ORDER These set of revisions are being taken together for disposal since parties are common in all these petitions. 2. These are complainant's revisions being aggrieved by the order passed by the learned Magistrate in discharging accused 3 and 4. Petitioner being the Reserve Bank of India through the Department of Non-Banking Supervision got filed a complaint against respondents 1 to 4. The 1st respondent is the Company by name Shetty Leasing India Limited and 2nd respondent is its Managing Director. The 3rd and 4th respondents are said to be the Directors of the said Company registered under the Companies Act, 1956. The petitioner-Reserve Bank of India is the regulatory authority for non-banking financial companies. As a regulatory authority, it has got' powers under Chapter III-B of the Reserve Bank of India Act, 1934 including issue of Certificate of Registration to non-Banking institutions, prescribing norms, issuing instructions, prohibiting non-banking companies from accepting deposits and filing of winding up petitions, etc. 3. It is stated that the 1st respondent-Company accepted deposits from the public in the course of its business. In terms of Section 45-QA of the Act, every deposit accepted by the non-banking financial Company is to be repaid in accordance with the terms and conditions of such deposits and therefore, the 1st respondent-Company was also bound to repay the deposits as per the terms and conditions of acceptance. The 1st respondent-Company having failed to repay the deposits on maturity, the aggrieved depositors approached the Southern Regional Branch of the Company Law Board at Chennai under Section 45-QA(2) of the Act complaining of non-payment of the matured deposits. The Company Law Board passed an order under Section 45-QA(2) of the Act directing the 1st respondent-Company to repay the deposits as per the conditions in its order dated 13-10-1988 - Annexure-C of the paper book and the said order was communicated to the petitioner-RBI to ensure compliance of the said order by the respondent-Company. 4. Thereafter, the petitioner in order to verify whether the Company Law Board's direction has been complied with by the respondent-Company as directed by the Company Law Board, has issued a show-cause notice dated 16-6-1999 to the respondent-Company calling upon the comply with the order passed by the Company Law Board to which the 1st respondent-Company replied admitting default. 4. Thereafter, the petitioner in order to verify whether the Company Law Board's direction has been complied with by the respondent-Company as directed by the Company Law Board, has issued a show-cause notice dated 16-6-1999 to the respondent-Company calling upon the comply with the order passed by the Company Law Board to which the 1st respondent-Company replied admitting default. Thereby it is stated that the 1st respondent have contravened the provisions of Section 45-QA of the Act and as such, it is guilty and is punishable under Section 58-B(4-AAA) of the RBI Act. According to the petitioner, as per Section 58-C of the Act, every person who is in charge of the affairs of the Company that has committed default should also be deemed to be guilty and liable for punishment. The 2nd respondent is the Managing Director and 3rd and 4th respondents are other Directors said to be in charge and responsible for the running of the respondent-Company and conduct of its business. As such, according to the petitioner, respondents 2 to 1 are guilty and liable for punishment for the offences as per Section 58-B(1-AAA) of the Act. 5. Further it is stated that petitioner had filed a private complaint under Section 58-C(1) read with Sections 15-QA, 58-B and 58-C of the Act before the VIII Additional City Metropolitan Magistrate, Bangalore. The Trial Court having taken cognizance, registered the complaint in CC Nos. 18198 to 18504 of 1999. In response to the summons issued by the Trial Court, respondents are said to have entered appearance and thereafter, matter was posted for evidence before framing charge and on behalf of the petitioner, one of the official was examined and cross-examined. The Trial Court after hearing the arguments of the petitioner and the respondents, passed the impugned order dated 22-12-2005 holding that charges be framed against respondents 1 and 2 and also holding that respondents 3 and 1 are not necessary parties and as such they are discharged. Being aggrieved by the order of discharge of respondents 3 and 1, petitioner is before this Court challenging the said order as illegal and erroneous on various grounds. 6. After securing the records, matter is taken up for final hearing. Heard the Counsel for the petitioner and the respondents. 7. Being aggrieved by the order of discharge of respondents 3 and 1, petitioner is before this Court challenging the said order as illegal and erroneous on various grounds. 6. After securing the records, matter is taken up for final hearing. Heard the Counsel for the petitioner and the respondents. 7. It is the submission of the petitioner's Counsel that as per Section 45-QA of the RBI Act, 1934, the Company Law Board has ordered the 1st respondent for repayment of deposits and as there was non-compliance of the order of repayment by the respondent-Company passed by the Company Law Board, the petitioner being a regulatory authority as per Section 58-B(4-AAA) which states that whoever fails to comply with any order made by the Company Law Board as per Section 45-QA(2), they shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine and as per Section 58-C where a person commits contravention or default as per Section 58-B, every person who at the time of contravention or default was in charge of or responsible to the Company for the conduct of the business of 1, he Company, as well as the Company, shall be deemed to be guilty of the contravention or default, filed a complaint and as per the complaint and also the petitioner represented by its officer specifically averred in the complaint as to the responsibility and conducting of the business of the 1st respondent-Company by respondents 3 and 4. Despite that, learned Magistrate without noting the same and the legal consequences, has passed an order of discharge and accordingly submitted that it is erroneous and that the winding up proceedings initiated will not bar the initiation of criminal proceedings against the defaulters namely, Directors of the Company which has not complied with the directions of the Company Law Board. 