A. Jawahar Palaniappan Majority Shareolder & Director Kumudam Publications Pvt. Ltd. v. State
2014-04-21
A.ARUMUGHASWAMY
body2014
DigiLaw.ai
Judgment : 1. The Revision Petitioner is the defacto complainant and he is a majority shareholder and Director of M/s. Kumudam Publications Private Limited. The father of the petitioner Late Mr.S.A.P.Annamalai is the founder of "Kumudam" in the year 1947 by investing their family properties. Mr.P.V.Parthasarathy was working as a Manager and later was given an opportunity to become Publisher. Subsequently, the petitioner gave an opportunity to Mr.P.Varadarajan s/o Mr.P.V.Parthasarathy to manage the business of M/s Kumudam Publications Pvt. Ltd. The family of Mr.P.Varadarajan was allotted one-third shares in the company without payment of any consideration. The revision petitioner had later on given chance to P.Varadarajan for administering Kumudam Publications Pvt. Ltd. in the absence of petitioner and P.Varadarajan had taken over all the responsibilities in the administration. During the course of administration, the said P.Varadarajan had committed forgery, misappropriation, cheating to the tune of Rs.25 crores belonging to Kumudam Publications Pvt. Ltd. 2. The petitioner lodged a complaint against him before the Commissioner of Police, Chennai on 21.04.2010, alleging that the second respondent namely Mr.Varadarajan was working as Manager in the Defacto Complainant's Publications when the management was with the father of the defacto complainant and due to long standing he was looking after the publications and his salary was originally fixed as Rs.5 lakhs per month and it was increased as 6.25 per month on 27.12.2004. When the petitioner had enquired about the salaries taken by the accused during the year 2007-2008, the accused had then produced a forged the minutes of the Board Meeting dated 10.1.2007 on his own had written his remuneration as "to Ten Lacs only" without the approval and knowledge of the petitioner and thereby misappropriated Rs.4 Crores as managerial remuneration. There was falsification of accounts in purchasing news print paper, advertisement, etc. Inspite of the repeated demands by the petitioner, the accused had refused to provide financial information as required by him, which clearly shows that he was having access to the files under his custody, manipulated the accounts particulars. The petitioner did not approve the accounts and financial statements submitted by the accused at the Board Meeting for the year 31.3.2008 and 31.3.2009. The said complaint was registered in Crime No.196/2010 u/s 420, 465, 468 r/w 471 IPC, on the file of the first respondent . Thereafter, P.Varadarajan was arrested and later, released on bail.
The petitioner did not approve the accounts and financial statements submitted by the accused at the Board Meeting for the year 31.3.2008 and 31.3.2009. The said complaint was registered in Crime No.196/2010 u/s 420, 465, 468 r/w 471 IPC, on the file of the first respondent . Thereafter, P.Varadarajan was arrested and later, released on bail. Thereafter, after examination of witnesses it appears, they issued interrogatory questionnaire to the second respondent and they able to get some reply. Subsequently, the respondent examined the petitioner, his mother and only two staff of the petitioner's organisation in the year 2011 and closed the case as 'mistake of fact'. Even though the referred charge sheet has been sent to the Magistrate, no notice was served on the complainant. Thereafter, after getting all those things, the complainant has filed Protest Petition before the Chief Metropolitan Magistrate, Egmore, Chennai on 21.08.2012 and the same was dismissed by the order dated 11.10.2013 made in Crl.M.P.No.4063 of 2012. Aggrieved by the said order, the petitioner has come forward with the present revision. 3. The learned senior counsel appearing for the petitioner has raised three contentions, the first one is the remuneration of the second respondent has not been increased from 6.25 laks per month to 10 lakhs, whereas the accused had produced a forged the minutes of the Board Meeting dated 10.1.2007 on his own had written his remuneration as "to Ten Lacs only" without the approval and knowledge of the petitioner and thereby misappropriated Rs.4 Crores as managerial remuneration. 4. The second contention raised by the learned senior counsel is that the accused has also produced minutes of the Board Meeting held on 25.04.2007 to enhance the remuneration of the accused by 35% from the existing gross remuneration and the the minutes of the Board Meeting held on 24.12.2007 to enhance the remuneration of the accused by 60% from the existing gross remuneration and caused loss of several crores for the publications. The petitioner has opposed the financial accounts of the financial year 2007-2008 and therefore, it was not approved by him as well as by the auditor. It has been placed before the General Body Meeting and in that meeting he has not participated, but still the financial irregularities have been established. Inspite of the auditors report, the closure of the complaint by the Judicial Magistrate is incorrect. 5.
