Gujarat High Court
Rajesh Jashwantlal Parikh vs Central Bureau Of Investigation on 17 February, 2023
Author: Ashutosh Shastri
Bench: Ashutosh Shastri
NEUTRAL CITATION
R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 12908 of 2013
With
CRIMINAL MISC.APPLICATION (FOR STAY) NO. 1 of 2022
In
R/CRIMINAL MISC.APPLICATION NO. 12908 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI Sd/-
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1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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RAJESH JASHWANTLAL PARIKH
Versus
CENTRAL BUREAU OF INVESTIGATION & 2 other(s)
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Appearance:
MR RD DAVE(264) for the Applicant(s) No. 1
MR RC KODEKAR(1395) for the Respondent(s) No. 1
MR PRANAV TRIVEDI, APP for the Respondent(s) No. 3
MR NANDISH THAKKAR forTHAKKAR AND PAHWA ADVOCATES(1357)
for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI
Date : 16-17/02/2023
ORAL JUDGMENT
1. By way of present Criminal Misc. Application under Section 482 of the Code of Criminal Procedure, petitioner has prayed for following reliefs:-
(A) This Hon'ble Court may be pleased to pass appropriate orders Page 1 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined and/or directions to quash and set aside the First Information Report being C. R. NO.15(A)/2002 GNR (at Annexure -A) and proceedings of Special C. B. I. Case No.23/2004 (at Annexure- B) pending in the Court of Learned City Sessions & Special Judge (First Court) at Ahmedabad pursuant to charge-sheet filed by the Respondent No.1 in respect of the Petitioner only being accused No.18.
(B) Pending hearing and final disposal of the present Petition, further proceedings of Criminal Case being Special C. B. I. Case No.23/2004 pending before the Learned City Sessions & Special Judge (First Court) at Ahmedabad may be stayed in respect of the Petitioner and the Respondent No.1 may be restrained from taking any coercive action against the Petitioner.
(C) Such other and further reliefs as may deem just and proper by this Hon'ble Court and in the interest of justice, may be granted.
2. The case of the petitioner is that petitioner is a businessman and carrying on business in Mumbai since about 25 years by now and same business is in the name and style of A.C. Enterprise as Karta, dealing in pharmaceuticals and cosmetics packaging materials as well as also a Proprietor of A.C. Pharmachem which is also dealing in pharmaceutical packaging materials and commission agent. Neither petitioner nor proprietary concerns have taken any loan till date from any bank or financial institution and business particularly is being done over a period of more than 25 years. One Mr. Manoj V. Patel, the then Director of Phar East was known to the petitioner and on account of personal relationship, petitioner was taken as non-functioning Director in the said Phar East and the company was situated in Godhra, District Panchmahal in State of Gujarat. On account of petitioner being in Mumbai, it was not possible for him to attend a single meeting of Board of Directors nor petitioner had taken any remuneration out of the Page 2 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined said company as a director and as such he was not in day-to-day functioning and affairs of the company nor in charge of administration of Phar East. Petitioner on account of such situation then had resigned on 14.7.1995 as Director of the said company and necessary forms before the Registrar of Companies have also been filled, precisely form No.32, and his resignation has been recognized. It is the case of petitioner that respondent No.2 lodged a written complaint on 3.7.2002 before Superintendent of Police, CBI, SPE at Gandhinagar alleging various transactions entered into by Phar East and its sister concerns namely M/s. Patson Pharma Ltd. and M/s. Haloes Manufacturing & Marketing Pvt. Ltd. Petitioner is neither concerned with transactions related to Phar East company nor was concerned with aforesaid two sister concerns, except mere director, petitioner was not connected with any activity of the company. It has been alleged that transactions have taken place during the period commencing from 7.12.1994 to 12.6.1997 and respondent No.2 during the aforesaid period gave financial assistance under RMA scheme (Raw Material Assistance). Under the said scheme, benefits were provided in the form of financial assistance to the company. On the basis of written complaint, respondent No.1 has registered a First Information Report (FIR) on or before 6.7.2002 in which name of the petitioner has been mentioned as accused since petitioner had no role to play in the alleged commission of crime.
