ANANTHA R. HEGDE v. GOPALAKRISHNA — 1996 DIGILAW 241 (KAR)

M. P. CHINNAPPA, J. ( 1 ) THE petitioners are shareholders/members of the Bangalore Stock Exchange Limited (hereinafter referred to as 'the Stock exchange'), the premier Stock Exchange of Karnataka. The board of Directors of the Stock Exchange which is known as council of Management consists of 13 Directors, six Directors elected by the members of the Bangalore Stock Exchange, three directors are public representatives and three are nominated by the Securities Exchange Board of India, which is a Government of India organisation. The respondent herein was a Director of the Stock Exchange. Due to various misdeeds committed by the respondent, he was removed from the Directorship of the Stock exchange by over-whelming majority of the members of the stock Exchange of the annual general meeting held on 19-11-1994. Ever since then, it is alleged that he has been filing false and frivolous suits, writ petitions criminal complaints, against the Stock Exchange and he is trying to destroy the Stock exchange, its Directors as well as its members. It is further alleged by the petitioners that the respondent herein in furtherance of his evil designs to destroy the Stock Exchange, coerced some of the members into signing a notice calling for extraordinary General Meeting of the Stock Exchange for removal of the President and Treasurer of the Stock Exchange. Thereafter, some of the members realising that it is not in the interest of the Stock Exchange as well as its members, to requisition any such Extraordinary General Meeting, withdrew the requisition. The notice given by the requisitionist was considered by the Board of the Stock Exchange, but by that time the number of members supporting the requisition had fallen short of the mandatory requirement of Section 169 of the companies Act, 1956, (hereinafter referred to as 'the Act' ). In view of the same, the Board of Directors of the Stock Exchange refused to call the Extraordinary General Meeting, in respect of which the respondent along with a few of his men, convened the extraordinary General Meeting of the Stock Exchange illegally. In view of the same, some of the petitioners filed original suits before the City Civil Court, Bangalore for declaration that the notice convening the Extraordinary General Meeting on 8-4-1995 is illegal and for other reliefs. The said suits are pending consideration. In view of the same, some of the petitioners filed original suits before the City Civil Court, Bangalore for declaration that the notice convening the Extraordinary General Meeting on 8-4-1995 is illegal and for other reliefs. The said suits are pending consideration. ( 2 ) THE petitioners further submit that the respondent here in with the sole intention of harassing the petitioners has filed private complaints in the Court of Economic Offences, bangalore, under Section 200 of the Cr. P. C. The respondent was examined by the learned Magistrate and his sworn statement was recorded. The learned Magistrate took cognizance under section 169 of the Act and directed issue of summons to the petitioners. The allegations made in the complaints are false and frivolous in nature and is in abuse of the process of Court. According to them, the complaints were filed with the sole intention of harassing the petitioners herein. Those cpmplaints came to be filed only on the statements made by the petitioners in the complaints and also affidavits filed in support of the I. As. The suits are pending consideration before the City Civil Court, bangalore. According to the respondent, the statements made therein are false and are made with an oblique motive and therefore, the respondent claims that the petitioners have committed offences under Section 629 of the Act on giving false evidence in the plaints and affidavits of the suits referred to above. Therefore, the petitioners approached this Court under section 482, Cr. P. C. to quash the entire proceedings pending before the Economic Offences Court of Bangalore. ( 3 ) WITH this prelude it is now necessary to refer to the specific criminal petitions filed before this Court. Criminal Petition No. 2554 of 1995 is filed to quash the entire proceedings in P. C. No. 494 of 1995 which is pending in C. C. No. 1459 of 1995. C. C. No. 1459 came to be filed by the respondent against Anantha R. Hegde on the allegation that he has filed Original Suit No. 10348 of 1995 on the file of the City Civil Judge, Bangalore, for declaration that notice convening the Extraordinary General meeting of the Stock Exchange by the defendants 1 to 9 on 8-4-1995 is illegal, invalid and void and also for consequential relief of injunction, etc. In that complaint, the complainant has specifically stated that the plaintiff therein made false statements to the effect that due to various misdeeds committed by him the members of the Stock Exchange removed him from the office of the Directors of the Stock Exchange. He is trying to destroy the Stock Exchange by various methods. He has failed to abide by the decision of the Council of Management. The 1st defendant in furtherance of his design to destroy the Stock exchange has coerced and forced some of the members to sign the notice for passing an Extraordinary General Meeting. The defendant in furtherance of his evil designs to destroy the Stock exchange has coerced and forced some of the members to sign a notice to call the Extraordinary General Meeting. Certain members whose signatures were obtained by coercion or misrepresentation withdrew. The Registrar of Companies who is the Administrative Authority on the administration of the company Law in the State of Karnataka came to the definite conclusion that there is no valid requisition under law. Though the requisition initially contained 15 signatures, admittedly certain signatures were obtained under force or misrepresentation were withdrawn. The defendants 3, 4, 5 and 7 were suspended from the Stock Exchange for a limited period on account of their not filing their audited accounts with the Stock exchange