It has been placed before the General Body Meeting and in that meeting he has not participated, but still the financial irregularities have been established. Inspite of the auditors report, the closure of the complaint by the Judicial Magistrate is incorrect. 5. The next contention of the learned senior counsel for the petitioner is that M/s Tricom Vision was in control of the accused and taking advantage of the fact that the accused was also in control of M/s.Kumadam Publications Pvt. Ltd., he sold the LED panels worth Rs.8.41 Lakhs for a whooping sum of Rs.3.13 crores to M/s. Kumudam Publications Pvt. Ltd. This material evidence alone clearly demonstrates the fraud, cheating, and misappropriation of funds conducted by the accused. The accused had in all misappropriated an amount of Rs.25 crores. Hence, he prays that the order of the learned Judicial Magistrate has to be set aside and the revision has to be allowed. 6. The learned counsel appearing for the second respondent would contend that so far as the irregularities said to have been committed the second respondent is factually incorrect. For enhancement of his remuneration from 6.25 lakhs to "ten lacs" resolution has been passed and in the Board Meeting held on 10.01.2007 the petitioner and other two shareholders were present and approved the resolution for enhancement of remuneration of the accused from 6.25 lacs to 10 lacs. Admittedly, previously his salary was Rs.5 lacs and it was enhanced by 25% by resolution dated 27.12.2004 and on that basis his salary was fixed at Rs.6.25 lacs per month. Likewise it has been enhanced by 25%, by resolution dated 10.01.2007 and on that basis his salary was fixed at Rs.7.81 lacs and subsequently, it has been enhanced to 10 lacs and the said resolution has been duly approved. Subsequently, 35% has been enhanced vide resolution dated 25.04.2007 and thereafter, 60% has been enhanced vide resolution dated 24.12.2007 and it has been given effect. Therefore, the contention of the learned counsel for the respondent is, The learned Judicial Magistrate on considering all these aspects has rightly closed the complaint. Hence, he prays that it has to be upheld. 7. The second contention raised by the learned counsel for the second respondent is that mere production of income tax return on that basis one cannot come to the conclusion that forgery has been committed by the accused.
Hence, he prays that it has to be upheld. 7. The second contention raised by the learned counsel for the second respondent is that mere production of income tax return on that basis one cannot come to the conclusion that forgery has been committed by the accused. Whereas, the complainant has not produced any document neither before the investigating agency along with the complaint nor before the trial Court to improve the complaint. Therefore, without any document of proof merely on the vague allegations one cannot come to the conclusion that the accused had committed forgery. 8. The third contention raised by the learned counsel appearing for the second respondent is interrogatory questionnaire has been given to the accused and thereafter he replied for the said questionnaire before the investigating agency and therefore, the complainant is not entitled for any audience by the police. The respondent is entitled to close the matter as they thinks fit. 9. The next contention raised by the learned counsel for the second respondent is that the mother of the complainant is also one of the partner of the TRICOM Visions and he has also signed in the agreement between the TRICOM Visions and M/s. Kumudam Publications Pvt. Ltd. for the purchase of LED panels. Hence, there is no misappropriation on the part of the second respondent. Considering all these aspects, the order of the trial court has to be upheld and the revision has to be dismissed. 10. From the perusal of the records it is seen that the defacto complainant gave a complaint to the Central Crime Branch, on 23.04.2010 against Mr.P.Varadarajan and the same has been registered at 5.30 p.m. on the same day in X.Cr.No.196 of 2010 for the offence under Section 420, 465, 468 r/w 471 IPC and the FIR reached the residence of the Chief Metropolitan Magistrate Court, at 10.20 p.m. on the same day. From the perusal of the complaint it is seen that allegations have been levelled against the accused. The respondent after registering the complaint, enquired into the matter and after examining two witnesses, they issued questionnaire containing 13 queries to the accused and after obtaining reply to the queries the respondent closed the complaint as "mistake of fact".
