Quashing criminal complaints under the Companies Act is justified when the accused was not an officer in default during the relevant period.

Criminal proceedings under the Companies Act may be quashed where the complaint itself does not disclose that the accused was an officer in default during the relevant period. Here, the alleged defaults ended before the petitioner became managing director, and the complaints did not specifically attribute responsibility to him under the Companies Act, 1956. On those pleaded facts, even if accepted in full, no offence was made out against him and continuation of the prosecution would amount to abuse of process. The complaints were therefore liable to be quashed insofar as they related to the petitioner.

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Issues: Whether the criminal proceedings under the Companies Act could be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the ground that the petitioner was not an officer-in-default during the relevant period and the complaints did not disclose any offence against him.

Analysis: The complaints themselves showed that the alleged defaults related to periods ending on 31-3-1992, whereas the petitioner became managing director only with effect from 16-9-1992. On the face of the complaints, the petitioner was not shown to be the person in charge during the relevant time and was not specifically attributed responsibility as an officer-in-default under Section 5 of the Companies Act, 1956. In these circumstances, the allegations, even if accepted in entirety, did not disclose the commission of the alleged offences against the petitioner. Continuation of the proceedings would therefore amount to abuse of the process of court, attracting the settled principles governing quashing of criminal proceedings.

Conclusion: The complaints were liable to be quashed insofar as they related to the petitioner, because no offence was made out against him on the allegations pleaded.

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