Kerala High Court
M. Aramugham vs The State Of Kerala on 25 February, 2020
Equivalent citations: AIRONLINE 2020 KER 1107
Author: Ashok Menon
Bench: Ashok Menon
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ASHOK MENON
TUESDAY, THE 25TH DAY OF FEBRUARY 2020 / 6TH PHALGUNA, 1941
Crl.MC.No.3605 OF 2018
CRIME NO.537/2018 OF Palarivattom Police Station , Ernakulam
PETITIONER/ACCUSED:
M. ARAMUGHAM, S/O.A.MARUTHA MUTHU, 2 & 4,
KAMAYA SAMY STREET, BODINAYAKANUR, TAMIL NADU.
BY ADVS.
SRI.BABU S. NAIR
SMT.PRIYADA R MENON
SRI.P.A.RAJESH
SMT.SMITHA BABU
SMT.SHAMSEERA. C.ASHRAF
RESPONDENTS/STATE & COMPLAINANT:
1 THE STATE OF KERALA, REPRESENTED BY THE PUBLIC
PROSECUTOR,HIGH COURT OF KERALA, ERNAKULAM,
KOCHI, PIN-682 031 - FOR THE SUB INSPECTOR OF
POLICE, PALARIVATTOM POLICE STATION, ERNAKULAM
DISTRICT, PIN - 682 025.
2 SURESH KUMAR, MARKETING MANAGER, SPICES BOARD,
SUGANDHA BHAVAN, N.H.BYE PASS, PALARIVATTOM,
KOCHI, ERNAKULAM DISTRICT, PIN - 682 025.
R1 BY SRI.SURESH BABU THOMAS K., ADDL.DIRECTOR
GENERAL OF PROSECUTION
R2 BY ADV. SRI.K.K.DHEERENDRAKRISHNAN
R2 BY ADV. SRI.D.FEROZE
R2 BY ADV. SRI.S.RAJEEV
R2 BY ADV. SRI.V.VINAY
OTHER PRESENT:
SRI HRITHWIK C.S(SR) -P P
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
15.01.2020, THE COURT ON 25.02.2020 PASSED THE FOLLOWING:
Crl.MC 3605/2018
2
O R D E R
[Dated this the 25th day of February, 2020] Petition under Section 482 Cr.PC.
Petitioner is the Managing Director of M/s.Cardamom Growersforever Pvt. Ltd. ('the company', for short), who is arraigned as the second accused along with the Company as the first accused in Crime No.537/2018 of Palarivattom Police Station for offences allegedly punishable under Sections 406, 420, 465, 468 and 471 read with Section 34 IPC.
2. The facts of the prosecution case as mentioned in Annexure-E FIR in brief are thus:
M/s Cardamom Growers Federation ('the firm', for short), a firm of which the petitioner was a partner, holding a cardamom auctioneer licence issued by the Spices Board ('Board', for short) in the name of the firm, registered a new company, M/s Cardamom Growersforever Pvt. Ltd., before the Crl.MC 3605/2018 3 Registrar of Companies ('RoC', for short) with the petitioner as the Managing Director, and in furtherance of common intention with others produced a forged Memorandum of Association ('MoA', for short) of the aforesaid Company and submitted it before the Palarivattom office of the Board, falsely adding a clause that the Company is the successor of the firm, and dishonestly induced the Board to permit the Company to continue using the cardamom auctioneer licence obtained in the name of the firm for the years 2014-2017 thereby deprived the Board of a licence fee of Rs.50,000/- essential to be remitted for the purpose of obtaining a fresh licence and illegally participated in the cardamom auction using the licence obtained in the name of the firm, and earned a sum of Rs.36 lakhs.
3. The petitioner would contend that the Company was incorporated with the intention to take over the entire business of the partnership firm Crl.MC 3605/2018 4 and therefore, a request was made to the Board to transfer the licence obtained in the name of the firm to the Company, which is the successor of the firm in every aspect, and in consequence to that, the Board issued a new auctioneer licence in the name of the Company. Consequent to the auction, the petitioner received a show cause notice on 11.04.2018 at Annexure-B from the Board stating that on verification of the documents produced along with the request made by the petitioner for transfer of licence of the firm to the Company, it was noticed that some changes have been effected to the first and last pages of the MoA produced before the Board. The MoA that was produced before the RoC, did not contain the recital that the main object of the Company was to succeed to the business of the firm Cardamom Growers Federation. A recital was fraudulently added to the MoA that was produced before the Board, with the intention to deceive. Hence, the petitioner was asked to show Crl.MC 3605/2018 5 cause, why action should not be taken against him for cancellation of the Auctioneer licence. The petitioner approached the Board in person and explained the circumstances under which the Company was formed and also apprised them that due to an inadvertent omission at the time of uploading the documents on-line for the registration of the Company, an unamended version of the MoA was attached to the application instead of the amended MoA which had the clause stating that the object of forming the Company was to take over the business of the firm, M/s.Cardamom Growers Federation. It is explained by the petitioner that it was only an inadvertent error which occurred on the part of the professional engaged by the Company while uploading the documents along with the changes brought about to the firm and that there were no intentional misleading by the petitioner representing the Company.
