TaxTMI 
TaxTMI 
2023 (5) TMI 1255
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.... U/s 482 Cr.P.C. No. 9389 of 2022 has been moved by the applicants-Yandana Yadav and Vivek Yadav with the prayer to quash entire proceedings of Case No. 28359 of 2022 (State Vs. Vandana Yadav and another) and any other proceedings initiated in respect of the first information report bearing Case Crime No. 896 of 2021, registered at Police Station Gomti Nagar, Lucknow under Sections 409, 420 I.P.C. as well as summoning order order dated 20.04.2022 passed by the Chief Judicial Magistrate, Lucknow and charge sheet dated 09.04.2022. 4. The F.I.R. pertaining to this case has been lodged on 15.11.2021 at Police Station Gomti Nagar, Lucknow East by opposite party no.2 namely Prashant Singh against the applicants Vandana Yadav and Vivek Yadav alleging that the applicant Vandana Yadav was a Director of M/s Piscesia Power Transmission Pvt. Limited (hereinafter to be referred as P.P.T.P.L.) along with the informant and the lurement given by the applicant Vandana Yadav and her husband Vivek Yadav, the informant Prashant Singh had transferred Rs. 1,33,20,000/-in their company namely M/s Viva Infratech Private Limited wherein the informant was also a Director for sometime and the money, which....
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....Yadav and others) pending before the Chief Judicial Magistrate, Lucknow arising out of F.I.R. bearing Case Crime No. 898 of 2021 registered at Police Station Gomti Nagar, Lucknow under Sections 409, 420, 467, 468, 471, 120-B I.P.C. and also to quash the charge sheet submitted by the investigating officer dated 18.05.2022 and summoning order dated 25.05.2022 passed by the Chief Judicial Magistrate, Lucknow. 7. The F.I.R pertaining to this case has been lodged by opposite party no.2/informant Prashant Singh against the applicants on 15.11.2021 at Police Station Gomti Nagar, Lucknow East alleging therein that the informant Prashant Singh is the Director and share holder of P.P.T.P.L. and the said company was established by him using his own means and capital and he is the founding Director and share holder of the company. It is also stated that the applicant Smt. Vandana Yadav was also a Director and share holder of the company. Initially the registered office of this company was at Vikas Nagar thereafter it was shifted to Vibhuti Khand, Gomti Nagar, Lucknow in the property owned by the informant. It is alleged that the applicants/accused persons in furtherance of a conspiracy has ....
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....noj Kumar Singh requesting to quash the charge sheet dated 11.04.2022 in pursuance of the investigation done pertaining to the F.I.R. bearing Case Crime No. 894 of 2021, under Sections 409, 420, 120-B I.P.C., Police Station Gomti Nagar, Lucknow East and summoning order dated 20.04.2022 passed by the Chief Judicial Magistrate, Lucknow and all the proceedings of the Case No. 62652 of 2022 (State Vs. Vandana Yadav and others), arising out of Case Crime No. 894 of 2021, under Sections 409, 420, 120-B I.P.C., Police Station Gomti Nagar, Lucknow East. 9. The F.I.R. of the this case has been lodged by the opposite party no.2 Prashant Singh on 15.11.2021 at Police Station Gomti Nagar, Lucknow East against the accused persons namely Vandana Yadav, Vivek Yadav, Tushar Nagar and Manoj Kumar Singh alleging therein that the informant is the Director and share holder of P.P.T.P.L. and on an internal assessment made certain financial irregularities had emerged for which the former directors of the company namely Smt. Vandana Yadav, Vivek Yadav and the then chartered accountant Tushar Nagar were responsible, who in connivance with each other were causing huge loss to the company. It is also all....
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....ontained in Bhajan Lal's case (supra) and after holding the same interim protection was granted to the accused persons of that case. However, on the filing of charge sheet the writ petition was dismissed as has become infructuous and the accused persons/applicants had challenged the said order by filing a Special Leave to Appeal (Crl.) No. 9898/2022 and vide order dated 04.11.2022 though permission to file appeal was granted but the Hon'ble Supreme Court was not inclined to issue notice and opined that the petitioners (applicants herein) can take recourse to appropriate remedy consequent to the filing of the charge sheet by taking proceedings in accordance with law. 12. It is vehemently submitted that the First Information Reports pertaining to the above mentioned cases have been filed with evident malafide as the informant/opposite party no.2 failed to obtain desired relief from the National Company Law Criminal. 13. Elaborating further, it is submitted that all the First Information Reports lodged by the opposite party no.2 pertaining to which charge sheet has also been filed primarily relate to the disputes which are in relation to the administration of the Company....
