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2009 DIGILAW 886 (CAL)

Ratanlal Tamakhuwala v. Gujarat Nre Coke Limited

2009-12-07

PARTHA SAKHA DATTA

body2009
Judgment :- (1.) This application under Section 482 of the Code of Criminal Procedure has been filed by one of the accused persons in Case No. C-26437 of 2008, under Section 63 of the Companies Act, 1956, and Section 199 of the Indian Penal Code, now pending before the learned Chief Metropolitan Magistrate, Calcutta praying for quashing of the proceeding. (2.) The opposite party No.1 M/s. Gujarat NRE Coke Limited, which is a Company registered under The Companies Act, 1956 was the complainant against this petitioner and five others. The petitioner and the accused Nos. 2, 3, 4 and 5 are said to be Directors of Austral Coke and Projects Limited (hereinafter referred to as ACPL), while accused No. 6 is a Chartered Accountant of the accused company. The complainant claims to be the largest Indian manufacturer of Met Coke and globally a reputed company in manufacture of Low Ash Metallurgical Coke. The present petitioner who is accused No.1 in this case was one of the directors of the complainant company appointed in the year 1993 as Managing Director and was in full-time employment of the complainant company until 1997 when he was dismissed from service in the year 1997. Similarly, accused No. 2 who was the Vice-president (Operations) of the complainant company was also dismissed from service as both the accused Nos. 1 and 2 defalcated and siphoned off crores of rupees from the complainant-company. Various litigations between two companies are said to be pending. In the year 2007, accused No.1 who is the petitioner herein and accused No.2 jointly floated a company called Gremach Infrastructure Equipment and Projects Limited (Gremach) and came out with a public issue in the stock market. They invited investors by making tall and unverified claims about their performance. Market price of this Gremach came down in July, 2008 in consequence of which public investors and mutual funds lost several hundred crores of rupees. Then the accused Nos.1 and 2 floated another company called ACPL, in 1995 and made a public offer to raise money. They issued Red Herring Prospectus, (RHP) on 18th July, 2000 and made themselves directors of ACPL. This ACPL entered into capital market through initial public offer, (IPO) of 72,60,000 equity shares in a price band of Rs.164/- to Rs. 196/- per equity share which was open for subscription from 7th August, 2008 and closed on 13th August, 2008. They issued Red Herring Prospectus, (RHP) on 18th July, 2000 and made themselves directors of ACPL. This ACPL entered into capital market through initial public offer, (IPO) of 72,60,000 equity shares in a price band of Rs.164/- to Rs. 196/- per equity share which was open for subscription from 7th August, 2008 and closed on 13th August, 2008. Now in, their prospectus they made serious mis-statements some of which are in the language of the. complainant as follows :- "(i) The M/s. Austral Coke and Projects Limited has claimed inter alia the existence of various fixed assets at its plant including 4 chimneys and 138 ovens. It has also claimed in its issue marketing materials, the current production capacity of 3.75 lakh MTPA based on such 4 chimneys. This statement is completely baseless considering the fact that the very basis on which the companys projections are made is wrong and misleading. The company has only two chimneys which can give a produce of 60,000-70,000 tones of coke which cannot justify the claimed figures by any stretch of engineering excellence. The balance 2 chimneys are still under construction and the ovens are also yet to be constructed, while the same have been claimed as having been completed and added to the list by the Austral Coke and Projects Ltd. (ii) The actual production figures have not been disclosed by Austral Coke in its prospectus to cover up the window dressing. (iii) T. N. Datta and Associates was appointed as an auditor of the M/s. Austral Coke and Projects Limited on or about 28th May, 2008. Within a short period of 18 days, that is, on 1.6th June, 2008 they have purported to have completed the audit of accounts of M/s. Austral Coke and Projects Limited and have submitted the audit report for last 5 years for the purpose of inclusion in the prospectus. As per the statement of profit and loss account appearing on page 147 of the RHP which is part of their audit report, for the 11 months ended 29th February, 2008 sales of products manufactured by the company at Rs. 12481.72 lacs is complemented by Raw materials and Goods consumed at Rs.12843.24 lacs while against sale of products traded by the company for Rs. 12481.72 lacs is complemented by Raw materials and Goods consumed at Rs.12843.24 lacs while against sale of products traded by the company for Rs. 10184.43 lacs, the corresponding cost of purchase of such traded goods is not shown thereby grossly inflating the profits reported by the auditors, (iv) The Gross Block of Fixed assets at Rs. 27546,99 lacs Is not supported by the information on existing assets as appearing elsewhere in the prospectus. There is an apparent falsification of books and accounts in this respect. The aggregate insurance policies taken out by the M/s. Austral Coke and Projects Limited on its fixed assets is less than 30% in value of the value of Gross Block certified by the auditors. The auditors have also