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2001 DIGILAW 325 (AP)

S. ASHOK RAO v. State Of A. P.

2001-03-27

R.RAMANUJAM

body2001
R. RAMANUJAM, J. ( 1 ) ORDER : this Criminal Petition is filed under Section 482 Cr. PC to quash the proceedings in Calendar Case No. 34 of 2000 on the file of the Special Judge for Economic offences, City Criminal Courts, Hyderabad. ( 2 ) PETITIONERS 1 to 3 herein are A1 to A3 respectively in the aforesaid Calendar case. The 1st petitioner herein is the managing Director, 2nd and 3rd petitioners are the Directors of Kami Chit Funds Private limited, which is a Company registered under the Companies Act. ( 3 ) THE complaint, on which the criminal proceedings were initiated were filed by one Sri Mukka Harish Babu, 2nd respondent herein, for the offence alleged to have been committed by the petitioners under Section 628 of the Companies Act (for short "the Act" ). ( 4 ) THE case of the complainant, as is evident from the complaint is that the accused have filed a false statement in form No. 32 before the Registrar of companies showing the complainant as one of the Directors of the said Company, even though he is not. ( 5 ) THE learned Special Judge, after examining the complainant, took cognizance of the complaint and issued process to the accused. Thereupon they filed the present petition for quashing the said proceedings. ( 6 ) THE main ground urged by Sri L. Venkateswara Rao, learned Counsel for the petitioners-accused is that the complainant is not a shareholder of the company and, therefore, the learned Special Judge ought not to have taken cognizance of the complaint in view of the mandatory provision contained in Section 621 of the act. ( 7 ) SRI P. Shiv Kumar, learned Counsel for the 2nd respondent-complainant, however, submits that the father of the complainant was a share holder of the company. After his death, the complainant became entitled to the said shares and he also filed an application for transfer of the same in his name. Therefore, he can maintain the complaint. ( 8 ) I find merit in the contention advanced on behalf of the accused. Section 621 of the Act reads thus:"sec. 621. After his death, the complainant became entitled to the said shares and he also filed an application for transfer of the same in his name. Therefore, he can maintain the complaint. ( 8 ) I find merit in the contention advanced on behalf of the accused. Section 621 of the Act reads thus:"sec. 621. Offences against Act to be cognizable only on complaint by Registrar, shareholder or Government : (1) No court shall take cognizance of any offence against this Act (other than an offence with respect to which proceedings are instituted under Section 545), which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf. . . . . . . . . . . . "a plain reading of the aforesaid provision clearly shows that prosecution for the offences under the Act (except offences under Section 545) cannot be initiated by any person other than a Registrar, or a shareholder of the Company or a person authorised by the Central Government. The petitioner is neither a Registrar nor a person authorised by the Central Government. Undisputedly, the complainant is not a shareholder of the Company as yet. His application for transfer of shares held by his late father is still pending and the shares are not yet transferred in his name in accordance with the procedure laid down in Schedule-I to Tabje-A to the Companies Act, in particular, Regulations 25 to 28. Till such time, he cannot be a shareholder of the company. Therefore, the complaint filed by the complainant should not have been taken cognizance by the Special Judge in view of the clear prohibition contained in section 621 of the Act. ( 9 ) THE criminal petition, therefore, succeeds and it is accordingly allowed. Consequently, the criminal proceedings in calendar Case No. 34 of 2000, pending on the file of the Special Judge for Economic offences, City Criminal Courts, Hyderabad, are quashed.