Mohd. Sabir Parvez v. Quinn Finace Unlimited Company
2018-12-03
P.KESHAVA RAO
body2018
DigiLaw.ai
ORDER : P. Keshava Rao, J. 1. The present application is filed to implead the petitioner/proposed respondent No. 2 as respondent No. 2 in the criminal revision case. 2. During the course of hearing, the learned Senior Counsel appearing for the revision petitioner raised an objection with regard to the locus of the petitioner/proposed respondent No. 2 to file the application. The said application was also opposed by the 2nd respondent Company represented by Resolution Professional. Therefore, this Court decided to take up the present application before hearing the main criminal revision case. 3. The parties herein are described as per the cause title mentioned in the above said application. 4. The facts which lead to filing of the present criminal revision case are as under: The petitioner/proposed respondent No.2 originally filed a complaint vide C.C.(S.R.) No.2933/2017 against six accused and others which include revision petitioner as accused No. 6 on the file of the Junior Civil Judge-cum-VII Metropolitan Magistrate, Cyberabad at Hayathnagar. In the said complaint, it is stated that respondent No. 2 - company is registered under the Companies Act, 1956 having its registered office at 'Q' City, 6th Floor, Block 'A', Sy. No. 109, 11C, 111/2, Nanakramguda village, Ranga Reddy District, Hyderabad. The complaint was filed through duly constituted attorney/representative, Mohd. Sabir Parvez, a Director of the 2nd respondent - company who has been duly authorized vide Board Resolution, dated 03.06.2015. The petitioner received monetary benefits during the period 24.12.2007 to 04.10.2010 from a group of entities for the purpose of buying Compulsorily Convertible Debentures (CCDs) and 12 Debenture Subscription Agreements (DSAs) were executed between the revision petitioner/first respondent and the petitioner on different dates. Accused No. 5 in the complaint claiming to be an authorized signatory of the 1st respondent placed on record copies of 11 DSAs before the proceedings initiated under Section 71 of the Companies Act, 2013 (for short, "the Act") infer alia seeking payment of interest and conversion of the Quinn Finance Debenture Subscription Agreements pending in CP/12/71/HDB/2016 before the National Company Law Tribunal, Hyderabad, (for short, "the Tribunal"). Having come to know about filing of the said 11 DSAs, the petitioner alleged that the said agreements are forged and fabricated by the accused and filed before the Tribunal for the purpose of seeking redemption of CCDs into equity shares and consequently to take control of the 2nd respondent Company.
Having come to know about filing of the said 11 DSAs, the petitioner alleged that the said agreements are forged and fabricated by the accused and filed before the Tribunal for the purpose of seeking redemption of CCDs into equity shares and consequently to take control of the 2nd respondent Company. The specific allegation made in this regard is that A-5 claiming to be the authorized agent of respondent No. 2 company filed 11 DSAs before the Tribunal which contains the endorsement of the notary public viz. Sri B. Rathnakar Rao, Advocate at Hyderabad suspecting the said documents as forged and fabricated one. The information obtained by the 2nd respondent Company from the said public notary discloses that 3 out of 11 DSAs have been endorsed prior to the appointment of the said Public Notary on 03.11.2008 by the Government of India. However, the said DSAs are dated 24.12.2007, 18.06.2008 and 18.06.2008. Therefore, the said documents are forged and fabricated one. In those circumstances, the 2nd respondent Company filed a private complaint against the accused before the learned Junior Civil Judge-cum-VII Metropolitan Magistrate. The learned Magistrate, after looking into the contents of the complaint, passed the orders on 04.07.2017 dismissing the complaint vide C.C.(S.R). No. 2933 of 2017 under Section 203 Cr.P.C. holding that no prima facie case is made out against the accused for the alleged offences in the complaint. Aggrieved by the said orders, the 2nd respondent company preferred Cr.R.P. No. 154 of 2017 before the learned VIII District and Sessions Judge, Ranga Reddy at L.B. Nagar, Hyderabad. After hearing, the learned Sessions Judge by orders dated 16.08.2017 allowed the revision petition and directed the learned VII Metropolitan Magistrate to register the complaint filed by the 2nd respondent company as calendar case and to proceed with in accordance with law by issuing summons to the accused. Aggrieved by the said orders, the present criminal revision case is filed by the 1st respondent, who is A-6 in the complaint. 5. During the course of hearing, the 1st respondent/revision petitioner raised the issue of locus of the petitioner to represent the 2nd respondent Company since the proceedings before the Tribunal resulted in appointing a Resolution Professional to represent the 2nd respondent Company.