not shown the amount of capital work-in-progress even though the prospectus as well as insurance policies taken out by the company refer to the same. (v) To cover up the falsification of accounts and such window dressing, accused persons Nos. 1 to 5 have not given in RHP any quantitative details 9f the goods produced and traced by M/s. Austral Coke and Projects Limited. (vi) The complainant is the largest independent coke producer in India With a total coke making capacity including its subsidiaries at 1 million tonnes per annym. It is the only Indian company to own and operate cooking coal mines in Australia and the value of ownership interest of such mines alone is more than Rs.3,000/-Crores besides the value of coke plant of 1 million tonnes and other assets including a steel plant and wind mills. (vii) The complainant has published the Basis for Issue Price of M/s. Austral Coke and Projects Limited on page Nos. 74 and 75 of the Prospetus, wherein they have compared the financials of M/s Austral Coke and Projects Limited with complainant. (viii) The financial comparison of M/s Austral Coke and Projects Limited with complainant has been made in utter disregard of the positions held by both companies in the industry with respect to size, quality of assets, Np. of years of standing in business, goodwill built up by complainant and its ownership of various assets in India as well as overseas coking coal mines which are in production and generated a substantial cash flow. As explained hereinbefore, the audited accounts of M/s Austral Coke and Projects Limited have been falsified and distorted. of years of standing in business, goodwill built up by complainant and its ownership of various assets in India as well as overseas coking coal mines which are in production and generated a substantial cash flow. As explained hereinbefore, the audited accounts of M/s Austral Coke and Projects Limited have been falsified and distorted. The financial comparison which is based on such engineered and doctored data in respect of M/s. Austral Coke and Projects Limited is made with the twin intent to cheat and defraud investors on the one hand and defame complainant on the other. (ix) In the prospectus, the accused person 1 and 2, the promoters of M/s. Austral Coke and Projects Limited have claimed that they were the one of the promoters of complainant and were instrumental in growth of the complainant, conveniently forgetting to mention that they were forcefully "expelled" in 1997 from the complainant by its shareholders because of their fraudulent practices including defalcation of shareholders monies. Several cases against accused persons Nos. 1 and 2 are still pending in the Calcutta High Court for investigation and recovery of public investor funds defalcated by them. (x) All such proceedings pending in this Honble Court are for investigation and recovery of company properties siphoned off and defalcated by the accused persons 1 and 2 and none of these cases in any manner related to any family dispute. (xi) Accused person Nos. 1 and 2 have been falsely claiming such pending cases for recovery of company properties defalcated by them to be part of a family dispute and thereby misleading the public at large as well as all those dealing with them. (xii) By wrongfully claiming themselves as original promoters of the complainant without disclosing their true relationship with complainant, they have actively misled with intent to defraud each and every person who relies on such statements made in the prospectus with sole purpose of luring the investors to subscribe to their public issue. (xiii) CARE one of the leading credit rating agencies in the country have graded the public issue of M/s Austral Coke and Projects Limited and has assigned the "CARE IPO GRADE 2" indicating below average fundamentals; (xiv) To wrongfully associate directly as well as indirectly the name of complainant to such below average issue has seriously damaged the credibility of complainant before its existing 1 lac investors as well as prospective investors". (3.) The accused persons thus committed offence under Section 63 of the Companies Act, 1956. The complainant having come to know of the misstatements issued a Press Release bringing the misstatements to the knowledge of the investors and public in general. Accused Nos. 1 and 2 issued a counter Press Release alleging that the complaint of the complainant was in the nature of a family dispute. The complainant then issued a further Press Release on 8th August, 2008 with the following :-"(i) The promoters of Austral Coke Mr. Ratari Lai Tamakhuwala and Mr. Rishi Raj Agarwal were "employees" of Gujarat NRE Coke Limited. They were "expelled" from the company when they were caught stealing shareholder monies and company funds. The term "family dispute" is not applicable as the case against the promoters of Austral Coke was not about the division of family properties, but was plain vanilla corruption and theft. (ii) Public Limited Listed Companies are not family fielddoms. To even hint that a management complaint about defalcation of corporate funds is a "family dispute" points at the utter disregard to corporate governance ethics, which only goes to strengthen the original case against the father-son-duo that they were using company and shareholder funds for personal gains, treating the shareholders assets as "family owned". (iii) Various cases are pending against the duo before the Honble