TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 401
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....ative Society Limited having its principal office at Supaul and a branch office at Saharsa. The informant was depositing a sum of Rs. 200/-per day through an agent and the amount was being entered in this pass-book which ultimately matured for payment at the end of the one year on 09.03.2006. 3. It is alleged in the written complaint that when the informant went to the Branch office for getting his maturity payment, he came to know that all the officers had closed the Branch and had fled away with the money of the investors. The informant was told by the gent that all the officers of the Bank have closed the Branch and they have fled away with the money. The informant alleged that he met the officers and requested them to make payment but the payment was not made, the informant came to know that the accused persons had engaged some persons who were misleading the customers so that the customers do not lodge any case against the accused persons. The allegation is that the accused persons have with an intention and conspiracy planned to cheat the people and after opening branch offices and collecting money from the customers they have fled away with some of Rs. 5 Crores approximatel....
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....en there is no power to the Magistrate except on a private complaint in a cognizable/non-cognizable offence to direct the police to investigate into the offence. The Magistrate is not empowered to interfere with the investigation by the police. In King Emperor v. Khawaja Nazir Ahmad, 71 Ind App 203, the Judicial Committee of the Privy Council held that "the function of the judiciary and the police are complementary, not overlapping" and "the court's functions begin when a charge is preferred before it, and not until then". In Jamuna Chaudhary v. State of Bihar (1974) 3 SCC 774, this Court held: "The duty of the investigating officer is not merely to bolster up a prosecution case with such evidence as may enable the court to record a conviction, but to bring out the real unvarnished truth." 5. Learned APP further relied upon the observations of the Hon'ble Supreme Court in paragraph '42' as under.:- 42. In S.N. Sharma v. Bipen Kumar Tiwari (1970) 3 SCR 945 : (AIR 1970 SC 786), this Court held that S. 159 primarily meant to give to the Magistrate the power to direct an investigation in cases where the police decides not to investigate the case under provision to S. 157(1) an....
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....can quash the investigation and interfere with the same under Article 226 of the Constitution of India but it cannot exercise its inherent power for quashing the investigation under Section 482 Cr.P.C. 7. Learned APP has relied upon the judgment in the case of R.P.Kapur V. State of Punjab reported in AIR 1960 Supreme Court 866, in the case of State of Bihar & anr. Vs. P.P.Sharma & anr. reported in 1992 Suppl. (1) SCC 222 and in the case of State of Bihar Vs. Murad Ali Khan & Ors. (AIR 1989 SC 1 = 1989 PLJR 6 (SC) and a Full Bench judgment of the 7 Hon'ble Judges of Allahabad High Court in the case of Ramlal Vs. State of U. P. (1989 Cr. L. J. 1013) wherein it has been observed in paragraph 22 that "the high court has no inherent power under Section 482 Cr.P.C. to interfere with the arrest of a person by a Police Officer even in violation of Section 41(1) (a) Cr.P.C. However, where no offence is disclosed in the first information report or when the investigation is mala fide as the inherent powers of the Court to prevent the abuse of the process of the Court or to otherwise secure the ends of justice came into play after the charge-sheet has been filed in court and not during invest....
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.... (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155 (2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is a sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the instituti....
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....Supreme Court has reiterated the legal position. It has been held by the Hon'ble Apex Court that power under Section 482 Cr.P.C. of the High Court are very wide but those are required to be exercised with great caution and the court must be very careful to ensure that the decision in exercise of this power is based on sound principles. The inherent power, cannot be exercised to scuttle the legitimate prosecution. 12. In view of the aforesaid legal pronouncement, this Court being prima facie satisfied that this application cannot be dismissed on the ground of maintainability alone because in a case where this Court finds that initiation or continuance of a proceeding itself is an abuse of the process of the court or that in the interest of justice the power under Section 482 Cr.P.C. is required to be invoked and exercised, this Court may entertain an application and examine the same to find out whether the facts of the case require an interference. This Court, therefore, called upon learned counsel for the petitioner to make submissions on merit of the case. 13. Learned counsel for the petitioners submits that all these petitioners are the members /officials of the Central Bank Em....