as required under the Rules of the Stock Exchange. According to the defendants, these allegations made in the complaint are false and he has misrepresented the Court with an intention to obtain an order of injunction, thereby he has committed an offence punishable under Section 629 of the Act. As against the order passed by the learned Magistrate, taking cognizance of the case, the accused/petitioner filed Criminal petition No. 2554 of 1995. ( 4 ) ONE U. B. Maiya filed Original Suit No. 2184 of 1995 against the respondent and 9 others for declaration that the notice convening the Extraordinary General Meeting of Stock exchange by the defendants 1 to 9 on 8-4-1995 in terms of the notice dated 14-3-1995 is illegal, invalid and void and for other consequential reliefs. ( 4 ) ONE U. B. Maiya filed Original Suit No. 2184 of 1995 against the respondent and 9 others for declaration that the notice convening the Extraordinary General Meeting of Stock exchange by the defendants 1 to 9 on 8-4-1995 in terms of the notice dated 14-3-1995 is illegal, invalid and void and for other consequential reliefs. On the basis of this, the respondent filed p. C. R. No. 493 of 1995 which is now registered as C. C. No. 1467 of 1995 on the allegation that he has made false averments and he has also specifically mentioned the averments and those averments are similar to be one stated above. As against taking cognizance of the complaint by the Magistrate, the accused petitioner filed Criminal Petition No. 2555 of 1995. ( 5 ) THE respondent herein filed a complaint in P. C. No. 356 of 1995 before the Special Court (Economic Offences) Bangalore, under Section 200, Cr. P. C. which is now pending in C. C. No. 1253 of 1995. In that complaint the respondent has made an allegation that one Sri Nitin C. Shah a Member of the Stock exchange had challenged the notice of convening the extraordinary General Meeting to be held on 8-4-1995 in original Suit No. 2185 of 1995 before the City Civil Judge. In that suit he was made as defendant 10. It is further alleged that the accused Ramachandra as the Executive Director of the exchange filed an affidavit supporting the plaintiffs prayer in the suit. In the said suit he had intentionally sworn to false affidavit. On that ground he claims that the accused has committed an offence punishable under Section 629 of the Act. The learned Magistrate has taken cognizance of the case and he had directed to issue process. That order is questioned in this petition, numbered as Criminal Petition No. 1703 of 1995. ( 6 ) CRIMINAL Petition No. 1241 of 1995 was preferred by K. E. C. Raj Kumar who is one of the Directors of Bangalore Stock exchange against the order passed by the Magistrate directing to issue process to the accused petitioner. The respondent has filed a complaint under Section 200, Cr. ( 6 ) CRIMINAL Petition No. 1241 of 1995 was preferred by K. E. C. Raj Kumar who is one of the Directors of Bangalore Stock exchange against the order passed by the Magistrate directing to issue process to the accused petitioner. The respondent has filed a complaint under Section 200, Cr. P. C. against the accused k. E. C. Raj Kumar and 11 others in P. C. R. No. 227 of 1995 now pending in C. C. No. 935 of 1995 alleging that the accused persons being Directors of Stock Exchange failed to convene a meeting as requisitioned by the shareholders and their failure to call the Extraordinary General Meeting under Section 169 (1) amounts to contravention of the provisions of Section 169. Hence, all of them committed an offence under Section 629-A of the Act. After recording the sworn statement, the Magistrate has taken cognizance of the case and directed to issue process to the accused persons. That order has been questioned by this petitioner K. E. C. Raj Kumar. ( 7 ) CRIMINAL Petition No. 1379 of 1995 was filed by all the 6 Directors viz. , K. Ishwara Bhat, F. Mahaveerkumar, Venkatesh n. Murthy, S. Jayaraman, S. S. Naganand and V. Sreenivas Rao against the order passed by the learned Magistrate directing issue of notice on the complaint filed by the respondent in C. C. No. 935 of 1995 on the allegations stated above. ( 8 ) SIMILARLY, Criminal Petition No. 2556 of 1995 is preferred against the order of the learned Magistrate taking cognizance in p. C. R. No. 542 of 1995 which is now registered as C. C. No. 1460 of 1995. That private complaint was filed by the respondent against P. K. Rungta and B. S. Venkatanarasaiah who are the members of the Arbitration Committee. The 1st petitioner is the chartered Accountant practicing at Bangalore. The 2nd petitioner is a retired income-tax official. They were nominated as public representatives of the Arbitration Committee of bangalore Stock Exchange by the Security Exchange Board of india. The respondent has alleged in the complaint that these two petitioners have knowingly given a false report to the counsel regarding auction of S. B. I. shares and thereby they committed an offence under Section 628 of the Act. ( 9 ) HEARD the learned Counsel for the petitioners and the respondent who appeared in person. The respondent has alleged in the complaint that these two petitioners have knowingly given a false report to the counsel regarding auction of S. B. I. shares and thereby they committed an offence under Section 628 of the Act. ( 9 ) HEARD the learned Counsel for the petitioners and the respondent who appeared in person. Perused the written arguments submitted by the respondent and also the materials produced in these cases. ( 10 ) AT the very outset the respondent has vehemently argued that the contentions raised by the petitioners to quash the proceedings cannot be entertained by this Court under Section 482, Cr. P. C. According to him the learned Magistrate has taken cognizance of the case after being satisfied by the prima facie case made out by the complainants. Normally the Court should not interfere with the order passed by the Magistrate taking cognizance of the offence and issuing of summons to the accused persons except in the rarest of rare cases. In support of his argument he placed reliance on a decision in Mrs. Dhanalakshmi v R. Prasanna Kumar and Others , wherein it is held:"specific allegation in complaint disclosing ingredients of offence Quashing of proceedings by High Court is illegal". He also placed reliance on a decision in State of Haryana and others v Ch. Bhajan Lal and Others, wherein their Lordships have held as follows:"in following categories of cases, the High Court may in exercise of powers under Article 226 or under Section 482 of Cr. P. C. may interfere in proceedings relating to cognizable offences to prevent abuse of the process of any court or otherwise to secure the ends of justice. However, power should be exercised sparingly and that too in the rarest of rare cases. (1) Where the allegations made in the F. I. R. 