Karnataka High Court
A.S. Pattabiraman And Etc. vs Smt. Shobha S. Hadli And Etc. on 11 March, 2004
Equivalent citations: IV(2005)BC525, [2005]127COMPCAS43(KAR), 2004CRILJ2265, 2004 CRI. L. J. 2265, 2004 AIR - KANT. H. C. R. 1353, (2005) 4 BANKCAS 525, (2004) 4 ICC 446, (2004) 3 KCCR 1706, (2004) 3 ALLCRILR 638, (2005) 127 COMCAS 43
ORDER M.S. Rajendra Prasad, J.
1. All these petitions involve common question of law and common arguments have been advanced by both sides, hence they are being disposed of by a common order.
2. All these criminal petitions are filed under Section 482 Cr. P.C.
3. The Cri. Pet No. 3819/03, is filed by the accused No. 2 praying the Court for setting aside the order dated 4-2-2003 passed in CC No. 2138/2003 on the file of the 13th Addl. C.M.M., Bangalore, wherein the learned Magistrate had taken cognizance of the case against the accused No. 2 -- petitioner and others for the offence punishable under Section 138 of the Negotiable Instruments Act (in short 'the Act').
4. The Crl. Pet. No. 3820/03, 3836/03, 3837/03 and 3838/03, are similar petitions filed by the accused No. 2 praying the Court for setting aside the order dated 4-2-2003 passed in CC No. 2141/2003, 2139/2003, 2140/2003 and 2142/2003 on the file of the 13th Addl. C.M.M., Bangalore, wherein the learned Magistrate had taken cognizance of the case against the accused No. 2 -- petitioner and others for the similar offence.
5. The Crl. Pet. No. 3821/03 filed by the accused No. 1 and 2 praying the Court for setting aside the order dated 26-11-2002 passed in CC No. 21668/2002, on the file of the 14th Addl. C.M.M., Bangalore, wherein the learned Magistrate had taken cognizance of the case against the accused petitioners and others for the similar offence.
6. The Crl. Pet. No. 3842/03, 3843/03, 3844/03, 3845/03 and 3846/03 are similar petitions filed by the accused No. 1, 4, 5, & 7 praying the Court for setting aside the order dated 4-10-2002 passed in CC No. 27331/2002, 27333/2002, 27334/2002, 27335/2002 and 27336/2002, on the file of the 14th Addl. C.M.M., Bangalore, wherein the learned Magistrate had taken cognizance of the case against the accused -- petitioners and others for the similar offence.
7. The Crl. Pet. No. 3839/03 filed by the accused Nos. 2, 3, 5 & 7 praying the Court for setting aside the order dated 9-8-2002 passed in CC No. 35409/2002, on the file of the 16th Addl. C.M.M., Bangalore, wherein the learned Magistrate had taken cognizance of the case against the accused-petitioners and others for the similar offence.
8. The Crl. Pet. No. 3840/03 filed by the accused Nos. 4 to 6 praying the Court for setting aside the order dated 7-5-2002 passed in CC No. 34677/2002, on the file of the 16th Addl. C.M.M., Bangalore, wherein the learned Magistrate had taken cognizance of the case against the accused petitioners and others for the similar offence.
9. The Crl. Pet. No. 2046/2003 and 2047/2003 are filed by the accused No. 2 praying the Court for setting aside the order dated 4-10-2002 passed in CC No. 27337/2002, on the file of the 14th Addl. C.M.M., Bangalore, wherein the learned Magistrate had taken cognizance of the case against the accused -- Petitioner and others for the similar offence.
10. The Crl. Pet. No. 3679/03, 3680/03, 3681/03, 3682/03, 3683/03 and 3684/03, are filed by the accused Nos. 2 and 8 praying the Court for setting aside the order dated 28-4-2003 passed in CC No. 17458/2003, 27481/2003, 27464/2003, 27480/2003, 27465/2003 and 27479/ 2003, on the file of the 14th Addl. C.M.M., Bangalore, wherein the learned Magistrate had taken cognizance of the case against the accused-petitioners and others for the similar offence.
