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2010 DIGILAW 3813 (MAD)

Mohan Gupta v. Enforcement Officer, Enforcement Directorate, Sashtri Bhawan

2010-08-27

P.R.SHIVAKUMAR

body2010
Judgment : 1 The arguments advanced by Mr. A. Ragunathan, learned senior counsel representing the counsel for the petitioner and that of Mr.K. Ramasamy, learned Special Public Prosecutor representing the respondent were heard. Records produced on both sides were also perused. 2 This petition has been filed under Section 482 Cr.P.C seeking an order quashing the prosecution launched against the petitioner in C.C.No;407 of 2002 on the file of the Additional Chief Metropolitan Magistrate, E.O.I, Egmore, Chennai wherein he has been arraigned as A4. The offences alleged are punishable under Section 56 (l)(i) read with sub-sections (3) and (4) of Section 19 of the Foreign Exchange Management Act, 1999. The first accused is a company by name Pappilon Exports Ltd., and the other three accused are said to be its Directors, who were responsible for the conduct of the business of the said Company at the time of the commission of the alleged offences. The petitioner herein was admittedly a Director of the said Company. However, the prosecution launched against him is sought to be quashed on the sole ground that whenever a person is sought to be prosecuted holding him vicariously liable for the acts of the Company as the Principal offender, necessary averments providing details as to how he was involved in the management of the business of the Company should have been made and in the absence of such averment, such a prosecution of a Director of the Company cannot be maintained. 3 Mr.A.Raghunathan, the learned senior counsel drawing the attention of this Court to two recent judgments of Hon ‘ ble Apex Court in Ramrajsingh v. State of Madhya Pradesh and Another (2009) 6 SCC 729 : (2009) 3 MLJ (Crl) 1060 and National Small Industries Corporation Limited v. Harmeet Singh Paintal and Another (2010) 3 SCC 330 : (2010) 2 MLJ (Crl) 301, argued that an analogous provision in Section 141 of the Negotiable Instruments Act 1881 providing for vicarious liability of the Directors of the Company/partners of a firm etc., was interpreted in such a way that prosecution for an offence under Section 138 of the Negotiable Instruments Act committed by a company cannot be sustained in the absence of necessary pleadings as to how the Director/Partner or other person was responsible for the conduct of the business of the Company. It is true that in those judgments, the Apex Court has held that the repetition of the magic words found in the statutory provision shall not be enough and there must be further details as to the manner in which one was involved in the conduct of the business of the Company to be held vicariously liable for the offence committed by the Company. 4 The learned Special Public Prosecutor, as an answer to the above said submission made by the learned senior counsel for the petitioner, submitted that necessary averments have been made in the complaint to sustain a prosecution of the petitioner and that hence the criminal proceedings against the petitioner shall not be quashed on the ground of want of necessary averments in the complaint This Court, after going through the contents of the complaint finds that except the bare recital that the petitioner, as one of the Directors of the first accused Company, was responsible for the conduct of the business of the first accused Company, no other details are found. 5 In fact the learned Special Public Prosecutor also conceded on the above said legal position. However, it is the contention of the learned Special Public Prosecutor that in this case, though there is lack of such details regarding the manner in which the petitioner was involved in the management of the business of the Company, nevertheless there are clear and unambiguous averments to the effect that he was responsible for the day-to-day affairs of the Company and management of the business of the Company and hence, the prosecution launched against the petitioner can be sustained. It is the further contention of the learned Special Public Prosecutor that a person seeking remedy before a Court of law, should, at the first instance, submit himself to the jurisdiction of the Court and then only he can be allowed to seek relief before the Court of law. Learned Special Public Prosecutor pointed out the fact that right from the inception of this case, the petitioner is absconding and till date he has not entered appearance before the trial Court and that such conduct itself shall be enough to non-suit the petitioner for the relief sought for in this petition, namely, an extraordinary relief that can be granted using the inherent powers of the High Court. It is trite law that the inherent power under Section 482 Cr.P.C to quash the criminal proceedings should be sparingly used with a view to render complete justice, to meet the ends of justice and to prevent the abuse of process of law. 6 As rightly pointed out by the learned Special Public Prosecutor in this case granting the relief to the petitioner who is evading the process of law for about eight years, shall have the effect of indirectly encouraging abuse of process of Court by persons who do not come forward to submit themselves to the authority of the Courts. Though this Court is not able to discard the contention raised by the learned senior counsel for the petitioner that the incorporation of the exact words found in the provision as magic words to sustain a prosecution of a Director of the Company for the offence committed by the Company without further details as to how the Director is responsible for the conduct of the business of the Company at the relevant point of time shall not be enough to sustain a prosecution and ask the accused (Director) to face trial, in view of the fact that the petitioner has so far evaded process of law and refused to subject himself to the authority of the Court, this Court is of the considered view that the discretion of the Court in exercise of the inherent jurisdiction under Section 482 Cr.P.C need not be exercised in favour of the petitioner and the petitioner has to be non-suited for the relief sought for in this petition. However, in order to render complete justice, this Court wants to make it open to the petitioner, without closing the avenue for the petitioner, to raise the issue before the trial Court after submitting himself to the authority of the trial Court. 7 For all the reasons stated above, this petition is dismissed. It is open to the petitioner to submit himself to the authority of the trial Court and raise all the issues raised in this petition before the trial Court. 7 For all the reasons stated above, this petition is dismissed. It is open to the petitioner to submit himself to the authority of the trial Court and raise all the issues raised in this petition before the trial Court. By way of clarification, it is also observed that while dealing with any question regarding discharge that may be raised by the petitioner after subjecting himself to the authority of the trial Court, the trial Court should consider the case on its merits without being influenced by any observation made in this order. Consequently, the connected miscellaneous petition is closed.