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Madhya Pradesh High Court · body

2012 DIGILAW 452 (MP)

Arun Kumar Singhania v. State of M. P.

2012-04-26

R.C.MISHRA

body2012
JUDGMENT : This common order shall govern disposal of all the aforesaid inter-connected petitions preferred, under Section 482 of the Code of Criminal Procedure (for short 'the Code'), for quashing of the criminal proceedings, details whereof, for sake of convenient reference, may be tabulated in the following manner :- M.Cr.C. No. Criminal Proceeding pending as Document & amount forming subject matter of the offences 3973/11 Case No/27/11 pending before JMFC, Lakhnadon, in respect of the offences under Sections 409 and 420 of the IPC Sale-deed dated 21-12-09 executed by the petitioner relating to land bearing survey No. 66, having a total area of 2.60 hectares, situated in Kevlari, for a consideration of Rs.65.000/-. 4537/11 and 10263/11 Case No. 387/11 pending before shri A.S. Sisidiya, JMFC, Lakhnadon, in respect of the offences under Section 420, 467, 468, 409 and 120-B read with Section 34 of the IPC. Sale-deed dated 21-12-09 executed by the petitioner Arun Singhania relating to land, bearing survey Nos. 101, 123/11, 165/3, 165/4 and 264, situated in Mouja Baiga, Pipariya, for a consideration of Rs. 5,18,000/-. 4538/11 Case No. 386/2011 pending before Shri A.S. Sisodiya JMFC, Lakhnadon, in respect of the offences punishable Under Section 420, 467, 468, 409 and 120-B read with Section 34 of IPC. Sale-deed dated 21 -12-09 executed by the petitioner relating to land bearing survey Nos. 46/2, 99/2, 134/3, 136/2, 165/5, 165/6, 267/2 and 321, having a total area of 21.32 hectares, situated in Mouja Baiga, Pipariya, for a consideration of Rs. 8,52,800/-. 4539/11 Case No. 385/11 pending before Shri A. S. Sisodiya, JMFC Lakhnadon, in respect of the offences under Section 420, 467, 468, 409, and 120-B read with Section 34 of IPC. Sale-deed dated 21-12-09 executed by the petitioner relating to lands bearing survey Nos. 19/1, 19/2, 20, 21, 22/4, 59, 61/1, 61/2, 140, 146, 148, 149, 177, 206, 211,212/1, 258/2, having a total area of 29.90 hectares, situated in Pindria, for a consideration of Rs. 23,17,500/-. 7717/11 Case No. 768/2011 pending before Shri A.S. Sisodiya, JMFC, Lakhnadon, in respect of the offences punishable under Sections" 420, 467, 468,409andl20-B of the IPC. Sale-deed dated 21-12-09 executed by the petitioner relating to land bearing survey Nos. 30/12, 36, 38, 49/3, 49/4, 75/2, 101, 115/2, 115/3, 146, 270, having a total area of 21.48 hectares, situated in Mouja Kevlari, for a consideration of Rs. 8,59,200/-. Sale-deed dated 21-12-09 executed by the petitioner relating to land bearing survey Nos. 30/12, 36, 38, 49/3, 49/4, 75/2, 101, 115/2, 115/3, 146, 270, having a total area of 21.48 hectares, situated in Mouja Kevlari, for a consideration of Rs. 8,59,200/-. 8288/11 Case No. 769/11 pending before Shri A.S. Sisodiya, JMFC, Lakhnadon, in respect of the offences under Sections 420, 467, 468, 409 and 120-B read with Section 34 of the IPC. Sale-deed dated 21-12-09 executed by the petitioner relating to Land bearing survey Nos. 1/2, 1/3, 40, 60/2 and 120, having a total area of 8.59 hectares, situated in Mouja Karakwada-Maal, for a consideration of Rs. 3,43,600/-. 2. In all these cases, cognizance of the offences has been taken upon respective complaints made by respondent A.K. Agrawal, for and on behalf of M/s Cheer Developers and Distributor Pvt. Ltd., a company registered under the Companies Act, 1956 (hereinafter referred to as the 'Company'). However, by virtue of the order-dated 9-12-2011 passed in M.Cr.C. No. 4537/11, it has to be treated as the lead case and accordingly, relevant annexures shall be referred to by their respective numbers, as given in that petition. 3. Complaints contained common allegations to the following effect :- "In its meeting held on 10-12-2007, Board of Directors of the Company had only authorized Arun Kumar Singhania (for brevity "Arun Singhania"), the petitioner in all the petitions except M.Cr.C. No. 10263/2011, to purchase properties for and on behalf of the Company and thereafter, he was neither authorized to sell or use the land nor was appointed as a Director thereof. However, in pursuance of a conspiracy to defraud the company, petitioner Arun Singhania, by making false documents purporting to be a resolution, dated 17-12-2007, authorizing him to sell the properties belonging to it and impersonating himself as a Director thereof, sold the lands, as described in the respective complaints and further, misappropriated the amounts thus obtained as consideration from the purchasers whereas all the co-accused including petitioner K,L. Shivhare, who at the relevant point of time, was posted as Patwari, had rendered necessary assistance to Arun Singhania by committing various acts or illegal omissions in furtherance of the common design. 