Madhya Pradesh High Court
Avtar Singh Narang vs Registrar Of Companies Ministry Of ... on 13 March, 2023
Author: Anand Pathak
Bench: Anand Pathak
1
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE ANAND PATHAK
ON THE 13th OF MARCH, 2023
MISCELLANEOUS CRIMINAL CASE No. 6965 of 2023
BETWEEN:-
1. AVTAR SINGH NARANG S/O SHRI DARSHAN SINGH
NARANG, AGE - 72 YEARS, OCCUPATION: BUSINESS,
R/O A.B.ROAD, 434/59 AMITESH NAGAR, INDORE
(MADHYA PRADESH)
2. VIJAY VERMA S/O SHRI HANSHRAJ VERMA, AGE -
70 YEARS OCCUPATION : BUSINESS, R/O 99, NEAR
BLUE WATER PARK, SAMPAT AVENUE, BHICHOLI
MARDANA, INDORE (MADHYA PRADESH)
.....PETITIONERS
(BY SHRI SAMEER KUMAR SHRIVASTAVA - ADVOCATE)
AND
REGISTRAR OF COMPANIES, MINISTRY OF
CORPORATE AFFAIRS, SANJAY COMPLEX, 3RD
FLOOR, A BLOCK, JAYENDRA GANJ, LASHKAR
GWALIOR (MADHYA PRADESH)
.....RESPONDENT
(BY SHRI PRAVEEN KUMAR NEWASKAR - DEPUTY SOLICITOR
GENERAL)
AND
MISCELLANEOUS CRIMINAL CASE No. 6970 of 2023
2
BETWEEN:-
1. AVTAR SINGH NARANG S/O SHRI DARSHAN SINGH
NARANG, AGE - 72 YEARS, OCCUPATION: BUSINESS,
R/O A.B.ROAD, 434/59 AMITESH NAGAR, INDORE
(MADHYA PRADESH)
2. VIJAY VERMA S/O SHRI HANSHRAJ VERMA, AGE -
70 YEARS OCCUPATION : BUSINESS, R/O 99, NEAR
BLUE WATER PARK, SAMPAT AVENUE, BHICHOLI
MARDANA, INDORE (MADHYA PRADESH)
.....PETITIONERS
(BY SHRI SAMEER KUMAR SHRIVASTAVA - ADVOCATE)
AND
REGISTRAR OF COMPANIES, MINISTRY OF
CORPORATE AFFAIRS, SANJAY COMPLEX, 3RD
FLOOR, A BLOCK, JAYENDRA GANJ, LASHKAR
GWALIOR (MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI PRAVEEN KUMAR NEWASKAR - DEPUTY SOLICITOR
GENERAL)
AND
MISCELLANEOUS CRIMINAL CASE No. 6975 of 2023
BETWEEN:-
1. AVTAR SINGH NARANG S/O SHRI DARSHAN SINGH
NARANG, AGE - 72 YEARS, OCCUPATION: BUSINESS,
R/O A.B.ROAD, 434/59 AMITESH NAGAR, INDORE
(MADHYA PRADESH)
2. VIJAY VERMA S/O SHRI HANSHRAJ VERMA, AGE -
70 YEARS OCCUPATION - BUSINESS, R/O 99, NEAR
BLUE WATER PARK, SAMPAT AVENUE, BHICHOLI
MARDANA, INDORE (MADHYA PRADESH)
3
.....PETITIONERS
(BY SHRI SAMEER KUMAR SHRIVASTAVA - ADVOCATE)
AND
REGISTRAR OF COMPANIES, MINISTRY OF
CORPORATE AFFAIRS, SANJAY COMPLEX, 3RD
FLOOR, A BLOCK, JAYENDRA GANJ, LASHKAR
GWALIOR (MADHYA PRADESH)
.....RESPONDENT
(BY SHRI PRAVEEN KUMAR NEWASKAR - DEPUTY SOLICITOR
GENERAL)
AND
MISCELLANEOUS CRIMINAL CASE No. 6977 of 2023
BETWEEN:-
1. AVTAR SINGH NARANG S/O SHRI DARSHAN SINGH
NARANG, AGE - 72 YEARS, OCCUPATION: BUSINESS,
R/O A.B.ROAD, 434/59 AMITESH NAGAR, INDORE
(MADHYA PRADESH)
2. VIJAY VERMA S/O SHRI HANSHRAJ VERMA, AGE -
70 YEARS OCCUPATION - BUSINESS, R/O 99, NEAR
BLUE WATER PARK, SAMPAT AVENUE, BHICHOLI
MARDANA, INDORE (MADHYA PRADESH)
.....PETITIONER
(BY SHRI SAMEER KUMAR SHRIVASTAVA - ADVOCATE)
AND
REGISTRAR OF COMPANIES, MINISTRY OF
CORPORATE AFFAIRS, SANJAY COMPLEX, 3RD
