Bangalore District Court
K. Raghu vs Vanivilas Cements Private Limited on 21 September, 2017
CC.No.235/09
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BEFORE THE SPECIAL COURT FOR ECONOMIC
OFFENCES AT BANGALORE.
Dated this the 21st day of September 2017.
: Present:
Sri. SHANTHANNA ALVA M., B.A., LL.B.,
Presiding Officer, Special Court
for Economic Offences, Bangalore.
CC. No. 235-2009.
Complainant: K. Raghu, No.4, 1st Main, 60 Feet Road,
Amarajyothi Layout, Sanjayanagar,
Bangalore.
(By Sri. B.S.G.. Advocate)
. Vs.
Accused: 1. Vanivilas Cements Private Limited,
No.302, II Floor, No.31, R.V. Apartments,
II Floor, 11th Cross, Malleshwaram,
Bangalore,
Rep., by its Managing Director Medisetty
Srinivasaiah,
2. B. Ramaswamy, S/o. Belerangappa,
Railway Gollahalli, Nelamangala Taluk,
Bangalore Rural District, Bangalore.
(By Sri. K.M.M., Adv.)
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CC.No.235/09
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JUDGMENT
1. The complainant filed the complaint filed u/s. 200 of Cr.P.C., against the accused No.1 & 2 alleging that they have committed the offence punishable u/s. 628 of the Companies Act, 1956. (Herein after referred as the 'Act')
2. The complainant's case in brief is that the accused No.1 is the company registered under the provisions of the Companies Act, 1956 and its registered office is situated at No.302, II Floor, No.31, R.V. Apartments, 11th Cross, Malleshwaram, Bangalore-03. The accused No.2 is the one of the Directors of the accused No.1 Company. From the date of incorporation, the accused No.2 was in charge and responsible for the day to day affairs till one Medisetty Srinivasaiah was appointed as Managing Director of accused No.1 Company. Medisetty Srinivasaiah was appointed as Managing Director of accused No.1 Company with effect from 09.07.2008. The authorized share capital of accused No.1 company is Rs.5,00,000/- and the issued, subscribed and paid up capital is Rs. 5,00,000/- divided into 5000 equity shares of Rs.100% each. The complainant is the share holder of 10 shares 2 CC.No.235/09 3 in the accused No.1 Company and delivered those shares certificates to accused No.2 to pledge them in another company. The accused No.2 so far not returned the original shares. The complainant was appointed as one of the directors of accused No.1 Company on 20.03.2000. The accused No.1 Company could not file the Annual returns, Balance sheet and other documents for the Financial Year 2003-04 and 2004-2005. In the last week of November 2005, the accused No.2 asked the complainant to affix the signature on the Balance sheet, Annual returns and other statutory returns of the accused No.1 Company for the Financial Years of 2003-2004 and 2004-2005. The complainant refused to sign as they were incomplete. Then on 06.09.2007, the complainant received the notice signed by accused No.2 informing to attend the meeting scheduled to be held on 13.09.2007 to fix up the date and time for conducting the extra ordinary general meeting of the company to consider the Special Notice issued by one of the members of the accused No.1 company. The complainant requested to fix another date for the meeting. The complainant not received any communications. Thereafter in the 3 CC.No.235/09 4 month of March-2008, the complainant contacted the accused No.2 and enquired and for that accused No.2 stated that the complainant is no more director of accused No.1 company. Then complainant got inspected the documents through secretary of company and found that his signatures have been forged in Form No. 23AC of the Year 2004 and 2005; in the Annual return of the Year 2004-2005, Registration of Resolutions and Form No.32. It is also disclosed that the accused No.2 misled the ROC with regard to the compliance of provisions of the Companies Act, 1956. The Form No.23AC filed by the accused No.1 is false and passing of resolution in the alleged Extra ordinary General Meeting of the company is contrary to the provisions of the Companies Act, 1956. The accused No.1 Company filed the Form No.32 before the Registrar of Companies intimating about the cessation of one of its directors, namely Sri. C. Govinda Raju and appointing the wife of accused No.2 Smt. Jayanthi Ramaswamy as its director with effect from 14.10.2005. The said Form No.32 is false in view of the reason that except accused No.2 no one else has attended the said meeting. Then complainant addressed letter dated:
4 CC.No.235/09 5 30.09.2008 requesting him to enquiry into the affairs of the accused No.1 Company, but so far not received response from Registrar of Companies. The submission of the documents referred above must be with knowledge of accused No.1 Company, hence it is made as accused. It is alleged that by filing the false documents before the Registrar of Companies, the accused committed the offence punishable u/s. 628 of the Companies Act, 1956.
