Madras High Court
R. Vijayakumar vs The Anubhav Plantations Limited, T. ... on 26 February, 2002
Equivalent citations: [2002]112COMPCAS234(MAD), (2002)1MLJ805, [2003]42SCL26(MAD)
Author: P.D. Dinakaran
Bench: P.D. Dinakaran
JUDGMENT S. Jagadeesan, J.
1. The appellant has preferred this appeal against the order of the learned Judge dated 4.12.2001 in the memo dated 16.8.2000 filed by the Administrator in Company Petition No.130 of 1999.
2. The matter relates to the Anubhav Plantations Ltd. This court in the said company petition appointed the Administrator to take over the assets of the company and to sell the same in order to make payment to the depositors. The Administrator Mr.M. Ravindran, senior counsel of the Madras Bar filed a memo on 16.8.2000 wherein he has stated that one Mr.Vijayakumar, the Managing Director of M/s. Goodluck Inn (P) Ltd. entered into an agreement with Mr.C. Natesan of Anubhav Plantations to sell certain lands of an extent of 5.28 Acres in Kazhipattur Village for a total consideration of Rs.26,40,000/-. The said Mr.Vijayakumar also entered into an another agreement with the said Mr. Natesan to sell another land of an extent of 5.42 Acres of the same village for a consideration of Rs.27.10 lakhs. Yet another agreement was also entered between them in respect of 2.04 acres. In three agreements of sale dated 24.1.1994 and another agreement of sale dated 9.5.96 merely survey number 20 is mentioned without any sub-division. The said Vijayakumar produced parent document only in respect of an extent of 9.05-1/2 Acres. In respect of the other remaining lands, there was no parent document. He also executed 25 sale deeds in favour of the said Natesan of Anubhav Plantations of which 14 are unregistered and in the description of property it is shown as if Survey No.20 was sub-divided and sub-division numbers have been given. Since suspicion arose with regard to the bona fide of the transaction, the learned Judge directed the Superintendent of Police, Crime Branch, C.B.,C.I.D., to investigate and file a Report.
3. On 9.11.2001 an interim report was filed by the C.B.,C.I.D., stating that some more investigation is required to be undertaken and requested three weeks time. Thereafter on 30.11.2001 the Superintendent of Police, Crime Branch-II, C.B.,C.I.D., Chennai filed a full report.
4. On 4.12.2001 the learned Judge passed the following order: As seen from the report, the investigation by the police disclose that the persons named therein have committed offence punishable under Sections 120-B, 420, 467, 468 I.P.C etc., Since the police have investigated the crime as per the orders of this court, this court directs the Superintendent of Police, Crime Branch-II, C.B.,C.I.D.,Chennai-2 to proceed further to prosecute the accused persons, named in the report, file a charge sheet, substantiate the charges and proceed further according to law. The Police may file a report once in six months setting out the progress of the criminal prosecution. If the police require any further direction, it is open to them to move this court.
The concerned Magistrate Court where the charge sheet is filed is directed to take up this case out of turn, try and dispose of the case as expeditiously as possible.
The prosecution shall file a memo before the concerned criminal court and bring this direction to the attention of the said court.
The Registry is directed to issue a copy of the proceedings to the said Superintendent of Police, Crime Branch-II, C.B.,C.I.D, Chennai-2 and also a copy to the learned Public Prosecutor, High Court, Madras, within two days from today (i.e.) 6.12.2001.
The Registry is directed to keep the report in a sealed cover in the custody of Registrar (OS) for future reference."
5. Mrs. Nalini Chidambaram, the learned senior counsel on behalf of the appellants contended that the company court has no jurisdiction to direct the prosecution; while she fairly represented that they are not challenging the Report of the C.B.,C.I.D.
6. The short question for consideration is whether the company court has got jurisdiction to direct the prosecution?
7. The contention of the learned counsel for the appellant is that Section 477 of the Companies Act empowers the court to summon persons suspected of having property of company etc. Sub-section (5) and (6) of the said Section empowers the court to direct the payment of money or delivery of property by the concerned person who was examined on summon, in case if he admits about the possession of the cash or the property belonging to the company. Barring this, there is no provision enabling the company court to launch prosecution. Even in respect of sub-section (5) and (6) of Section 477 of the said Act only if the concerned person admits, the company court can direct the deposit of cash with the Official Liquidator or the delivery of property.
8. On the contrary, the learned Administrator contended that Rule 9 of the Companies (Court) Rules provides the inherent power which runs as follows: "Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court."
9. The Administrator also relied upon the judgment of the Supreme Court in the case reported in A.R.ANTULAY v. R.S. NAYAK and contended that any one can take note of the offence and put the criminal law in motion and this being the prosecution, the company court has set the criminal law in motion and as such the order of the learned Judge directing the prosecution is quite legal.
10. We carefully considered the above contentions of both the counsel. From the order of the learned Judge it is clear that the Report filed by the C.B.,C.I.D., discloses that the person named therein have committed offences punishable under Section 120-B, 420, 467 and 468 I.P.C. All these offences are grave in nature. When the jurisdiction of the court in calling for the Report has not been challenged, the court is entitled to act upon the Report received from the C.B.,C.I.D.,
11. When prima facie case has been made out against the persons who alleged to have committed the offences punishable under the Indian Penal Code, the court cannot shut its eyes and simply keep the Report for record purpose.
12. What all the learned Judge has thought fit is that the C.B.,C.I.D., Report has made out a prima facie case that certain persons have committed criminal offences punishable under the Indian Penal Code and hence they should be prosecuted. This is nothing but setting the criminal law in motion. It is a direction given to the appropriate authority to proceed against those persons who alleged to have committed the offences. If the Report itself can be acted upon, there is no need for the learned Judge to direct the prosecution, but straight away find the persons mentioned in the Report as guilty of the offences mentioned therein and convict them and impose the punishment.
13. When that has not been done and the prosecution has been directed to be initiated, it is nothing but setting the law in motion, which is essential in order to proceed further pursuant to the Report. Otherwise there is some possibility that because of the pendency of the company petition the police authorities may think that till the company petition is over they may not be in a position to initiate the criminal proceedings against those who have been found to have committed the offence. The mere direction to prosecute a person will not amount to an order of imposing the punishment. It is for the concerned person to establish his innocence in the trial before the criminal court.
14. In our view, the company court is empowered to issue such direction under Rule 9 of the Companies (Court) Rules. Hence we do not find any merit in the appeal and accordingly the same is dismissed.