Madras High Court
Ms. Sowmya Parameswaran vs A.A. Shahul Hameed on 30 January, 2020
Author: N. Sathish Kumar
Bench: N. Sathish Kumar
Crl.O.P.Nos.922 and 14500 of 2022
and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022
THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on Delivered on
12~08~2022 23~08~2022
CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
Crl.O.P.Nos.922 and 14500 of 2022
and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022
Ms. Sowmya Parameswaran .. Petitioner/9th Accused
[in Crl.O.P.No.922 of 2022]
Raghu .. Petitioner/1st Accused
[in Crl.O.P.No.14500 of 2022]
.Vs.
A.A. Shahul Hameed .. Respondent/Complainant
[in both Crl.O.Ps.]
Prayer: Criminal Original Petitions filed under Section 482 of Cr.P.C.to call for the
records pertaining to C.C.No.220 of 2022 on the file of the learned Judicial
Magistrate No.I, Chengalpattu and quash the same.
For Petitioners : Mr. R. Rajesh
[in Crl.O.P.No.922/2022]
Mr.P. Jesus Moris Ravi
Page 1 / 19
https://www.mhc.tn.gov.in/judis
Crl.O.P.Nos.922 and 14500 of 2022
and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022
[in Crl.O.P.No.14500/2022]
For Respondent : Mr. H. Imthiaz Ahmed
[in both Crl.O.Ps.]
COMMON ORDER
The Criminal Original Petitions have been filed to quash the criminal proceedings against the petitioners for the offences under Section 120B, 379, 406, 420, 447, 467, 468, 469, 471 and 506(1) I.P.C. in C.C.No.220 of 2021 pending on the file of the learned Judicial Magistrate No.I, Chengalpattu.
2. The Petitioner in Crl.O.P.No.922 of 2022 is 9th Accused and the Petitioner in Crl.O.P.No.14500 of 2022 is 1st Accused in C.C.No.220 of 2021 before the trial Court. Since both the Criminal Original Petitions are arising out of the above case in C.C.No.220 of 2021, this Court is inclined to dispose of both the Criminal Original Petitions in a common order.
3. A private complaint has been filed against 11 persons including Directors of company, previous Directors, Chartered Accountants, Company Secretary and also Sub-Inspector of Police. The crux of the allegations in the private complaint are Page 2 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 as follows:
3.a. The Complainant was originally working under A2 one P.I.Peter, who was running a company known as “Noni Biotech Private Limited”, as a factory Manager. A1 is also working in the same Company. Since the above company was about to be closed, the defacto complainant and A1 started a company called “Herb Nutra Lab Pvt.Ltd.,” in the year 2017. A2 has entered into a Deed of Assignment to assign the trade mark in favour of the Herb Nutra Lab Pvt. Ltd., As per the agreement between the parties Health Drink has been produced by the Herb Nutra Lab Pvt.Ltd., and the rights have been given to the other company of A2 known as “Wellness Noni Ltd.,” Accordingly, the company was running healthily.
3.b. Due to the difference of opinion and disputes between the Directors and other Director/promoter A1 was carrying out illegal activities including tax evasion, production of adulterated drinks, inside the company premises, misappropriation of funds, inclusion with the employees of the company called “Wellness Noni Limited.” A1 conspired with others and inducted two new persons as directors and removed the name of the defacto Complainant as the Director of the Company by Page 3 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 creating forged and manipulated documents in MCA e-portal with the help of A10 and A9 Chartered Accountant and Company Secretary respectively. Besides when the defacto complainant was not in the office, the documents were also removed by A1. The defacto complainant also came to know that new Director Kokila was inducted in respect of which he has given a complaint before the Sub-Inspector of Police as he has failed to take action. He has also made as Accused No.8.
According to the defacto complainant A9 has forwarded Forms to the RoC indicating that Kokila was appointed as Director and the auditor was also filed such documents before Registrar of Companies. The previous complaint given by the defacto complainant pending investigation by the Kelambakkam Police. According to him all the documents submitted to the Registrar of Companies are forged documents. Hence, he filed private complaint.