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....mpanies Act, 2013 and despite the fact that writ petition filed by the petitioners was dismissed as has become infructuous, the finding of the interim order dated 30.11.2021 may not be negated. 18. It is further submitted that the case of the applicant is covered by the law laid down by High Court of Madras in Doraisamy (supra) as well as Bhajan Lal (supra) and thus, proceedings pending before the court below of the cases mentioned herein before as well as their summoning order and filing of charge sheet are nothing but the abuse of process of law and the same be quashed. 19. Learned counsel for the applicants in support of his submissions and written submissions have relied on following case laws:- 1. Doraisamy and another vs. State. 2. Sri Ramdas Motor Transport Ltd. vs. Tadi Adhinarayana Reddy [(1997) 5 SCC 446]. 3. State of Haryana & Ors. vs. Bhajan Lal & Ors. [1992 Supp(1) SCC 335]. 4. Vijay Kumar Ghai & Ors. vs. State of West Bengal & Ors. [ (2022) 7 SCC 124 ]. 5. Mitesh Kumar J. Sha vs. State of Karnataka 6. R. Nagender Yadav vs. The State of Telangana 7. Ramesh Dahyalal Shah vs. State of Maharashtra 8. Usha Chakraborty & Anr. ....
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....es and did not return the same. 23. It is also submitted that several other transfers were made by Vivek Yadav and Manoj Kumar Singh to different parties without any authority and accused persons Vivek Yadav and Tushar Nagar submitted forged work order and invoice pertaining to M/s RST Infrastructure Pvt. Ltd. and M/s Sarvesh Rai Contractor and also to J.B.T.Y.C.P.L. and the said work orders were signed by Vivek Yadav as Director of P.P.T.P.L. in February, 2013 and April, 2013. 24. It is further submitted that in huge amount of Rs. 1,78,70,000/-was also transferred by accused Manoj Kumar Singh from P.P.T.P.L. without approval of the Board. 25. It is also submitted that the accused persons have fraudulently acquired majority in the shareholding of the Company. The shares have been transferred without any proper valuation and the accused persons did not even pay the share money in full. 26. Learned counsel representing the informant/opposite party no.2 while referring to various documents and references of the case diary, submits that the accused persons have committed criminal breach of trust, cheating, forgery in order to defraud the company and the informant of a huge ....
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....16. Bhushan Kumar & anr. vs. State(NCT of Delhi) & anr. [ (2012) 5 SCC 424]. 17. Nupur Talwar vs. C.B.I. & anr. [(2012) 11 SCC 465]. 18. State of Gujarat vs. Afroz Mohammed Hasanfatta [ (2019) 20 SCC 539 ]. 19. Amit Kapoor vs. Ramesh Chander &anr. (2012) 9 SCC 460]. 20. State of Karnataka vs. M. Devendrappa & anr. (2002) 3 SCC 89 ]. 21. State of Uttar Pradesh vs. Akhil Sharda & ors. 22. Jagdish & ors. vs. State of Haryana [(2019) 7 SCC 711]. 23. Kuna @ Sanjaya Behera vs. State of Odisha [ (2018) 1 SCC 296]. 24. Juman & anr. vs. State of Bihar [ (2017) 11 SCC 85]. 25. Kamla Kant Dubey vs. State of U.P. & ors.[ (2015) 11 SCC 145 ]. 26. K.D. Sharma vs. Steel Authority of India Ltd. & ors. [ (2008) 12 SCC 481]. 27. Smt. Ramendri vs. State of U.P. & anr. [ passed by the Hon'ble Allahabad High court in Application u/s 482 no. 5094 of 2021 ]. 31. It is submitted that if by the same set of facts criminal and civil rights are emerging the exercise of civil right shall not be a bar for criminal prosecution. 32. Learned counsel for informant/opposite party no.2 has also relied on the law laid down in Priti Sarraf and another Vs. NCT Delhi ....