5. During the course of hearing, the 1st respondent/revision petitioner raised the issue of locus of the petitioner to represent the 2nd respondent Company since the proceedings before the Tribunal resulted in appointing a Resolution Professional to represent the 2nd respondent Company. That apart, the Resolution Professional also filed an application in I.A. No. 4 of 2018 seeking permission of this Court to allow him to appear on behalf of the 2nd respondent Company. In these circumstances, this Court has taken up the locus standi of the petitioner as a preliminary issue before going into the merits of the case. 6. Sri Nalin Kohil, learned counsel appearing on behalf of Sri B. Vijaysen Reddy, learned counsel appearing for the petitioner, submits that the petitioner being a Director/Authorized Signatory of the 2nd respondent company vide Board Resolution, dated 20.04.2015 is acting as its Director. The accused and the prosecutor cannot be the same person and the said aspect is unknown to the criminal jurisprudence. The Resolution Professional is appointed by the Committee of Creditors (hereinafter referred as 'CoC') and his appointment, removal and salary are determined by the CoC. By virtue of appointment of the Resolution Professional and during the period of moratorium, though the Board of Directors is suspended, the Directors are not suspended and they can appear for and on behalf of the Company. Apart from the directorship, the petitioner is an authorized signatory by virtue of Board Resolution dated 20.04.2015 which empowered him to file the complaint in question before the competent Court. The learned counsel also submitted that the moratorium, as imposed under Section 14 of the Insolvency and Bankruptcy Code (for short, "the IBC"), cannot be read as it is applicable to the proceedings even under other statutes, which include the procedure contemplated under the provisions of the Criminal Procedure Code/Criminal Law. The learned counsel also brought to the notice of this Court the objectives sought to be achieved under IBC and submitted that since the Court initiated a speedy resolution process and ensure higher level of debt financing, it does not preclude continuation of criminal proceedings. Relying on Section 166 of the Act, the learned Counsel further submitted that it imposes a positive fiduciary duty on the Director of a company to act in good faith to promote the objects of the company.
Relying on Section 166 of the Act, the learned Counsel further submitted that it imposes a positive fiduciary duty on the Director of a company to act in good faith to promote the objects of the company. Since the management of the insolvent company vests with the Insolvency Resolution Professional (for short, MRP') and the said IRP acts at the behest of CoC and his action requires approval of CoC and 96% of the members of the CoC are from the Quinn Group of Companies, which include the Quinn Finance Unlimited i.e. the 1st respondent herein, learned counsel strenuously contended that the accused and the prosecutor cannot be one and the same. If a power is conferred on the Director before the commencement of moratorium, such power is not suspended and cannot be taken away by the IRP. To support his contention, he relied on the judgments of the Apex Court in M/s. Innoventive Industries Ltd. v. ICIC Bank & another, (2018) 1 SCC 407 and Vivek Gupta v. M/s. Hero Fincorp Ltd. and another Civil Appeal No. 16143 of 2017, dt. 03.10.2017, and the decision of the Tribunal in Steel Konnect (India) Pvt. Ltd. v. M/s., Hero Fincorp Ltd. Company Appeal (AT) (Insolvency) No. 51 of 2017, dt. 29.08.2017. 7. With regard to the locus standi of the petitioner to intervene in the present proceedings, the learned counsel submitted that the locus standi is unknown to criminal jurisprudence and unless the statute creating an offence imposes any embargo to the contrary, anyone can set or put the criminal law into motion. He further submitted that an aggrieved person has to be heard by the competent Court. To support the said submissions, he relied on A.R. Antulay vs. Ramdas Sriniwas Nayak and another, (1984) 2 SCC 500 , Ratanlal vs. Prahlad Jat and others, (2017) 9 SCC 340 , Bhagwant Singh vs. Commissioner of Police and another, (1985) 2 SCC 537 and J.K. International vs. State (Govt. of NCT of Delhi) and others, (2001) 3 SCC 462 . Alternatively, he also submitted that even if the statute is silent, the parties, whose rights and interests are likely to be affected, have the right to be heard, unless the statute otherwise provides. For the said proposition, he relied on Mangilal vs. State of M.P., (2004) 2 SCC 447 . 8.
