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2012 DIGILAW 1421 (BOM)

Ajay Krishnakant Parikh v. Anand Jayant Dave

2012-08-01

ABHAY M.THIPSAY

body2012
Judgment : Heard Mr.Prakash Naik, learned counsel for the applicants. Heard Mr.Sampat, learned counsel for the respondent no.1. Heard Mr.More, learned APP for the State. 2. The applicants are the accused in C.C.No. 452/SS/2008 pending before the Metropolitan Magistrate, 27th Court at Mulund. The said case is in respect of an offence punishable under section 138 of the Negotiable Instruments Act, and arises on a complaint filed by the respondent no.1 herein. There are totally five accused in the said case. The accused no.1 is a company by name “M/s.UPA Pharmaceuticals Ltd”. The accused nos.2 and 3 are one Mr.Digant Upadhyay and Ms.Naliniben Upadhyay, respectively. The applicants are the accused nos.4 and 5, respectively, in the said complaint. The applicants and even the accused nos.2 and 3 are being prosecuted on the basis that they are the Directors of the accused no.1 company, who had issued the cheque in question. 3. According to the applicants, they are not the Directors of the accused no.1 company. According to them, they had resigned from the Directorship of the accused no.1 company, as back as on 10 October 2002. Since the transaction of the cheque and its dishonor took place in the year 2008, they claim that they have nothing to do with the alleged offences. On these contentions, they are invoking the inherent powers of this Court for quashing the said prosecution, so far as it relates to them. 4. The contention of Mr.Naik that the applicants are not the Directors of the accused no.1 company, is attempted to be supported by him by placing reliance on a number of documents. Primarily, he places reliance on a copy of Form No.32, which gives the particulars of appointment of Directors and Manager and changes among them, pursuant to the provisions of section 302 of the Companies Act, 1956. This Form indeed suggests that the applicants have resigned their position as Directors of the accused no.1 company on 10 October 2002. 5. Mr.Sampat, learned counsel for the original complainant submits that the document said to be the Form no.32 does not appear to be genuine. He submits that on the reverse of the said Form, a date has been put as “Dated the 7th day of Friday 2002” which obviously is wrong. According to him, there are averments in the complaint to show that the applicants are involved in the alleged offences. 6. He submits that on the reverse of the said Form, a date has been put as “Dated the 7th day of Friday 2002” which obviously is wrong. According to him, there are averments in the complaint to show that the applicants are involved in the alleged offences. 6. A perusal of the complaint shows that in paragraph no.4 thereof, the complainant has claimed as follows:- “The statutory records show Accused Nos.2 to 5 as its (of the accused no.1 company) directors.” In paragraph no.9 of the complaint, it is mentioned as follows:- “That the Accused No.2,3, 4 and 5 are directors of the said company M/s.UPA Pharmaceuticals Ltd.who is Accused No.1 and all of them are responsible for the conduct of the business of the said Company and from time to time interacted with the Complainant to secure the extension of time for repayment of the said loan. Again in the same paragraph, it is mentioned “................ Accused nos.4 and 5 have participated with Accused Nos.2 and 3 in the conduct of the affairs of the firm and in seeking extension of the repayment of the loan given by the Complainant to their company” Lastly, it is averred that all the accused are responsible for the issue of the dishonored cheque. 7. I have categorically asked the learned counsel for the original complainant as to whether the complainant feels the necessity of reconsidering the involvement of the applicants in the alleged offence, on the basis of their claim of having resigned the position of the director, as back as on 10 October 2002. The learned counsel answers in the negative. He emphasized that the document produced as Form No.32, is suspicious and the genuineness or correctness thereof, cannot be accepted. 8. The question is, in the face of such averments, and a repetition of the same allegations before this Court, the Court would be justified in arriving at a conclusion that the applicants were not the directors of the accused company, at the material time, by having a look at the documents which are attempted to be shown to this Court. According to Mr.Naik, this can be done. He placed reliance on a decision of the Supreme Court of India in the case of HarshendraKumar D. Versus Rebatilata Koley Etc., reported in 2011(4) Bom.C.R.(Cri) 222. According to Mr.Naik, this can be done. He placed reliance on a decision of the Supreme Court of India in the case of HarshendraKumar D. Versus Rebatilata Koley Etc., reported in 2011(4) Bom.C.R.(Cri) 222. He emphasised that in this case, the Supreme Court had taken into consideration the Form No.32 and other relevant documents for coming to a conclusion that the appellant before the Supreme Court were not the directors of the accused company. He however, overlooked the observations made in paragraph no.19 of the reported judgment which are as follows: “19. The above documents placed on record by the appellant have not been disputed nor controverted by the complainants. As a matter of fact, it was not even the case of the complainants before the High Court that the change among Directors of the Company, on resignation of the appellant with effect from March 2, 2004, has not taken place.” (Emphasis supplied) That is not the case here. Here, the factual assertion of the applicants is disputed on behalf of the complainant. 9. Mr.Naik also placed reliance on the following two decisions delivered by the Supreme Court of India. (i) DCM Financial Services Ltd Versus J.N. Sareen and Anr 2008(2) Bom.C.R.