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....nal conduct is found attributable to any person connected with the affairs of the society, the liquidator has the power to institute criminal proceedings also. In that view of the matter also the present complaint case is not fit to continue." 15. Per contra, learned APP for the State submits that in the case of P.P. Sharma (supra) the Hon'ble Supreme Court has categorically observed that the proceedings in a criminal case commences only after the learned Magistrate takes cognizance of the offences upon consideration of the materials so placed before him. Thus, only because an FIR has been lodged, it cannot be said to be initiation of a criminal proceeding. Secondly it is submitted that in order to arrive on a just and a proper conclusion as to the purport and meaning of the words "other legal proceedings" this Court would be required to look into the Act of 1996 and compare it with the provisions of Section 446 of the Companies Act, 1956. It is submitted that although the judgment of the Hon'ble Delhi High Court in the case of D. K. Kapur (supra) was cited before the learned coordinate Bench of this Court but the same has been held not applicable to the facts and circumstances o....
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....roves the final account rendered by the Liquidator, he shall issue such directions with respect to the custody or disposal of the documents records of the co-operative society. 18. It is submitted that so far as Section 50 which creates Bar of Jurisdiction of the court is concerned, it specifically provides that "Save as otherwise expressly provided in this Act, no Civil or Revenue Court shall have any jurisdiction in respect of any dispute required by Section 40 to be referred to the Cooperative Tribunal, or recovery proceeding under Section 41 or dissolution under Sections 43 and 44. Sub-section (2) of Section 50 provides that where a Cooperative Society is in liquidation, no suit or other legal proceedings shall be proceeded with or instituted against the liquidator or against the Cooperative society or any member thereof on any matter touching of the affairs of the co-operative society except by the leave of the Registrar and subject to such terms as he may impose. 19. It is submitted that Section 446 of the Companies Act 1956 contains a similar provision which had come for consideration by the Hon'ble Delhi High Court. The Hon'ble Delhi High Court looked into the scheme of t....
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....ections 442 and 446 of the Act is to enable the Company Court to oversee the affairs of the company and to avoid wasteful expenditure. Therefore, the intention of the legislature under these sections does not appear to provide jurisdiction to the Company Court over criminal proceeding either against the company or against its directors. Wherever legislature thought it necessary to provide such jurisdiction it has used the appropriate expressions." 22. Again in paragraph '14' the Hon'ble Court observed as under:- "14. The scope and meaning of expressions "other legal proceedings" or "proceedings" under Section 446(1) came up for consideration before the Supreme Court in the context of Income Tax proceedings in S.V. Kondaskar Vs. V. M. Deshpande reported in [1972] 83ITR 685 (SC). It was observed that the expression "other legal proceedings" in this Section cannot be extended to Income Tax proceedings as these cannot appropriately be dealt with by the company court. It was held:- "While holding these assessment proceedings the Income Tax Officer does not, in our view, perform the functions of a Court as contemplated by Section 446 (2) of the Act. Looking at the legislature histor....
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....the Act of 1996. The scheme of Section 446 and various other provisions of the Companies Act, 1956 which have been referred in detail by the Hon'ble Delhi High Court in the case of D. K. Kapur (supra) is similar to the scheme of sub-section (2) of Section 50 of the various provisions falling under Chapter 'X' of the Act of 1996 which deals with the liquidation and the dissolution of the society. The plea of learned counsel for the petitioners that in view of sub-section (2) of Section 50 of the Act of 1996, the first information report in this case shall be covered under the meaning of the word "a criminal proceeding" is to be out rightly rejected in view of the observation of the Hon'ble Apex Court in the case of P.P. Sharma (supra). Paragraph '40' of the judgment in the case of P.P. Sharma (supra) has been referred hereinabove. 25. The next submission that in view of the judgment of the learned co-ordinate Bench of this Court, the words "other legal proceedings" referred in Section 50(2) of the Act of 1996 shall cover "criminal proceeding" also is required to be referred to the Hon'ble Division Bench of this court because this Court regrets it's inability to agree with the view....