Alternatively, he also submitted that even if the statute is silent, the parties, whose rights and interests are likely to be affected, have the right to be heard, unless the statute otherwise provides. For the said proposition, he relied on Mangilal vs. State of M.P., (2004) 2 SCC 447 . 8. Per contra, Sri T. Niranjan Reddy, the learned Senior Counsel appearing for the counsel for the revision petitioner/1st respondent submitted that the submissions made on behalf of the petitioner are beyond the prayer sought in the implead petition since in the said petition he has not sought any prayer that he is representing the 2nd respondent company. The prayer sought is that he should be impleaded as a proposed respondent No. 2 in his individual capacity. He does not have any authorization in his favour to implead himself to represent the 2nd respondent Company. The learned Senior Counsel also taken this Court to various provisions under the Code of Criminal Procedure as well as the Indian Penal Code and submitted that the complaint in question filed by the 2nd respondent is under Section 200 Cr.P.C. and it is not a case instituted upon a police report. Section 200 Cr.P.C. is a special provision under Criminal Procedure Code and the proceedings initiated thereunder should be treated as a lis between two private parties. Since the petitioner, being a third party, cannot be allowed to intervene in the proceedings. As per Section 2(d) of the Cr.P.C. 'complaint' means any allegation made orally or in writing before a Magistrate for the purpose of taking action under the Code of Criminal Procedure that an offence has been committed by a person known or unknown but it does not include a police report. He further submitted that the first informant/complainant can be termed as a de facto complainant and once a final report as contemplated under Section 173 Cr.P.C. is filed, the State steps into the shoes of the complainant to prosecute the accused. Therefore, the complainant in the present complaint being the 2nd respondent represented by a Resolution Professional, the petitioner cannot have locus to come on record. He also submitted that the Courts have to adopt the procedure laid down in Section 305 Cr.P.C. when a company institutes a complaint.
Therefore, the complainant in the present complaint being the 2nd respondent represented by a Resolution Professional, the petitioner cannot have locus to come on record. He also submitted that the Courts have to adopt the procedure laid down in Section 305 Cr.P.C. when a company institutes a complaint. In the instant case, since a Resolution Professional has been appointed by the learned Tribunal in supersession of the Board of Directors of the 2nd respondent-Company, and since he has to manage the affairs of the said company, it is only the Resolution Professional who can represent it as its representative. As such, the actions of the suspended Board of Directors or a Director of the suspended Board of Directors in individual capacity cannot represent the Company. To support the said contention, he relied on the decision of the Apex Court in Associated Cement Co. Ltd. vs. Keshvanand, (1998) 1 SCC 687 and argued that no Magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. In the case on hand, since a Resolution Professional has already been appointed by the Tribunal, he alone can represent the 2nd respondent company. In Dhanraj Bagaria vs. S.C. Chatterjee, 1997 Crl.L.J. 823 the Calcutta High Court while dealing with a similar issue held as under: "After giving my anxious consideration to the submissions of both the sides, I come to the conclusion that in view of the admitted position that the Company in question went into liquidation on 26.05.87 and an official liquidator having been already appointed by the Court the petitioner who at one point of time being a Director of the Company voluntarily took upon himself the responsibility of representing the Company, by resorting to an application under Section 305 Cr.P.C. cannot hold good at the present moment. The only person who can represent the Company at the present moment is the official liquidator and appropriate steps need be taken for making him a party so as to represent the Company in all the proceedings pending before the trial Court. It is made clear that the liability of the company notwithstanding its liquidation in my opinion still continues since offence was committed at a point of time when the company was functioning properly.
It is made clear that the liability of the company notwithstanding its liquidation in my opinion still continues since offence was committed at a point of time when the company was functioning properly. It is also made clear that the liability of the petitioner as a Director of the company shall also remain in accordance with the appropriate provisions of the Act of 1952. But the only exemption which he gets in this scope of the revisional applications is that he is absolved from the liability to represent the company who also figures as an accused in the aforesaid proceedings. The revisional applications are accordingly disposed of on contest in the light of the observations made in the body of the judgment." He also relied on the following decisions on the above said issue: 1. Satish & Co. vs. S.R. Traders and Others, 1997 (1) ALD (Crl.) 745 (AP); 2. The Hon'ble NCLT, Kolkata in its order dated 09.02.2017 in C.P. No. 03/2017, Nicco Corporation Limited. 9. The learned Senior Counsel further submitted that the petitioner has not shown himself as an aggrieved person. Resorting to the provisions under the IBC, he submitted that once a moratorium is imposed on a corporate debtor, the Board of Directors is suspended and the Directors are completely disassociated from the management of the company, the Interim Resolution Professional alone has to manage the operations of the corporate debtor as a going concern. In the case on hand, the CoC has recommended the appointment of Sri Mohan Lal Jain in place of Mr. Sundaresh Bhatt as a Resolution Professional and the same has been confirmed by the Tribunal by orders dated 31.01.2018. To support his contention that once the moratorium has been declared on a corporate debtor, in supersession of the Board of Directors the Interim Resolution Professional alone has to take care of the management on all aspects, he relied on Innoventive Industries (supra) and Burn Standard Co. Ltd. vs. United Bank of India, 2017 SCC Online Cal 9863 at para 5: 10.