11. The Court has heard the arguments of Sri C. V. Nagesh, the learned Senior Counsel on behalf of the petitioners and Sri Rajendra C. Desai, Sri Mahesh, Sri K. N. Dayalu, Sri Chandulal, Sri C. M. Poonacha, Sri Kiran V. Ron, Sri M. C. Ravikumar and Sri H. C. Shivakumar, the learned counsel on behalf of Complainants.
12. The learned counsel for the petitioners strenuously contended that the material on record clearly shows that the orders impugned are illegal and improper. There is no prima facie case made out against the petitioners for the said offence. He also contended that the material on record clearly shows that the petitioner Prakash Jain had seized to be the Director of the Company with effect from 4-10-2000 and there is absolutely no reason for proceeding against him in respect of these cases. He also contended that there is absolutely no legal obligation or liability on his part to face the prosecution. The learned counsel also contends that the learned Magistrate in each of these cases has made use of printed format. The settled law in this regard is to the effect that the order of taking cognizance is a judicial act and the same has to be exercised after due application of mind. The material on record clearly discloses that there is absolutely no application of judicial mind at all by the lower Court. The learned counsel also contends that there is absolutely no averment in the complaint that the petitioners had been in charge of the affairs of the company and had been responsible for conduct of the business of the Company. Such being the case the learned Magistrate had not been justified at all in passing the order impugned. The learned counsel also contends that the accused Prakash Jain, has placed on record the certified copy of the documents issued by Registrar of Companies and the same substantiate his contentions;
1. 2003 SCC (CRI) 151;
2. ILR (2002) 1 Kant 475 : (2002 AIR--Kant HCR 544 ; 2002 Cri LJ 1353);
3. ILR (1997) Kant 3239;
4. ;
5. 2003 Cri LJ 3292 (Guj);
6. ILR (2000) Kant 4773;
7. 2004 (1) Crimes 197 (Mad);
8. 2001 I DCLR 338 (Madras High Court);
9. Unreported Judgment in Crl. Pet. No. 1769/1998 -- DD No. 31-3-1999;
10. Unreported Judgment in Crl. Pet. No. 1439/1998 -- DD No. 20-9-1999;
11. Unreported Judgment in Crl. Pet. No. 492/1998 C/W Crl. Pet. No. 985/1998 --DD No. 24-7-2001.
Placing reliance on the ratio laid down in the said decision, he prayed for allowing the revision petitions.
13. On the contrary, the learned counsel for the respondents strenuously contended that the material on record clearly goes to show that the order impugned are legal and proper. There has been a prima facie case made out against the petitioners. The learned Magistrate after application of judicial mind and on perusal of the material on record had passed the orders impugned, which are sustainable in the eye of law. They also contended that the case putforth by the petitioners in these matters are required to be thrashed out at full dressed trial and this Court, at this stage, cannot exercise the powers under Section 482 Cr. P.C. and allow the petitions.
14. The learned counsel for the respondents in Crl. Pet. No, 2046/2003 and 2047/ 2003, in particular, contended that the accused had signed the cheques in question and as such there has been prima facie case against the accused. The learned counsel also contended that there is no illegality or irregularity committed by the Courts-below while taking cognizance and moreover, even if there has been any such illegality they are curable under Section 465 Cr. P.C.
15. The learned counsel for the respondents in Crl. Pet. No. 3842 to 46/2003, in particular, contended that the cheques in question had been issued towards discharge of legal liability, which arises under the contractual obligations. Moreover, the petitioners had not even replied to the legal notice and it is not now open for the petitioners to contend anything to the contrary. He also contends that no credibility could be attached to the copies of Form No. 32 at this stage.
16. The learned counsel for the respondents in Crl. Pet. Nos. 3819/03, 3820/03, 3836/03, 3837/03, 3838/03, 3839/03, 3679/03, 3680/03, 3681/03, 3682/03, 3683/03 and 3684/03, also contended that there has been a specific averments in the complaints that the accused had been responsible for the conduct of business of the Company and had also been responsible for the affairs of the company. Such being the case, the petitioners cannot now contend anything to the contrary. Moreover, the material on record also shows that the grounds urged by the petitioners in these cases will have to be thrashed out at full dressed trial.
