TaxTMI 
TaxTMI 
2009 (12) TMI 1028
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.....C. No. 801/2009 is the Secretary of the company and the petitioners in other cases are the Directors of India Infoline Ltd. 2. A complaint alleging commission of offences under Section 406/409/420/477A/34/120B IPC was filed by the respondent against the petitioners. It was alleged in the complaint that the respondent/complainant opened a Demat account with accused No.1-India Infoline Ltd. on 11th September, 2007 and placed orders from time to time for purchase of shares and also made payments, from time to time, against its running account with the company. The accused company claimed that there was an outstanding debit of ₹ 10.48 crores against the complainant, in its Demat account with it. Accused No. 1 was having lien on 20,46,195 shares purchased by the complainant in that account. Vide letter dated 30th April, 2008, accused No. 1 informed the complainant about the aforesaid debit. The complainant cleared the amount outstanding against it, by making payment of ₹ 10.48 crores, by a cheque. Later on, it transpired that the correct debit against the complainant was ₹ 10,22,77,522/- only and the accused dishonestly received a sum of ₹ 25,22,477.53 from th....
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....p and there have been instances in the past whereby the complainant has joined other group companies of GHCL Group for taking loan and pledging its assets for grant of loan to those companies. Referring to the observations made by the Hon'ble Supreme Court in All Cargo Movers v. Dhanesh Badarmal, AIR 2008 SC 247 to the documents can be considered in proceedings under Section 482 of the Code of Criminal Procedure and in support of this contention, he has referred to Annexure P-9 (Colly.) to the petition which are seven OMPs filed by various group companies of GHCL Group and Annexure P-10 (Colly.), which are the copies of agreement executed jointly by those group companies and the complainant Trust for taking loan from Birla Global Finance Ltd. 5. In my view, at this stage, it is neither permissible nor feasible for this Court, in exercise of its extraordinary jurisdiction under Section 482 of the Code of Criminal Procedure, to go into such disputed questions of fact and take a view, one way or the other. The case of the complainant is that the letter dated 1st March, 2008 was not sent by Shri Bhuwneshwar Mishra to India Infoline Ltd. Shri Bhuwneshwar Mishra has been produced before....
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....anies of GHCL Group. Thus, it was the company which was entrusted with the property of the complainant or with dominion over its property. It is the company which allegedly disposed of the shares of the complainant and adjusted the sale proceeds in violation of the contract between complainant-Trust on the one hand and accused No.1 on the other hand, whereunder Demat Account was opened and shares were purchased by the complainant through accused No. 1-India Infoline Ltd. 8. This is not the case of the complainant that the decision to sell its shares and to appropriate the sale proceeds towards the liquidation of the outstanding against group companies of GHCL Group was taken by any of the accused out of accused Nos. 2 to 7. Admittedly, accused No. 1 is a large company. Assuming the allegations made in the complaint to be true, there is no allegation or material to show as to who either forged or got forged the letter dated 1st March, 2008 and who decided to sell the shares purchased by the complainant and to proceed the sale proceeds in liquidation of the amount due from group companies of GHCL Group instead of crediting the same in the Demat Account of the complainant. 9. The fo....
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.... State of Uttar Pradesh and others (2008) 5 SCC 622, the complainant sent two demand drafts to a company in which the appellant was the Managing Director, alleging commission of an offence under Section 406 of IPC by him. It was contended before the Hon'ble Supreme Court that since the appellant was in-charge of and in control of the business of the company, he would be deemed to be liable for the offence committed by the company. Rejecting the contention, the Hon'ble Supreme Court observed that the Penal Code save and except some provisions specifically providing therefor, does not contemplate any vicarious liability on the part of a party who is not charged directly for commission of an offence. Noticing that the drafts were drawn in the name of the company, it was held that the appellant who was its Managing Director cannot be said to have been committed an offence under Section 406 of IPC. The Hon'ble Supreme Court noted that if and when a Statute contemplates creation of such a legal fiction, it provides specifically therefor and held that in the absence of any provision laid down under the Statute, a Director of a company or an employee cannot be held to be vicarious liable f....
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....rs does not contemplate any vicarious liability on the part a person. Commission of an offence by raising a legal fiction or by creating a vicarious liability in terms of the provisions of a statute must be expressly stated. The Managing Director or the Directors of the Company, thus, cannot be said to have committed an offence only because they are holders of offices. 15. In Madhavrao Jiwajirao Scindia & Others Vs. Sambhajirao Chandrojirao (1998) 1 SCC 692, the Hon'ble Supreme Court, inter alia, observed as under: "The legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a....
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....preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused" 18. Keeping in view the facts and circumstances of the case and considering the nature of a personal allegation made in the complaint, without any material, either in the form of oral statements or in the form of documentary evidence, indicating involvement of any particular person, it would not be appropriate to subject accused No.2 to 7 to undergo the agony and harassment of a criminal trial, particularly when I see no reasonable possibility of their being convicted on the basis of allegations made in the complaint against them. 19. As regards the alleged cheating, it was contended by the learned counsel for the respondent that though the amount outstanding against the complainant was only ₹ 10,22,77,522/- the accused claimed ₹ 10.48 crores vide its letter dated 30th April, 2008 and thus dishonestly induced the....