Ltd. vs. United Bank of India, 2017 SCC Online Cal 9863 at para 5: 10. Sri K. Vivek Reddy, learned counsel, who filed I.A. No. 4 of 2018 seeking permission of this Court to permit the Resolution Professional to represent the 2nd respondent Company, submits that as per the provisions of IBC once the insolvency petition is admitted and Resolution Professional is appointed, the moratorium as contemplated under Section 14 of IBC comes into effect by order of the Tribunal and thereafter the management of the affairs of the Company vests in the IRP as per Section 17(1)(a) of IBC. The powers of the Board of Directors stand suspended and they will be exercised by the IRP under Section 17(1)(b) of IBC. As per Section 17(2)(a) of IBC, the IRP has to act and execute in the name of corporate debtor. The IRP has to manage the operations of the corporate debtor. He is required to appoint legal and other professionals of the corporate debtor under Section 20(2)(a) of IBC. He further contended that the petitioner was removed as a Director of the Company with effect from 1.8.2018. Though it is challenged, no interim orders have been granted. He also specifically contended that it is the Resolution Professional who has to represent the corporate debtor in all the proceedings as per Section 25 of IBC and the same is as under: "25. (2) For the purposes of sub-section (1), the resolution professional shall undertake the following actions namely:- (b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration proceedings." To support his submissions made supra, he relied on Innoventive Industries Limited (supra). He also submitted that the petitioner cannot be a 'victim' within the definition of Section 2(wa) of Cr.P.C. since he has not suffered any loss or injury caused by reason of the act or omission. 11. Having heard the learned counsel for the parties and from a perusal of the material on record, the question that arises for consideration is: "Whether the petitioner herein has locus to represent the 2nd respondent company and, if so, whether I.A. No. 3 of 2018 filed to implead the petitioner as party respondent No. 2 is maintainable in law?" 12.
Having heard the learned counsel for the parties and from a perusal of the material on record, the question that arises for consideration is: "Whether the petitioner herein has locus to represent the 2nd respondent company and, if so, whether I.A. No. 3 of 2018 filed to implead the petitioner as party respondent No. 2 is maintainable in law?" 12. Admittedly, the 2nd respondent company is incorporated under the Companies Act, 1956 having its registered office at Q City, 6th floor, Telangana Block-A, Sy. Nos. 109, 110 and 111/2, Nanakramguda Village, Ranga Reddy District. The said company received monetary benefits during the period win effect from 24.12.2007 to 04.07.2010 for the purpose of buying CCDs and also 12 DSAs were executed between the revision petitioner and the 2nd respondent company on different dates. Since the 2nd respondent company failed to pay the interest, the revision petitioner initiated proceedings in C.P. No. 12/71/Hyd/2016 before the Tribunal seeking payment of interest and conversion of the Quinn Finance DSAs. The petitioner, after going through the proceedings before the learned Tribunal, realized that the 11 DSAs are forged and fabricated by all the accused and initiated criminal proceedings vide C.C.(S.R.). No. 2933 of 2017 for various offences against the accused therein, which include the 1st respondent herein as A-6, It is relevant to mention that in the said complaint the 2nd respondent company was represented by the petitioner as its authorized signatory on 09.05.2017. When Crl.R.P. No. 154 of 2017 was pending, on 11.08.2017, the learned Tribunal admitted the Insolvency Petition under Section 7 of IBC, in the orders, the learned Tribunal satisfied that the petitioner has defaulted in payment of its debts. As per the provisions of IBC, once an Insolvency Petition is admitted and an Interim Resolution Professional is appointed, the moratorium, as contemplated under Section 14 of IBC, comes into force.
As per the provisions of IBC, once an Insolvency Petition is admitted and an Interim Resolution Professional is appointed, the moratorium, as contemplated under Section 14 of IBC, comes into force. By virtue of the same, all the acts mentioned under the provision are prohibited by the 2nd respondent company, since the management of the affairs of the company vests in IRP, powers of Board of Directors stand suspended and be exercised by the IRP, the IRP has to act and execute in the name of corporate debtor, the IRP is required to manage the operations of the corporate debtor as a going concern and the IRP is required to appoint legal and other professionals of the corporate debtor under Sections 17 and 20 of the Code. 13. As far as Section 25(2) of IBC is concerned, the resolution professional shall represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration proceedings. Therefore, once, the moratorium under Section 14 of IBC comes into operation by virtue of the orders passed by the Tribunal, the powers of the Board of Directors stand suspended and the same shall be exercised by the IRP. 14. In Innoventive Industries Limited (supra), the Apex Court held as under: "Having heard learned Counsel for both the parties, we find substance in the plea taken by Shri Salve that the present appeal at the behest of the erstwhile directors of the Appellant is not maintainable. Dr. Singhvi stated that this is a technical point and he could move an application to amend the cause title stating that the erstwhile directors do not represent the company, but are filing the appeal as persons aggrieved by the impugned order as their management right of the company has been taken away and as they are otherwise affected as shareholders of the company According to us, once an insolvency professional is appointed to manage the company, the erstwhile directors who are no longer in management, obviously cannot maintain an aspect on behalf of the company. In the present case, the company is the sole Appellant. This being the case, the present appeal is obviously not maintainable. However, we are not inclined to dismiss the appeal on this score alone.