(Cri.) 754 (ii) Anita Malhotra Versus Apparel Export Promotion Council & Anr 2011(6) Bom.C.R. 694 10. By relying on these decisions, what he contended was that it was permissible for this Court to examine the documents and come to a conclusion as to whether the applicants were indeed directors of the accused company, at the material time. The permissibility of such a course, cannot be doubted and it cannot be suggested that there would be an absolute prohibition for looking into the documents submitted by the accused persons while dealing with an application under section 482 of the Code of Criminal Procedure. At the same time, it ought to be kept in mind that in these proceedings, the Court is not expected to give a finding on disputed questions of fact. The complainant is disputing, the genuineness of the documents produced by the applicants showing that they had resigned as back as in the year 2002. Now, the question is whether by looking at this document which is not an admitted document, the Court should come to a conclusion that the averments made in the complaint which are reproduced above, are false. This, in my opinion, cannot be done. Now, the question is whether by looking at this document which is not an admitted document, the Court should come to a conclusion that the averments made in the complaint which are reproduced above, are false. This, in my opinion, cannot be done. In doing so, in effect, the Court will be considering whether the assertions are disproved because of the existence of Form No.32 – an exercise to be undertaken during the trial. 11. In a given case, the complainant may not dispute the genuineness or correctness of the documents referred to or produced by an accused and would be very well willing to reconsider his allegations in the light of such documents but, that is not the case here. Here, the complainant is persisting with the allegations that the applicants are the directors of the accused no.1 company. In paragraph no.4 of the complaint, the complainant has made a specific statement that the statutory records show the accused nos.4 and 5 as the directors of the accused no.1 company. Now, when such a stand: that is, of disputing the genuineness or correctness of the Form No.32, is taken by the complainant before this Court also, to find the truth, a thorough scrutiny of the matter would be required to be done by holding an elaborate inquiry; and in my opinion, in these proceedings, it would not be permissible. 12. Though some examination of the matter even on the basis of the documents produced or relied upon by an accused would be permissible at this stage, it would not be possible to go deeper into the matter, and give a finding on which of the conflicting claims is true. 13. It all therefore, depends on how deeper the scrutiny of the matters would be required to be done. It is needless to say that a deeper inquiry for the purpose of fact finding cannot be undertaken in these proceedings, though it may be permissible in a given case, to refer to certain documents produced even by the accused. The totality of the facts placed before the Court which obviously includes the specific averments made in the complaint, need to be taken into consideration for the purpose of deciding whether or not, there are grounds for proceeding against the applicants. 14. The totality of the facts placed before the Court which obviously includes the specific averments made in the complaint, need to be taken into consideration for the purpose of deciding whether or not, there are grounds for proceeding against the applicants. 14. Logically speaking, the fact that the applicants had resigned in the year 2002 cannot automatically lead to an inference that in the year 2008, they were not the directors of the said company. There would be no prohibition for the applicants to again being appointed as the directors of the applicant no.1 company which is a private limited company. 15. Mr.Naik, at this stage, drew attention to a certificate issued by the Assistant Registrar of Companies on 15 February 2011, copy of which is annexed to the application and contended that this shows that, till date, the applicants have not been again appointed as directors. I fail to read anything of that sort in the certificate. 16. In my opinion, when the correctness of the contents of Form No.32 is disputed and the averments in the complaint are prima facie sufficient to show the involvement of the applicants in the alleged offence, for the purpose of proceeding against them, the inherent powers of this Court cannot be exercised to quash the prosecution against them. In fact, the whole basis of the arguments of the learned counsel for the applicants is that the allegations made against the applicants and the averments made in the complaint are false. Whether they are false or not, can be satisfactorily decided only during trial. Needless to say that the complainant has made a specific statement in paragraph no.4 that the statutory record show the accused nos.2 to 5 as its (company's) directors and this aspect, he would need to prove during the trial. If the complainant is making a false statement and persisting in prosecuting the applicants, he would face the consequence if his assertions are found to be wrong or false. 17. The authoritative pronouncements of the Supreme Court of India on which reliance has been placed by Mr.Naik, only lay down that it would be permissible for this Court to look into the materials produced by the accused which are in the nature of public documents, or which are beyond doubt or suspicion, while exercising inherent jurisdiction, or sometimes even in revision proceedings. Their Lordships have laid down the Law by making it clear that there would be no absolute prohibition on looking at materials or documents produced or relied upon by an accused, and that in appropriate cases, if on the face of documents – which are beyond suspicion or doubt – relied upon by the accused, the accusation cannot stand, the accused may not be required to face the trial and the Court would be justified in quashing the prosecution in such cases. The propositions laid down by Their Lordships of the Supreme Court of India cannot be stretched to mean that even where the documents or materials produced by the accused are disputed, the Court should undertake a fact-finding exercise in the proceedings under section 482 or section 397 of the Code of Criminal Procedure and decide whether what the accused says is true. 18. Whatever may be the truth of the matter, in the present proceedings, in view of the averments in the complaint, and the stand taken by the complainant even in the course of the hearing of the application, it is not possible to hold that there are not sufficient grounds for proceeding against the applicants. 19. Consequently, the order issuing process cannot be interfered with. The application is rejected.