4. On a perusal of the private complaint the trial Court took cognizance of the same. Learned counsel appearing for the Petitioner would contend that there is a dispute between the Directors and new Directors were inducted. Merely because the same has been notified with the Registrar of Companies, such action never be construed as creation of false documents and amount to forgery. It is the contention Page 4 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 that similar complaint is also given before the Police in Cr.No.27 of 2021 and the FIR has been registered which was also challenged before the Court in Crl.O.P.No.3636 of 2021 and this Court has granted stay of investigation on 26.02.2021. On the same set of allegations again a private complaint has filed against 11 persons including the Company Secretary and Chartered Accountant who said to have submitted documents to the Registrar of Companies. Therefore, merely because there was a change of Directorship certain documents were filed before the Registrar of Companies such act would never amounts to forgery or cheating or creation of false documents. Hence, it is the contention of the learned counsel that if at all any mismanagement or suppression, the remedy of defacto complainant would lie before the Tribunal under the Companies Act and by way of criminal case.
5. It is also submitted that the defacto complainant has already filed an application before the NCLT to de-register the approved DIR-12 Form SRN No.R30767263 dated 30.01.2020 and to restore the defact complainant as Director in the MCA 21 portal maintained by the Registrar of Companies. The National Company Law Tribunal has dismissed the application not only on the ground of Page 5 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 non-joinder of necessary parties but also for want of evidence. Hence, his contention is that the entire grievances raised in the private complaint are with regard to the oppression and mismanagement. Therefore remedy lies against such action is only under Section 241 of the Companies Act. Hence, merely some Directors were removed and oppression and mismanagement has raised, the same will not attract any of the offences. Hence seeks to quash the entire private complaint.
6. Whereas the learned counsel appearing for the Respondent submitted that the Ministry of Corporate Affairs has enquired the complaint and its letter dated 19.10.2020 indicated that defacto complainant was illegally removed from the company. Therefore he has been advised to approach appropriate court of law and get orders from judiciary to de-register the approved Dir-12 form. Therefore, it is the contention of the learned counsel for the respondent that, Registrar of Companies has also found that the Respondent has been illegally removed from the company. All the forms submitted are not correct and fabricated. Since, the Registrar of companies has found that there is fabrication of documents, the complaint is very much maintainable. The trial Court has taken cognizance of the Page 6 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 above offences in accordance with law. It is his further contention that the earlier FIR was against 7 persons with regard to various other offences, whereas the private complaint is filed on different cause of action. Hence, submitted at this stage the Private Complaint cannot be quashed.
7. I have perused the entire materials. Admitted documents also filed by both sides. On perusal of the entire private complaint the main dispute appears to be with regard to the removal of the defacto complainant from the company by other directors. The allegation in the private complaint show as if the false documents have been filed in the Dir-12 Form. Therefore, all of them should be prosecuted including the Company Secretary and Chartered Accountant who have filed such form. It is relevant to note that as far as A9 is concerned the company vide letter dated 18.12.2019 has sent certain documents for filing form Dir-12 for appointment of Mrs. Kokila as an Additional Director attaching certified true copy of the Board Resolution appointing Mrs.Kokila as Additional Director and consent from Mrs. Kokila to act as Director, Copy of the Board Minutes dated 16.12.2019 and extract of Director's Register. Pursuant to the above communication addressed to A9, Form No.DIR-12 was uploaded though A9. Except that she has not done anything to the Page 7 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 company. It is relevant to note that the entire allegation in the private complaint revolve around the removal of the defacto complainant from the company. According to him the form submitted to the Registrar of Companies in Form No.DIR-12 with the false documents and thereby committed a forgery. Much emphasis has been made by the learned counsel for the Respondent on the communication sent by the Ministry of Corporate Affairs. Though the letters dated 05.02.2020 and 30.04.2020 of the Ministry of Corporate Affairs indicate that based on the complaint of the defacto complainant reply sought from A9 and others, the Registrar of Companies in its letter dated 30.04.2020 observed that though kokila is appointed as Additional Director, however in the said form the designation of Kokila shown as Director instead of Additional Director. Hence filing of Form DIR-12 dated 20.12.2019 for the appointment of Smt. Sadagoban Kokila as Director in the Board should be invalidated and marked as defective as per Rule 10(6) of Companies (Registration offices and fees) Rules 2014. Accordingly the said SRN marked as Defective.