In the present case, the company is the sole Appellant. This being the case, the present appeal is obviously not maintainable. However, we are not inclined to dismiss the appeal on this score alone. Having heard both the learned Counsel at some length, and because this is the very first application that has been moved under the Code, we thought it necessary to deliver a detailed judgment so that all Courts and Tribunals may take notice of a paradigm shift in the law. Entrenched managements are no longer allowed to continue in management if they cannot pay their debts." 15. Further, in spite of declaration of the moratorium and by virtue of Section 25(2)(b) of IBC, if one of the Board of Directors is allowed to represent the company, the basic object in appointing the resolution professional and the object behind it in performing the management power of resolution professional, which include to represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration proceedings would be defeated. In a way, once by virtue of admission of the Insolvency petition, the moratorium comes into force, the erstwhile management is denied of all its rights. Therefore, the contention of the learned counsel appearing for the petitioner that after appointment of IRP though the Board of Directors stand suspended, that does not amount to suspension of a Director, cannot be countenanced. As such, the decisions of the learned Tribunal in M/s. Subasri Realty Private Ltd. vs. Mr. N. Subramaniam and another (Company Appeal (AT) (Insolvency) No. 290 of 2018 dated 22.02.2018) and Quinn Logistics India Pvt. Ltd., vs. Mack Soft Tech Pvt. Ltd., dated 27.04.2018 are against the principles of law. In fact, the said orders run contrary to the mandatory procedure contemplated under the provisions of IBC. The entire procedure to be followed after commencement of the moratorium is contemplated till, Its conclusion. As such, the IBC Is a self-contained Code. Further, if the contention of the petitioner is accepted, the provisions of Section 25(2)(b) of IBC Itself would become otiose. 16.
The entire procedure to be followed after commencement of the moratorium is contemplated till, Its conclusion. As such, the IBC Is a self-contained Code. Further, if the contention of the petitioner is accepted, the provisions of Section 25(2)(b) of IBC Itself would become otiose. 16. The further contention of the learned counsel for the petitioner that If an officer or employee had a financial power of signing cheques prior to the moratorium, such power does not stand suspended on suspension of Board nor can be taken away by the resolution professional relying on the decision in M/s. Subasri Realty Private Ltd. (supra) is not applicable to the facts of the case. As far as this aspect is concerned, the officer or an employee conferred with a financial power, particularly, signing cheques prior to the moratorium stands on a different footing compared to a Director of a Company. If the person empowered to sign the cheques refuses to function on the direction of the resolution professional or misuse such power, it is always open for the resolution professional to take away such power after notice to the person concerned in exercise of the powers conferred under the provisions of IBC. Therefore, the said order will not help the petitioner. 17. The other contention raised by the learned counsel for the petitioner is that locus standi is unknown in criminal jurisprudence. As a Director of the 2nd respondent company, it is always open to the petitioner in his individual capacity to initiate criminal proceedings when the rights and interest of the 2nd respondent company are prejudiced. Therefore, the petitioner being the Director of the 2nd respondent company also comes within the definition of an "aggrieved person". To support his contentions, he relied on the judgment of the Apex Court in A.R. Antulay (supra), wherein the Apex Court while dealing with the concept of locus standi of the complainant held as under: "It is a well recognized principle of criminal jurisprudence that anyone can set or put the criminal law into motion except where the statute enacting or creating an offence indicates to the contrary. The scheme of the Code of Criminal Procedure envisages two parallel and independent agencies 'or taking criminal offences to court.
