Madhya Pradesh High Court
Vijay Soni vs Union Of India Thru. Department Of ... on 27 July, 2017
HIGH COURT OF MADHYA PRADESH: BENCH AT INDORE
S.B.:Hon'ble Shri P.K. Jaiswal, J.
M.Cr.C No.6311/2016
VIJAY SONI
Versus
UNION OF INDIA & OTHERS.
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M.Cr.C No.6312/2016
VIJAY SONI
Versus
UNION OF INDIA & OTHERS.
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Shri Manoj Munshi, learned counsel for the petitioner.
Shri P. Prasad, Advocate for respondent No.1.
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ORDER
(Passed on this 27th day of July, 2017) Since the common question of law is involved in these petitions therefore, they are head together and are being disposed of by this common order. For the sake convenience, the facts are borrowed from M.Cr.C.No.6311/2016.
2. The petitioner - accused No.2 (Vijay Soni), being aggrieved by order dated 4.3.2016, passed in Criminal Case No.05/2015, whereby the application under Section 190 read with Section 204 of Cr.P.C. 1973 (herein after refereed as 'Code') for summoning the Chairman and Managing Director of the Company being responsible officer under Section 9AA of the Central Excise Act, 1944 (herein after referred as 'the Act of 1944'), for conducting of business of the Company, has been rejected, filed this application under Section 482 of the Code, for issuance of direction to summon to the Chairman and Managing Director of the Company as an accused.
3. The non-applicant No.1 - complainant, Central Excise Deptt., filed a complaint under Section 9(A)(A) of the Act of 1944, on 27.5.2015 under Section 200 of the Code. It was alleged that the respondent No.1 in connivance with Rajiv Soni, Chairman and Managing Director did not arraign him as accused in the complaint and excluded him for all allegation in contrast to the provisions of Section 9AA of the Act of 1944. Mr. Rajiv Soni, Chairman and Managing Director of the respondent No.2 - M/s. Sony Ispat Limited (herein after referred as 'M/s. SIL') was responsible to the company for the conduct of the business of the accused company. However, the complainant did not arraigned him as accused in the present case and dropped him from all the allegations, which have been levelled on other co-accused who were acting under his instruction, supervision, control and direction.
4. The petitioner being the Director of the Company is accused No.2 in the complaint. As per complaint, he is looking after all their affairs and day to day activities and main person of acts/ommission of respondent No.2 - M/s. SIL. He was instrumental and directly responsible for under valuation of finished goods cleared to consignment agent and to one of their group firm's depot at Mumbai; irregular availment of credit and illicit removal of dutiable goods and cenvatable inputs without payment of duty and without reflecting the same into M/s. SIL's books of accounts/records. He was the master mind and key person responsible and accountable for the intentional and willful acts of ommissions and commissions and for active involvement in dealing with the excisable goods, which he knew or had reason to believe were liable for confiscation under Rule 25 of the Central Excise Rules, 2002. By his aforesaid acts, he has rendered himself liable for penal action under Rule 25 of the Central Excise Rules, 2002 and Rule 15 of the Cenvat Credit Rules, 2004 and Section 9 A and 9A A of the Act of 1944.
5. The respondent No.3 - Manohar Singh Rana, is accused No.3, is the Excise In-charge and authorized signatory of M/s. SIL and looking after all customs and excise matters of M/s. SIL. He was looking of the work of removal of goods from the factory, payment of central excise duty, maintaining excise records and taking and utilising the Cenvat credit. He is the main person for all the acts/ommissions of M/s. SIL. The statement of Mr. Rajeev Soni, Chairman and Managing Director of M/s. SIL recorded by the respondent No.1 reads as under :-
Statement of Shri Rajiv Soni, Chairman cum Managing Director of M/s. SIL;-
"A statement of Rajiv Soni, Chairman cum Managing Director of M/s. SIL was recorded on 13.3.2009 under section 14 of the Central Excise Act, 1944, wherein he inter-alia stated that he has been looking after future planning and general administration of the company. During the course of his statement, he perused the statement dated 11.2.2009 of Shri Vijay Soni and signed on its first page in token thereof and stated that since he (Rajiv Soni) has never been involved in day to day operations of M/s. SIL at any point of time, hence whatever has been stated by Shri Vijay Soni has to be true and correct as he was the person responsible for all the operations on day to day basis of M/s. SIL including production, despatch, arrangement of transportation, accounts and central excise etc. He had nothing to add or alter in the statement tendered by Shri Vijay Soni. Shri Rajiv Soni also stated that Shri MS Rana has been assisting Shri Vijay Soni in this regard on day to day basis."