3. It is further case of the petitioner that subsequently, charge-sheet came to be filed by respondent No.1 in the jurisdictional Court and at that time, for the first time, name of petitioner has been mentioned as accused No.18. Even during Page 3 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined the course of investigation and upon submission of the charge- sheet, relevant statements with regard to transaction about Phar East merely mention that financial assistance taken by Phar East, in turn the company has also made repayment. During the period when petitioner was director only upto July 1995, outstanding balance mentioned as 'NIL' in Table No.2 under head of "Details of Payment received/ adjusted by NSIC, Ahmedabad" on internal page 16 of the charge-sheet and according to petitioner, it is quite clear that there was no outstanding amount payable to respondent No.2 by the company even during his tenure of directorship upto July 1997. According to petitioner, even on the basis of the material which has been gathered during the course of investigation, no specific role has been attributed to petitioner nor it has been alleged even in the written complaint except mere fact that petitioner was a director of the company for the period commencing from 1994 to 1997. In fact, as can be seen from Form No.32, petitioner was Director of the company only upto 14.7.1995 and not upto 1997 and as such, ex-facie even apart from this, there is no specific attribution against petitioner even indirectly playing role in commission of the alleged crime. According to petitioner, the complaint is lodged only with a view to recover outstanding amount.
4. According to the petitioner, even after petitioner resigned from the company as Director, Phar East has also been provided further financial assistance by respondent No.2 on 24.8.1996 under the said scheme known as RMA scheme and in that subsequent financial transactions, it appears that outstanding amount has been reflecting in Table Nos.3 and 4 on internal Page 4 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined page 19 and 20 of the charge-sheet and as such, by no stretch of imagination, according to petitioner for such transaction, petitioner can be held responsible in any manner and as such when petitioner has been shown as an accused for the first time when he came to know about it, has rushed down to this Court by way of Criminal Misc. Application No.12908 of 2013 for the reliefs which are stated herein-before.
5. At the first instance, vide order dated 21.8.2013, the Court issued notice on the respondents based upon such assertion and after bi-parte hearing which took place on 26.12.2013, the Court passed an order not to take any coercive steps against petitioner in connection with the FIR in question. Said order dated 26.12.2013 deserves to be quoted hereunder:-
"Heard Mr. R.D. Dave, learned advocate for the applicant, Mr. Y.N. Ravani, learned advocate for respondent No.1 and Mr. Dipak Thakkar, learned advocate for respondent No.2.
Having regard to the submissions advanced by the learned advocates for the respective parties and more particularly the nature of the allegations made against the applicant herein and the documents placed on record, the court is of the view that the matter requires consideration. Hence, issue rule, returnable on 13th January, 2014. Mr. Y.N. Ravani, learned advocate, waives service of notice of rule on behalf of respondent No.1, Mr. Dipak Thakkar, learned advocate, waives service of notice of rule on behalf of respondent No.2 and Mr. Himanshu Patel, learned Additional Public Prosecutor, waives service of notice of rule on behalf respondent No.3.
In the meanwhile, no coercive steps shall be taken against the applicant herein pursuant to the first information report in question."
6. It is with this background, present petition has come up for consideration before this Court finally, wherein the Court Page 5 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined has heard learned advocate Mr. R.D. Dave appearing for the petitioner, learned advocate Mr. R.C. Kodekar for respondent No.1 and learned advocate Mr. Nandish Thakkar appearing for Thakkar & Pahwa Associates, advocates on behalf of the original complainant- respondent No.2.