Calcutta High Court relating to the defalcation of shareholder funds not family property. (iv) Austral Coke has made several misstatements in the prospectus with a criminal intent to defraud investors. While they have only two running chimneys, they have claimed to have four chimneys seeking to pass off two under construction chimneys as running ones. This in itself a serious offence and warrants immediate investigation. (v) Austral Coke has also claimed a current production capacity of 3.75 lakh MTPA which too is a blatant lie. As per technical specification of ovens, with two chimneys cannot give them a production figure more than 60,000 to 70,000 tons of coke. Even with four chimneys as claimed by Austral, they cannot produce more than 1,40 lakh MPT of Coke. The balance is a screaming lie. We will again urge the media to visit the Austral Coke Plant at Lunva, Taluka Bhachau, Gujarat to veryfy the claims of the company. (vi) The Austral Coke Prospectus does not disclose the actual production figure to cover up the fraud. The balance is a screaming lie. We will again urge the media to visit the Austral Coke Plant at Lunva, Taluka Bhachau, Gujarat to veryfy the claims of the company. (vi) The Austral Coke Prospectus does not disclose the actual production figure to cover up the fraud. (vii) Gujarat NRE Coke has already sent and request SEBI and the Company Law Board to consider the Press Release issued yesterday as an FIR and initiate appropriate investigation against the promoters of Austral Coke. (viii) Gujarat NRE Coke would like to ask the Merchant Bankers and various other "interested parties" who have lent their names to the issue as to whether they are aware to the aforesaid facts and whether they can stand up and verify under oath one simple thing that Austral Coke had four chimneys that are in operation as mentioned and certified in the prospectus dated 18.7.2008". (4.) Thus according to the complainant the accused persons committed offences under Section 199/200 of I.P.C. and Section 63 of the Companies Act, 1956. (5.) The bulky prospectus of the ACPL running over 258 pages has been made enclosure to the revisional application. (6.) Mr. S. K. Kapoor, learned Advocate for the petitioner in support of the application praying for quashing of the proceeding made two-fold submissions. The first submission is that the prosecution under Section 63 of the Companies Act is hot maintainable at the instance of the accused ih View of the bar under Section 621 of the Companies Act in terms of which ho Court shall take cognizance of offence except oh a complaint made By the Registrar of Companies or a share-holder or the Central Government. Mis second submission is that on the facts alleged in the petition of complaint offences under Section 199/200, I.P.C. cannot lie because the prospectus is not a declaration within the meaning of explanation to Section 200 of the I.P.C. It is submitted that the complainant is a company, namely Gujarat NRE Coke Ltd., engaged in the coke manufacturing business and the petitioner is also a director of the Public Limited Company engaged in the same type of business. The complainant is admittedly a rival in the trade and there is a family relationship between the principal controlling shareholders of both the companies and there is not only business rivalry but also long standing family rivalry between them. The complainant is admittedly a rival in the trade and there is a family relationship between the principal controlling shareholders of both the companies and there is not only business rivalry but also long standing family rivalry between them. In 2008 ACPL made an IPO inviting the public to subscribe 72,60,000 equity share at a price band of Rs. 164/- to Rs. 196/- and they issued a prospectus which is a subject matter of controversy between the parties. Mr. Kapoor submits that the Bombay Stock Exchange and National Stock Exchange have approved of the listing of the equity shares offered for sale in the open market. The prospectus was duly filed with the Registrar of Companies, Kolkata as well as the Stock Exchange Board of India (SEBI) and no grievance against the prospectus has been made by either of the statutory public bodies of any kind whatsoever. The vetting of the prospectus has been done by the SEBI and it is only after its approval, that the prospectus could be published. When the IPO was opened in the market for subscription a Press Release was published by the complainant contending defamatory and scandalous matter against the ACPL. Then the complainant filed a civil suit in this High Court being Suit No. 160 of 2008. Since the I.P.O. was being managed from Bombay, the ACPL filed a civil suit in the Bombay High Court being Suit No. 2486 of 2008 against the complainant and in that proceeding an ad interim order of injunction was issued against the complainant. The complainant went in appeal which was dismissed by the Division Bench of the Bombay High Court where the interlocutory application was later taken up before the Bombay High Court on 23rd August, 2008 which was actually admitted on behalf of the complainant that the Press Release contains objectionable materials and the complainant agreed to delete those objectionable materials. To pursue their vendetta the complainant also made a complaint with the-Registrar of Companies, Kolkata, which, however, did not take any steps. A similar complaint was made by the complainant to the SEBI which also did