From the perusal of the complaint it is seen that allegations have been levelled against the accused. The respondent after registering the complaint, enquired into the matter and after examining two witnesses, they issued questionnaire containing 13 queries to the accused and after obtaining reply to the queries the respondent closed the complaint as "mistake of fact". From the perusal of the complaint as well as the records produced before the court, it is seen that the defacto complainant a doctor by profession is the owner of the entire share capital of the company along with his mother and recognizing the yeomen service rendered by the publisher to "Kumudam", the defacto complainant gave a gift in favour of the family of Late Mr.P.V.Parthasarathy to an extent of 1/3 of the paid up equity capital of the company which was registered in the name of Imprint Tech India Private Limited which is owned by the family of Late Mr.P.V.Parthasarathy. Since the defacto complainant was working as a physician at Newyork the accused alone has taken care of the day to day affairs of the Kumudam Publications Pvt. Ltd. is also not in dispute. Further, from the perusal of the records it is seen that in the minutes of the Meeting of the Board of Directors of Kumudam Publications Private Limited held on 10.09.2003 the remuneration of Mr.P.Varadarajan was fixed as Rs.5.00 lacs with effect from 1st September, 2003. Thereafter, the remuneration of Mr.P.Varadarajan was increased by 25% to the existing remuneration , in the meeting of the Board of Directors held on 27.12.2004 and his remuneration was fixed as 6.25 lacs. Thereafter, the remuneration of Mr.P.Varadarajan was increased by 25% to the existing remuneration with effect from 1st June, 2006, in the meeting of the Board of Directors circulated on 13th May 2006 and his remuneration was fixed as Rs.7,81,25,000/-. For this also there is no much dispute. According to the defacto complainant the remuneration of the accused has been enhanced to Rs.10 lacs by way of minutes of the Board Meeting held on 10.01.2007 in which there was an interleniation regarding the "amount of ten lacs" towards enhancement of remuneration to the accused and it has been made without the knowledge and consent of the defacto complainant.
According to the defacto complainant the remuneration of the accused has been enhanced to Rs.10 lacs by way of minutes of the Board Meeting held on 10.01.2007 in which there was an interleniation regarding the "amount of ten lacs" towards enhancement of remuneration to the accused and it has been made without the knowledge and consent of the defacto complainant. From the perusal of the resolution it is seen that the entire matter in the said resolution has been typed and the amount of "ten lacs" alone has been inserted manually written and at the place where it was written manually no initial has been found. Whereas at the bottom of the resolution the defacto complainant has put his signature. From this it is very clear that except the interleniation made in the resolution manually, the other portion of the entire resolution has not been disputed by the defacto complainant. Furthermore, the service rendered by the accused also has been accepted and they have proposed to enhance the salary of the accused also has been seen. 11. The contention of the learned senior counsel appearing for the accused is that subsequent to the said resolution, the remuneration of the accused has been enhanced by 35% from the gross remuneration as per the minutes of the board meeting held on 25.04.2007 and thereafter the remuneration of the accused has been enhanced by 60% from the existing gross remuneration as per the minutes of the board meeting held on 24.12.2007. Since the defacto complainant has not disputed the subsequent two resolutions making enhancement of the remuneration of the accused, the enhancement made prior to the said two resolutions would not have been forged by the accused. Hence, he prays that the revision has to be dismissed. 12. The learned senior counsel appearing for the defacto complainant contended that the subsequent two resolutions have also been passed within a the year 2007 enhancing the remuneration of the accused in two times by 35% and by 60% respectively from the existing gross remuneration. These two resolutions also has been disputed by the defacto complainant stating that he has not signed in the above two resolutions and his signature has been forged in the said resolutions. From the comparison of the signature found in the said two resolutions it is seen that the signature is differs from the admitted signature of the defacto complainant.
