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Issues: (i) Whether a second complaint/FIR on the same set of allegations, when an earlier complaint on substantially the same facts was already pending, was maintainable; (ii) Whether the complaint disclosed a prima facie criminal case against the petitioners, who had resigned as directors before the later complaint and were shown to be non-executive directors.
Issue (i): Whether a second complaint/FIR on the same set of allegations, when an earlier complaint on substantially the same facts was already pending, was maintainable.
Analysis: The allegations in both complaints arose from the same transaction and the same factual foundation concerning the company's public issue and prospectus. The earlier complaint had already been filed before the competent court, and if any additional penal allegations were to be pursued, they ought to have been raised in that proceeding. Filing a fresh complaint before the police, after delay and without disclosing the accused names despite their earlier disclosure, amounted to repetitive prosecution on the same set of facts and was treated as an abuse of process.
Conclusion: The second complaint/FIR was not maintainable and was liable to be quashed.
Issue (ii): Whether the complaint disclosed a prima facie criminal case against the petitioners, who had resigned as directors before the later complaint and were shown to be non-executive directors.
Analysis: The material showed that the petitioners had resigned in 1996, long before the FIR of 2004, and the complaint did not contain specific averments showing the requisite dishonest or fraudulent intention attributable to them at the relevant time. Mere reference to their signatures on the prospectus, without facts establishing active control or participation in the alleged wrongdoing, was insufficient to justify criminal prosecution under the penal provisions invoked.
Conclusion: No prima facie criminal liability was made out against the petitioners on the facts alleged.
Final Conclusion: The inherent jurisdiction was properly invoked to prevent repetitive and unjustified prosecution, and the proceedings were quashed qua the petitioners.
Ratio Decidendi: A second criminal complaint based on the same factual foundation as an earlier pending complaint, without specific material showing the petitioners' criminal intent or active role, constitutes abuse of process and is liable to be quashed under inherent powers.
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