4. 4. According to petitioner Arun Singhania, his prosecution for the offences is an abuse of the process of Court in view of the following background facts :- (i) He was authorized, by way of resolution taken by the Board in its meeting held on 17-12-2007 (Annexure P-1), to sell the property and this resolution was duly signed by Anil Sharda, one of the Directors of the company. (ii) By the year 2010, nearly 1200 acres of land worth Rs. 2 crores was purchased by him for and on behalf of the company and in the process, he had invested a sum of Rs. 50 lacs as 20% of his share. However, upon his decision to leave the Company, he was authorized to collect the amount of Rs. 50 lacs, invested by him, by selling useless pieces of land, purchased by him, for and on behalf of the Company and to adjust the considerations there against and also to get two pieces of agricultural lands, admeasuring 10 acres and 4 acres, transferred in the name of his wife and respective amounts of consideration, viz. Rs. 5,50,000/- and Rs. 4,00,000/- paid or credited to the Company. (iii) Under the authority so granted, he, during the period from 8-12-2009 to 25-12-2009, had sold nine pieces of agricultural holdings for a total, consideration of Rs. 49,16,100/- and handed over the same, in cash, to Vinod Kumar Agrawal (for brevity 'Vinod Agrawal'), the Chairman of the Company. (iv) While acknowledging the factum of his investment, the Board of Directors, in its meeting held on 26-12-2009 had resolved to return the amount of Rs. 49,16,100/- and the corresponding resolution (Annexure P-2) bore the signature of Vinod Agrawal only on behalf of the Company. (v) Since the amount remained unpaid despite repeated demands and reminders, he, on 21-4-2010, filed a complaint (Annexure P-3) against Vinod Agrawal and A.K. Agrawal alleging commission of the offences under Sections 420, 409, 500, 506-B and 507 read with Section 34 of the IPC and on 6-5-2010 instituted a suit (Annexure P-5) for settlement of accounts against the Company whereas, the complaints in question were filed on 7-6-2010 and 1-3-2011. Meanwhile, after due inquiry, vide order dated 25-6-2010 (Annexure P-4) direction was given to issue process against both the persons arraigned as accused in the complaint (Annexure P-3) for the offences punishable under Sections 420, 406 and 507 of the IPC. Meanwhile, after due inquiry, vide order dated 25-6-2010 (Annexure P-4) direction was given to issue process against both the persons arraigned as accused in the complaint (Annexure P-3) for the offences punishable under Sections 420, 406 and 507 of the IPC. (vi) The complaint leading to registration of Case No. 27/11, was forwarded, under Section 156 (3) of the Code, to S.H.O. of P.S. Ghansaur, for investigation and the police officer, in response, forwarded a report suggesting that the matter was purely of a civil nature. 5. Petitioner K.L. Shivhare, while supporting the case of Arun Singhania, has urged that he has also been unnecessarily dragged into the Court despite the fact that, being the Patwari, he had no role to play in the dispute between Arun Singhania and the Company. 6. In reply, respondent A.K. Agrawal has submitted that both the documents (Annexures P-1 and P-2) purporting to be the resolutions passed by the Board of Directors on 17-12-2007 and 26-12-2009, relied on by Arun Singhania to demonstrate that prima facie no case for prosecution is made out, are apparently forged documents. According to him, the words "sale of the properties" were fraudulently inserted in the original resolution dated 10-12-2007 so as to convert it into the resolution passed on 17-12-2007 (Annexure P-1) and no meeting of the Board was even called on 26-12-2009, the day on which the resolution (Annexure P-2) containing acknowledgment of the liability by the Chairman to return the sum of Rs. 49,16,100/- to Arun Singhania was said to have been passed. In order to fortify the argument, he has made extensive reference to copies of the Minutes of the Board meetings convened during the period from 30-7-2004 to 15-6-2011 (Annexure R-1) indicating that the petitioner Arun Singhania was never appointed as Director of the Company and also that no meeting of the Board was held during the period between 15-11-2009 and 4-12-2010. Attention has also been drawn to a specific allegation contained in some of the complaints that it was co-accused Sneh Gupta, who had rendered necessary assistance to Arun Singhania in generating the above mentioned false documents on computer. 