where the ingredients required to constitute a criminal offence are not made out from a bare reading of the complaint, the continuation of the criminal proceeding will constitute an abuse of the process of the court."

35. In Indian Oil Corporation's case (7 supra), the Hon'ble Apex

Court held that:

"While on this issue, it is necessary to take notice of a growing tendency in business circles to convert purely civil disputes into criminal cases. This is obviously on account of a prevalent impression that civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable break down of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claims, which do not involve any criminal offence, by applying pressure 6 2019 (16) SCC 739 7 2006 (6) SCC 736 Dr.GRR,J 35 Crl. P No.8025 & 8024 of 2021

though criminal prosecution should be deprecated and discouraged. In G. Sagar Suri vs. State of UP [2000 (2) SCC 636], this Court observed :

"It is to be seen if a matter, which is essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which High Court is to exercise its jurisdiction under Section 482 of the Code.

Jurisdiction under this Section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice."

While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under section 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant. Be that as it may."

36. The learned counsel for the respondent No.1, on the other hand,

relied upon the judgment of the Hon'ble Apex Court in Kamal Shivaji

Pokarnekar v. The State of Maharashtra and others8, wherein it was

held that:

8

MANU/SC/0180/2019 Dr.GRR,J 36 Crl. P No.8025 & 8024 of 2021

"...The correctness or otherwise of the said allegations has to be decided only in the Trial. At the initial stage of issuance of process it is not open to the Courts to stifle the proceedings by entering into the merits of the contentions made on behalf of the accused. Criminal complaints cannot be quashed only on the ground that the allegations made therein appear to be of a civil nature. If the ingredients of the offence alleged against the accused are prima facie made out in the complaint, the criminal proceeding shall not be interdicted."

37. Learned counsel for the petitioner also contended that there was

no application of judicial mind by the Economic Offences Court while

taking cognizance of the offences under Section 447 of the Companies

Act, 2013 despite the bar under Section 212 (6) of the Act. The

cognizance order did not provide any reasons for taking cognizance of the

impugned complaint and relied upon the judgments of the Hon'ble Apex

Court in Mehmood Ul Rehman v. Khazir Mohammad Tunda9, wherein

it was held that:

"23. Having gone through the order passed by the Magistrate, we are satisfied that there is no indication of the application of mind by the learned Magistrate in taking cognizance and issuing process to the appellants. The contention that the application of mind has to be inferred cannot be appreciated. The further contention that without application of mind, the process will not be issued cannot also be appreciated. Though no formal or speaking or reasoned orders are required at the stage of Sections 190/204 CrPC there must be sufficient indication of the application of mind by the Magistrate to the facts constituting commission of an offence and the statements recorded under Section 200 CrPC so as to proceed against the offender. No doubt, the High Court

9 20015 (12) SCC 420 Dr.GRR,J 37 Crl. P No.8025 & 8024 of 2021

is right in holding that the veracity of the allegations is a question of evidence. The question is not about veracity of the allegations, but whether the respondents are answerable at all before the criminal court. There is no indication in that regard in the order passed by the learned Magistrate."

38. He further relied upon the judgment of the Hon'ble Apex Court in

Pepsi Foods Ltd. v. Special Judicial Magistrate10, wherein it was held

that:

"Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. it is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused."

39. He further relied upon the judgment of the Hon'ble Apex Court in

Inder Mohan Goswami v. State of Uttaranchal11, wherein it was held

that:

"While exercising the said power court must ensure that criminal prosecution is not used as an instrument of

10 1998 (5) SCC 749 11 2007 (12) SCC 1 Dr.GRR,J 38 Crl. P No.8025 & 8024 of 2021

harassment or for seeking private vendetta or with an ulterior motive to pressurize the accused."

40. The Hon'ble Apex Court in State of Haryana and Ors. v. Ch.

Bhajan Lal and ors.12 had enunciated the principles for use of the

extraordinary power under Article 226 of the Constitution of India or the

inherent powers under Section 482 Cr.P.C. and gave a list of myriad kinds

of cases wherein such power should be exercised:

"(1) where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused;

(2) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code;

(3) where the uncontroverted allegations made in the FIR or 'complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused;

(4) where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code;

(5) where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused;

12 1992 AIR 604 Dr.GRR,J 39 Crl. P No.8025 & 8024 of 2021

(6) where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party;

(7) where a criminal proceeding is manifestly attended with malafide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

41. Considering point No.(6) in Bhajan Lal's case, wherein it was

stated that when there is an express legal bar engrafted in any of the

provisions of the Code or the concerned Act, continuance of the

proceedings would amount to an abuse of process of law and in the present

case also, as per Section 212(6) of the Companies Act, 2013, there is a bar

for taking cognizance of the case for the offence under Section 447 of the

Companies Act 2013, it is considered fit to exercise the inherent powers

under Section 482 Cr.P.C. to quash the complaint.

42. The record also would disclose that both the petitioner in Crl.P.

No.8025 of 2021 and the respondent No.1 (complainant) initiated civil

proceedings against each other. The record also would disclose that the

Annual Returns were filed by the Company from 2002-2014 and the said

returns were also signed by the complainant showing the shareholding of Dr.GRR,J 40 Crl. P No.8025 & 8024 of 2021

the petitioner in PARPL company. The complainant did not choose to

dispute the said Annual Returns and kept quiet for more than a decade.

The filing of the complaint after twenty years alleging fabrication from the

year 2002 onwards would only show that it was filed with a malafide

intention to take revenge against the petitioner. As per point No.(7) in

paragraph - 102 of the Bhajan Lal's case also, it was stated that where a

criminal proceeding was manifestly attended with malafides or where the

proceedings were maliciously instituted with an ulterior motive for

wrecking vengeance on the accused and with a view to spite him due to

private and personal grudge, it can be quashed, it is considered fit to allow

the petitions on the said ground also.

43. Another contention of the learned Counsel for the respondent No.1

was that the Economic Offences Court had taken cognizance as per the

direction of this Court in Criminal petition No. 222 of 2021 and the said

fact was suppressed by the learned counsel for the petitioners. A perusal

of the order of this Court in Criminal Petition No.222 of 2021 would

disclose that it considered only the aspect that whether a private complaint

could be maintained by a Power of Attorney holder, but did not consider

the contents of the complaint whether they would make out the ingredients Dr.GRR,J 41 Crl. P No.8025 & 8024 of 2021

of the offences which were alleged against the petitioner. As such, the said

order is not a bar in considering the maintainability of this petition.

44. Hence, for the reasons stated above, it is considered fit to quash the

proceedings against the petitioners in C.C. No.31 of 2021 on the file of

VIII Additional Metropolitan Sessions Judge-cum-Special Judge for

Economic Offences, City Criminal Courts at Nampally, Hyderabad.

45. In the result, the Criminal Petition Nos.8024 and 8025 of 2021 are

allowed by quashing the proceedings against the petitioners in C.C. No. 31

of 2021 on the file of VIII Additional Metropolitan Sessions Judge-cum-

Special Judge for Economic Offences, City Criminal Courts at Nampally,

Hyderabad.

Miscellaneous Petitions pending, if any, shall stand closed.

_____________________ Dr. G. RADHA RANI, J June 06, 2022 BDR/KTL