7. Learned advocate Mr. R.D. Dave has submitted that petitioner has not committed any overt act in alleged commission of crime. Petitioner has never signed any document nor petitioner has applied for any loan nor has put up any signature in that connection. Authorized Signatory on the contrary has submitted application which has been clearly revealed from the papers of investigation and as such, dragging the petitioner to criminal prosecution is not only impermissible but would tantamount to be a mere harassment and as such, has requested that complaint be quashed insofar as it relates to present petitioner.
8. Learned advocate Mr. R.D. Dave has drawn the attention of the Court by referring to form No.32 to indicate that petitioner has already resigned from the company on 14.7.1995 and said entry relates to resignation has been deducted in writing and reflecting in form No.32 issued by Registrar of Companies, which is reflecting on page 65 of the petition compilation and as such any transaction which took place after resignation of petitioner for which petitioner cannot be saddled with any responsibility.
9. On the contrary, learned advocate Mr. Dave has further submitted that during the tenure in which petitioner had Page 6 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined remained as a Director, table No.2, as stated above, is clearly reflecting that there was no outstanding amount payable to respondent No.2 by the company and undisputedly, petitioner was not concerned with any other two companies which are allegedly sister concerns of the company to which petitioner was attached at relevant point of time and as such, any act of transaction which has taken place subsequent to resignation of petitioner cannot be attributed to him and as such has requested that petitioner may be absolved from rigorous process of criminal prosecution.
10. Learned advocate Mr. Dave has further pointed out from page 85 of the petition compilation that recovery certificates were also issued and as such, measure of recovery has already been initiated. Hence, there is hardly any reason to justify enough to continue the petitioner with complaint in question and as such has requested to grant the reliefs as prayed for in the petition.
11. Learned advocate Mr. Dave has further submitted that from the table No.2, which relates to the details of payment received/ adjusted by NSIC, Ahmedabad reflecting on page 39 has submitted that during petitioner's tenure as Director, outstanding amount even as on 31.3.2002 was stated to be 'NIL' though petitioner had already resigned from the company way back in 1995. In fact, it is only in respect of subsequent finance which has been provided, problem might have cropped up and as such it cannot be said that petitioner is responsible in any manner with regard to such alleged transactions. By referring to page 42, learned advocate Mr. Dave has submitted that even if Page 7 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined petitioner having resigned from the company, further assistance was provided by NSIC, Ahmedabad on 24.8.1996 under RMA scheme (Raw Material Assistance). Hence, for the act which had taken place subsequent to petitioner's tenure, by no stretch of imagination, vicarious liability can be attached to the petitioner in any form. Petitioner has been arraigned as an accused in the prosecution which is nothing but a clear example of misuse of process of law and as such, requested to quash the complaint.
12. Yet, another aspect which has been brought to the notice of the Court by Mr. Dave is that application for seeking financial assistance was made on 21.11.1994, but same was not by petitioner in any form. It was submitted by authorized signatory to the company and petitioner was never a party to such kind of request and for that purpose, learned advocate Mr. Dave has made a reference on page 37 of the compilation and after referring to this has submitted that neither petitioner is responsible nor concerned with any alleged act which has been mentioned in the complaint and as such, continuance of prosecution would be nothing but a clear example of abuse of process of law.
13. Learned advocate Mr. Dave has significantly mentioned that papers collected by Investigating Officer have also revealed that only few Directors/ authorized signatories of the company had signed various letters and invoices and submitted to NSIC, Ahmedabad and availed financial assistance. It is only because of the fact that being a company, all Directors of the applicant units and suppliers mentioned are equally responsible for commission of crime for non-payment of outstanding dues and it Page 8 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined is only on this mere material on the basis of which present petitioner has been arraigned in prosecution, hence has submitted that by no stretch of imagination, the Director who is not a party to any transaction, who is not signatory to any application or process for availing financial assistance and is not continued to be a Director after 1995 cannot be dragged into prosecution, same would tantamount to be a clear misuse of process of law and as such requested to grant the reliefs as prayed for.