7. Attention has also been drawn to a specific allegation contained in some of the complaints that it was co-accused Sneh Gupta, who had rendered necessary assistance to Arun Singhania in generating the above mentioned false documents on computer. 7. During the course of arguments, while highlighting certain discrepancies in the dates and contents of the minutes of meetings, learned Counsel for the petitioner Arun Singhania sought to bring a counter-charge by asserting that no presumption, under Section 195 of the Companies Act, 1956, as to authenticity of the minutes can be drawn as the same have not been kept in accordance with the provisions of Section 193. 8. Adverting to the legal aspects, learned Counsel for the petitioners have contended that :- (A) Cognizance of the offences could not be validly taken upon the complaints made by A.K. Agrawal for and on behalf of the Company in absence of any resolution of its Board of Directors authorising him to do so. (B) Issuance of process in respect of the offences under Sections 409, 467 and 468 of the 1PC, which have been made triable exclusively by the Court of Session in the State of M.P., is vitiated due to non-compliance with proviso to sub-section (2) of Section 202 of the Code. 9. Indisputably, in the complaint as well as in the civil suit filed by petitioner Arun Singhania, A.K. Agrawal has been impleaded as one of the persons in-charge of and responsible for conduct of business of the Company. Although, he claims that necessary authorisation was given to him by way of resolutions dated 19-4-2010 and 10-2-2011 yet, it is well settled that a company can be represented by an employee or even by a non-employee authorized and empowered to represent the company cither by a resolution or by a power of attorney. Moreover, merely because complaint is signed and presented by a person, who is neither an authorised agent nor a person empowered under Articles of Association or by any resolution of the Board to do so, the same is no ground to quash the complaint since the defect is curable (M.M.T.C. Ltd., MA. Vs. MA. Medchl Chemicals and Phtirma (P) Ltd., AIR 2002 SC 182 ). In this view of the matter, the contention (A) has no merit or substance. 10. Vs. MA. Medchl Chemicals and Phtirma (P) Ltd., AIR 2002 SC 182 ). In this view of the matter, the contention (A) has no merit or substance. 10. In support of the contention (B), learned Counsel for the petitioners have cited observations made by Justice K.T. Thomas in Rosy Vs. State of Kerala, AIR 2000 SC 637 , to the effect that the proviso confer a compelling duty on the Magistrate to perform in a case relating to the offence triable exclusively by the Court of Session. However, the argument deserves to be rejected as apparently misconceived. It was explained in Roxy's case (supra), only that violation of mandate of the proviso to examine all the witnesses on behalf of the complainant would not vitiate trial unless prejudice caused to accused is established. In a subsequent decision on the point, rendered in Shivjee Singh Vs. Nagendra Tiwary, (2010) 7 SCC 578 = 2010(5) M.P.H.T. 413 (SC), it has been pointed out that the word "shall" occurring in the proviso is though prima facie indicative of the mandatory character, yet non-examination of any or some of the witnesses cited by the complainant is, by itself, not sufficient to denude the Magistrate of the jurisdiction to take cognizance and issue process, provided that he is satisfied as to existence of a prima facie case. 11. Still, learned Counsel for the petitioners, making reference to the decision of the Supreme Court in Ashok Chaturvedi Vs. Shitul H. Chanchani, AIR 1998 SC 2796 , have contended that in absence of material to indicate involvement of each of the accused, bald allegations in the complaint and the statement of the complainants could not be considered as sufficient to make out the offences. According to them, the complaints, containing averments constituting dispute predominantly civil in nature, were filed as a counter blast to the prosecution of Vinod Kumar and Ashok Kumar, with a view to wreaking vengeance, and therefore, fall within categories (1) and (7) of the cases, as enumeraled in State of Haryana Vs. Bhajan Lal, AIR 1992 SC 604 , attracting exercise of the inherent powers for quashment thereof. 