FLOOR, A BLOCK, JAYENDRA GANJ, LASHKAR
GWALIOR (MADHYA PRADESH)
.....RESPONDENT
(BY SHRI PRAVEEN KUMAR NEWASKAR - DEPUTY SOLICITOR
GENERAL)
4
AND
MISCELLANEIOUS CRIMINAL CASE No. 6982 of 2023
BETWEEN:-
1. AVTAR SINGH NARANG S/O SHRI DARSHAN SINGH
NARANG, AGE - 72 YEARS, OCCUPATION: BUSINESS,
R/O A.B.ROAD, 434/59 AMITESH NAGAR, INDORE
(MADHYA PRADESH)
2. VIJAY VERMA S/O SHRI HANSHRAJ VERMA, AGE -
70 YEARS OCCUPATION - BUSINESS, R/O 99, NEAR
BLUE WATER PARK, SAMPAT AVENUE, BHICHOLI
MARDANA, INDORE (MADHYA PRADESH)
.....PETITIONER
(BY SHRI SAMEER KUMAR SHRIVASTAVA - ADVOCATE)
AND
REGISTRAR OF COMPANIES, MINISTRY OF
CORPORATE AFFAIRS, SANJAY COMPLEX, 3RD
FLOOR, A BLOCK, JAYENDRA GANJ, LASHKAR
GWALIOR (MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI PRAVEEN KUMAR NEWASKAR - DEPUTY SOLICITOR
GENERAL)
These petitions coming on for admission this day, the court passed
the following:
ORDER
Regard being had to the similitude of the controversy, instant petitions under Section 482 of Cr.P.C. are heard analogously and are decided by this common order. For convenience's sake, facts as narrated 5 in M.Cr.C.No.6965/2023 are taken into consideration.
2. A tabular representation of different petitions with alleged violation by petitioner and their brief particulars is given for ready reference:-
Sr.No. Case Number Violation alleged by Relevant Year Brief particular respondent about offence 1 MCRC Allegation of 2011-2012 Allegation is No.6970/2023 violation Section 2012-2013 non-submission 129 read with 137 of 2013-2014 of financial Companies Act, statement 2013 which is within the punishable under stipulated time Section 129 (7) and with registrar of 137 (3) of companies Companies Act, 2013 2 MCRC Allegation of 2014 Allegation is of No.6965/2023 violation Section 12 not having (1) of Companies registered office Act, 2013 which is capable of punishable under receiving and Section 12 (8) of acknowledging Companies Act, the 2013 communication.
3 MCRC Allegation of 2011-12 The AGM has
No.6975/2023 violation Section 96 2012-13 not been held
read with 129 of 2013-14 and its
Companies Act, proceedings has
2013 which is not been
punishable under forwarded to
Section 99 of Registrar.
Companies Act,
2013
4 MCRC Allegation of 2008-2009 Allegation is of
No.6977/2023 violation Section 2009-2010 non-submission
220 of Companies of 3 copies of
Act, 2013 which is Balance Sheet
punishable under and Profit and
6
Section 162, 220 (3) Loss A/c with
of Companies Act, the Registrar.
1956
5 MCRC.6982/2023 Allegation of 2008-09 Allegation is
violation Section 2009-10 non-submission
166 read with of annual return
Section 159 of and holding of
Companies Act, annual general
2013 which is meeting in the
punishable under relevant year.