14. Additionally, learned advocate Mr. Dave has further submitted that in an identical situation with regard to co- accused on this very complaint, the Coordinate Bench of this Court while entertaining Criminal Misc. Application No.2444 of 2011 has passed an order on 2.4.2013 and was pleased to quash the FIR and subsequent proceedings arising therefrom and by referring to this decision reflecting on page 67, Mr. Dave has requested to grant the reliefs as prayed for in the petition.
15. To justify the stand taken by learned advocate Mr. Dave, a reference is made to the decisions reported in the case of Anand Kumar Mohatta vs. State (Govt. of NCT of Delhi) Department of Home reported in 2018 (0) AIJEL- SC 63030 and in the case of D.B. Negandhi vs. Registrar of Companies reported in 2017 (0) AIJEL-SC- 61267 and by referring to these decisions, Mr. Dave has requested the Court to grant the reliefs as prayed for in the petition.
16. As against this, learned advocate Mr. R.C. Kodekar appearing on behalf of respondent No.1 has submitted that Page 9 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined Directors of the company are vicariously liable since they are looking after the affairs of the company and have availed financial assistance. Director also should be held responsible for alleged commission of crime since Section 120B of Indian Penal Code is one of the charges as alleged in the complaint and as such, he being Director during the tenure when such financial assistance was availed cannot absolve his responsibility from said company. It has been mentioned that after thorough investigation, material is collected and on the basis of consideration of various statements, it was found clearly that petitioner along with other directors are responsible for alleged commission of crime. In fact, now it has been submitted that investigation has clearly revealed the role played by petitioner and other directors and in spite of knowledge, Directors allowed disbursement of amount under financial services scheme due to which NSIC, Ahmedabad has suffered long back monetary loss to the tune of Rs.1,89,45,636/-, hence petitioner being connected with the company as Director is rightly framed as accused No.18 since investigation has further revealed that private parties have prepared false and fake documents and availed financial assistance dishonestly and thereby cheated NSIC, Ahmedabad.
17. Learned advocate Mr. R.C. Kodekar has further submitted that even if petitioner has not taken any active part in commission of the crime, but fact is not in dispute that once upon a time, he was a director of the company and during his tenure, financial transactions have taken place and as such, petitioner cannot be absolved from his responsibility by just mentioning that he has tendered his resignation and that being Page 10 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined so, case is made out at least to exercise power under Section 482 of the Code of Criminal Procedure. Mr. Kodekar after submitting this has made a reference to one of the decisions delivered by the Hon'ble Apex Court reported in (2008)4 SCC 471 and then submitted that application under Section 482 of the Code does not require to be entertained. However, Mr. Kodekar has submitted that except the fact that petitioner was Director in the company, there is no other material found from the record and as such has submitted that director cannot be allowed to be absolved from responsibility of commission of crime as alleged, hence requested to dismiss the petition.
18. Learned advocate Mr. Nandish Thakkar, appearing on behalf of complainant, i.e. respondent No.2 has vehemently opposed the petition by contending that there is a clear charge of Section 120(B) of Indian Penal Code in which, aspect of liability will be examined during the course of trial. Allegations which are made are in specific form and as such, has submitted that same will be appropriately adjudicated at the time when trial will take place. Mr. Thakkar has submitted that joint vicarious liability will not arise in present proceedings in view of the fact that during the course of investigation, it was found that there was no mens rea of company and transactions in which private parties are involved and as such petitioner being a Director cannot keep himself away from the transaction and to canvas his submission, Mr. Thakkar has made a reference to assertions made in second last paragraph of page 53 and submitted that prosecution is not recommended against M/s. Patson Pharma Ltd. (accused No.4), M/s. Phar East Laboratories (accused No.5), M/s. Haloes Manufacturing & Marketing Pvt.