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 F. I. R. 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. (2) Where the allegations in the F. I. R. 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 f. I. R. 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 F. I. R. 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 F. I. R. 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. (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 mala fide 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. Where allegations in the complaint did constitute a cognizable offence justifying registration of a case and investigation thereon and did not fall in any of the categories of cases enumerated above, calling for exercise of extraordinary powers or inherent powers, quashing of f. I. R. was not justified". Further, he also relied on a decision in Union of India and others v B. R. Bajaj and Others. Here also the Hon'ble Supreme court following the decision rendered in Ch. Further, he also relied on a decision in Union of India and others v B. R. Bajaj and Others. Here also the Hon'ble Supreme court following the decision rendered in Ch. Bhajan Lai's case, supra, has held that treating whole matter as though it was an appeal against the order of conviction was not permissible in exercising inherent power under Section 482 particularly at stage of F. I. R. when same discloses commission of cognizable offence which had still to be investigated thoroughly by police. ( 11 ) HE also submitted that accused persons are entitled to request the learned Magistrate to drop the proceedings at any stage. Hence, the petitioners be directed to approach the magistrate's Court for necessary orders, and in support of his argument he placed reliance on a decision in 1992 (1) Comp. Cas. 170 (sic ). ( 12 ) PER contra, the learned Counsel for the petitioners also mainly relied on the decision in Ch. Bhajan Lai's case, supra, in support of his case and submitted that the cases filed by the respondent squarely come within the guidelines 1, 3, 5, 6 and 7. Therefore, he submitted that the interference by this Court is called for under Section 482, Cr. P. C. ( 13 ) EMPHASISING these arguments, he submitted that if the complaint is taken as a whole, no offence has been made out either under Sections 628, 629 or 629-A of the Act. With these broad principles in mind, it is necessary to consider the cases on hand. It may also be mentioned that out of these 6 cases criminal Petition Nos. 2254, 2255 and 1703 of 1995 arising out of civil suits, the reference of which I have already made above. It is advisable to bring these three cases into one group as they are arising out of the civil suits filed by them before the Court. It may also be mentioned that out of these 6 cases criminal Petition Nos. 2254, 2255 and 1703 of 1995 arising out of civil suits, the reference of which I have already made above. It is advisable to bring these three cases into one group as they are arising out of the civil suits filed by them before the Court. According to the complainant, the petitioner committed offences under Section 629 of the Act which reads:"if any person intentionally gives false evidence, (a) upon any examination upon oath or solemn affirmation, authorised under this Act; or (b) in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this Act, or otherwise in or about any matter arising under this Act; he shall be punishable with imprisonment for a term which may extend to seven years and shall also be liable to fine. However, repelling the arguments of the respondent that Section 629 has G limbs which will come within the purview of at least one of the limbs of Section 629, the learned Counsel for the petitioners submitted that the offence alleged does not come under the Act. He emphasised that filing false affidavit making false representation to the Court does not amount to any offence under the Act. Section 629 attracts the offence only in commission or omission under the Act. The respondent further contended that the suits arise under 'the Act. Therefore, misrepresentation or false affidavit filed in the Court are only in connection with the Act. Therefore, they have committed offence under the Act. This argument is unsustainable on two-folds: (a) First of all, filing a civil suit in regard to company affairs is not prohibited. Therefore it cannot be said that the petitioners committed an offence as they filed a suit for declaration that the notice issued to convene the meeting is invalid and also to issue injunction to desist the respondent and others from convening the meeting on 8-4-1995; and (b) According to the allegation, the petitioners filed a false affidavit is also not covered by the Act. Even accepting for the sake of arguments that they filed a false affidavit, it is not held by the Court that the affidavits filed by the petitioners are false. Even accepting for the sake of arguments that they filed a false affidavit, it is not held by the Court that the affidavits filed by the petitioners are false. From a perusal of the complaint it appears that it is only the surmise of the respondent that they filed false affidavits with an ulterior motive. Even if the Court were to come to the conclusion ultimately that they made false