8. Per contra, Counsel for the respondents has contended that in a discriminatory and arbitrary manner the petitioner has chosen only few of the Directors from the same family having left out several other Directors and further, the person who has given evidence on behalf of the petitioner is not aware whether the affected persons have given a representation as to non-payment by the respondent-Company and also that he does not know the details. Further, even during pendency of the matter, no further particulars of representation given to the petitioner is produced before the Court and there is no such default either being committed by 3rd and 4th respondents much less are they responsible for the conduct of the business of the Company. Further, according to him, it is the Company alone that would be liable and respondents 3 and 4 being the Directors, could not be held personally liable or be prosecuted. Accordingly, having taken me through the detailed cross-examination of the officer examined on behalf of the petitioner, learned Counsel has pointed out several discrepancies in his evidence that there is no such complaint being received by the petitioner from the depositors and, he has also argued that when winding up proceedings has already been initiated and if the deposits are to be returned, they can very well-approach the Company Court seeking redressal. Accordingly, learned Counsel contended that there is no illegality as such committed by the learned Magistrate in passing the impugned order of discharge of respondents 8 and 4 who are only Directors and not responsible for the conduct of the business of the Company. It is also submitted that they are not parties before the Company Law Board wherein order has been passed and they have not been heard as well. 9. In the light of the arguments advanced, let me consider whether the Trial Court has committed any illegality in passing the order of discharge of respondents 3 and 4. 10. As per the provisions of the RBI Act, especially Section 45-IA, every non-banking financial Company shall commence or carryon the business of non-banking financial institutions, only after obtaining a certificate of registration as per Chapter III-B of the Reserve Bank of India Act, 1931. Further, as per Section 45-JA of the RBI Act has power to determine and issue directions permitting non-banking financial institutions regarding conduct of the business in the manner not detrimental to the interest of the depositors or in a manner not prejudicial to the interest of non-banking financial institutions and it may determine the policy and give directions to all or any of the non-banking financial institutions relating to income recognition, accounting standards, making of proper provisions for bad and doubtful debts and such other activities of the non-banking financial institutions. In that context, as per Section 58-B(4-AAA) aggrieved persons if they approach the Company Law Board and the Company Law Board on such application passes any such order, whoever fails to comply with that order as is passed under Section 45-QA of the Act, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to pay fine. Further, as per Section 15-QA where every deposit is accepted by a non-banking financial Company, unless renewed, shall be repaid in accordance with the terms and conditions of such deposit and as per Section 45-QA(2) where a non-banking financial Company has failed to repay the deposit or part thereof in accordance with the terms and conditions of such deposit, the Company Law Board on its own motion or on application of the depositor, to safeguard the interest of the Company deposits or in public interest, direct the non-banking financial Company to make repayment of such deposits within a particular time and subject to such conditions specified in the order. As noted, Section 58-C of the Act reads as under: "58-C. Offences by companies.-(1) Where a person committing a contravention or default referred to in Section 58-B is a Company, every person who at the time the contravention or default was committed, was in charge of, and was responsible to, the Company for the conduct of the business of the Company, as well as the Company, shall be deemed to be guilty of the contravention or default and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention or default was committed without his knowledge or that he had exercised all due diligence to prevent the contravention or default. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a Company and it is proved that the same was committed with the consent or connivance of, or is attributable to any neglect on the part of, any Director, manager, secretary, or other officer or employee of the Company, such Director, manager, secretary, other officer or employee shall also be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly". 11. 