3. On the presentation of complaint, cognizance was taken for the offence punishable u/s. 628 of the Companies Act, 1956.
After registration of the case, summonses were issued to accused No1 & 2. The accused No.1 & 2 appeared through their counsel and got released on bail. Then copies of the complaint and other documents were furnished to accused No.1 & 2 as required u/s. 207 of Cr.P.C. Then the charge was framed and read over to the accused No.1 & 2. The accused No.1 & 2 denied the charge leveled against them and pleaded not guilty and claimed to be tried. During the cross examination of P.w.1, the accused got marked Ex.D.1 & 2.
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4. To prove the case, the authorized person of the complainant himself got examined as P.w.1 and produced the documents are marked as Ex.p.1 to 10.
5. After closure of the complainant's side evidence, the statements of accused No.1 & 2 were recorded as provided u/s.313 of Cr.P.C. The accused No.1 & 2 denied incriminatory evidence found against them and they did not choose to lead any defence evidence.
6. Heard the arguments of the learned counsels of the complainant and accused. Perused the evidence on record and the documents. The points that arise for consideration are :
Point No.1: Whether the complainant has proved that the accused No.2 being the in charge of company of accused No.1 company submitted the documents such as Form No.23ac, 20b, Form No.23 and 32 by forging the signature of the complainant and without the notice of AGM before the Registrar of Companies and thereby committed the offence punishable u/s. 628 of the Companies Act, 1956?
Point No.2 What order?
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7. My findings on the above said points are as under:
Point No.1: In the Negative, Point No.2: As per the final orders for the following:
REASONS
8. Point No.1: The accused No.1 is the Company incorporated under the provisions of the Companies Act, 1956 and it is represented by is Managing Director. According to the complainant, the accused No.2 was in charge of day to day affairs of the accused No.1 Company up to 09.07.2006. There is no allegation against the present Managing Director of accused No.1 Company. In the complaint, it is stated that the accused No.1 is made an accused for the reason that the documents produced must be with knowledge of accused No.1 Company.
9. The complainant come up with case that he is the share holder of the complainant and also one of the director and accused No.2 submitted balance sheet dated: 31.03.2004 & 31.03.2005, Form No. 23AC, Annual returns of the Financial 7 CC.No.235/09 8 Year 2003-05, Registration of Resolutions and Form No.32 by forging the signature of the accused. It is also alleged that the accused No.2 mislead the Registrar of Companies by not producing the notice of AGM along with Form No.23AC filed before the Registrar of Companies.
10. The complainant produce the certified copy of Form No.20B, the notice dated: 04.09.2007 and the letter dated:
01.09.2007 submitted Smt. Jayanthi Ramaswamy u/s.284(2) of the Companies Act, 1956. The officer copy of the notice dated:
08.09.2007 sent by the accused requisition to fix another date to disclose the issues. The certified copy of Form No.23AC dated: 31.03.2004 and 31.03.2005, Form No.20B of the Financial Year 2004-2005, Registration of Resolution in Form No.23, Form No.32, the letter dated: 30.09.2008 addressed to Registrar of Companies and postal acknowledgement.
Complainant in the evidence reiterated the complaint averments.