not initiate any proceeding in respect of the same purported complaint. The complainants grievances were only about the prospectus and the contents of the prospectus without anything more which are sub-judice before the two High Courts. A similar complaint was made by the complainant to the SEBI which also did not initiate any proceeding in respect of the same purported complaint. The complainants grievances were only about the prospectus and the contents of the prospectus without anything more which are sub-judice before the two High Courts. In this background it is submitted that the complaint is not maintainable on the ground that so far as charge under Section 63 of the Companies Act is concerned, the complainant has no locus standi to maintain such complaint and secondly, so far as the charge under Section 199/200 of I.P.C. is concerned on the facts presented, the said charges are not maintainable because the prospectus is not a declaration. Unless the accused makes a false statement in a declaration and subscribe it knowing it to be false the accused cannot be prosecuted under Section 199, I.P.C. It is argued that a Court of justice or any public servant is not legally bound or authorized by law to receive such a prospectus in evidence as declaration. Prospectus is simply an advertisement inviting offers from the members of the public for subscription or purchase of share, and under Section 621, as aforesaid, it is the Registrar of Companies or a share-holder or the Government who can initiate a complaint for publication of mis statements or false statement in the prospectus. Furthermore, it was argued that the prospectus was not issued by the complainant; it was issued by the ACPL, the company, and the publication of the prospectus can at best be regarded as the act of the company and not as act of any of its directors or other officers of the company. Company has not been arrayed in the list of accused. Mr. Kapoor referred to a decision in Kalisankar Chatterjee v. Sarat Chandra Dey and Anr. reported in 1981 Cal WN 797. It is argued that unless the prospectus comes within the ambit of the declaration prosecution under Section 199/200, I.P.C. is not competent and maintainable. Section 199, it is argued, contemplates that there has to be a statement of facts in the form of declaration which for the purpose of proof of the fact declared has by itself all the legal force of evidence given on oath or solemn affirmation. Section 199, it is argued, contemplates that there has to be a statement of facts in the form of declaration which for the purpose of proof of the fact declared has by itself all the legal force of evidence given on oath or solemn affirmation. Prospectus does not fulfill these criteria and prospectus cannot be said to be document as receivable in evidence of any fact. Thus, it is argued that the petition of complaint has no leg to stand upon. (7.) Mr. Sudipto Moitra, learned Advocate for the complainant/opposite party No.1, submitted that prospectus having been registered with the Registrar of Companies contains series of mis-statements which are full of lies and falsity. Since this is a document registered with the Registrar of Companies it is receivable in evidence as declaration and there is no scope for the accused to flee away so as to make a stand that it was not a declaration containing certain statements. It is argued that Section 199 of the I.P.C. does not mandate that the statement has to be on oath or affirmation and there is a distinguishing feature between Section 191 and Section 199 of the I.P.C. While Section 191, the statement has to be on oath or affirmation, the statement under Section 199 need not be on oath and given the facts that a prospectus is a statement of a company about their viability and infrastructure and by such false statements and representation misled the members of the public and investors; as such they are liable to be prosecuted under Section 199/200 of I.P.C. In this connection, Mr. Moitra referred to a decision in AIR 1967 SC 68 . Thus, once the prospectus is given a statutory recognition it cannot be argued that it is not receivable in evidence. Mr. Moitra submitted that it is wrong to suggest that SEBI did not find it necessary to make any adverse comment on the prospectus of the ACPL. In course of hearing he produced the observation of the SEBI showing how the SEBI came to the conclusion that the ACPL committed fraud and misrepresentation so as to misguide the investors, share-holders and the members of the public in general. They had only two chimneys but they had shown that they had four chimneys. No quantitative details of the goods produced and traded was given. Their audited statements of account was false and distorted. They had only two chimneys but they had shown that they had four chimneys. No quantitative details of the goods produced and traded was given. Their audited statements of account was false and distorted. Their data are all engineered and doctored with the avowed object of cheating investors and defaming the complainant Company. Actual production figures were not disclosed to cover up the window dressing. The amount of capital work-in-progress was not shown. Quantitative details of goods produced and traded were not shown in the RHP. Thus, it is argued that Section 199/200 are very well applicable to this case because prospectus is not simply an advertisement as Mr. Kapoor argues and it having been accorded