The scheme of the Code of Criminal Procedure envisages two parallel and independent agencies 'or taking criminal offences to court. Even for the most serious offence of murder, it was not disputed that a private complaint can, not only be filed but can be entertained and proceeded with according to law. Locus standi of the complainant is a concept foreign to criminal jurisprudence save and except that where the statute creating an offence provides for the eligibility of the complainant, by necessary implication the general principle gets excluded by such statutory provision. Numerous statutory provisions, can be referred to in support of this legal position such as (i) Section 187-A of Sea Customs Act, 1878 (ii) Section 97 of Gold Control Act, 1968 (iii) Section 6 of Import and Export Control Act, 1947 (iv) Section 27 and Section 279 of the Income Tax Act, 1961 (v) Section 61 of the Foreign Exchange Regulation Act, 1973, (vi) Section 621 of the Companies Act, 1956 and (vii) Section 77 of the Electricity Supply Act. This list is only illustrative and not exhaustive. While Section 190 of the Code of Criminal Procedure permits anyone to approach the Magistrate with a complaint, it does not prescribe any qualification the complainant is required to fulfill to be eligible to file a complaint. But where an eligibility criterion for a complainant is contemplated specific provisions have been made such as to be found in Sections 195 to 199 of the Cr.P.C. These specific provisions clearly indicate that in the absence of any such statutory provision, a locus standi of a complainant is a concept foreign to criminal jurisprudence. In other words, the principle that anyone can set or put the criminal law in motion remains intact unless contra-indicated by a statutory provision. This general principle of nearly universal application is founded on a policy that an offence i.e. an act or omission made punishable by any law for the time being in force [See Section 2(n) Cr.P.C.] is not merely an offence committed in relation to the person who suffers harm but is also an offence against society. The society for its orderly and peaceful development is interested in the punishment of the offender. Therefore, prosecution for serious offences is undertaken in the name of the State representing the people which would exclude any element of private vendetta or vengeance.
The society for its orderly and peaceful development is interested in the punishment of the offender. Therefore, prosecution for serious offences is undertaken in the name of the State representing the people which would exclude any element of private vendetta or vengeance. If such is the public policy underlying penal statutes, who brings an act or omission made punishable by law to the notice of the authority competent to deal with it, is immaterial and irrelevant unless the statute indicates to the contrary. Punishment of the offender in the interest of the society being one of the objects behind penal statutes enacted for larger good of the society, right to initiate proceedings cannot be whittled down, circumscribed or fettered by putting it into a strait-jacket formula of locus standi unknown to criminal jurisprudence, save and except specific statutory exception. To hold that such an exception exists that a private complaint for offences of corruption committed by public servant is not maintainable, the court would require an unambiguous statutory provision and a tangled web of argument for drawing a far-fetched implication, cannot be a substitute for an express statutory provision. In the matter of initiation of proceeding before a Special Judge under Section 8(1), the Legislature while conferring power to take cognizance had three opportunities to unambiguously state its mind whether the cognizance can be taken on a private complaint or not. The first one was an opportunity to provide in Section 8(1) itself by merely stating that the Special Judge may take cognizance of an offence on a police report submitted to it by an investigating officer conducting investigation as contemplated by Section 5-A. While providing for investigation by designated police officers of superior rank, the Legislature did not fetter the power of Special Judge to take cognizance in a manner otherwise than on police report. The second opportunity was when by Section 8(3) a status of a deemed public prosecutor was conferred on a private complainant if he chooses to conduct the prosecution. The Legislature being aware of a provision like the one contained in Section 225 of the Cr.P.C., could have as well provided that in every trial before a Special Judge the prosecution shall be conducted by a Public Prosecutor, though that itself would not have been decisive of the matter.
The Legislature being aware of a provision like the one contained in Section 225 of the Cr.P.C., could have as well provided that in every trial before a Special Judge the prosecution shall be conducted by a Public Prosecutor, though that itself would not have been decisive of the matter. And the third opportunity was when the Legislature while prescribing the procedure prescribed or warrant cases to be followed by Special Judge did not exclude by a specific provision that the only procedure which the Special Judge can follow is the one prescribed for trial of warrant cases on a police report. The disinclination of the Legislature to so provide points to the contrary and no canon of construction permits the court to go in search of a hidden or implied limitation on the power of the Special Judge to take cognizance unfettered by such requirement of its being done on a police report alone. In our opinion, it is no answer to this fairly well-established legal position that for the last 32 years no case has come to the notice of the court in which cognizance was taken by a Special Judge on a private complaint for offences punishable under the 1947 Act. If something that did not happen in the past is to be the sole reliable guide so as to deny any such thing happening in the future, law would be rendered static and slowly wither away." He also relied on the judgment of the Apex Court in Ratanlal (supra) wherein the Apex Court held as under: "15. It is thus clear that Article 136 does not confer a right to appeal or any party but it confers a discretionary power on the Supreme Court to interfere in suitable cases. The exercise of the power of the court is not circumscribed by any limitation as to who may invoke it. It does not confer a right to appeal, it confers only a right to apply for special leave to appeal. Therefore, there was no bar for the appellant to apply for special leave to appeal as he is an aggrieved person. This Court in exercise of its discretion granted permission to the appellant to file the special leave petition on 3-8-2012 [Ratanlal v. Prahlad Jat, SLP (Cri.) No. ... of 2012 (Crl.
