Madras High Court
Meena R.Sampath vs The State Rep. By on 7 April, 2005
Author: M.Chockalingam
Bench: M.Chockalingam
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 7-4-2005
CORAM
THE HONOURABLE MR.JUSTICE M.CHOCKALINGAM
CRL.O.P.(MD) No.3964 of 2004
Meena R.Sampath
Managing Director
Sri Venkatesa Paper and Boards Ltd.,
Swaminathapuram
Madathukulam 642 113
Udumalpet Taluk .. Petitioner
vs
1. The State Rep. By
The Inspector of Police
District Crime Branch
Dindigul
2. B.Bennie
(Impleaded as per orders of
Court made in CRL.M.P.(MD)
1782/05 dated 7.1.2005) .. Respondents
This criminal original petition is filed under Sec.482 of the Code of
Criminal Procedure praying to call for the records in C.C.No.286 of 2004 on the
file of the Judicial Magistrate No.II, Dindigul, and quash the charge sheet.
For Petitioner : Mr.N.Munirathina Naidu
for Mr.P.Saravana Sowmiyan
For Respondents : Mr.A.Ramar
Government Advocate (Crl. Side) - R1
Ms.P.V.Rajeswari for R2
:ORDER
This O.P. has been brought forth by the petitioner, who faces trial in C.C.No.286 of 2004 which was taken cognizance by the Judicial Magistrate No.II, Dindigul, under Sections 406 and 420 of I.P.C.
2. The de-facto complainant gave a complaint alleging that it rendered service to M/s.Sri Venkatesa Paper and Boards Ltd, for which there was a liability of Rs.7,47,500/- payable to the de-facto complainant; that on the request of M/s.Sri Venkatesa Paper and Boards Ltd., through its Directors, the same was deposited in the fixed deposit, on the promise to return the same on maturity; that the same was also matured on 8.5.2001; that there was a further promise of returning the same with interest; that it was again renewed for one year; that despite the maturity of the same, it was not repaid, and hence, it has become necessary to initiate proceedings. On receipt of the complaint, a case came to be registered by the State through the first respondent police under Sections 406 and 420 of I.P.C., and subsequently, it was taken cognizance by the Judicial Magistrate as Calendar Case referred to above.
3. While the matter stood thus, the accused has approached this Court for quashing the proceedings stating that M/s.Sri Venkatesa Paper and Boards Ltd., is a public limited Company; that it is governed by the special enactments namely The Companies Act; that it was a deposit made; that the company has been declared as a sick unit under Sec.22A of the Act; that it could not dispose of any of the assets without getting the consent of the Board for Industrial and Financial Reconstruction (BIFR); that apart from that, in view of the provision under Sec.22 of the Act, the de-facto complainant was barred from initiating any action, without the prior consent of the BIFR; that it was a deposit made to the Company in question, and thus, the provisions of the Companies Act would prevail the provisions of law as to the deposits made and accepted which are governed by Sections 58A and 58AA of the Act; that they are cognizable under the Code of Criminal Procedure; that Sec.58AAA of the Act would clearly reveal that every offence connected with or arising out of acceptance of deposits under Sec.58A or Sec.58AA would remain cognizable under the Code of Criminal Procedure, notwithstanding anything contained in Sections 621 and 624 of the Act; and that cognizance is possible only when a complaint is made by the Central Government or any Officer authorised in this behalf.
4. The learned Counsel appearing for the petitioner would further add that it was a deposit made; that there is nothing to indicate that at the time of making the deposit or getting the deposit, the petitioner had got any mens rea to cheat; that so long as it is not shown, the complaint for cheating has to fall; that there is no question of any entrustment, which would attract the provisions of the I.P.C., which would penalize the breach of trust, and thus, the penal provisions of Sections 406 and 420 of I.P.C. would not be attracted under the facts of the case, and hence, the proceedings pending in the hands of the lower Court, have got to be quashed.