statements, still the Act does not say that the Court can take action. But only I. P. C. is applicable, in the event the Court comes to the conclusion that the petitioners have committed an offence under Chapter XI of I. P. C. In that event it is for the Court to take action following the procedure as contemplated under Section 340, Criminal Procedure Code. It is also clear that the affidavits filed in the Civil Court are not required to be filed under Section 169 of the Act, and these affidavits are filed for the purpose of the suit, if any offence is committed, it is against the Court and hence the Court has to take action. Therefore, before the Court decides that the averment made in the affidavit are false and the same is made with ulterior motive, etc. the deponents therein, cannot be prosecuted. Under those circumstances it is clear that the offence is not made out". ( 14 ) THE respondent has vehemently argued that Section 629 of the Act is non-cognizable one as per Section 624 and hence cannot be a matter of investigation by the police under Section 156 (3) of the Cr. P. C. and in support of it, he also placed reliance on a decision in D. K. Raju v K. V. Desinga Raju and the State. Asfaras this position of law is concerned, there is absolutely no quarrel and it is also true that the offences alleged against the petitioners are only non-cognizable offences and the Magistrate has rightly not referred it to the police. Asfaras this position of law is concerned, there is absolutely no quarrel and it is also true that the offences alleged against the petitioners are only non-cognizable offences and the Magistrate has rightly not referred it to the police. ( 15 ) HE also submitted that as between the civil and criminal proceedings, the criminal matter should be given precedence and no hard and fast rule can be applied and in support of this contention, he also placed reliance on a decision in M. S. Sheriff and Another v State of Madras and Others, wherein it is held by their Lordships of the Supreme Court that as between civil and criminal proceedings, the criminal matters should be given precedence to. No hard and fast rule can be laid down but the possibility of a conflict of decisions in a Civil and Criminal Court is not a relevant consideration. On this ground he submitted that the Magistrate need not wait till the final disposal of the civil suit to find out as to whether the petitioners have committed an offence under Section 629 of the Act. He also placed reliance on a decision in Gopal Chauhan v Smt. Satya and Another, wherein the Himachal Pradesh High Court has held that there cannot be any absolute proposition of law that whenever a civil proceeding is pending between the parties, criminal proceedings can never be proceeded with. There are many transactions which result in civil as well as criminal liabilities. Cheating, misappropriation and theft are undoubtedly the transactions of this type. Therefore, simply because civil proceedings between the parties are pending, it cannot be said that the present proceeding cannot go on before the learned magistrate. First of all, the offence alleged against the petitioners does not come under Section 629 of the Act. On the other hand, if ultimately the Court were to hold that the petitioners have committed any offence, it may come under the i. P. C. Therefore, the complaint filed by the petitioners is not maintainable. He also placed reliance on a decision in Durvasa and Others v chandrakala, to repel the argument of the learned Counsel for the petitioners to the effect that the Magistrate has taken cognizance after recording the sworn statement which is contrary to the provisions of law. He also placed reliance on a decision in Durvasa and Others v chandrakala, to repel the argument of the learned Counsel for the petitioners to the effect that the Magistrate has taken cognizance after recording the sworn statement which is contrary to the provisions of law. He placed reliance on a decision in S. H. Taralagatti v Director General, All India Radio and Others, wherein it is held that Section 195, Cr. P. C. deals with prosecution for contempt of lawful authority of public servants for offences against public justice or for offence relating to documents given in evidence. In such cases a written complaint of the public servant or the Court as the case may be is required for taking cognizance. It would be illegal and without jurisdiction if the cognizance is taken contrary to the provisions of this section. The objects of the law requiring a complaint from the Court or authority concerned are (i) to protect persons from criminal prosecutions by persons actuated by malice, hatred or illwill; (ii) to insist on there being prosecution only when the interests of public justice render it necessary and to protect prosecutions when public interest cannot be served; (iii) to protect persons from prosecutions on insufficient grounds and to ensure prosecution only when the Court after due consideration is satisfied that there is proper case to put a party on his trial. ( 16 ) THE respondent further claims that the main issue in the civil suit is based on the facts that the signatures of the signatories to the requisitions were coerced. He further contended that the petitioners have no locus standi to file the suit as they were not signatories. According to him, the persons who had withdrawn the signatures might have filed the suit and not these petitioners. Therefore he contends that the suit itself is a false suit filed by the petitioners. This Court cannot give a finding as to who should have filed the suit or that the suits filed by the petitioners are maintainable or not. In these petitions, the court is concerned only with the allegations made in the complaint by the respondents. It cannot go into the question as to whether the civil suits are maintainable or not. He also contended that the documents produced in the Civil Court do not prove that the Directors were coerced to put their signatures. In these petitions, the court is concerned only with the