6. The learned trial court taken cognizance in the aforesaid private complaint against the accused No.1, 2 and 3 and issued summon to them. After taking cognizance protest application under Section 190 read with Section 204 of the Code has been filed by the petitioner for issuance of summons to Mr. Rajeev Soni, Managing Director of the accused No.1 Company - M/s. SIL for making him as main accused for the offence stated in the complaint.
7. The learned Special Judicial Magistrate - Economics Office, Indore (M.P.), rejected the application by impugned order dated 4.3.2016.
8. Relevant part of the order by which application has been rejected reads as under :-
ÞizFke iz'u ds laca/k esa vkosnd dk eq[; rdZ ;g gS fd jktho lksuh vkjksih dEiuh esllZ lksuh bLikr fyfeVsM dk ps;jesu ,oa eSusftax Mk;jsDVj gS rFkk mDr jktho lksuh dEiuh ls osru izkIr djrk gSaA bl izdkj dEiuh ds lHkh fnu izfrfnu ds dk;ksZa ds fy;s tokcnkj gSA ifjoknh dh vkjs ls bl rdZ dk [k.Mu ugha fd;k x;k gS fd jktho lksuh vkjksih dEiuh esllZ lksuh bLikr fyfeVsM dk ps;jesu ,oa eSusftax Mk;jsDVj gS] fdUrq ek= jktho lksuh ds ps;jesu ,oa eSusftax Mk;jsDVj gksus ek= ls ;g ugha ekuk tk ldrk fd vkjksih dEiuh esllZ lksuh bLikr fyfeVsM }kjk tks vijk/k fd;k tkuk izFke n`"V;k ik;k x;k gS ml vijk/k dks fy;s jktho lksuh Hkh tokcnkj gSaA izdj.k dh bl LVst ij laKku fy;s tkus gsrq ifjokn ,oa ifjokn ds lkFk tks nLrkost izLrqr fd;s x;s gS mUgha dk voyksdu fd;k tk ldrk gSA vjksih@ vkosnd fot; lksuh }kjk vuqla/kku ds nkSjku fn;s x;s vius dFku esa dEiuh ds dk;ksZ ds fy;s vius dks nkf;Rok/khu crk;k x;k gSA vkosnd@fot; lksuh }kjk vius dFku esa ,slk dgh mYysf[kr ugha fd;k gS fd vkjksih dEiuh esllZ lksuh bLikr fyfeVsM ds d`R;ksa ds fy;s jktho lksuh Hkh nkf;Rok/khu gSA blh izdkj jktho lksuh ds tks dFku ys[kc) fd;s x;s gS mu dFkuksa esa Hkh ,slk dksbZ rF; ifjoknh }kjk ugha ik;k x;k gS] ftlds vk/kkj ij jktho lksuh }kjk vijk/k dkfjr fd;k tkuk izFke n`"V;k ik;kA mijksDr dkj.k ls gh bl U;k;ky; }kjk vkjksih Øekad&1] 2 ,oa 3 ds fo:) laKku fy;k tkdj mifLFkfr ckcn leu tkjh fd;s x;s FksA vfHkys[k ij U;k;ky; ,sls dksbZ rF; ugha ikrk gS ftlds vk/kkj ij jktho lksuh ds fo:) lsUVªy ,DlkbZ ,DV dh /kkjk 9,, ds vijk/k fd;s tkus gsrq laKku fy;s tkus ds vk/kkj gksA mijksDr ifjLFkfr esa tcfd jktho lksuh ds fo:) laKku fy;s tkus ds dksbZ vk/kkj vfHkys[k ij ugha gS rc U;k;ky; ds le{k fopkj.kh; f}rh; iz'u fd D;k U;k;ky; bl izØe ij ,slh O;fDr dks vkjksih ds :i esa la;ksftr dj ldrh gS] ftls ifjoknh }kjk vius ifjokn esa vkjksih ds :i esa la;ksftr ugha fd;k x;k gS\ ij fu"d"kZ fn;s tkus ds vk/kkj ugh gSA vkosnd }kjk vius leFkZu esa U;k;n`"Vkar Anupam Chakraborty Vs. State of Assam MANU/GH/0068/1983, Keshkali and Ors. Vs State of U.P. And Ors MANU/UP/0852/2015 ,oa R.N. Agarwal Vs. R.C. Bansal (2015) 1SCC48 izLrqr fd;s gSA mDr leLr U;k;n`"Vkar laKku fy;s tkus ds laca/k esa gksus ls bl izØe ij lqlaxr ugha gSA ifj.kkeLo:i vkosnd dk vkosnu vLohdkj dj fujLr fd;k tkrk gSaAÞ
