Gujarat High Court
Ashok Chinubhai Shah vs State Of Gujarat on 17 October, 2023
NEUTRAL CITATION
R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 2046 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 7072 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 7076 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 7077 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 7080 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 7081 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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ASHOK CHINUBHAI SHAH
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MR ASHISH H SHAH(2142) for the Applicant(s) No. 1
MS MH BHATT, APP for the Respondent(s) No. 1
MR KSHITIJ M AMIN, CENTRAL GOVERNMENT STANDING COUNSEL for
the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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NEUTRAL CITATION
R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023
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Date : 17/10/2023
COMMON ORAL JUDGMENT
1. All these applications are filed under Section 482 of the Code of Criminal Procedure, 1973 (`the Code' for short) for quashing and setting aside the complaints being Criminal Case Nos.54 of 2006, 446 of 1998, 447 of 1998, 271 of 2000, 435 of 2003 and 437 of 2003 respectively filed under the offences punishable under Section 68 read with Section 628 of the Companies Act, 2013 (`the Act' for short) pending in the Court of learned Additional Chief Metropolitan Magistrate, Ahmedabad and the order of issuance of process against the applicant under Section 204 of the Code.
2. As the common question of facts and law are involved in all these applications, at the request of learned advocates for the parties, they are heard together and disposed of by this common oral judgment.
3. The facts of Criminal Miscellaneous Application No.2046 of 2018, as stated in the application, are such that the applicant is a Director of M/s Lesha Steels Limited; that the said company floated public issue aggregating to Rs.3.06 crores; the company issued prospectus dated 3.12.1992; the Inspecting Officer had inspected the book of accounts of the Page 2 of 12 Downloaded on : Fri Oct 20 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined company under Section 209-A of the Act and submitted report on 12.9.2002; the Registrar of Companies issued show cause notice on 14.1.2006 alleging violation of provisions of Section 68 read with Section 628 of the Act; the Company submitted detailed reply on 3.2.2006; that the Government of India, Department of Company Affairs granted sanction for prosecution vide order dated 16.4.2004; that the respondent no.2 lodged the impugned complaint.
4. The facts of Criminal Miscellaneous Application No.7072 of 2018, as stated in the application, are such that the applicant company was registered as a public limited company; that the applicant-company had issued a prospectus and offered shares for subscription to the Indian public; that that books of accounts of the company were inspected under Section 209A of the Companies Act; that the Inspecting Officer had found violation and contravention of provisions of Section 209 and 309 read with Section 629A of the Companies Act and it was found that one Ashok C Shah has been continued as the Managing Director of the company without passing a resolution in General Meeting and without submitting Form No.25C with the Registrar of Companies and Registrar of Companies issued the notice; that the complaint was filed for the offence under Section 292 of the Companies Act read with Section 629A of the Act. Page 3 of 12 Downloaded on : Fri Oct 20 20:38:11 IST 2023
NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined
5. The facts of Criminal Miscellaneous Application No.7080 of 2018, as stated in the application, are such that the the applicant company was registered as a public limited company; that the applicant-company had issued a prospectus and offered shares for subscription to the Indian public; that the complaints were received from Ajay Amrutlal Gosrani and Sambharmal Jain regarding non-receipt of duly transferred share certificates; that the complaint was filed alleging non- receipt of duly transferred share certificates and therefore, alleged breach of provisions of Section 113(1) read with Section 113(2) of the Companies Act.
6. The facts of Criminal Miscellaneous Application No.7076 of 2018, as stated in the application, are such that the applicant company was registered as a public limited company; that the applicant-company had issued a prospectus and offered shares for subscription to the Indian public; that the books of accounts of the company were inspected under Section 209A of the Companies Act; that it was allegedly found that the company had given loans and made investments in other Body Corporate without passing resolution under Section 292 of the Act; that the complaint was filed for the offence under Section 292 of the Companies Act read with Section 629A of the Act.
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NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined
7. The facts of Criminal Miscellaneous Application No.7077 of 2018, as stated in the application, are such that the applicant company was registered as a public limited company; that the applicant-company had issued a prospectus and offered shares for subscription to the Indian public; that one Manoj Mehta had lodged the complaint regarding non- receipt of duly transferred share certificates; that Registrar of companies issued notice; that the complaint was filed alleging non-receipt of duly transferred share certificates and breach of provisions of Section 113(1) read with Section 113(2) of the Companies Act.
8. The facts of Criminal Miscellaneous Application No.7081 of 2018, as stated in the application, are such that the applicant company was registered as a public limited company; that the applicant-company had issued a prospectus and offered shares for subscription to the Indian public; that complaints were made by two persons namely Rajkumar Maheshwari of Jaipur and V.K.Negi of Delhi regarding non- receipt of allotment letter/share certificates; Registrar of Companies had issued notice; that the complaint is filed for breach of provisions of Section 73(2A) read with Section 73(2B) of the Companies Act.