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....ed on the same day in order to pressurize the applicants and thus highlighting the grounds mentioned in the State of Haryana Vs. Bhajan Lal (supra), it is submitted that the proceedings of the cases mentioned herein-before pending before the trial court is abuse of process of law and the same be quashed. 37. Per contra learned counsels for the informant/opposite party no.2 are of the view that by virtue of Section 430 of the Companies Act, 2013 only civil litigation is barred and the criminal prosecution under any of the Section of the I.P.C. has not been barred by any of the provisions of the Companies Act, 2013. It is also submitted that the procedure in the Companies Act with regard to the investigation has been provided only pertaining to the technical financial irregularities committed by its office bearers in the management of the company, however, if a substantive penal offence has been committed by any of the office bearers of the company, the F.I.R. is to be recorded as it is mandatory for S.H.O. of any police station to lodge an F.I.R., which has been given mentioning the commission of cognizable offences. 38. It is also submitted that after thorough investigation t....
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....is stage, the Magistrate has to be satisfied whether there is sufficient ground for proceeding and not whether there is sufficient ground for conviction. Whether the evidence is adequate for supporting the conviction can be determined only at the trial and not at the stage of enquiry. If there is sufficient ground for proceeding then the Magistrate is empowered for issuance of process Under Section 204 of the Code. Similar view was taken in Darshan Singh Ram Kishan v. State of Maharashtra (1971) 2 SCC 654, wherein it is held that the process of taking cognizance does not involve any formal action, but it occurs as soon as the Magistrate applies his mind to the allegations and thereafter takes judicial notice of the offence. This is the position whether the Magistrate takes cognizance of an offence on a complaint, or on a police report, or upon information of a person other than a police officer. Therefore, when a Magistrate takes cognizance of an offence upon a police report, prima facie he does so of the offence or offences disclosed in such report. In Kishun Singh and Ors. v. State of Bihar (1993) 2 SCC 16, the Court reiterated the position that when the Magistrate takes notice o....
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....ng steps to determine the veracity of a prayer for quashing, raised by an accused by invoking the power vested in the High Court under Section 482 of the Code of Criminal Procedure: (i) Step one, whether the material relied upon by the accused is sound, reasonable, and indubitable, i.e., the material is of sterling and impeccable quality? (ii) Step two, whether the material relied upon by the accused, would rule out the assertions contained in the charges levelled against the accused, i.e., the material is sufficient to reject and overrule the factual assertions contained in the complaint, i.e., the material is such, as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false. (iii) Step three, whether the material relied upon by the accused, has not been refuted by the prosecution/complainant; and/or the material is such, that it cannot be justifiably refuted by the prosecution/complainant? (iv) Step four, whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice? If the answer to all the steps is in the affirmative, judicial....
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....t information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the Accused. (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 sufficient....
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.... object and purpose of the provision which seeks to save the inherent powers of the High Court to do justice, between the State and its subjects, it would be impossible to appreciate the width and contours of that salient jurisdiction. 13. A three-Judge Bench in State of Karnataka v. M. Devendrappa, 2002) 3 SCC 89, had the occasion to consider the ambit of Section 482 Code of Criminal Procedure By analysing the scope of Section 482 Code of Criminal Procedure, this Court laid down that authority of the Court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the Court has power to prevent abuse. It further held that Court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. The following was laid down in para 6: (SCC p. 94) 6. ... All courts, whether civil or criminal possess, in the absence of any express provision, has inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of jus....
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....s Court in State of Haryana v. Bhajan Lal. 16. After considering the earlier several judgments of this Court including the case of State of Haryana v. Bhajan lal (supra), in Vineet Kumar (supra), this Court laid down following in paragraph 41: 41. Inherent power given to the High Court Under Section 482 Code of Criminal Procedure is with the purpose and object of advancement of justice. In case solemn process of Court is sought to be abused by a person with some oblique motive, the Court has to thwart the attempt at the very threshold. The Court cannot permit a prosecution to go on if the case falls in one of the categories as illustratively enumerated by this Court in State of Haryana v. Bhajan Lal. Judicial process is a solemn proceeding which cannot be allowed to be converted into an instrument of operation or harassment. When there are materials to indicate that a criminal proceeding is manifestly attended with mala fide and proceeding is maliciously instituted with an ulterior motive, the High Court will not hesitate in exercise of its jurisdiction Under Section 482 Code of Criminal Procedure to quash the proceeding under Category 7 as enumerated in State of Haryana v....