12. In Bhajan Lal's case (supra), nature, scope and purpose of Section 482 of the Code have been explained after analyzing all the leading decisions concerning the subject including the one rendered in R.P. Kapur Vs. State of Punjab, AIR 1960 SC 866 . Bhajan Lal, AIR 1992 SC 604 , attracting exercise of the inherent powers for quashment thereof. 12. In Bhajan Lal's case (supra), nature, scope and purpose of Section 482 of the Code have been explained after analyzing all the leading decisions concerning the subject including the one rendered in R.P. Kapur Vs. State of Punjab, AIR 1960 SC 866 . In that case also, a three-Judge Bench of the Supreme Court illustrated categories of cases, where the inherent jurisdiction to quash proceedings can and should be exercised. They are :- (i) Where it manifestly appears that there is a legal bar against the institution or continuance, e.g., want of sanction; (ii) Where the allegations in the First Information Report or complaint taken at their face value and accepted in their entirety do not constitute the offence alleged; (iii) Where the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or the evidence adduced clearly or manifestly fails to prove the charge. In dealing with this class of cases it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence, which is manifestly and clearly inconsistent with the accusation made and cases where there is legal evidence which on its appreciation may or may not support the accusation in question. (Emphasis supplied) 13. Thus, this Court's jurisdiction in quashing the complaint is confined to examination of documents annexed thereto as a whole without going into the merits of the allegations made therein. The acid test is whether any offence would be made out against the petitioner if the allegations are taken at their face value and accepted in their entirety. Further, the inherent powers, under Section 482 of the Code, are to be exercised ex debito justitiae to prevent abuse of the process of Court, but not to stifle a legitimate prosecution, when the issues involved, whether factual or legal, cannot be decided without sufficient material. 14. Reverting to the facts of the cases in hand, issues as to whether the documents (Annexures P-1 and P-2), relied on by Arun Singhania, are false and fabricated documents or the minutes (Annexure R-1) are not valid, are questions of fact to be determined on the evidence. 14. Reverting to the facts of the cases in hand, issues as to whether the documents (Annexures P-1 and P-2), relied on by Arun Singhania, are false and fabricated documents or the minutes (Annexure R-1) are not valid, are questions of fact to be determined on the evidence. Still, it may be observed that Paragraph 7 of the plaint filed by Arun Singhania did not contain reference to any written authority to sell the lands belonging to the Company. Further, there is no official document to show that during the relevant period, petitioner Arun Singhania was inducted as one of the Directors of the Company on or before 17-12-2007, the day on which the resolution (Annexure P-1) reflecting status of Arun Singhania as Director was said to have been passed, despite the fact that the Companies Act has made specific provisions for all Companies registered with the Registrar of Companies to fife a Return about the directors in the company. 15. For these reasons, prima facie none of the complaints is a case of no incriminating evidence or that of no criminal liability. The allegations made therein do not fall within anyone of the categories enumerated in Bhajan Lal case (supra), wherein a note of caution was also sounded that the power of quashing the criminal proceedings should be exercised very sparingly with circumspection and that too in the rarest of rare cases. Accordingly, no interference under the inherent powers is called for. 16. The petitions, therefore, stand dismissed. However, nothing contained herein shall be construed as any expression of opinion on the merits of the case. It shall still be open to the petitioners to raise all such pleas as are available under law.