Page 11 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined Ltd. (accused No.6) and M/s. Corru Plast Packaging Pvt. Ltd. (accused No.18) for lack of mens rea and as such when that being the situation, petitioner being Director cannot absolve his responsibility at least his role will have to be examined at an appropriate stage. According to Mr. Thakkar, it is a joint effort made by all the directors to see that respondent No.2 is put to huge financial loss and may not be able to recover financial assistance which has been provided. On the contrary, according to Mr. Thakkar, investigation has revealed that company to which the petitioner was attached had rotated the financial assistance received from NSIC for making payment of outstanding dues to NSIC, Ahmadabad and as such, by making such kind of fraudulent efforts, when respondent No.2 is put to jeopardy, allegations leveled in the complaint are required to be examined at an appropriate stage. In fact, during the course of investigation, it has also been found that no bonafide commercial business transaction had taken place and that is one another reason for which exercise of 482 power is not uncalled for, hence requested to dismiss the application.
19. Learned advocate Mr. Nandish Thakkar has submitted that during passage of time, charge has been framed recently in the month of November 2022 and Criminal Misc. Application No.23 of 2004 has also been registered and as such, at this stage of prosecution, no exercise to be undertaken under Section 482 of Code of Criminal Procedure.
20. At this stage, as a part of rejoinder, learned advocate Mr. R.D. Dave has reiterated his submission that vicarious liability principle cannot be stretched to such an extent where ex-
Page 12 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined director who is not concerned with transactions or affairs of the company can be brought into prosecution and as such by reiterating his submission, this is a fit case in which relief prayed for deserves to be granted. No other submissions have been made by either parties.
21. Having heard learned advocates appearing for the parties and having gone through the material on record, following few circumstances are not possible to be un-noticed by this Court before coming to final conclusion:-
(1) Petitioner had already resigned from the company as a director on 14.7.1995 and with regard to factum of his resignation, form No.32 is also attached to the petition compilation.
(2) Further, case papers reveal that during the tenure of petitioner as a Director, statement table No.2 indicates that there was no outstanding amount payable to respondent No.2 which can be seen from page-39 of the petition compilation.
(3) Further from page 42 of the document attached to the petition, it has been clearly reflected that financial assistance was provided by respondent No.2 to the applicant unit, i.e. Phar East Laboratory Ltd. on 24.8.1996 much after the petitioner discontinued from the company as Director.
(4) Learned advocate Mr. Dave has pointed out from the list of documents placed on page 56, i.e. item No.41, which consists of list of directors of M/s. M/s. Haloes Manufacturing & Marketing Pvt. Ltd. and simultaneously has placed on record a xerox copy Page 13 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined of certified document reflects list of directors of the company in which name of the petitioner is not figuring at all and as such, petitioner is unconnected with said company as well.
(5) In addition to it, petitioner was neither signatory to the application presented for financial assistance nor has taken active part in such process.
(6) Further, even it is the case asserted in the complaint itself that an application was submitted in NSIC Ltd. on 21.11.1994 at Ahmedabad through authorized signatory for seeking financial assistance and said authorized signatory was Mr. R.N. Kamodia.
Hence, it is not in dispute that petitioner was never an authorized signatory as well.
(7) Further, it is revealed from the charge-sheet papers, particularly from page 42, that since NSIC has received/ adjusted the amount along with interest and service charges, there was no outstanding amount towards said transactions which were during the tenure of petitioner being a director in the company and apart from that, whenever petitioner was director in the company, he was neither an authorized signatory nor was in charge of administration or affairs of the company at any point of time. This can be seen from the charge-sheet papers, precisely, from page 37. Whatever outstanding appears to have remained is undisputely not during the tenure of petitioner's director-ship and as such when alleged offence said to have been committed is not apparently during the tenure of petitioner as Director, there is hardly any case made out against petitioner by the prosecution. This fact has also been broadly Page 14 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined disputed by learned advocate Mr. R.C. Kodekar appearing on behalf of respondent No.1 as beyond the aforesaid circumstance, nothing further came out during the course of investigation. When that be so, to stretch the liability or arraign the petitioner as accused person and continue to prosecution would be nothing but a clear example of abuse of process of law. In fact, this rigorous prosecution cannot be continued against the petitioner in view of the aforesaid undisputed position prevailing on record.