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....guidelines of the Reserve Bank of India and payment of work done by the company was taken in that bank account and has been misappropriated. 44. The allegations referred to herein-before pertaining to which above mentioned four first information reports have been lodged would project that certainly some of the allegations leveled against the applicants are pertaining to the fraud and illegal financial activities committed by them while managing the company, but certain other allegations have also been leveled with regard to criminal breach of trust and forgery allegedly committed by the applicants with the informant. Thus it is prima facie reflected that all the allegations, which have been leveled in the above mentioned first information reports and in the statement of prosecution witnesses may not be confined only with the management of the company and thus it could not be said that alleged offences on the basis of first information reports have been lodged by the opposite party no.2/informant are confined to the mismanagement of the company. 45. Thus the First Information Reports are not confined only to the allegations of mismanagement of the company and fraud committed d....
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.... which provides that where anything which is an offence is made-up of parts, any of which parts is itself an offence, the offender shall not be punished with the punishment of more than one of such offences, unless it be so expressly provided. or where anything is an offence falling within two or more separate definitions of any law in force for the time being by which offences are defined or punished, or where several acts, of which one or more than one would by itself or themselves constitute an offence, constitute, when combined a different offence, the offender shall not be punished with a more severe punishment than the Court which tries him could award for one of such offence. 53. Hon'ble Supreme Court in State of Rajasthan vs. Hat Singh and Ors., while considering the similar issue opined as under :- "15. The leading Indian authority in which the rule against double jeopardy came to be dealt with the interpreted by reference to Article 20(2) of the Constitution is the Constitution Bench decision in Maqbul Hussain v. State of Bombay 1983ECR1598D(SC) . If the offences are distinct, there is no question of the rule as to double jeopardy being extended and applie....
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.... as under :- ''48. Mr Tankha's submissions, which were echoed by Mr Jain, that the M.P. Cooperative Societies Act, 1960 was a complete code in itself and the remedy of the prosecuting agency lay not under the criminal process but within the ambit of Sections 74 to 76 thereof, cannot also be accepted in view of the fact that there is no bar under the M.P. Cooperative Societies Act, 1960, to take resort to the provisions of the general criminal law, particularly when charges under the Prevention of Corruption Act, 1988, are involved.'' 55. Hon'ble Supreme Court in the case of State (NCT of Delhi) Vs. Sanjay reported in (2014)9 SCC 772, has held as under :- ''61. Reading the provisions of the Act minutely and carefully, prima facie we are of the view that there is no complete and absolute bar in prosecuting persons under the Penal Code where the offences committed by persons are penal and cognizable offence.'' 56. Hon'ble single judge of Punjab And Haryana High Court in Dhanpreet Singh and Ors. vs. State of Punjab, while considering the similar question has relied on a judgment of Hon'ble Supreme Court in th....
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....octrine of double jeopardy and Section 26 of the General Clauses Act to observe that prosecution under two different Acts is permissible if the ingredients of the provisions are satisfied on the same facts. While considering a dispute about the prosecution of the Respondent therein for offences under the Mines and Minerals (Development and Regulation) Act 1957 and Indian Penal Code, this Court in State (NCT of Delhi) v. Sanjay held that there is no bar in prosecuting persons under the Penal Code where the offences committed by persons are penal and cognizable offences. A perusal of the provisions of the FSS Act would make it clear that there is no bar for prosecution under the IPC merely because the provisions in the FSS Act prescribe penalties. We, therefore, set aside the finding of the High Court on the first point.'' 57. Hon'ble Supreme Court in Kanwar Pal Singh vs. The State of Uttar Pradesh and Ors. (18.12.2019-SC) : while considering the similar issue held as under :- "Section 26 of the General Clauses Act permits prosecution for 'different offences' but bars prosecution and punishment twice for the 'same offence' under two or more ena....