allegations made in the complaint by the respondents. It cannot go into the question as to whether the civil suits are maintainable or not. He also contended that the documents produced in the Civil Court do not prove that the Directors were coerced to put their signatures. According to him the Board of Directors did not convene the meeting on the ground that before the meeting is convened, some of the signatories withdrew their signature and requisite number of persons did not sign the requisition. Hence the meeting was not convened. This decision is not correct as the directors had no option but to decide to convene the meeting. In support of this argument he relied on a decision in Cricket Club of India Ltd. and Others v Madhav L. Apte and Others. This decision will be discussed presently while dealing with another point of law. The respondent however contended that when an Extraordinary general Meeting was requisitioned properly, there was no alternative left for the Board of Directors but to call for the meeting. It may be mentioned here that as the Board of Directors failed to call for meeting, the requisitionists issued notice to hold the meeting which constrained these petitioners to file civil suit for declaration and injunction as stated above. However, no finding need to be given by this Court on this aspect as it is a matter for the Civil Court to decide the case in regard to the calling of meeting by the Board of Directors when a requisition was made. The remedy is available under sub-section (6) of Section 169 which reads:"if the Board does not, within twenty one days from the date of the deposit of a valid requisition in regard to any matters, proceed duly to call a meeting for the consideration of those matters on a day not later than forty five days from the date of the deposit of the requisition, the meeting may be called"for the foregoing reasons, it is clear that none of the limbs of section 629 is attracted. When no offence is made out as held by their Lordships of the Supreme Court in Ch. Bhajan Lal's case, supra, this Court will have to interfere to avoid the abuse of process of the Court. When no offence is made out as held by their Lordships of the Supreme Court in Ch. Bhajan Lal's case, supra, this Court will have to interfere to avoid the abuse of process of the Court. Having come to that conclusion of the Court the Criminal Petition Nos. 2554, 2555 and 1703 of 1995 deserve to be allowed. ( 17 ) CRIMINAL Petition No. 1241 of 1995 came to be filed by one K. E. C. Raj Kumar and Criminal Petition No. 1379 of 1995 has been filed by K. Ishwara Bhat and 5 others to quash the order passed by the learned Magistrate in C. C. No. 935 of 1995. The complainant alleged in C. C. No. 935 of 1995 that the accused persons committed offence by not convening the Extraordinary general Meeting as per the three requisitions deposited by the signatories thereby committing an offence punishable under section 169 and Section 629 of the Act. According to Section 169 of the Act, it is clear that on the requisition of such number of members of the company as is specified in sub-section (4), forthwith proceed duly to call an Extraordinary General Meeting of the company. In this case, admittedly the complainant and others deposited 3 requisitions to convene the meeting of the board of Directors. According to Section 169 they should call for the meeting within 21 days from the date of deposit of a valid requisition. The petitioners contended that even 14 days from the date of deposit of requisitions, some requisitionists withdrew their signatures and hence the requisitions failed as the number of persons required to call for Extraordinary General Meeting fell short and the Board of Directors could not convene the extraordinary General Meeting as requisitioned. Therefore, they submitted that no offence has been made out as against the directors of the company. ( 18 ) PER contra, the respondent has drawn my attention to the decision in Cricket Club of India Ltd. 's case, supra, wherein the bombay High Court has held:"the word or adjective "valid" used in Section 169 had no reference to the object of the requisition but rather to be requirements in that section itself. ( 18 ) PER contra, the respondent has drawn my attention to the decision in Cricket Club of India Ltd. 's case, supra, wherein the bombay High Court has held:"the word or adjective "valid" used in Section 169 had no reference to the object of the requisition but rather to be requirements in that section itself. All that is required to be seen before the provisions of Section 169 (6) become applicable would be to consider whether the requisition deposited was in accordance with the provisions of Section 169 as to its contents the number of signatories and similar matters and it would not be open to the Board of Directors of a company to refuse to act on a requisition on the ground that although such requisition was in accordance with the requirements of Section 169, it was otherwise invalid. The requisition in this case must be considered to be a valid requisition. (c) As the requisition for the meeting satisfied the procedural and numerical requirements of Section 169 of the Act, and was, therefore, valid the Executive Committee of the Club would appear to be bound and liable to call the meeting as provided by the section". From this decision, it is clear that when once the valid requisition is deposited, the Board of Directors are bound to call for the extraordinary General Meeting and that the Board of Directors have no option but to decide to call the meeting on the ground that procedural and numerical requirements of Section 169 of the Act are not satisfied. The question is, if the meeting is not convened, what is the consequence ? The question is, if the meeting is not convened, what is the consequence ? That is provided under section 169 (6) as follows: (6) If the Board does not, within twenty one days from the date of the deposit of a valid requisition in regard to any matters, proceed duly to call a meeting for the consideration of