Court quashes proceedings in C.C. No. 31 of 2021 over jurisdictional issues

The court quashed the proceedings in C.C. No. 31 of 2021 due to jurisdictional issues regarding the Economic Offences Court's authority to take cognizance of the complaint without a written complaint by the Director, SFIO, as required by Section 212(6) of the Companies Act, 2013. Additionally, the court emphasized the necessity of including the Company as a party in fraud prosecutions under Section 447. The court found the complaint to be an abuse of process with malafide intentions, leading to the quashing of the proceedings and allowing the petitions.

---

---

Issues Involved
1. Quashing of proceedings in C.C. No. 31 of 2021.
2. Allegations of forgery, fabrication, and manipulation of documents.
3. Jurisdiction of the Economic Offences Court.
4. Applicability of Section 212(6) of the Companies Act, 2013.
5. Non-inclusion of the Company as a party.
6. Concurrent proceedings in different forums.
7. Abuse of process of law and malafide intentions.

Detailed Analysis

1. Quashing of Proceedings in C.C. No. 31 of 2021
The petitioners sought to quash the proceedings in C.C. No. 31 of 2021 under Section 482 of the Code of Criminal Procedure. The court considered whether the allegations made in the complaint, even if taken at face value, constituted any offence or made out a case against the petitioners.

2. Allegations of Forgery, Fabrication, and Manipulation of Documents
The respondent alleged that the petitioners had forged, fabricated, and manipulated documents, including Board Resolutions and Annual Reports, and uploaded these to the ROC website. The complaint included offences under Sections 447, 448, and 451 of the Companies Act, 2013, and various sections of the IPC. The court noted that the Economic Offences Court had not taken cognizance of the offences under Sections 628 and 629A of the Companies Act, 1956.

3. Jurisdiction of the Economic Offences Court
The petitioners argued that the Economic Offences Court lacked jurisdiction to take cognizance of the complaint due to the absence of a written complaint by the Director, SFIO, or any officer of the Central Government as required under Section 212(6) of the Companies Act, 2013. The court agreed, stating that the cognizance of the offence under Section 447 of the Companies Act could not have been taken by the trial court on a private complaint, as it is a cognizable offence.

4. Applicability of Section 212(6) of the Companies Act, 2013
Section 212(6) provides that the Economic Offences Court can take cognizance of offences under Section 447 only upon a complaint in writing by the Director, SFIO, or an officer authorized by the Central Government. The court emphasized that this provision acts as a safeguard against frivolous complaints and ensures that prosecution for fraud can only be launched after due investigation.

5. Non-inclusion of the Company as a Party
The petitioners contended that the Company (PARPL) was not arrayed as an accused, even though the allegations were primarily against the Company. The court held that the failure to make the Company a party was fatal to the complaint, as the prosecution for fraud under Section 447 must relate to the company in the first instance.

6. Concurrent Proceedings in Different Forums
The petitioners argued that the dispute was already being dealt with by the National Company Law Tribunal (NCLT) in Company Petition No. 431/HDB/2020. The court noted that initiating parallel investigations on the same issue could give rise to concurrent findings in different forums. However, the court clarified that pendency of civil proceedings is not a bar to initiate criminal proceedings as long as the ingredients of the offence are made out.

7. Abuse of Process of Law and Malafide Intentions
The court considered whether the complaint was an abuse of the process of law and filed with malafide intentions. The court observed that the complaint was filed after a significant delay and appeared to be motivated by a desire to take revenge against the petitioner. The court relied on precedents where it was held that criminal proceedings should not be used as an instrument of harassment or for seeking private vendetta.

Conclusion
The court concluded that the proceedings against the petitioners in C.C. No. 31 of 2021 were not maintainable due to the bar under Section 212(6) of the Companies Act, 2013, and the failure to include the Company as a party. The court quashed the proceedings and allowed the petitions.

---