8. Much reliance has placed on the above observation made by the Registrar or Companies. It is relevant to note that Registrar of Companies did not find that Page 8 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 the very form itself is forged one by creation of false document. But it is only found that since Kokila was appointed as Additional Director, it is uploaded as Director, which are defective as per the Rules. Therefore, it cannot be said that the Registrar of Companies have found that the very forms have been created and forged. The letter of the company dated 18.12.2019 itself indicate that Mrs. Kokila was appointed only as an Additional Director. Therefore, she was shown as Director instead of Additional Director, it cannot be said that there was a forgery of document. It is only a defect as observed by the Registrar of Companies. The Registrar of Companies has also held that removal of Directorship has not been done in accordance with provision of Section 169 of the Companies Act, 2013. therefore, the matter has been referred to Directorate as per rule 11 of the Companies (Registration office and fees) Rules, 2014 and held that on receiving the instructions action will be taken accordingly.
9. Thereafter, another letter dated 19.10.2020 the Registrar of Companies has directed the defacto complainant to approach appropriate Court of law and get orders from judiciary to de-register the approved DIR-12 Form SRN No.R30767263 filed for removal of Directorship. Pursuant to the above Page 9 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 directions, the defacto complainant has filed a petition before the NCLT. By order dated 01.06.2022 the National Company Law Tribunal (NCLT) has dismissed the application for non-joinder of necessary parties and also for want of evidence. It is also relevant to note that in a similar set of allegations an FIR has been registered in Cr.No.27 of 2021 by the Kelampakkak Police against 7 persons, which was challenged before this Court and this Court has granted stay of investigation Crl.O.P.No.3636 of 2021 on 26.2.2021. It is relevant to note that the crux of the allegations in the private complaint and allegations found in the FIR in Crl.No.27 of 2021 is almost similar. The only difference is in the FIR only 7 persons were implicated. Now 4 other persons also implicated and totally 11 persons were implicated in the private complaint. The entire allegation in the private complaint revolving around the removal of the defacto complainant from the directorship and filing of the forms before the Registrar of Companies. As discussed above, Registrar of Companies have never found that the documents are forged or created. He has only observed that instead of Additional Director it is uploaded as Director. Therefore, it is held to be a defective. Such being the position, unless there is evidence of creation of false documents the forgery will not be attracted. It is relevant to note that the main allegation of the defacto complainant is with regard to Page 10 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 the removal of the directorship is oppression and mismanagement. Such a view of the matter remedy lies elsewhere not by way of criminal prosecution. Under Section 241 of the companies Act the defacto complainant has to approach only the Company Law Tribunal for appropriate relief.
10. Except the general allegations that the documents have been forged, no other allegations are found in the complaint. To attract the offence of cheating, there must be a deception on any person to deliver any property to any person, or to consent that any person shall retain any property or intentionally induced to do or omit to do anything which he would not do or omit if he were not so deceived and which act of omission causes or likely to causes damage or harm to the person induced in body, mind, reputation or property is said to be cheating. None of the allegation falls under the definition of cheating to attract the offence under Section 420 I.P.C.
11. As far as Section 406 I.P.C. is concerned, admittedly the defacto complainant was the director, his grievance is that he was removed from the directorship. When the company was managed by all the directors, the question of Page 11 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 entrustment by the one of the directors to others will also not arise, all are equally entitled to look after the affairs. In such a view of the matter the offence under Section 406 I.P.C. also would not be attracted. The entrustment has not been established mere dispute on the affairs of the company over the mismanagement and oppression, the offence under Section 406 I.P.C. would not be attracted. As far as Section Section 120B and 379 I.P.C. except general allegations of filing a Form the conspiracy cannot be inferred. The circumstances must clinchingly establish that there must be a conspiracy. Mere dispute in a company and merely because the defacto complainant was removed from the company by valid resolution, without challenging the same one cannot infer that there is a conspiracy.
12. Similarly, to attract the offence under Section 379 I.P.C., except the general allegations in the complaint that petitioners documents have been removed no particulars whatsoever given. Therefore, even the entire statements have been taken on face value, the offence under section 379 I.P.C. on the basis of the general allegation would not be attracted. Admittedly other directors were also in the helm of affairs of the company. Therefore, the question of trespass also will not arise. As far as the Section 467, 468, 469 and 471 I.P.C. are concerned mere change of Page 12 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 directorship without establishing forgery or any finding by Tribunal in this regard these offences cannot be inferred.
