TaxTMI 
TaxTMI 
2002 (7) TMI 560
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....e complaint. However, the fact remains that the complaint is only at the initial stage and moreover, this being a private complaint, evidence has to be recorded and only then charges have to be framed by the magistrate. Therefore, admittedly witnesses have not been examined and charges have not been framed yet. At this stage, the petitioners who are A-1 and A-2 have come forward with the present petition. The gist of the complaint is as follows : (a)The first accused namely the first petitioner M/s. Sundaram Finance Services Limited is the sponsor for the third accused namely M/s. Vishnu Forge Industries. In order to expand their business operations, the third accused company required finance and accordingly for the said purpose, had along with the first accused approached and induced the complainant to subscribe for shares. Accordingly, the complainant believing their representation to be true subscribed for 50,000 equity shares of face value Rs. 10 each with a premium of Rs. 6 for each share and in that process, enclosed therewith a cheque, addressed to the first petitioner along with the cheque for Rs. 8,00,000. The said cheque no doubt was drawn in favour of the third acc....
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....ean the shares subscribed by the subscribers and bonus shares, if any, issued to the investors before the date of offer for sale. In all other respects, the other clauses and terms and conditions of divestment agreement stood unaltered. (f)Here, it is important to note that clause (15) of the divestment agreement dated September 1, 1995, namely, the sponsor shall arrange to offer the equity shares for sale to the public not later than April 30, 1996, stood unaltered. The complainant only on such representation made by the accused and further it is only on the basis of these terms and conditions in the sponsorship agreement and divestment agreement, believed the same to be true and had purchased the shares to the tune of Rs. 8,00,000. (g)However, contrary to such representations, promises made and the agreements entered into, the first accused failed to arrange to offer the equity shares for sale to the public by April 30, 1996, and moreover, no efforts had been taken by the accused either to list the shares nor was anything done in the direction of going public. (h)In the meantime, surprisingly, pursuant to the criminal conspiracy between them, the first and the third a....
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....r converting that property to his own use; or (b) dishonestly using or disposing of thatproperty or wilfully suffering any other person so to do in violation (i ) of anydirection of law prescribing the mode in which such trust is to be discharged, (ii) of any legal contract made, touching the discharge of such trust." Learned counsel for the petitioners would further persuade this court that what has to be seen is that whether there is any intention of cheating at the time of making the representation and he would stress that the agreement dated September 1, 1995, has alone to be considered and on going through the agreement, it is seen that there is absolutely no element of cheating and according to the agreement the date mentioned for the company to go public was on April 30, 1996. But due to certain unforeseen circumstances, the said company could not go public and at best, it may only amount to a breach of an agreement, for which the complainant would be entitled to seek remedies before the civil court. The second limb of the argument advanced by learned counsel is that even assuming that the company did not go public wilfully, the third accused is the company who has com....
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.... Criminal Procedure Code has to be viewed, in the case of one, which has been instituted on a police report as opposed to a private complaint. A case instituted on a police report is a culmination of an entire investi-gation and the entire evidence that is sought to be relied on by the prosecution forms part of the section173 of the Criminal Procedure Code records and as such the framing of the charge is based purely on such statements and records and consequently, the accused is at liberty to put forth his contention on the basis of the materials that are available under section 173 of the Criminal Procedure Code and persuade the court that the evidence is insufficient to warrant framing of charges. But whereas, in the case of a complaint filed by a private person, there are two stages, one is the stage of taking cognizance and the other is the stage of framing charges. At the stage of taking cognizance by the magistrate the only material before him is the complaint and the documents in support of the same. He may on certain occasions conduct an enquiry under section 202 of the Criminal Procedure Code and then take cognizance or in the absence of the same, if he is satisfied....
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....and bring in for sale on or before April 30, 1996. An agreement had been entered into between the complainant and the accused with regard to the same. But however three days prior to the expiry of the date, i.e., on April 27, 1996, a supplementary agreement has been entered into between the complainant and the third accused in which only certain amendments had been made and those two amendments are to the effect that the words found in the earlier agreement, namely, "Over the Counter Exchange of India (OTCEI)" would stand altered and be read as "OTCEI or any other stock exchange" and the second amendment was to the effect that the words "the shares" stand altered to mean the shares subscribed by the subscribers and bonus shares, if any, issued to the investors before the date of offer for sale. In all other respects, the earlier divestment agreement stood unaltered, that is to say that the earlier commitment made by the third accused along with the first accused that the shares shall be brought for sale on or before April 30, 1996, shall stand valid. However, the case of the complainant is that on the very same day, namely, on April 27, 1996, without his knowledge, A-1 and A-3 h....