11. As per Annexure-C of the papers, the order of the Company Law Board at Southern Regional Branch, Chennai in Company Application Nos. 1016 to 1022, under Section 45-QA(2) of the RBI Act, on the petition filed by the depositors and after making the respondent-Company a party, in the course of its order dated 13-10-1998, has noted that the depositors have made application under Section 45-QA(2) of the RBI Act stating that the Company failed to repay the deposits together with interest. Further, it has noted that the Advocate who represented the Company sought time for repayment of the amount to the applicants in three installments at 25% of the amount due by 31-12-1998 and another 25% of the amount due by 28-2-1999 and the remaining balance by 31-3-1999. On that basis, the Company Law Board has ordered the 1st respondent to repay the deposits in respect of the applicants together with the contracted rate of interest calculated at the date of the payment in three installments. Further, it has ordered that a copy of the order be sent to the General Manager, Department of Non-Banking Supervision, RBI, Bangalore Regional Office to ensure compliance and for taking appropriate action for non-compliance of the order, if any. 12. In furtherance of the said direction issued by the Company Law Board, for non-compliance, the petitioner filed a private complaint before the VIII Additional CMM, Bangalore who although has taken cognizance of the complaint and issued process against all the Four respondents, after hearing, passed an order of discharge insofar as respondents 3 and Ii are concerned. At this juncture, it may be noted that it is the argument of Counsel representing respondents 3 and Ii that the petitioner has only chosen to prosecute respondents 3 and 4 leaving out other Directors, although the RBI Act envisages to prosecute and to take action on all those who are responsible for the conduct of the business of the respondent-Company and, only with an ulterior motive and at the instigation of ill-wishers, these respondents have been proceeded with the rightly, the learned Magistrate having noted the non- responsibility of respondents 3 and 4, has discharged them. 13. 13. In reply, learned Counsel for the petitioner has taken me through the averments made in para 10 of the complaint wherein it is clearly stated that in the beginning accused 1 to 4 were in charge and responsible for accused I-Company for the conduct of its business and also at the time of default i.e., failing to comply with the directions of the order dated 13-10-1998 passed by the Company Law Board in the Company Applications filed before it. Accordingly, it is stated that the accused were liable to be prosecuted and punished accordingly. 14. In the evidence before charge, the person representing the petitioner has specifically deposed that the 1st accused is a non-banking financial Company and the 2nd accused is the Managing Director of the 1st accused-Company and accused 3 and 4 are the Directors of the Company and accused 2 to Ii are representing and responsible for the Company. This aspect has not been taken note of by the Trial Court and it has simply proceeded to hold that nothing has been stated against the respondents 3 and 4 regarding the conduct of business and responsibility and without applying its mind, in a mechanical manner, has passed the order which is prima facie erroneous and illegal. 15. Further, referring to Sections 442 and 446 of the Companies Act, Counsel representing the petitioner submitted that though the official liquidator is appointed provisionally, as per Section 446 of the Companies Act, no suit or legal proceeding shall be commenced or if pending at the date of the winding up order, shall be proceeded with against the Company except by leave of the Court but, insofar as criminal prosecutions are concerned, it does not include the context provided under Section 446 and the question of staying the criminal proceedings does not arise. What is being prohibited is, in the event of any winding up order is passed, the initiation of civil suit or legal proceedings acts as a bar but not criminal prosecution for violation of the legal provisions wherein a penal clause has been invoked to prosecute the guilty as is held by the Division Bench of the Delhi High Court in Company Appeal No. 18 of 2000 in the case of D.K Kapur v. Reserve Bank of India and Others1. 16. 16. However, it is the submission of the respondents that other Directors were not taken into consideration while filing the complaint and the 3rd and 4th respondents have been discriminated against and only family members have been chosen to be prosecuted by the petitioner. Here, it is relevant to note the proviso as per Section 58-C of the RBI Act, which states that every person who at the time of contravention or default was in charge or is responsible for the Company and for the conduct of business of the company, shall be deemed to be guilty of the contravention. Nothing has been forthcoming as to whether other Directors are also responsible for the conduct of the business of the Company. If the petitioner has arbitrarily or falsely implicated only respondents 3 and 4 leaving out others, it may be an arbitrary act and necessarily the petitioner may have to take action against others who have been left out. 17. However, for the present, respondents 3 and 4 are said to be the persons who are in charge of and responsible for the conduct of the business of the respondent-Company along with the 2nd respondent who is the Managing Director. In that context, just because the other Directors have not been brought to books, it cannot be said that these respondents can be left out. However, it may be clarified with a direction to the petitioner to ascertain who others are responsible for the conduct of the business of the Company as Directors and to take action against them. Meanwhile, it is for the Trial Court to entertain any such other application being filed and to proceed against them as well. 18. As per Section 58-C of the Act, it is for the respondents to make out that they are not responsible for the conduct of the business of the Company or to show that inspite of due diligence and without their knowledge, the act of default was committed and in that event, if it is able to make out by them or any other person who is responsible that without their knowledge such default had occurred and they could not ascertain with aJ] due diligence, to prevent the contravention or default and on such satisfactory material being produced by them, it is for the Court to act as per the proviso to Section 58-C of the Act. 19. 19. For the foregoing reasons, the revisions are allowed. The impugned orders of discharge of respondents 3 and 4 is set aside. It is for the Trial Court to pass orders in accordance with law as there is averment against the 3rd and 4th respondents also as responsible for the conduct of the business of the Company.