those matters on a day not later than forty-five days from the date of the deposit of the requisition, the meeting may be called, (a) by the requisitionists themselves; (b) in the case of a company having a share capital, by such of the requisitionists as represent either a majority in value of the paid-up share capital held by all of them or not less than one-tenth of such of the paid-up share capital of the company as is referred to in clause (a) of sub-section (4), whichever is less; or (c) in the case of a company not having a share capital, by such of the requisitionists as represent not less than one-tenth of the total voting power of all the members of the company referred to in clause (b) of sub-section (4 ). Explanation. For the purposes of this sub-section, the Board shall, in the case of a meeting at which a resolution is to be proposed as a special resolution, be deemed not to have duly convened the meeting if they do not give such notice thereof as is required by sub-section (2) of Section 189. From this it is clear that in the event of failure of the Board of directors to convene the meeting, an alternative and efficacious remedy is provided under Section 169 (6) of the Act. In actual fact, the respondent and his fellow men had given a notice to call for the meeting as contemplated under Section 169 of the Act. Some of the Directors filed the suit to restrain the respondent and other persons from convening the meeting. That are suits pending in the Civil Court. In those circumstances, it cannot now be said by this Court as to whether the refusal of the Board of Directors to convene the meeting on the ground stated above is valid or not as it is for the Civil Court to decide. That are suits pending in the Civil Court. In those circumstances, it cannot now be said by this Court as to whether the refusal of the Board of Directors to convene the meeting on the ground stated above is valid or not as it is for the Civil Court to decide. From the entire reading of Section 169 of the Act, nowhere it is stated that if the Board of Directors refuse to convene a meeting, it would amount to an offence punishable under any provision of the Act, much less under Section 629-A of the Act. Section 629-A provides for penalty where no specific penalty is provided elsewhere in the Act. From the wording of Section 169, it can be gathered that the Legislature never intended that on failure of the Board of directors to convene the meeting, it can be construed as an offence, as an alternative and efficacious remedy is provided under the Act. Therefore, I am of the considered view that the learned counsel for the petitioners is right in his submission that no offence has been committed by the Board of Directors and the company need not convene the meeting and therefore, the complaint is not maintainable. Under these circumstances, it is necessary to refer to State of West Bengal and Others v Swapan kumar Guha and Others, wherein it is held that if, on the other hand, the Court on a consideration of the relevant materials is satisfied that no offence is disclosed, it will be the duty of the court to interfere with any investigation and to stop the same to prevent any kind of uncalled for and unnecessary harassment to an individual. ( 19 ) THE learned Counsel for the petitioners further submitted that when a civil suit is pending, when the Civil Court is seized of the matter, the Criminal Court cannot proceed with the case. In support of his argument he also placed reliance on a decision in Ram Sumer Puri Mahant v State of Uttar Pradesh and others, wherein it is held that when a civil litigation is pending in the property wherein the question of possession is involved and has been adjudicated, initiation of proceedings under section 145 of the Code would not be justified. Parallel proceedings should not be permitted to continue and in the event of a decree of the Civil Court, the Criminal Court should not be allowed to invoke its jurisdiction particularly when the position is being examined by the Civil Court and parties are not in a position to approach the Civil Court for interim orders. Though the facts are not applicable to the case, the principles enunciated by their Lordships are squarely applicable to this case' also. There are several cases pending questioning the validity of the meeting called for by the respondent and others and the main question involved in that suit is as to whether the notice issued by the respondents and others to convene the meeting is valid or not and that question is dependant on the failure on the part of the Directors to convene the meeting as requisitioned by the requisitionists as contemplated under Section 169 (1 ). These are all interconnected. Such being the case, the Criminal Court cannot give any finding on that aspect as the Civil Court is seized of the matter. ( 20 ) IN this case as stated earlier, the basic question involved is as to whether the Directors have committed an offence punishable under Section 629-A for violation of Section 169 of the Act in not convening the meeting, etc. Therefore, the finding of the Civil Court will go to the root of the criminal case. Such being the position, it cannot be said that the Criminal Court can proceed with the matter. However, as observed supra, there is nothing to indicate that violation of Section 169 contemplates a criminal offence. ( 21 ) THE learned Counsel for the petitioners further argued that K. E. C. Raj Kumar and others were inducted by the directors as Government servants. Therefore, to prosecute them, sanction is necessary under Section 195 of Cr. P. C. It is an undisputed fact that these officers are ex officio officers holding the post of Directors. Under those circumstances, they discharge the work of a director only in view of the post they hold in the department and not otherwise. Therefore, to prosecute them, sanction is necessary under Section 195 of Cr. P. C. It is an undisputed fact that these officers are ex officio officers holding the post of Directors. Under those circumstances, they discharge