Crl.MC 3605/20186
4. Annexure-A is copy of the notification containing the Cardamom (Licencing and Marketing) Amendment Rules, 2014 which had amended the Cardamom (Lincencing and Marketing) Rules, 1987. The petitioner points out that there is no prohibition in transferring the licence under Rule 10(1)(n) of the Amended Rules, which states that on transfer of the licence, the transferor must intimate about such transfer to the Board and obtain a fresh licence in accordance with the provisions of the Rules. That is what the petitioner and the Company have done.
5. Consequent to the issuance of the show cause notice, the Board prevented the petitioner from participating in the auction of cardamom and the petitioner approached the Madurai Bench of the Madras High Court and obtained an interim injunction against such prevention of the petitioner from participating in the auction. The Crl.MC 3605/2018 7 said interim order obtained on 27.4.2018 in WP(MD) No.9826/2018 is at Annexure-C. The petitioner also gave a detailed reply to Annexure-B show cause notice which is at Annexure-D. Despite the interim order at Annexure-C, the petitioner was not permitted to participate in the auction stating that the Board officials did not receive the order of the Madras High Court. The petitioner moved the Madurai Bench of the Madras High Court by filing a contempt application against the officials of the Board. It is in retaliation of that action taken by the petitioner that the criminal complaint was lodged on 17.4.2018 by the Marketing Manager of the Board, which was taken on file of the Palarivattom Police Station as Crime No.537/2018 and the FIR is at Annexure-E.
6. The petitioner would contend that none of the offences as alleged in Annexure-E would be attracted based on the allegations made in the Crl.MC 3605/2018 8 complaint. It is also stated that the inadvertent error by the petitioner while uploading the documents along with the application for registering the Company, and informing the Board of about the transfer, has not resulted in any wrongful loss to the Board or unlawful gain to the Company. Under the circumstances, it is prayed that the entire proceedings in the crime registered against the petitioner be quashed invoking the powers under Section 482 Cr.PC.
7. The learned counsel appearing for the petitioner submits that though an inadvertent mistake had occurred while uploading the MoA, immediately the said mistake was corrected and intimated to the RoC.
8. The second respondent filed a counter statement contending that the petitioner was holding Annexure-R2(a) licence having validity up to 31.08.2017, and extended till 30.06.2018. while Crl.MC 3605/2018 9 so, the Board received Annexure-R2(b) letter dated 25.09.2017 from the petitioner representing the firm innocuously seeking change of the name of the firm to a company with effect from 01.10.2017. The Board issued a new certificate on 01.12.2017 in the name of the company, believing that it was a just change of name, as stated. The Board received a complaint from a third party revealing the deceit. During the course of processing the complaint, it was noticed that not just the name, but entire constitution was changed. It amounted to a transfer of the business by the firm to the newly constituted company as contemplated under Rule 10 (1)(n). The company was not a successor of the firm as alleged. The MoA submitted to the Board is at Annexure-R2(d), while the one filed before the RoC is at Annexure-R2(e). They are entirely different on the objects of the company. That would reveal that the document produced before the Board was fabricated to circumvent the issuance of a new Crl.MC 3605/2018 10 licence. Hence the complaint Annexure-R2(f) and the consequent FIR at Annexure-R2(g). The offences as alleged are clearly made out, and there is no ground to quash the FIR.
9. Heard the learned counsel appearing for the petitioner, Sri.Babu S. Nair and the learned Additional Director General of Prosecutions, Sri.Suresh Babu Thomas K.
10. To attract an offence punishable under Section 406 IPC, it must be alleged and proved by the prosecution that there was a criminal breach of trust with regard to property that was entrusted to the accused as defined under Section 405 IPC. Even going by the complaint, the ingredients made necessary to attract Sections 406 IPC are not made out as there was no entrustment of property by the complainant to the petitioner which was misappropriated or converted by the accused to his own use nor was there any alienation in breach of Crl.MC 3605/2018 11 trust.
11. Likewise, to attract an offence punishable under section 420 IPC, there must be dishonest inducement made by the petitioner to the complainant to deliver any property or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security.
12. That apart, the complainant has also alleged forgery and making of a false document as defined under Sections 463 and 464 IPC. The allegedly inadvertent mistake on the part of the Company in uploading the MoA cannot be described as an act of forgery or an act of making of a false document, submits Sri. Babu S. Nair. The contention of the petitioner is that officials of the Board have taken action against the petitioner to wreak vengeance for his approaching the Madras Crl.MC 3605/2018 12 High Court with the contempt application. Filing of such a complaint against the petitioner is only an abuse of process of law.