(8) It is trite law by catena of decisions that when offence has not taken place during continuation of director-ship of the petitioner, more particularly authorized signatories are already available, continuance of prosecution against said discontinued director is nothing but abuse of process.
(9) At this stage, in view of the relevant decisions delivered by the Hon'ble Apex Court, including the decisions delivered by the Coordinate Bench, the Court is of the opinion that case is made out by the petitioner to call for an interference, particularly when undisputed position as reflected above is prevailing.
(10) Following are the decisions delivered by the Hon'ble Apex Court which deserve consideration to be applied here:-
A) In the case of Anil Khadkiwala vs. State (Government of NCT of Delhi) and Another reported in 2019 Lawsuit (SC) 1388, Hon'ble Apex Court has held and observed in paragraph 2 and 7 as under:-Page 15 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023
NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined "2. Respondent no.2 filed a complaint under Section 142 read with Section 138 of the Negotiable Instruments Act (hereinafter referred to as "the Act") against the appellant who was the Director of M/s. ETI Projects Ltd., the Company in question. It was alleged that the accused person had issued cheques dated 15.02.2001 and 28.02.2001, which were dishonoured upon presentation. The appellant had preferred Crl.M.P. No.1459 of 2005 for quashing the same. He took the defence, without any proof that he had already resigned from the Company on 20.12.2000 and which was accepted by the Board of Directors on 20.01.2001. The application was dismissed on 18.09.2007 after noticing the plea of resignation, solely on the ground that the cheques were issued under the signature of the appellant.
7. The complaint filed by respondent no.2 alleges issuance of the cheques by the appellant as Director on 15.02.2001 and 28.02.2001. The appellant in his reply dated 31.08.2001, to the statutory notice, had denied answerability in view of his resignation on 20.01.2001. This fact does not find mention in the complaint. There is no allegation in the complaint that the cheques were post-dated. Even otherwise, the appellant had taken a specific objection in his earlier application under Section 482, Cr.P.C. that he had resigned from the Company on 20.01.2001 and which had been accepted. From the tenor of the order of the High Court on the earlier occasion it does not appear that Form 32 issued by the Registrar of Companies was brought on record in support of the resignation. The High Court dismissed the quashing application without considering the contention of the appellant that he had resigned from the post of the Director of the Company prior to the issuance of the cheques and the effect thereof in the facts and circumstances of the case.
The High Court in the fresh application under Section 482, Cr.P.C. initially was therefore satisfied to issue notice in the matter after noticing the Form 32 certificate. Naturally there was a difference between the earlier application and the subsequent one, inasmuch as the statutory Form 32 did not fall for consideration by the Court earlier. The factum of resignation is not in dispute between the parties. The subsequent application, strictly speaking, therefore cannot be said to a repeat application squarely on the same facts and circumstances.
Page 16 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined B) In the case of Sunita Palita & Others Vs. M/s. Panchami Stone Quarry reported in 2022 LawSuit (SC) 891, Hon'ble Supreme Court has held and observed in paragraphs 20, 42 and 43 as under:-
"20. Mr. Sidharth Luthra appearing on behalf of the Appellants submitted that Section 205 of the Cr.P.C. confers discretion on the Court to exempt personal appearance of an accused, till such time as his appearance may be considered necessary. In considering an application under Section 205 of the Cr.P.C., the Magistrate has to bear in mind the nature of the case, as also the conduct of the persons summoned. The Magistrate may not exempt personal appearance, where any useful purpose would be served by requiring the personal attendance of the accused, or where the progress of the trial was likely to be hampered on account of his absence.