These two resolutions also has been disputed by the defacto complainant stating that he has not signed in the above two resolutions and his signature has been forged in the said resolutions. From the comparison of the signature found in the said two resolutions it is seen that the signature is differs from the admitted signature of the defacto complainant. It is pertinent to note that the defacto complainant was not aware of the above two subsequent resolutions. That is the reason the defacto complainant has not mentioned in the complaint about the subsequent two resolutions. Furthermore, at the time of passing of accounts in the annual general meeting the auditor has also objected the subsequent two resolutions regarding the enhancement of remuneration of the accused considering the financial status of the company. 13. Therefore, I am of the view that since there is denial regarding the two resolutions said to have been signed by the defacto complainant agreeing for the enhancement of remuneration of the accused by 35% and 60% it has to be investigated by sending the same the same to the handwriting expert only on the strength of resolution. The suspicion arises not only on seeing the signature of the defacto complainant without opinion from the expert but on common knowledge the management has increased the remuneration of the Managing Director within 6 months 95% could be acceptable? Further the financial position of the company was so weak he is capable of claiming several lacs. Even though in the protest petition it has been mentioned that already report also has been received by the first respondent which is not available with the respondent. The admitted signature of the defacto complainant in a resolution dated 10.01.2007 alone has been sent for verification. However, the handwriting expert's opinion has not been obtained by the learned Magistrate and there is no reference in this regard. Any how, from the reading of the order it is seen that the admitted signature alone has been sent for verification whereas the prosecution has not made any request to the handwriting expert to get an opinion about the author of the writing. Of course the learned senior counsel appearing for the accused now contended that it was written by the accused himself only in the presence of the defacto complainant.
Of course the learned senior counsel appearing for the accused now contended that it was written by the accused himself only in the presence of the defacto complainant. Therefore, this cumulative effect has to be seen at the time of investigation and then only one can easily fix the role played by the accused. 14. The next contention of the learned counsel for the defacto complainant is that the petitioner is that M/s Tricom Vision was in control of the accused and taking advantage of the fact that the accused was also in control of M/s.Kumadam Publications Pvt. Ltd., he sold the LED panels worth Rs.8.41 Lakhs for a whooping sum of Rs.3.13 crores to M/s. Kumudam Publications Pvt. Ltd. This material evidence alone clearly demonstrates the fraud, cheating, and misappropriation of funds by the accused. It is relevant to extract the relevant portion of the assessment order for the assessment year 2006-2007 for the year ending 31.03.2006: “On perusal of the details filed by the assessee, it is seen that the assessee has purchased a LED Panel for Rs.3 crores from M/s. Tricom Vision, New No.306, Old No.151) Purasawakkam High Road, on 04.08.2004 vide invoice number 001/04/2005 for Rs.3,00,000/-. In response to the summons issued u/s 131 of the Income Tax Act 1961, the assessee filed a letter on 23.12.2008. ..... Though the Led panel is purchased, the erection was completed on 29.11.2005 and commissioned on 05.12.2005. ........” 15. According to the learned counsel for the accused, the mother of the defacto complainant is also one of the directors of the tricom vision and that no such order can be placed by the mother of the defacto complainant is also a party for the purchase of the LED Panel board. 16. Of course the mother of the petitioner was also one of the directors of the Tricom Vision till 2003 and thereafter she has resigned from the directorship of tricom vision in the year 2003 and that the irregularities said to have happened in the year 2007 and at the relevant point of time either the defacto complainant, or his mother or the other director of the Kumudam Publications Pvt. Ltd., was not the director of tricom vision. From the perusal of the minutes of the meeting held on 21.11.2003 it has been mentioned that Mr.P.Varadarajan being a partner in Tricom Vision is interested in this resolution.