11. The accused persons taken up the contention that the complainant transferred his share in favor of the accused No.2 8 CC.No.235/09 9 and complainant was removed from the directorship by following legal requirement with effect from 13/09/2007. The Registrar of Companies has accepted the Form No.32 and it is contended that only to harass the accused No.2, false complaint is filed. The accused persons produced share transfer form marked as Ex.D.1 & 2. The complaint in the cross examination admitted that his signatures are affixed in those documents.
12. The learned counsel of the complainant in the written argument reiterated the complaint averments and submitted that the charge leveled against the accused is proved beyond reasonable doubt. It is submitted that nothing has been elicited during the cross examination of the complainant. The learned counsel of the accused by referring to the answers given by the complainant and Ex.D.1 argued that the complainant has no loco-standi to file the complaint because he transferred his ten share on 15.01.2001 vide Ex.D.2. The accused was ceased to be the director of the company with effect from on 13/09/2007. The complaint is filed in the year 2008. It is further argued that it 9 CC.No.235/09 10 is not stated what are incorrect statements are made in annual returns. It is argued that the accused filed the company petition and debt has been shown and that was received by the complainant, hence winding up request was not conceded.
13. The complaint is filed alleging that accused committed the offence punishable u/s. 628 of the Companies Act, 1956 and sustain an action under the said provisions, it has to be proved that in any return, report certificate, balance sheet, prospectus, statement or other document required by or for other purposes of any of the provision of the Act, any person makes a statement which is false in any material particular, knowing it to be material. The learned counsel for the accused relied upon the ruling rendered by the Hon'ble High Court of Kerala, in case of P.P.Looke Vs. N.J. Mathew and Ors., reported in 1968 Cr.L.J., 561, wherein it is held that "burden was on the complainant to show that alleged statement in balance sheet was made with dishonest intention of making a wrongful gain or to deceive public."
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14. In the complaint, the details of incorrect statement is not stated. Except oral assertions there is no material to the effect that signature of the complainant were forged in the documents submitted before the Registrar of Companies. The complainant in the cross examination, admitted that the meeting proceedings was filed before the Registrar of Companies. Ex.p.8 is the Form No.23 and wherein there is reference about the conveying of A.G.M. The complainant not challenged the said proceedings and the records shows that it was accepted by the Registrar of Companies. The complainant contended that he asked to re-fix the date for the meeting of directors. The complainant produced the copy of the letter said to have been issued, but there is no material to the effect that the said letter was served upon the accused persons. Even otherwise, the said aspect is beyond the scope of this case. The complainant so far not challenged his removal from the directorship.
15. The complainant, in the cross examination stated that he filed the Annual Return for the Year 2002-2003 and stated that he do not know when the balance sheet of the year 2003-04 11 CC.No.235/09 12 and 2004-2005 were filed. The complainant stated that without looking into the balance sheet, it is not possible to say as to where the accounts are incorrect. The complainant stated that he given the letters stating that his signatures were forged, but said document was not produced.
16. The complainant admitted that in the year 2007, he instituted a petition to winding up the company, on the ground that the company did not pay the debt due to him. The complainant admitted that along with petition, he submitted the balance sheet and other connected documents. The complainant admitted in the petition, he has not stated that his signatures were forged. It is not the case of the complainant that in the company petition, he stated about the alleged wrong entries balance and account statement. It is argued that complainant based on entry in the submitted account claimed the debt and initiated liquidation proceedings. The complainant admitted that in the company proceedings, the company had taken up the contention that he left the company. The complainant admitted that he had not challenge the 12 CC.No.235/09 13 proceedings dated: 13.09.2007 before the Company Law Board. The complainant admitted that he received the amount deposited in the company petition.