the work of a director only in view of the post they hold in the department and not otherwise. In the circumstances, sanction is necessary to prosecute them and in support of that argument, the learned Counsel for the petitioners also submitted that penal provision will have to be construed very strictly and that sanction should be obtained from the Government as required under Section 195, Cr. P. C. Further he submitted that even if two views are possible, the interpretation which is favourable to the accused should be taken. He also submitted that unless the offences are made out, no complaint can be filed. ( 22 ) HOWEVER, the learned respondent vehemently argued that sanction is not necessary as the officer was prosecuted as a director of the company and not as a Government servant, notwithstanding the fact that the offences committed are technical in nature, but they are very serious and the accused' persons are liable to be convicted. On the other hand, in support of that argument, he relied on a decision in Raghunath Swamp mathur v Dr. Raghuraj Bahadur Mathur and Others. In that case, a complaint was lodged before the Magistrate for the violation of Section 263 (1) and the learned Magistrate sentenced to pay a fine of Rs. 250/- each under Section 629-A of the Act. The Sessions Judge also dismissed that appeal. It is alleged that a single resolution moved to elect 4 Directors, of a company normally amounts to contravention of Section 263 and such contravention would be punishable under Section 629-A of the act. However, in view of the existence of Section 263 (2) the court held that the resolution itself becomes non-existent in the eye of law. Therefore, the conviction was set aside and held that the contravention in question, if any, would be only technical in nature. At any rate the matter of the alleged breach or contravention of the provisions of the Act being highly controversial, its benefit must go to the accused. Similarly in this case also the offence alleged is a technical one and the benefit of such technicality should go to the benefit of these petitioners. At any rate the matter of the alleged breach or contravention of the provisions of the Act being highly controversial, its benefit must go to the accused. Similarly in this case also the offence alleged is a technical one and the benefit of such technicality should go to the benefit of these petitioners. Under these circumstances, it is clear that there is a scope for two interpretations and that being the case, the interpretation which is available to the accused persons should be applied. For the foregoing reasons, I hold that these petitions deserve to be allowed and the impugned order is liable to be quashed. ( 23 ) NEXT it is necessary to consider Criminal Petition No. 2556 of 1995. This case slightly varies from other cases. But all the general observations made above are applicable to the facts of this case also. In this case, the respondent has given a complaint to the Stock Exchange with regard to certain irregularities committed by some persons. The Board of Directors thought it fit to refer to the Committee consisting of two Directors. They are also called Arbitration Committee. This Committee is in the nature of a Judge. They gave a report and on the basis of their report, a complaint came to be filed alleging that they have not properly conducted the enquiry. Thus, they have committed an offence punishable under Section 628 of the Act. In view of this contention, it is necessary to refer to Section 628 of the Act which reads:"if in any return, report, certificate, balance sheet, prospectus, statement or other document required by or for the purposes of any of the provisions of this Act, any person makes a statement, (a) which is false in any material particular, knowing it to be false; or (b) which omits any material fact' knowing it to be material; he shall, save as otherwise expressly provided in this Act, be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine". ( 24 ) THE learned Counsel for the petitioners submitted that the offences contemplated under Section 628 of the Act are in regard to the report referred to under Sections 227, 228 of the Act. Section 227 (2) refers to the powers and duties of the auditors. Section 217 refers to the report of the Board of Directors. ( 24 ) THE learned Counsel for the petitioners submitted that the offences contemplated under Section 628 of the Act are in regard to the report referred to under Sections 227, 228 of the Act. Section 227 (2) refers to the powers and duties of the auditors. Section 217 refers to the report of the Board of Directors. Section 216 refers to profit and loss account to be annexed and auditors' report to be attached to balance sheet. Section 240 deals with production of documents and Section 240-A is pertaining to seizure of documents by Inspector. Section 165 also refers to the statutory meeting and statutory report of the company. Section 241 deals with Inspectors' report and Section 255 pertains to report by official liquidator. Therefore, the Arbitration committee's report is not found in the Act. But it has a reference in the Memorandum of Association and Articles of Association of bangalore Stock Exchange Limited. Section 2 of the Articles of association reads:"the Regulations contained in Table "a" in the First schedule to the Companies Act, 1956 so far as the same may be applicable to a public company shall to apply this company in the same manner as if all such Regulations of table "a" are specifically contained in these articles, subject to modifications herein contained". Section 26 of the Act under Articles of Association reads:"there may in the case of a public company limited by shares, and there shall in the case of an unlimited company or a company limited by guarantee or a private company limited by shares, be registered with the memorandum, Articles of Association signed by the subscribers of the memorandum, prescribing regulations for the company". Therefore, the learned Counsel for the petitioners submitted that the