From the perusal of the minutes of the meeting held on 21.11.2003 it has been mentioned that Mr.P.Varadarajan being a partner in Tricom Vision is interested in this resolution. This Court is able to see that only in order to evade the payment of income tax the accused has manipulated the records as if the LED panel board worth about 8.41 lakhs has been purchased for Rs.3.13 Crores. Therefore, I am of the view that the defacto complainant has sufficiently proved the irregularities said to have been committed by the accused and the said aspect also has to be investigated by the respondent. 17. The third contention raised by the learned senior counsel for the defacto complainant is that even though questionnaire has been supplied to the accused after getting reply from the accused, the prosecution ought to have enquired the defacto complainant. Whereas, without making enquiry, the prosecution has closed sthe complainant as “mistake of fact” which is incorrect according to him. 18. The learned senior counsel appearing for the second respondent/accused would contend that after giving questionnaire to the accused, the accused has given his reply to the queries raised by the prosecution and the investigating agency has satisfied with the said reply and that is the reason they have closed the complaint. This aspect has also been properly appreciated by the learned Chief Metropolitan Magistrate. Hence, he prays that the revision has to be dismissed. 19. From the perusal of the questionnaire given by the respondent to the accused it is seen that the respondent has raised 13 queries which are all leading questions and none of the questions have been put to the defacto complainant to prove the correctness of the reply given by the accused. The language used by the first respondent in the questionnaire is not correct one. Even though the respondent put leading questions to the accused, on a plain reading of the questionnaire itself it is seen that the investigating agency has not correctly investigated the matter as expected by law. Even though the first respondent has satisfied with the reply given by the accused the investigating agency ought to have examined the complainant regarding the reply given by the accused. 20.
Even though the first respondent has satisfied with the reply given by the accused the investigating agency ought to have examined the complainant regarding the reply given by the accused. 20. Therefore, I am of the view to determine whether the alleged misappropriation against the accused has been proved more than prima facie and to determine the quantum of misappropriation it requires further investigation. The investigating Agency has not properly considered the said aspects and they have closed the complaint mechanically on the basis of the reply given by the accused for the questionnaire issued to him, that too without giving an opportunity for the defacto complainant to ascertain the correctness of the reply given by the accused. Instead of put the cart behind the horse, they have put the cart before the horse. Therefore, I am of the view that the closure report is not correct one. Further, the learned Chief Metropolitan Magistrate has also failed to consider all these aspects in the protest petition and passed an order of action drop which is not on the basis of the facts and law and it is liable to be set aside. 21. The learned Chief Metropolitan Magistrate is directed to forward the same to the respondent for further investigation by forming different teams to investigate the mater by way of documents. This Court do not want to express further more it may affect the interest of the case. Therefore, I am of the view that further investigation alone will clinch the issue to determine the issue regarding the so called insertion of “ten lacs” in the resolution dated 10.01.2007 and the alleged misappropriation and the enhancement of remuneration of 95% for the accused within one year also can be seen by making proper investigation. 22. The points to be determined are: (1) for three resolutions dated 10.01.2007 regarding the so called insertion of ”ten lacs”, 25.04.2007 to enhance the remuneration of the accused by 35% from the existing gross remuneration and 24.12.2007 to enhance the remuneration of the accused by 60% from the existing gross remuneration, already pointed out that the signature in the said resolutions have been denied by the defacto complainant, it has to be determined by sending the same to the handwriting expert and expert opinion has to be obtained and thereafter, the amount received by the second respondent towards remuneration has to be determined.
(2) The second aspect is that purchase of LED panel Board from Tricom Visions for Rs.3.13 Crores. How many LED panel Boards have been sold by the Tricom Vision and for whom for how much amount it has been sold. The actual value of the board purchased by the accused and for how much amount the irregularity has been committed by the accused has to be determined. These two aspects have to be verified at the time of investigation and file a final report. As per the investigation, dealt out. 23. With the above observation the revision is allowed the referred charge sheet filed by respondent closing the complaint as as "mistake of fact" and the order dated 11.10.2013 passed by the Chief Metropolitan Magistrate, Egmore, Chennai in the protest petition in Crl.M.P.No.4063 of 2012 in X.Cr.No.196 of 2010 are set aside and the matter is remitted back to the first respondent to investigate the matter on the above lines and directed to file final report as expeditiously as possible, preferably within six months.