17. The complainant contended that 10 shares were taken by accused No.2, in order to pledge them, but to substantiate that the complainant not produced the materials. The complainant admitted that in the company petition, he not stated that he is having the share in accused No.1 Company. Ex.D.2 is the Share Transfer Form dated: 15.12.2001 and wherein, it is stated that the complainant transferred his ten shares in accused No.1 in favour of accused No.2. The complainant stated that he put signatures on Ex.D.2 while pleading the share with M/s. Grashim Industries Pvt., Ltd., However, the contents of Ex.D.1 shows otherwise, the complainant claimed the debt on the bass of the balance sheet of the 2003-04 & 2004-05. Thus he is estopped from claiming that the contents of the statements are not correct.
18. In the complaint, it is stated that during the much 2008, he met accused No.2, but in the cross examination, the 13 CC.No.235/09 14 complainant stated that after 13.09.2007, he had not met accused No.2. When it was suggested that by there resolution dated:10.10.2005, Smt. Jayanthi Ramaswamy was inducted as director, the complainant not denied, but shown the ignorance. The complainant admitted that he appeared the court for the reason that his name is not brought in the balance sheet after he transferred his share.
19. There is no reliable evidence to the effect that the complainant is having the share and the documents on record disclose that the complainant, ceased to be the director with effect from 13.09/2007. The complainant has transferred his share in the year 2005. Thus, as argued by the accused counsel, the complainant has no legal right to file the complaint. Added to this, there is reliable evidence to the effect that signatures of the accused were forged in the balance sheet and false statement were made in the balance sheet and false materials facts were stated in the documents submitted before the Registrar of Companies.
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20. Thus, an appreciation of evidence on record, I hold that the complainant has failed to prove the accused persons committed the offence punishable u/s. 628 of the Companies Act, 1956. Accordingly, this point is answered in negative.
21. Point No.2: In view of my findings on Point No.1, I proceed to pass the following :-
ORDER By exercising the power conferred u/s. 248 (1) of Cr.P.C. accused No.1 & 2 are acquitted from the offence punishable u/s. 628 of the Companies Act, 1956.
Bail bonds of accused No.1 & 2 and their sureties shall stand cancelled.
(Dictated to the Stenographer, directly on computer, typed by her, corrected and st then pronounced by me, in open court on this the 21 day of September 2017.) PRESIDING OFFICER.
15 CC.No.235/09 16 ANNEXURE:
ON BEHALF OF THE COMPLAIN ANT: WITNESSES:
P.w.1 K.Raghu.
DOCUMENTS:
Ex.p.1 Complaint, Ex.p.1(a) Sig. of P.w.1, Ex.p.2 Annual of A.1 Company, Ex.p.3 Copy of Notice, Ex.p.4 Copy of Reply Notice, Ex.p.5 Copy of Balance sheet for the Year 2004-05, Ex.p.6 Copy of Balance sheet for the Year 2005-06, Ex.p.7 Copy of Annual Return for the Year 2004-05, Ex.p.8 Copy of Registration of Resolution, Ex.p.9 Copy of Form No.32, Ex.p.10 Copy of Letter dated: 30.09.2008.
ON BEHALF OF THE ACCUSED: WITNESSES: Nil.
DOCUMENTS:
Ex.D.1 Transferred Forms document, Ex.D.1 (a) Sig. of P.w.1, Ex.D.2 Share Transfer Form, Ex.D.2 (a) Sig. of P.w.1.
(SHANTHANNA ALVA. M) PRESIDING OFFICER, SPL. COURT FOR ECONOMIC OFFENCES, BANGALORE.
16 CC.No.235/09 17 21.09.2017 Complt.,- B.S.G., A.1 Co., rep. by A.2, A.2 - K.M.M., For Judgement.
(Judgement pronounced in open
court vide separate order)
ORDER
By exercising the power conferred u/s. 248 (1) of Cr.P.C., accused No.1 & 2 are acquitted from the offence punishable u/s. 628 of the Companies Act, 1956.
Bail bonds of accused No.1 & 2 and their sureties shall stand cancelled.
Presiding Officer.
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