13. The learned counsel for the petitioner, Sri.Babu S.Nair, relies on two decisions in support of his contentions and arguments. In Mathew v. George [1989(1) KLT 470], K.T.Thomas J., it is observed thus:
"7. There can possibly be no contention that the questioned document in this case would ever fall within the purview of the second and third divisions. Hence, the only question to be considered is whether the first division in Section 464 would apply to exhibit P-4. In order to constitute a false document as per the first division, the document must be purported to have been signed, made or sealed by a person who did not in fact do it. The mere fact that a document contains some false recitals or untrue statements would not make it a false document within the meaning of the section. For example, a plaint, or a written statement, or an application may very often contain averments which may be untrue. Such untrue statements in pleadings or applications would not be sufficient to make them forged Crl.MC 3605/2018 13 documents. Similarly, the affidavits, though supposed to contain only true statements, may contain untrue statements. The deponents in such cases may perhaps, be liable for other offences, but not the offence of forgery."
The argument of the learned counsel is that merely making a false statement in a document would not come within the purview of Section 464 IPC to attract an offence of forgery. In the instant case, the accused had allegedly uploaded a MoA without mentioning that the main object of the Company was to take over the business of the erstwhile firm. The MoA was not amended at that point in time and soon thereafter the actual amended MoA was uploaded for the RoC to register it.
14. The submission is that mere assertion of a false claim in a document will not by itself constitute the document false, since there is no intention of causing a belief that it was executed with ulterior motives or was fictitious. In order Crl.MC 3605/2018 14 to commit forgery, the document must contain a recital of certain facts which were apparently false and untrue. In the instant case, no such recital is made in the earlier MoA uploaded mistakenly and inadvertently by the petitioner, argues Sri.Babu S. Nair, the learned counsel for the petitioner.
15. The learned counsel also relies on a recent decision of this Court in Manmohan Shenoy v. State of Kerala [2019(3) KLT 939], wherein it is observed thus:
"13. The section defines a false document by descriptive enumeration of the processes by which it may be rendered false. To bring the case within clause (1) of Section 464 of the IPC, it is necessary to establish that the accused intended to induce a belief that a document was made, signed, sealed or executed by the authority of a person who did not make, sign, seal or execute it or that it was made signed or sealed or executed at a time when it was not so done.
In other words, the document must purport to have been made, signed or sealed by a person who did not in fact make it. It is the essence of making a false document that the signature, seal or date shown on it should be Crl.MC 3605/2018 15 false. The mere making of a false statement in a document would not come within the ambit of Section 464 of the IPC and would not amount to forgery."
16. The indication by the prosecution in the FIR is that the petitioner had dishonestly or fraudulently made an amended MoA with the intention of causing it to be believed that the document which was originally made was subsequently altered changing the objects of the Company as to become the successor of the erstwhile firm.
17. Per contra, the learned Additional Director General of Prosecutions (ADGP) argues that the police authorites are bound to register an FIR upon receiving an information relating to commission of a cognizable offence because registration of an FIR is mandatory under Section 154 Cr.PC. If information discloses commission of a cognizable offence, there is no preliminary enquiry permissible in such a situation, argues the learned ADGP. The learned ADGP relies on the two Crl.MC 3605/2018 16 decisions of the Honourable Supreme Court in Lalita Kumari v. Government of U.P. and Others [2013 (4) KHC 552] and in State of Haryana & Others v. Ch.Bhajan Lal and Others [1992 KHC 600] in support of his arguments. In Ch.Bhajan Lal (supra), it is observed that when allegations in the FIR or the complaint clearly constitute a cognizable offence justifying registration of a case and an investigation thereon, there is no reason to exercise the extraordinary or inherent powers of the High Court to quash the FIR. The Hon'ble Supreme Court has extracted and reproduced category of cases by way of registration, wherein powers under Section 482 Cr.PC could be invoked to interfere with the investigation of the case. They are enumerated in Ch.Bhajan Lal (supra) as thus:
"1.Where the allegations made in the First 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.Crl.MC 3605/2018 17
2. Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. 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 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 concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a Crl.MC 3605/2018 18 specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
7. Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
18. The learned ADGP argues that the reasonableness or credibility of the information received under Section 154 Cr.PC is not a condition precedent for registration of a case. Relying on the decision of Lalita Kumari (supra), the learned ADGP would argue that Section 154(1) Cr.PC uses the word "shall" and therefore it is mandatory for the Police to register FIR and investigate, unless the complaint itself is so absurd that the offence is not attracted. A preliminary enquiry is not contemplated before registering of an FIR and therefore the mere allegation about the attracting of the offence alone would suffice to start an Crl.MC 3605/2018 19 investigation into the matter. The learned ADGP submits that in Mathew (supra), the acquittal of the accused was challenged and the court was observing into the veracity of the allegations made resulting in confirming the acquittal, and therefore that decision would not apply to the instant case.