9. It is this order, which has been impugned in this miscellaneous criminal case filed under Section 482 of Cr.P.C.
10. Learned counsel for the petitioner has submitted that as per Section 2(2) (B) of the Companies Act, 1956, the Managing Director, means a Director who is invested with substantial power of management. The memorandum of association and article of association of the company provides for substantial power, which a managing director can exercise. Mr. Rajeev Soni being Chairman - cum - Managing Director of M/s. SIL Company, all employees worked under his guidance and instructions. He is one who controls entire affairs of the company and is responsible for the company and conduct of the business. He further submitted that the learned Special Magistrate without verifying the role of Chairman and Managing Director in company and the complainant merely on the basis of statement of Rajeev Soni, came to the conclusion that he has never been involved in day to day operation of the company and also without verifying whether he was involved in day to day operations of the company or not without appreciating the intention of legislature under Section 9AA of the Act of 1944, where it has been provided that every person who at the time of offence was committed was incharge of, and was responsible to, the company for conduct of the business of the company, erred in rejecting the application. The Chairman - cum - Managing Director being responsible for conduct of the business of the company ought to have been arraigned as accused.
11. He further submitted that the Chairman - cum - Managing Director is person who controls all affairs of the company gives instruction and direction to the employees of the company, who performed their job for the company. There was no reason for the complainant to believe blind folded to the statement of Rajeev Soni, without any enquiry.
12. He lastly submits that Mr. Rajiv Soni in connivance with the complainant has got himself dropped from the complaint. The complainant has acted in a designed motive for the benefit of Rajeev Soni and prayed that the impugned order be set aside.
13. Shri Prasana Prasad, learned counsel for the non- applicant No.1 has submitted that the statement of Ashutosh Nivsarkar, Superintendent Central Excise, Indore, has been recorded on 21.4.2016 and on the basis of the aforesaid, cognizance has been taken against all the three accused persons. The application under Section 190 read with Section 204 of the Code, has been rejected on merit, the proper remedy for the petitioner is to file an application under Section 319 of Cr.P.C. and prayed for dismissal of the application.
14. Section 9AA of the Central Excise Act, 1944 reads as under :-
"9 AA. Offence by companiesWhere an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-
section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section,-- company" means any body corporate and includes a firm or other association of individuals; and
(b) "director" in relation to a firm means a partner in the firm]."
15. Learned counsel for the petitioner has drawn my attention to a decision of the Apex Court in the case of Securities and Exchange Board of India and Ors. V/s. Gaurav Varshney & Ors., 2016 (7) Scale 4, decided on 15.7.2016, Sunil Bharti Mittal V/s. Central Bureau of Investigation, AIR 2015 SC 923 and M/s. SWIL Ltd. V/s. State of Delhi and Anr., AIR 2001 SC 2747 and submits that the person who has not joined as accused in the charge sheet can be summoned at the stage of taking cognizance under Section 190 of the Code, the Magistrate is empowered to issue process against some other person who has not been charge sheeted, but there has to be sufficient material in police report showing his involvement.
16. In the case of Sunil Bharti Mittal V/s. Central Bureau of Investigation (supra), the Magistrate is empowered to ignore the conclusion arrived at by the Investigating Officer and apply his mind independently on the facts emerging from the investigation and take congnizane in the case, at the time, it is not permissible at this stage to consider any material other then that collected by the Investigating Officer. The Apex Court in para 44 has held that the Magistrate is empowered to issue process against some other person who has not been charge sheeted, but there has to be sufficient material in police report showing his involvement. In that case, the Magistrate is empowered to ignore the conclusion arrived at by the Investigating Officer and apply his mind independently on the facts emerging from the investigation and take cognizance from the accused. At the time, it is not permissible at this stage to consider any material other then that collected by the Investigating Officer.
17. In the case in hand, the learned Magistrate decided the application on merit. At the stage of taking the cognizance, the duty of the learned Magistrate is limited to the extent of finding out whether from material placed before it, offence alleged therein against accused is made out or not. In the present case, the learned Magistrate after appreciating the material available on record came to the conclusion that, no case is made out against Rajeev Soni (not named in the complaint), Chairman and Managing Director of M/s. SIL to summon him as an accused and held that proper course to proceed against him and summon him only on the basis of evidence recorded during trial. There is no room for interference with the impugned order.
18. M.Cr.C.No.6311/2016 and M.Cr.C.No.6312/2016, have no merit and are, accordingly, dismissed.
(P.K. JAISWAL) JUDGE SS/-