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....ogy but also will deplete the groundwater levels. 70. There cannot be any dispute with regard to restrictions imposed under the MMDR Act and remedy provided therein. In any case, where there is a mining activity by any person in contravention of the provisions of Section 4 and other Sections of the Act, the officer empowered and authorised under the Act shall exercise all the powers including making a complaint before the Jurisdictional Magistrate. It is also not in dispute that the Magistrate shall in such cases take cognizance on the basis of the complaint filed before it by a duly authorised officer. In case of breach and violation of Section 4 and other provisions of the Act, the police officer cannot insist the Magistrate for taking cognizance under the Act on the basis of the record submitted by the police alleging contravention of the said Act. In other words, the prohibition contained in Section 22 of the Act against prosecution of a person except on a complaint made by the officer is attracted only when such person is sought to be prosecuted for contravention of Section 4 of the Act and not for any act or omission which constitutes an offence under the Penal Code.....
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....l Code. Thus, they are two 'different' and not the 'same offence'. It would be relevant to state here that the Delhi High Court in its decision reported as Sanjay v. State (2009) 109 DRJ 594, which was impugned in Sanjay (supra), had accepted an identical argument to hold that once an offence is punishable Under Section 21 of the Mines Regulation Act, the offence would not be punishable Under Section 379 of the Indian Penal Code. This reasoning was rejected by this Court and the judgment of the Delhi High Court was reversed. The contention relying on the same reasoning before us, therefore, must be rejected." 58. Above mentioned law reports would demonstrate that there is no bar in lodging an FIR or in conducting an investigation or even in the trial or conviction of an offender under two different enactments, but the bar is only with regard to the punishment of the offender twice for the same offence. Where an act or an omission constitutes an offence under two enactments, the offender may be prosecuted under either or both enactments but shall not be liable to be punished twice for the same offence. 59. At this stage Section 430 of Companies Act is also rele....
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....ions and material collected during the course of investigation that the ingredients of the offences are disclosed, there would be no justification for interfere. The defences that might be available, or facts/aspects which when established during trial, might lead to acquittal ,are not grounds for quashing the Charge Sheet or summoning order at the threshold. At that stage, the only relevant question was whether averments in the complaint spell out ingredients of criminal offence(s) or not. The Court has to consider whether from allegations contains in FIR and material collected during the course of investigation prima facie any offence is disclosed. Correctness or otherwise of the said allegations has to be be decided only during trial. At the initial stage of issuance of process, it was not open to Courts to stifle proceedings by entering into merits of the contentions made on behalf of the accused. Criminal complaints could not be quashed only on the ground that, allegations made therein appear to be of a civil nature. If ingredients of offence alleged against Accused were prima facie made out , Criminal proceeding shall not be interdicted. 62. Hon'ble Supreme Court in St....
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....e is not required to meticulously examine and to evaluate the evidence and to record detailed reasons. 8. A bare reading of Sections 203 and 204 Code of Criminal Procedure shows that Section 203 Code of Criminal Procedure requires that reasons should be recorded for the dismissal of the complaint. Contrary to it, there is no such' requirement Under Section 204 Code of Criminal Procedure. Therefore, the order for issue of process in this case without recording reasons, does not suffer from any illegality. We fully endorse the above view taken by the learned Judge. 20. In para (21) of Mehmood Ali Rehman, this Court has made a fine distinction between taking cognizance based upon charge sheet filed by the police Under Section 190(1)(b) Code of Criminal Procedure and a private complaint Under Section 190(1)(a) Code of Criminal Procedure and held as under: 21. Under Section 190(1)(b) Code of Criminal Procedure, the Magistrate has the advantage of a police report and Under Section 190(1)(c) Code of Criminal Procedure, he has the information or knowledge of commission of an offence. But Under Section 190(1)(a) Code of Criminal Procedure, he has only....
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.... taken cognizance of an offence upon a police report and the Magistrate is satisfied that there is sufficient ground for proceeding, the Magistrate directs issuance of process. In case of taking cognizance of an offence based upon the police report, the Magistrate is not required to record reasons for issuing the process. In cases instituted on a police report, the Magistrate is only required to pass an order issuing summons to the Accused. Such an order of issuing summons to the Accused is based upon subject to satisfaction of the Magistrate considering the police report and other documents and satisfying himself that there is sufficient ground for proceeding against the Accused. In a case based upon the police report, at the stage of issuing the summons to the Accused, the Magistrate is not required to record any reason. In case, if the charge sheet is barred by law or where there is lack of jurisdiction or when the charge sheet is rejected or not taken on file, then the Magistrate is required to record his reasons for rejection of the charge sheet and for not taking on file. " (Emphasis Mine) 63. Thus a distinction has been made by the Hon'ble Supreme Court betwe....