Section 162 of
Companies Act,
1956
3. Perusal of table indicates violation of different provisions of Act, 1956 as well as Act 2013 and the relevant years.
4. The present petitions under Section 482 of Cr.P.C. have been preferred by the petitioners taking challenge to the complaint filed/ prosecution lodged at the instance of the Registrar of the Companies for alleged violation of different provisions of the Companies Act, 1956/Companies Act, 2013.
5. Precisely stated facts of the case as represented in MCRC No.6965/2023 are that the petitioners were earlier one of the Directors of M/s. Sterling Kalks Sand Bricks Limited (hereinafter referred as Company) between the period 30th September, 1992 to 19.04.1995 and 05.05.1998. On 19.04.1995 and 05.05.1998, petitioners resigned and no longer continued to remain as Directors of the Company thereafter.
6. In the year 2015, complaint was filed by respondent with the 7 allegations that the Company and its Directors including the present petitioners were guilty of offence as contained in Section 12 (1) of the Companies Act, 2013. It was the allegation that Company is not having registered office address capable of receiving communications. Therefore, company and its Directors were guilty of such non-compliance.
7. Since the petitioner No.1 Avtar Singh Narang and the petitioner No.2 Vijay Verma resigned as Directors of the Company w.e.f. 19.04.1995 and 05.05.1998 respectively, thereafter, when petitioners as accused (in summon's case) appeared before the Trial Court. It was the contention of petitioners that they resigned in the year 1995 and 1998 as referred above and in support of submissions, he filed certified copy of acceptance of resignation by the Registrar of the Companies. Therefore, on the strength of such documents, it was his submission that they may be discharged because at the relevant point of time, they were not at the helm of affairs in any capacity in the Company. He also referred the proceedings of Securities and Exchange Board of India (hereinafter referred as S.E.B.I.) vide proceedings dated 09.09.2004 in which concerned authority considered this aspect and came to the conclusion that since petitioners are no longer Director of the Company, therefore, no action was proposed against them. He also referred the proceedings dated 21.10.2016 of S.E.B.I. to submit that S.E.B.I. exonerated the petitioners and other similarly placed persons on account of resignation wherein S.E.B.I. referred the fact that it already exonerated them vide order dated 9 th September, 2004, therefore, show cause notice was disposed of.8
8. It is the submission of learned counsel for the petitioners that petitioners resigned from the Company w.e.f. 19.04.1995 and 05.05.1998 and thereafter, they had no role to play in the affairs of the Company.
Notice in question referred the year 2014 where certain non-compliances under Section 12 of the Act, 2013 were noticed. Therefore, proceedings under Section 12 (8) of the Act, 2013 were initiated. Since petitioners resigned much earlier and S.E.B.I. recognized this fact earlier in their different proceedings, therefore, no case is made out at all. Counsel relied upon the judgment rendered by the Apex Court in the case of Rajeev Thapar and others Vs. Madal Lal Kapoor reported in (2013) 3 SCC 330 to submit that this is a case where no dispute regarding facts exist and date of resignation and its effect is not being disputed even by the respondent i.e. Registrar of the Companies. Therefore, no offense is prima facie made out and petitioners cannot be made to suffer such frivolous litigation.
9. Per contra, learned Deputy Solicitor General appearing on behalf of respondent/Registrar of Companies opposed the prayer and submitted that record of respondent appeared online at some later point of time, therefore, when the complaint was instituted, it was not known to the respondent that petitioners already resigned and S.E.B.I. had already taken note of this fact. However, he prayed for dismissal of the petitions.
10. Heard learned counsel for the parties at length and perused the documents appended thereto.
11. This is a case where admittedly petitioners worked as Directors of 9 the Company between the period 30 th September, 1992 till 19.04.1995 and 05.05.1998 and then resigned. In 2015, under the mistaken belief, complaint was filed against present petitioners also for alleged non- compliance of Section 12 of Act, 2013 for which penalty is provided under Section 12 (8) of the Act, 2013. For ready reference, Section 12 (8) of the Act is reproduced as under:-
"If any default is made in complying with the requirements of this section, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees."