9. Heard learned advocates for the parties. Page 5 of 12 Downloaded on : Fri Oct 20 20:38:11 IST 2023
NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined 9.1 Learned advocate MrShah for the applicants mainly submits that the impugned complaints are required to be quashed on the ground of limitation. He submits that the impugned complaints are filed after the period of limitation as provided under Section 468(2) of the Code in respect of offences punishable under Section 628 of the Companies Act. He submits that the offences are of the year 1992 and the complaints are filed in the year 2006 i.e. after a period of 14 years. He further submitted that on bare perusal of the complaints, the ingredients of the sections invoked are not satisfied. He, therefore, submitted that these applications are required to be allowed only on the ground of delay, though other grounds are raised in the applications.
10. Per contra, learned advocate Mr.Amin for the respondent no.2 has strongly opposed the prayers made in the applications. However, he could not justify the inordinate delay of 14 years caused in filing the complaints. He, therefore, prayed to pass appropriate order in the facts of the cases.
11. I have considered the rival submissions and perused the material placed on record.
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NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined
12. On bare perusal of the impugned complaints, there is a gap of more than one year between the offence and date of filing of the complaint. Section 468 of the Code provides as under:
"468. Bar to taking cognizance after lapse of the period of limitation-
(1) xxxx (2) The period of limitation shall be -
(a) Six months, if the offence is punishable with fine only;
(b) One year, if the offence is punishable with imprisonment for a term not exceeding one year.
(3) Three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years."
13. The offences registered in the present applications and the punishment prescribed for that can be tabularized as follows:
Case No. Criminal Case No. Sections invoked Punishment 2046 of 2018 54 of 2006 Sections 68 read Section 68 :
with Section 628 imprisonment for of the Companies a term of five Act. years Section 628 :
Imprisonment for a term of two years.Page 7 of 12 Downloaded on : Fri Oct 20 20:38:11 IST 2023
NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined 7072 of 2018 446 of 1998 Section 73(2B) Imprisonment for a term of one year.
7076 of 2018 447 of 1998 Section 113(1) Punishable with read with Section fine.
113(2) of the
Companies Act.
7077 of 2018 271 of 2000 Section 113(1) Punishable with
read with Section fine.
113(2) of the
Companies Act.
7080 of 2018 435 of 2003 Section 269 and Punishable with
309 read with fine.
Section 629A of
the Companies
Act
7081 of 2018 437 of 2003 Section 292 read Punishable with
with Section 629A fine.
of the Companies
Act.
Thus, in view of Section 468 of the Code, all the complaints are time barred and filed beyond the period of limitation, for which there is no explanation coming forth. Therefore, without going into the further merits of the cases, these applications are required to be allowed mainly on this ground of delay.
14. Further, it will also be fruitful to mention the judgment of Hon'ble Supreme Court in the case of State of Haryana V/s Bhajan Lal reported in AIR 1992 SC 604, wherein the Hon'ble Supreme Court has observed thus - Page 8 of 12 Downloaded on : Fri Oct 20 20:38:11 IST 2023
NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined "In the backdrop of the interpretation of the various relevant provisions of the Code under Ch.XIV and of the principles of law enunciated by this court in a series of decisions relating to the exercise of the extraordinary power under Art.226 or the inherent powers under sec.482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under sec.156(1) of the Code except under an order of a Magistrate within the Page 9 of 12 Downloaded on : Fri Oct 20 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined purview of sec.155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-
cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under sec.156(2) of the Code. (5) 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.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/ or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
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NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
15. It is also relevant to refer to the judgment of the Hon'ble Apex Court in the case of Inder Mohan Goswami and Another versus State of Uttaranchal reported in (2007) 12 SCC 1, more particularly para : 23 & 24 thereof, which read as under :
"23. This Court in a number of cases has laid down the scope and ambit of courts' powers under Sec. 482 CrPC. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court. Inherent power under Sec. 482 CrPC can be exercised:
[(i) to give effect to an order under the Code;] [(ii) to prevent abuse of the process of court, and] Page 11 of 12 Downloaded on : Fri Oct 20 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/2046/2018 JUDGMENT DATED: 17/10/2023 undefined [(iii) to otherwise secure the ends of justice.]
24. Inherent powers under Sec. 482 CrPC though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself'. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the statute. Discussion of decided cases."
16. This Court has already decided the issue of delay in Criminal Miscellaneous Application Nos.17966 of 2020 and allied matters on 26.7.2023 and considering the same, these applications are required to be allowed.
17. Resultantly, all these applications are allowed qua the present applicants. Criminal Case Nos.54 of 2006, 446 of 1998, 447 of 1998, 271 of 2000, 435 of 2003 and 437 of 2003 respectively pending in the Court of learned Additional Chief Metropolitan Magistrate, Ahmedabad and the consequential proceedings, if any, are hereby quashed and set aside qua the present applicants only. Rule is made absolute. Direct service is permitted.
(SANDEEP N. BHATT,J) SRILATHA Page 12 of 12 Downloaded on : Fri Oct 20 20:38:11 IST 2023