Arbitration Committee's report even if held to be false, does not come within the purview of Section 628 of the Act and the arbitrators cannot be prosecuted. ( 25 ) AS against it, the respondent submitted that it is not an Arbitration Committee, anybody can be appointed as a committee. It is only the Articles of Association which provide for the same. ( 25 ) AS against it, the respondent submitted that it is not an Arbitration Committee, anybody can be appointed as a committee. It is only the Articles of Association which provide for the same. Article 62 (a) of the Articles of Association reads:"in addition to the Committees of the Council of Manage- ment, if any, referred to in the above clause, the Council of management shall every year and as early as convenient after every annual general meeting appoint the following committees namely: (i) Arbitration Committee (ii) Defaults Committee (iii) Disciplinary Committee: provided that the constitution of such Committees should be in the proportion of 40 : 60 between member brokers and non-members respectively with the prior approval of S. E. B. I. (amended at Extraordinary General Meeting 26-6-1993)". Therefore, it is clear that Arbitration Committee is constituted by Article 62. Here also there is nothing to show that the directors have either accepted the report or they found that the report submitted by the Committee is false. There is nothing to indicate that the report submitted by this Arbitration Committee is a false one or it leads to misrepresentation, etc. On the other hand, it appears that the respondent had written a letter to one P. K. Rungta on 20th June, 1995. In that letter he has stated that the auction Register was tampered after he gave his findings to the council or the Exchange Authorities had presented to him fabricated auction Register. The respondent wanted to know when he had taken up this matter with the Stock Exchange Authorities after going through the Economic Times on 20th May, 1995 which was reported in the paper. On the basis of it, he sought for clarification as to whether the same Auction Register was presented to him and he had signed or initialled on the Auction register as a mark for his verification and who had presented the Auction Register to him, etc. From this it is clear the respondent has drawn a conclusion that the report itself is a concocted one and that it does not reflect the true picture, etc. On the basis of it, the respondent wants the Court to hold that they are guilty of the offence under Section 628 of the Act. From this it is clear the respondent has drawn a conclusion that the report itself is a concocted one and that it does not reflect the true picture, etc. On the basis of it, the respondent wants the Court to hold that they are guilty of the offence under Section 628 of the Act. ( 26 ) ALL these cases will have to be considered in the background of the fact that the respondent was a Director of Stock Exchange and he was removed from the Directorship. It is also an admitted fact that he filed suits, writ petitions and complaints against the stock Exchange, its Directors and Members. However, it is alleged that he was removed from the Directorship due to various misdeeds and with a view to wreak vengeance he filed false and frivolous suits and complaints with an object to destroy the Stock Exchange, its Directors and Members. If we look into the cases, in the light of the fact that the respondent is a disgruntled person as he was removed from Directorship, the argument of the learned Counsel for the petitioners that these cases are filed only with a view to wreak vengeance, attended with mala fide intention and such cases cannot be entertained by the court etc. has some force. If the cases are taken as a whole, it appears that the respondent filed these cases with personal vengeance as submitted by the learned Counsel. ( 27 ) THE respondent also placed reliance on several decisions to substantiate his argument that under the Company Law there is a distinction between individual membership rights and rights available to qualified minorities. The qualified minority rights are generally enforceable by recourse to civil suits except in cases where specific provision is found in the Act for its enforcement elsewhere. There is no provision prescribing special forum for enforcement of right of shareholders under Sections 257 and 284 of the Act. All the decisions referred to by the respondent would only indicate the above principles. As far as the principles enunciated by these decisions are not in dispute, these decisions would in no way help the respondent in substantiating his case. All the decisions referred to by the respondent would only indicate the above principles. As far as the principles enunciated by these decisions are not in dispute, these decisions would in no way help the respondent in substantiating his case. Therefore, for the foregoing reasons and viewed from any angle, it is clear that these complaints came to be filed by the respondent without any basis and the complaints if taken as a whole would not constitute any offence under the act much less under Sections 628, 629 or 629-A of the Act. ( 28 ) IN the normal course, this Court would have directed the petitioners to approach the Magistrate to put forth their argument before him without interfering with the order passed by the learned Magistrate taking cognizance of the case. But as stated earlier, following the guidelines issued by the Hon'ble supreme Court and also taking into consideration the fact that this Court while admitting these petitions granted stay and the matter is pending in this Court since a long time, and if these matters are remanded once again to the Magistrate, it would consume time and cause inconvenience to the parties. Under those extraordinary circumstances and also due to the fact that these cases are of a different nature, the cases have to be considered under Section 482, Criminal Procedure Code in its proper perspective. ( 29 ) IN the result, I proceed to pass the following order. --- *** --- .