42. A Director of a company who was not in charge or responsible for the conduct of the business of the company at the relevant time, will not be liable under those provisions. As held by this Court in, inter alia, S.M.S. Pharmaceuticals Ltd. (supra), the liability under Section 138/141 of the NI Act arises from being in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed, and not on the basis of merely holding a designation or office in a company. It would be a travesty of justice to drag Directors, who may not even be connected with the issuance of a cheque or dishonour thereof, such as Director (Personnel), Director (Human Resources Development) etc. into criminal proceedings under the NI Act, only because of their designation.
43. Liability depends on the role one plays in the affairs of a company and not on designation or status alone as held by this Court in S.M.S. Pharmaceuticals Ltd. (supra). The materials on record clearly show that these Appellants were independent, non-executive Directors of the company. As held by this Court in Pooja Ravinder Devidasani v. State of Maharashtra and Anr. (supra) a non-Executive Director is not involved in the day-to-day affairs of the company or in the running of its business. Such Director is in no way responsible for the day-to-day running of the Accused Company. Moreover, when a complaint is filed against a Director of the company, who is not the signatory of the dishonoured cheque, specific averments have to be made in the pleadings to substantiate the contention in the complaint, Page 17 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined that such Director was in charge of and responsible for conduct of the business of the Company or the Company, unless such Director is the designated Managing Director or Joint Managing Director who would obviously be responsible for the company and/or its business and affairs."
C) In the case of Anand Kumar Mohatta vs. State (Govt. of NCT of Delhi) Department of Home reported in 2018 (0) AIJEL- SC 63030l, Hon'ble Apex Court has held and observed in para 16 and 17 as under:-
"16. Even otherwise it must be remembered that the provision invoked by the accused before the High Court is Section 482 Cr. P.C and that this Court is hearing an appeal from an order under Section 482 of Cr.P.C. Section 482 of Cr.P.C reads as follows: -
"482. Saving of inherent power of the High Court.- Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice."
17. There is nothing in the words of this Section which restricts the exercise of the power of the Court to prevent the abuse of process of court or miscarriage of justice only to the stage of the FIR. It is settled principle of law that the High court can exercise jurisdiction under Section 482 of Cr.P.C even when the discharge application is pending 2 (2011) 7 SCC 59 with the trial court3. Indeed, it would be a travesty to hold that proceedings initiated against a person can be interfered with at the stage of FIR but not if it has advanced, and the allegations have materialized into a charge sheet. On the contrary it could be said that the abuse of process caused by FIR stands aggravated if the FIR has taken the form of a charge sheet after investigation. The power is undoubtedly conferred to prevent abuse of process of power of any court."
D) Decision delivered by Coordinate Bench (then) of this Court dated 25.4.2017 passed in Special Criminal Application No.4377 of 2015 Page 18 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023 NEUTRAL CITATION R/CR.MA/12908/2013 JUDGMENT DATED: 17/02/2023 undefined
22. From the conjoint reading of the aforesaid proposition of law in the context of undisputed position, which is prevailing on record, it appears that present petitioner cannot be responsible for the crime which has been alleged in the FIR, as neither there is any prima facie case made out nor at any stretch of imagination, petitioner can be continued to be in prosecution and as such, the Court is inclined to accept the stand of learned advocate for the petitioner. Hence, following order is passed which would meet the ends of justice:-
ORDER (1) Present Criminal Misc. Application No.12908 of 2013 is ALLOWED and complaint being C.R. No. 15(A)/2002 at Annexure-A and the proceedings of Special C.B.I. Case No.23 of 2024 at Annexure-B are hereby quashed and set aside insofar as it relates to present petitioner only. Rule is made absolute accordingly.
(2) Since the main petition is disposed of, connected Criminal Misc. Application No.1 of 2012 does not survive and stands DISPOSED OF.
Sd/-
(ASHUTOSH SHASTRI, J) OMKAR Page 19 of 19 Downloaded on : Sun Sep 17 21:57:02 IST 2023