statutory recognition with registration of the same with the Registrar of the Companies, it partakes of the character of declaration upon which the members of the public may act. The mere fact that it is not a sworn statement is immaterial. Mr. Moitra argues that with regard to the submission of Mr. Kapoor that charge under Section 63 of the Companies Act can only be maintained at the instance of the Registrar of Companies or share-holder or Government is not correct because any member of the public or the complainant for that matter may initiate action under that Section of the law when it comes to light that the members of the public have been cheated, defrauded and deceived with glaringly false statement making glossy picture of the company by the accused and in such a situation, prosecution under Section 63 of the Companies Act and Sections 199/200 I.P.C. can be initiated by a person other than Registrar or shareholder or the Government. It is argued that even if Section 63 of the Companies Act is kept outside the purview of the complaint in view of Section 621 of the Act as is argued by Mr. Kapoor, still then provision of Section 199/200 of I.P.C. will lie and apply in the instant case. It is submitted finally that criminal law for mis-statement in prospectus is analogous to Section 191 of the I.P.C. and Court can take cognizance of the offence on the complaint. (8.) Having placed the submissions of the learned Counsel for the parties, it is now necessary to examine the subject matter of the case with reference to the provisions of the Companies Act. (8.) Having placed the submissions of the learned Counsel for the parties, it is now necessary to examine the subject matter of the case with reference to the provisions of the Companies Act. The word prospectus has been defined in Section 2(36) of the Act as follows :- "prospectus means any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in/or debentures of a body corporate". (9.) In essence, prospectus is a document, intended to invite the attention of the members of the public to make deposits or to invest by purchasing of shares or debentures of the company. Now, it is not in dispute that a prospectus of a company requires to be registered with Registrar of the Companies. Now, Section 63 imposes criminal liability for misstatements in prospectus. The Section runs as follows :-"i) where a prospectus issued after the commencement of this Act includes any untrue statement, every person who authorised the issue of the prospectus shall be punishable with imprisonment for a term which may extent to two years or with fine which may extent to Rs. 50,000/- or with both, unless he proves either that the statement was immaterial or that he had reasonable ground to believe, and did up to the time of the issue of the prospectus believed, that the statement was true". Sub-section (2): a person shall not be deemed for the purposes of this Section to have authorized the issue of a prospectus by reason only of his having given-(a) the consent required by Section 58 to the inclusion therein of a statement purporting to be made by him as an expert, or (b) the consent required by sub-section (3) of Section 60. (10.) Therefore, we find that the Companies Act has prescribed penalty for misstatements in prospectus. (10.) Therefore, we find that the Companies Act has prescribed penalty for misstatements in prospectus. Section 621 of the Act provides as follows:- Sub-section (i): "No Court shall take cognizance of any offence against 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 or of a share-holder of the company or a person authorized by the Central Government in that behalf; Provided that nothing in this sub-section shall apply to a prosecution by a company of any of its officers. Provided further that the Court may take cognizance of offence relating to issue and transfer of proceedings and non-payment of dividend on a complaint in writing by a person authorized by the Security and Exchange Board of India". (11.) Therefore, it appears that for prosecution of a company or any officer of the company on the charge of mis-statements in prospectus the Act has laid down a specific provision and procedure to proceed against such a company or officer of the company. Section 621 clearly excludes any person as complainant other than the Registrar, share-holder or a person authorized by the Central Government to lodge complaint against the offender company to prosecute on the charge of mis-statements in prospectus. It seems to me that when a statute lays down a procedure for prosecution for misstatements in prospectus the procedure laid down therein has to be followed and no other procedure is maintainable. Again, when a statute, special of its kind, has defined a specific offence and provided punishment thereof prosecution has to be launched under that special law to the exclusion of the general law. In this connection we may take recourse to Section 135 of the Indian Electricity Act which provides for prosecution on charge of dishonest abstraction of electrical energy. The said Act has laid down a procedure as to how a complaint has to be lodged or how the investigation has to be conducted. Invocation of Section 379 of I.P.C. in case of dishonest abstraction of electrical energy is not permissible. The law is well-settled that when a statute provides that a thing should done in a certain way it has to be done in that way or not at all. The other methods of