12. Admittedly, alleged non-compliance is for the period 2014 where some defaults on the part of the Company are made. Admittedly, petitioners resigned w.e.f. 19.04.1995 and 05.05.1998. Much thereafter, alleged defaults have been committed.
13. In year 2004, in the matter of directions under Section 11 readwith Section 11(B) of the S.E.B.I. Act, 1992 to Sterling Kalks Sand Bricks Limited and its Directors, and in respect of some companies which were identified as vanishing companies, therefore, task force was set up in this regard. After detail inquiry by the task force in its report dated 09.09.2004 in para 5.1, a specific finding has been given in favour of petitioner. The said para 5.1 is reproduced as under:-
"5.1- I find that in respect of the erstwhile directors viz. P.S. Santhankrishnan, Vijay Kumar Verma, Avtar 10 Singh Narang, Sachidanand Chitalre, Neinz George Sibehlds, Paramjeet Singh Saluja and Ramnik Shah Saluja, I find that while they were directors of SKBL, the company had filed balance sheets and otherwise complied with requirements of the listing agreement. Since they are no longer directors of the company, I find that no action needs to be taken against them."
14. Later on, in the year 2016, also vide order dated 21.10.2016, S.E.B.I. again looked into and the report dated 09.09.2004 and affirmed the fact that petitioner has already been exonerated vide order dated 9 th September, 2004, therefore, show cause notice issued earlier was disposed of in respect of the petitioner and others similarly placed persons. The said conclusion is in Para 14 of report dated 21.10.2016. Same is reproduced as under for ready reference:-
"It has also been confirmed that names of Mr. P.S. Santhanankrishnan, Vijay Kumar Verma, Avtar Singh Narang, Sachidanand Chitalre, Neinz George Sibehlds, Paramjeet Singh Saluja and Ramnik Shah Saluja have been removed from the list of directors of Sterling Kalks Sand Bricks Ltd. and they have been exonerated vide order dated 09.09.2004. I accordingly, dispose of the SCNs in respect of them."11
15. From the facts, it appears that S.E.B.I. has already considered this aspect twice and exonerated the petitioners from the teeth of Section 162 of the Act and other related provisions. This stands true for all other cases also, particulars of which are given in table above. All provisions and respective penalty, if looked into, then it is clear that no case is made out against the petitioner.
16. Therefore, if on such allegations, Trial Court is allowed to continue, then it would nothing but harassment to be meted out to the petitioner because long drawn proceedings itself tantamount to punishment, when prima facie no case is made out and case of the petitioner already considered by the concerned authority i.e. S.E.B.I. and given findings in favour of the petitioner twice.
17. In the case of State of Haryana Vs. Bhajanlal reported in 1992 Supp. (1) SCC 335, seven parameters were prescribed under which court can interfere for resorting to extraordinary jurisdiction. Here contingency No.5 is attracted and same is reproduced as under:-
"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."
18. In the case of Rajiv Thapar and others Vs. Madan Lal Kapoor reported in (2013) 3 SCC 330, the Apex Court reiterated the scope of 12 power vested under Section 482 of Cr.P.C. in following words:-
30. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following 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 Cr.P.C.:-
(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 13 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 conscience of the High Court should persuade it to quash such criminal proceedings, in exercise of power vested in it under Section 482 of of the Cr.P.C.. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as, proceedings arising therefrom) specially when, it is clear that the same would not conclude in the conviction of the accused."
19. Considering the submission and going through the documents appended thereto as well as the reply filed by the respondent, it appears that petitioners made out their case for interference. Once, they resigned in the years 1995 and 1998, then they cannot be fastened with any liability for a period of 2014.
20. Resultantly, petitions are hereby allowed and complaint (Annexure 14 P-1) as well as the proceedings pending before the Trial Court (Chief Judicial Magistrate, Gwalior) in Criminal Cases No.2048/2015, No.1482/2015, No.1481/2015, No.3634/2011, and No.3633/2011, so far as it relates to petitioners only, namely petitioner No.1 Avtar Singh Narang and the petitioner No.2 Vijay Verma have been quashed. For rest of the accused, trial may proceed in accordance with the law.
(ANAND PATHAK) JUDGE AK/-
ANAND KUMAR 2023.03.14 14:34:38 +05'30'