5. Heard the learned Government Advocate for the first respondent on the above contentions.
6. The learned Counsel for the second respondent would submit that there was a deposit made by the petitioner herein, which would not fall within the ambit of the provisions of the Companies Act; that it was really an amount, to which the de-facto complainant is entitled by way of rendering services, and the same amount was deposited; that it became matured; that even after the date of maturity, there was a renewal; that at that time, it was well within the knowledge of the accused that the company has become sick and has been running in loss, and thus, it would be very clear that even at the time of the renewal, the accused had the mental frame to cheat; that so long as the deposit was not made either under Sec.58A or under Sec.58AA of the Act, the provisions of Sec.58AAA of the Act have no application; that it is true that a complaint has got to be lodged by the Central Government or any Officer authorized in this behalf, so long as the deposits are made under the provisions of Sec.58A or Sec.58AA of the Act; that the deposit in question would not fall within those provisions of law; that if a deposit is to be made under Sec.58A, necessary advertisements have got to be made; that in the instant case, the deposit was made not pursuant to an advertisement, and hence, it cannot be stated that if, in a given case, the advertisement was not done, the statement would be suffice to the Registrar of Companies; that whether any statement was made is the question of fact; that apart from that, the statements were made pertaining to the year 1998-99; but, these deposits have been made subsequently; that no material is available to indicate that the statements were made for the relevant period, and under the circumstances, the proceedings have got to be proceeded with, and the O.P. for quash has got to be dismissed.
7. After careful consideration of the rival submissions made, this Court is of the considered opinion that the O.P. has got to be dismissed as one devoid of merits.
8. The first contention of the learned Counsel for the petitioner that the deposit what was made, would fall within the provisions of the Companies Act, and if there is any default, it should be brought by way of a complaint before the Company Law Board cannot be countenanced at this stage. It is not in dispute that the complainant originally rendered service towards which the sum of Rs.7,47,500/- was payable, and there was a deposit to that extent, and a voucher was passed. Thus, it would be clear that it was not made out of any advertisement. Apart from that, so long as the deposit is not made either under Sec.58A or 58AA of the Act, no question of application of Sec.58AAA of the Act would arise. It would be more appropriate and advantageous to reproduce Sec.58AAA of the Companies Act, which reads thus:
"58AAA (1) Notwithstanding anything contained in Sections 621 and 624, every offence connected with or arising out of acceptance of deposits under Section 58A or Section 58AA shall be cognizable offence under the Code of Criminal Procedure, 1973 (2 of 1974).
(2) No Court shall take cognizance of any offence under sub-section (1) except on a complaint made by the Central Government or any Officer authorized by it in this behalf."
9. A very reading of the above provisions would make it abundantly clear that a complaint has got to be made by the Central Government or any Officer authorized in this behalf in respect of the offence, which is connected with or arising out of acceptance of deposits under Sec.58A or Sec.58AA. But, in the instant case, the facts and circumstances recorded above, would clearly indicate that it was not a deposit made either under Sec.58A or under Sec.58AA of the Act. Under the circumstances, this Court is of the firm view that the provisions of Sec.58AAA have no application in the case.
10. The next contention of the petitioner's side that at the initial stage of making the deposit, there was no mens rea to cheat cannot also be countenanced. Whether they have got intention to cheat or otherwise cannot be gone into at the initial stage. If the contention of the petitioner's side has got to be accepted, then in all the cases, where the deposits are made and subsequently, the parties are cheated, the defence would come forward with a plea stating that they had no intention to cheat, and therefore, the criminal proceedings could not be proceeded with. Hence, such contention cannot be accepted.
11. The decisions relied on by the learned Counsel for the petitioner and reported in AIR 2000 SUPREME COURT 2341 (HRIDAYA RANJAN PD. VERMA AND OTHERS V. STATE OF BIHAR) and in 2003 SUPREME COURT CASES (CRI) 703 (AJAY MITRA V. STATE OF M.P. AND OTHERS), pointing to the existence of the frame of mind for cheating at the initial stage of deposit, have no application to the present facts of the case. Thus, this Court is unable to appreciate all or any one of the contentions put forth by the learned Counsel for the petitioner to quash the proceedings.
12. In view of the above reasons, this criminal original petition is devoid of merits, and the same is dismissed. However, the petitioner is at liberty to raise all the contentions both factual and legal before the lower Court at the time of trial. The trial Court is directed to carry on expeditious trial.
7-4-2005 Index: yes Internet: yes To:
The Judicial Magistrate No.II Dindigul nsv/ M.CHOCKALINGAM, J.
CRL.O.P.(MD) 3964 of 2004 Dt: 7-4-2005