Therefore, there was no bar for the appellant to apply for special leave to appeal as he is an aggrieved person. This Court in exercise of its discretion granted permission to the appellant to file the special leave petition on 3-8-2012 [Ratanlal v. Prahlad Jat, SLP (Cri.) No. ... of 2012 (Crl. M.P. No. 15640 of 2012), order dated 3-8-2012 (SC), wherein it was directed: "Permission to file SLP granted. Issue notice, returnable four weeks hence. In the meantime, there will be stay of further proceedings in Sessions Case No. 33 of 2009, pending before the Additional Sessions Judge (Fast track), Sikar, Rajasthan."] and leave was granted on 24-2-2014 [Ratanlal v. Prahlad Jat SLP (Cri. No. 5909 of 2012, order dated 24-2-2014 (SC), wherein it was directed: "Leave granted. However, the trial court may proceed without considering the evidence subsequently recorded by the trial court."]. 18. On the aspect of, if a statute is silent, whose rights and interest are likely to be affected, have a right to be heard unless the statute provides otherwise no form or procedure should ever be permitted to exclude the presentation of a litigant's defence or stand, since it violates the principles of natural justice. To support the said submission, he relied on the judgment of the Apex Court in Mangilal (supra), wherein the Apex Court held as under: "Even if a statute is silent and there are no positive words in the Act or the Rules made thereunder, there could be nothing wrong in spelling out the need to hear the parties whose rights and interest are likely to be affected by the orders that may be passed, and making it a requirement to follow a fair procedure before taking a decision, unless the statute provides otherwise. The principles of natural justice must be read into unoccupied interstices of the statute, unless there is a clear mandate to the contrary. No form or procedure should ever be permitted to exclude the presentation of a litigant's defence or stand. Even in the absence of a provision in procedural laws, power inheres in every tribunal/court of a judicial or quasi-judicial character, to adopt modalities necessary to achieve requirements of natural justice and fair play to ensure better and proper discharge of their duties.
Even in the absence of a provision in procedural laws, power inheres in every tribunal/court of a judicial or quasi-judicial character, to adopt modalities necessary to achieve requirements of natural justice and fair play to ensure better and proper discharge of their duties. Procedure is mainly grounded on the principles of natural justice irrespective of the extent of its application by express provision in that regard in a given situation. It has always been a cherished principle. Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice where substantial rights of parties are considerably affected. The application of natural justice becomes presumptive, unless found excluded by express words of statute or necessary intendment, (See Swadeshi Cotton Mills v. Union of India, [ (1981) 1 SCC 664 : AIR 1981 SC 818 ].) Its aim is to secure justice or to prevent miscarriage of justice. Principles of natural justice do not supplant the law, but supplement it. These rules operate only in areas not covered by any law validly made. They are a means to an end and not an end in themselves. The principles of natural justice have many facets. Two of them are: notice of the case to be met, and opportunity to explain. In the aforesaid premises, the irresistible conclusion is that opportunity has to be granted before directing payment of compensation under Section 357(4) of the Code." 19. Per contra, the learned Senior counsel appearing for the counsel for the 1st respondent submitted that the petitioner cannot be treated as a complainant since complaint was lodged by the 2nd respondent company. Under Section 2(d) Cr.P.C., 'complaint' means any allegation made orally or in writing to a Magistrate, with a view to his taking action under the Code, that some person has committed an offence, but does not include a police report. However, 'person' is not defined in Cr.P.C. Section 2(y) Cr.P.C. contemplates the words and expressions used herein and not defined but defined in the Indian Penal Code having the meanings respectively assigned to them in that Code. Section 11 IPC defined 'person', which includes any company or association or body of persons whether incorporated or not. 20.