performance are exclusively forbidden. Mr. Invocation of Section 379 of I.P.C. in case of dishonest abstraction of electrical energy is not permissible. The law is well-settled that when a statute provides that a thing should done in a certain way it has to be done in that way or not at all. The other methods of performance are exclusively forbidden. Mr. Kapoor in this connection rightly relied on the decision in Nazir Ahamed case reported in 1935 PC 253. Analogy has also been made not without justification to prosecution under Section 537 of Calcutta Municipal Act, 1923, since repealed in the matter of institution of legal proceedings. Mr. Kapoor referred to the decision in Chande Pershad v. Abdur Rhaman, Sub-Overseer, Monghyr Municipality, reported in ILR 22 Cal 131, where it was held that the Municipal Act is intended to be complete in itself as regards the offences committed against the Municipal Commissioners and there is no indication of any intention to render a delinquent also liable to punishment under the I.P.C. The Companies Act is a complete self-contained Code. It provides in clear terms the remedy available in case a company issues a prospectus with misstatements and Section 63 clearly provides that a company or a officer of a company can be prosecuted on account of misstatement in prospectus under Section 63 and where thus there is a special provision in a statute which is a self-contained one providing punishment on account of the offences alleged prosecution has be to launched in the manner as laid down in that Act itself. Therefore, in terms of Section 621 of the Act a parallel or a rival company cannot, initiate a complaint alleging offences under Section 63 of the Act. In that view of the matter, it does not appear to me that prosecution under Section 199/200 I.P.C. which is said to correspond to Section 63 of the Companies Act is maintainable. When a specific offence has been provided in the statute and penalty on account of the offence has been laid down in the said statute, it is no longer available to a person to say that since the provision of Section 199/200 I.P.C. corresponds to Section 63 of the Companies Act the former can be invoked at the instance of a private individual or a parallel company. Therefore, I am of the considered opinion that so far as prosecution under Section 63 of the Companies Act is concerned the complaint has no locus standi to initiate an action under that Section of the law. (12.) As indicated above, as a corollary to what has been said above the prosecution under Section 199 does not lie in the instant case. Having read the definition of prospectus as it appears in Section 2(36) of the Act it comes to this that it is a sort of an advertisement giving certain information with the sole object of inviting depositors from the members of the public. The declaration contemplated by Section 199 is not necessarily one which the person making the declaration is bound by law to make. It is true, that in terms of Section 199 such a declaration need not be on oath or solemn affirmation. But then the statement has to be in a declaration. The ingredients of Section 199 are three namely, a) making of a declaration which a Court or a public servant is bound or authorized by law to receive in evidence; b) it must be a false statement in such declaration knowing or believing it to be false and c) such false statement should be touching upon any point material to the object for which the declaration is made or used. Before the statement in the prospectus is regarded an offence under Section 199, such a statement must be in the form of a declaration which for the purpose of proof of the fact declared to, has by itself all the legal force of evidence. A prospectus cannot be said to be a statement of fact in a form of declaration. A prospectus of a company is a presentation of picture of the financial viability of the company so that the members of the public are allured to purchase a share in the company and become a shareholder. No doubt if a shareholder is misguided by untruthful statement, glaringly false statement, then there is Section 63 of the Companies Act that can take care of the situation. No doubt if a shareholder is misguided by untruthful statement, glaringly false statement, then there is Section 63 of the Companies Act that can take care of the situation. It is difficult to hold that prospectus of a company is a declaration within the meaning of Section 199 of the I.P.C. In Kalisankar Chatterjee (supra) it was held that a statement in a verified pleading does not constitute evidence and receivable as such, the making of a false statement in such a pleading does not constitute offence under Section 199 of the I.P.C. Prospectus on a plain reading of the definition cannot be such as being receivable as evidence of any fact. It is not a piece of evidence which a person is bound or authorized by law to receive as evidence. Firstly, it is not a declaration and secondly, it is not receivable as evidence. (13.) Accordingly, the revisional application succeeds and is allowed. The criminal proceedings being Case No. C-26437 of 2008 under Section 199/200 of I.P.C. and under Section 63 of the Companies Act, now pending before the learned Chief Metropolitan Magistrate, Kolkata is hereby quashed. It is, however, made clear that quashing of the proceeding initiated by the complainant will not prevent prosecution of the petitioner by the person authorized by law.