19. The petitioner had allegedly made a request to change the name of the Company from Cardamom Growers Federation to Cardamom Growersforever Pvt. Ltd. together with certain documents which include the certificate of auctioneer licence, the Board resolution and appointment of the Managing Director, PAN, TAN, MoA, list of Directors and GST. The petitioner contends that the MoA produced before the Board was the actual MoA. The one uploaded along with the application for registration of the company was an unamended MoA. Subsequently, the amended MoA was Crl.MC 3605/2018 20 also uploaded.
20. The amended Rule 10(1)(n) of the Rules reads thus:
"On transfer of his business to another person, the auctioneer shall intimate the same to the Board and surrender his licence and the transferee shall obtain a fresh licence in accordance with the provisions of these Rules."
A reading of the aforesaid amended Rule would indicate that there is no embargo on the transfer of the business licence by the auctioneer. What is required is only an intimation to the Board. The contention of the Board whether transformation of the firm into a Company is a transfer of business requiring intimation and whether a fresh licence has to be obtained under the provisions of the Rules in accordance with the seniority and the waiting period etc; are all matters to be considered by a court of competent jurisdiction. Whether the mere mentioning of the petitioner Crl.MC 3605/2018 21 regarding the objects of a Company would amount to forgery is the only question that arises for consideration before this Court. I am not going to find whether the conversion of the firm into a Company would require a fresh application for obtaining licence and whether the Company would have to stand in the queue as required under the Rules are all matters to be considered by a competent forum. The only question that arises here is whether prima facie it would amount to forgery, misappropriation or cheating on the part of the Company to have uploaded two MoAs, the first one without mentioning about the taking over the business by the Company as the successor of the firm, and the subsequent, uploading another MoA indicating the said purpose as the main objective of the Company. Going by the decisions relied upon by both sides, I have no hesitation to find that an offence under Section 406 or 420 or 464 IPC for forgery, misappropriation and cheating may not Crl.MC 3605/2018 22 arise in the instant case even if the allegations made in the complaint and in the FIR are to be accepted. Under the circumstances, this Court is competent to interfere in the matter and quash the FIR.
In the result, the Criminal MC is allowed and the entire proceedings as against the petitioner in Crime No.537/2018 of Palarivattom Police Station shall stand quashed under Section 482 Cr.PC.
Sd/-
ASHOK MENON JUDGE jg Crl.MC 3605/2018 23 APPENDIX PETITIONER'S/S EXHIBITS:
ANNEXURE A: TRUE COPY OF THE CARDAMOM (LICENSING AND MARKETING) AMENDMENT RULES, 2014. ANNEXURE B: TRUE COPY OF THE SHOW CAUSE NOTICE ISSUED TO THE PETITIONER BY THE SPICES BOARD DATED 11/04/2018.
ANNEXURE C: TRUE COPY OF THE INTERIM ORDER PASSED BY THE MADURAI BENCH OF MADRAS HIGH COURT DATED, 27/04/2018 IN WP(MD) NO.9826/2018.
ANNEXURE D: TRUE COPY OF THE REPLY GIVEN BY THE PETITIONER BEFORE THE SECRETARY, SPICES BOARD DATED, 04/05/2018.
ANNEXURE E: TRUE COPY OF THE F.I.R. IN CRIME NO.537/2018 OF THE PALARIVATTOM POLICE STATION DATED, 17/04/2018.
RESPONDENT'S EXHIBITS ANNEXURE R2(A): TRUE COPY OF THE LICENCE NO.AU/CS/C580/010/2015 DATED 1.12.2017 ANNEXURE R2(B): TRUE COPY OF THE LETTER DATED 25.9.2017. ANNEXURE R2(C): TRUE COPY OF THE LETTER DATED 3.4.2018 ALONG WITH THE ENCLOSURES.
ANNEXURE R2(D): TRUE COPY OF THE MEMORANDUM OF ASSOCIATION SUBMITTED BY THE COMPANY ALONG WITH REQUEST FOR CHANGE OF NAME.Crl.MC 3605/2018 24
ANNEXURE R2(E): TRUE COPY OF THE MEMORANDUM OF ASSOCIATION OBTAINED BY THE PETITIONER FROM THE REGISTRAR OF COMPANIES.
ANNEXURE R2(F): TRUE COPY OF THE COMPLAINT FILED BY THIS RESPONDENT BEFORE THE STATION HOUSE OFFICER, PALARIVATTOM POLICE STATION.
ANNEXURE R2(g) TRUE COPY OF THE FIR IN CRIME NO.537/2018 OF PALARIVATTOM POLICE STATION.