However, 'person' is not defined in Cr.P.C. Section 2(y) Cr.P.C. contemplates the words and expressions used herein and not defined but defined in the Indian Penal Code having the meanings respectively assigned to them in that Code. Section 11 IPC defined 'person', which includes any company or association or body of persons whether incorporated or not. 20. In the case on hand, the dispute is between two private persons based on a private complaint filed under Sections 190 and 200 Cr.P.C. 21. In Associated Cement Co. Ltd. (supra) the Apex Court held as under: "It is true that the complainant M/s. Associated Cement Company Ltd. is not a natural person. We have no doubt that a complaint can be filed in the name of a juristic person because it is also a person in the eye of law. But then, who would be the complainant in the criminal court for certain practical purposes. The word "complainant" is not defined in the Code of Criminal Procedure, whether old or new. Any person can set the taw in motion except in cases where the statute has specifically provided otherwise. The word "person" is defined in the Indian Penal Code (Section 11) as including "any company or association or body of persons whether incorporated or not". By virtue of Section 2(y) of the new Code words and expressions used in that Code but not defined therein can have the same meaning assigned to them in the Penal Code. Thus when the word "person" is specifically defined in the Penal Code as including a company that definition can normally be adopted for understanding the scope of the word "complainant". However, the definition clauses subsumed in Section 2 of the new Code contains the opening key words that such definitions are to be adopted "unless the context otherwise requires". We have, therefore, to ascertain whether a company or association of persons or body corporate can be a complainant as per the new Code as for all practical purposes, looking at different contexts envisaged therein. Be that so, we suggest as a pragmatic proposition that no magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings.
Be that so, we suggest as a pragmatic proposition that no magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. There may be occasions when a different person can represent the company e.g. the particular person who represents the company at the first instance may either retire from the company's services or may otherwise cease to associate therewith or he would be transferred to a distant place. In such cases it would be practically difficult for the company to continue to make the same person represent the company. In the court. In any such eventuality it is open to the de jure complainant company to seek permission of the court for sending any other person to represent the company in the court. At any rate, absence of the complainant envisaged in Section 249 or Section 256 of the new Code would include absence of the corporeal person representing the incorporeal complainant." 22. In the case on hand, the complaint was lodged by the 2nd respondent company represented by its authorized signatory i.e., the petitioner herein. The present application is filed by the petitioner in his individual capacity. By virtue of the orders passed under Section 14 of IBC, the resolution professional is the competent authority to represent the Company, such as, management of the affairs, powers of Board of Directors and etc. As per Section 25(2)(b) of IBC, the resolution professional alone shall represent the corporate debtor in all proceedings, which include represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings. If that be so the petitioner cannot be said to be an aggrieved person so as to maintain the present application. That apart, the IBC being a self-contained Code, clearly puts an embargo on the person aggrieved or a third party to set the law into motion since by virtue of appointment of the resolution professional, and it is for him to protect the rights and interest of the corporate debtor in judicial, quasi-judicial or arbitration proceedings.
That apart, the IBC being a self-contained Code, clearly puts an embargo on the person aggrieved or a third party to set the law into motion since by virtue of appointment of the resolution professional, and it is for him to protect the rights and interest of the corporate debtor in judicial, quasi-judicial or arbitration proceedings. When the statute itself creates a provision dealing with such a situation, the contention of the learned counsel that the petitioner being a Director, is aggrieved and can maintain the present application cannot be countenanced. The principle relied upon by the learned counsel for the petitioner decided by the Apex Court in A.R. Antulay (supra) and Ratanlal (supra) is not applicable to the facts of the present case, since in those cases the criminal prosecutions initiated are based on a police report and there is no material available in the present case. 23. Admittedly, in the case on hand, it is a private complaint lodged under the provisions of Sections 190 and 200 Cr.P.C. by the 2nd respondent company. In fact, in A.R. Antulay (supra) the Apex Court held that locus standi of the complainant is a concept foreign to criminal jurisprudence save and except that where the statute creating an offence provides for the eligibility of the complainant, by necessary implication the general principle gets excluded by such statutory provision. In other words, the principle that anyone can set or put the criminal law in motion remains intact unless contra-indicated by a statutory provision. In this case, the private complaint was lodged by the 2nd respondent company and under the provisions of IBC, it is only the resolution professional, who has to represent and act on behalf of the corporate debtor with third parties for exercising the rights and interest for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration proceedings. Thus, when a clear embargo is stipulated, it cannot be said that a Director of a Company is entitled to maintain a complaint. 24. During the course of arguments, it is also brought to the notice of this Court that the petitioner was removed as a Director of the 2nd respondent company with effect from 01.08.2018. Though the same has been challenged by him, no interim orders are granted.
24. During the course of arguments, it is also brought to the notice of this Court that the petitioner was removed as a Director of the 2nd respondent company with effect from 01.08.2018. Though the same has been challenged by him, no interim orders are granted. That being the position, viewed from any angle, the petitioner cannot be treated as an aggrieved person and he does not have locus to launch criminal proceedings, more particularly, the present application in this Court. In these circumstances, this Court is of the opinion that the application, as filed, is misconceived and is liable to be dismissed. 25. Accordingly, the application is dismissed. 26. Since in the present application the locus of the petitioner alone is decided, without going into the merits of the case, and since the matter is coming up for admission, the registry is directed to post the matter before the appropriate Bench.