13. It is relevant to note that when any inspection or enquiry or investigation is required with regard to the affairs of the company, a separate proceedings are contemplated under the Companies Act 2013. Chapter XIV deals with enquiry, inspection and investigation. Section 206 of the Companies Act deals with the power to call for information, inspect books and conduct enquiries on the basis of the information received by the Registrar. On such investigation, if it is found that the business of a company is being carried for fraudulent or unlawful purpose or not in compliance with the provisions of the Act or if the grievances of investors are not being addressed every officer of the company who is in default shall be punishable for fraud in the manner as provided under section 447. Similarly, apart from the registrar, the Central Government may also authorize any statutory authority to carry out the inspection of books of accounts of a company or class of companies as per clause 6 of Section 206 of the Companies Act, 2013. Section 207 of the Companies Act deals with conduct of inspection and enquiry. Section 208 contemplates further investigation on the basis of the recommendation made by the Page 13 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 Registrar or Inspector. Section 210 deals with investigation of the affairs of the company where the Central Government is of the opinion that it is necessary to inspect into the affairs of the company and may Order investigation into the affairs of the company. Section 211 deals with establishment of Serious Fraud Investigation Office. Section 212 deals with investigation into the affairs of the company by serious fraud investigation office. Sub Section 6 of section 212 reads as follows :
“(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, 1[offence covered under section 447] of this Act shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless?
(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence Page 14 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 and that he is not likely to commit any offence while on bail:
Provided that a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs:
Provided further that the Special Court shall not take cognizance of any offence referred to this sub~section except upon a complaint in writing made by?-
(i) the Director, Serious Fraud Investigation Office; or
(ii)any officer of the Central Government authorised, by a general or special order in writing in this behalf by that Government.” Sub section 6 of Section 212 makes it very clear that the offence covered under section 447 of the Companies Act shall be cognizable in nature. The second proviso of the above section makes it clear that the Special Court shall not take cognizance of any offence referred to this Sub~section except upon a complaint in Page 15 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 writing made by the Director, Serious Fraud Investigation Office or any office of the Central Government authorized by a general or special Order in writing in this behalf by that Government in this regard. Therefore, to maintain the prosecution for the offence of fraud, a complaint ought to have been made by either by the Director, Serious Fraud Investigation Office or any office of the Central Government authorized by a general or special Order by the Government. To find out the irregularities of the fraudulent activities only, Chapter XIV has been specifically made in the Companies Act.
14. It is also relevant to note that even in mismanagement, oppression, complaint by any of the minority shareholders, the remedy lies under section 241 of the Companies Act for oppression or mismanagement. Only if the Tribunal gives any finding that there are fraudulent activities and fraud has been committed by any person, give cause of action to proceed under section 447 of the Companies Act. Chapter XIV and XVI of the Companies Act are fact finding procedures.
15. Therefore, except holding that the filing of the Form is defective it is not the finding of the Registrar of Companies, that act of the company was fraudulent. Page 16 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 Therefore, when there is not such factual finding has been recorded with regard to the affairs of the company as to the fraud, merely on the basis of a private complaint, the person cannot be prosecuted. Therefore, the offence under Section 467, 468, 471 I.P.C. also would not be attracted. It is also to be noted that similar set of allegations was pressed into service earlier in Cr.No.27 of 2021 against 7 persons, the FIR was stayed by this Court in Crl.O.P.No.3636 of 2021. Thereafter, a private complaint was filed implicating another 4 accused with same set of allegations which is nothing but an abuse of process of law. Accordingly, this Court hold that the entire private complaint is nothing but an abuse of process of law. It is also relevant to note that the contention of the defacto complainant to de- register his name on the similar set of grounds before National Company Law Board was also got dismissed. In such a view of the matter, continuing the prosecution on the basis of the private complaint is nothing but abuse of process of law. Accordingly, the proceedings in C.C.No.220 of 2021 is quashed.
16. In the result, both the Criminal Original Petition are ordered. The proceedings in C.C.No.220 of 2021 pending on the file of the learned Judicial Magistrate No.1, Chengalpattu is quashed. Consequently, connected Miscellaneous Page 17 / 19 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 Petition is closed.
23.08.2022
ggs
Internet : yes
Index : yes
Speaking/Non-spearking order
To
The Judicial Magistrate No.1
Chengalpattu.
N. SATHISH KUMAR, J.
ggs
Page 18 / 19
https://www.mhc.tn.gov.in/judis
Crl.O.P.Nos.922 and 14500 of 2022
and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 Order in:
Crl.O.P.Nos.922 and 14500 of 2022 and Crl.M.P.No.7978 of 2022 in Crl.O.P.No.14500 of 2022 23.08.2022 Page 19 / 19 https://www.mhc.tn.gov.in/judis