17. The learned counsel for the complainant-respondents in Crl. Pet. Nos. 3679/ 03, 3680/03, 3681/03, 3682/03, 3683/03 and 3684/03, in particular, contended that there has been ample material to show that subsequent to the alleged date of resignation of the accused-Pattabhiraman, the Bank had honoured other cheques issued by the said accused and in the 9th Annual Report of M/s. S. N. Finance Limited, shows that Smt. Jyotsna Pattabhiraman, as a Board of Director of the accused Company and such being the case the contentions raised by the accused in this behalf cannot be considered by this Court at this stage.
18. All the learned counsel also contended that the accused-company had received deposits from the public and the accused cannot get-away from the prosecution on technical grounds.
19. The learned counsel also relied upon the following decisions in support of their contentions;
1. ;
2. ILR (2002) 1 Kant 2429 : (2001 AIR--Kant HCR 2692 : 2001 Cri LJ 4438);
3. ILR (2003) Kant 5137 : (2004 AIR--Kant HCR 340);
4. ILR (2003) Kant 4617 : (2004 AIR--Kant HCR 120 : 2004 Cri LJ 672).
5. 1997 (4) Kant LJ 23 : (1997 Cri LJ 4598);
6. (2000) 10 SCC 529;
7. 2002 Cri LJ 4444 : (2002 AIR--Kant HCR 2688);
8. 2002 Cri LJ 4564 (All);
9. 2002 Cri LJ 4226 (AP);
Placing reliance on the ratio laid down in the said decision, they prayed for dismissal of the revision petitions.
20. The Court has carefully gone through the material on record and has given its anxious thought over the rival contentions raised at Bar.
21. It is settled principle of law that the inherent powers of this Court under Section 482 Cr. P. C. are to be exercised with due care and caution and in rarest of rare cases.
22. In the first instance, Crl. Pet. No. 3840/2003 is taken up for consideration. As stated earlier, this petition by the accused Nos. 4 to 6 praying the Court for setting aside the order dated 7-5-2002 passed in C. C. No. 34677/2002 on the file of the 16th Addl. C.M.M., Bangalore, challenging the legality and propriety of the order impugned.
23. On presentation of the Private Complaint, the learned Magistrate had ordered for issue of process against seven accused persons for the offence punishable under Section 138 of N. I. Act. The accused 4, 5 and 7 have come up with the instant petition before this Court.
24. The learned counsel for the respondent has fairly submitted that he has no objections for allowing this petition as prayed for and let the criminal case proceed against the other accused persons.
25. Having regard to the facts and circumstances of the case and settled law in this regard, this Court is of the opinion that it would be in the ends of justice, if the petition is allowed as prayed for.
26. In the rest of the cases, the learned counsel for petitioners has submitted three fold arguments. In the first instance, he contends that printed formats had been made use of and the order of taking cognizance is a judicial order and there must be application of judicial mind by the learned Magistrate. Secondly, it is contended that there is no specific averment in the complaint to the effect that petitioners had been incharge of the affairs of the company and had been responsible for conduct of the business of the company. Thirdly, it is contended that so far as the petitioner in Crl. P. Nos. 3819, 3820, 3836, 3837, 3838, 3821/2003, first petitioner in Crl. P. Nos. 3842, 3843, 3844, 3845, 3846/2003, second petitioner in Crl. P. No. 3839/2003, and fourth petitioner in Crl. P. No. 3840/2003 is concerned, he ceased to be the Director of the Company with effect from 4-10-2000. The other petitioners in Crl. P. Nos. 3842, 3843, 3844, 3845, 3846, 3839, 3840/2003 are nothing to do with the affairs of the company and they are in no way liable to answer the clam of the complainant in each of these cases. The learned counsel also contended that the petitioners in Crl. P. Nos. 2046 and 2047/ 2003, second petitioner in Crl. P. Nos. 3679, 3680, 3681, 3682, 3683 and 3684/2003 had ceased to be Directors of the Company with effect from 20-3-2002, and the other petitioner in the said bunch of cases, by name Smt. Jyotsna Pattabhiraman, did not accept the post of Director in the accused company at all and as such she has nothing to do with the affairs of the accused company and she is not liable for prosecution in any of these cases.
27. In the first instance, let me consider the said first contention. On perusal of the material on record, it is seen that the complaints in these cases have been presented before the learned Magistrate and after recording the sworn statements and after completing other formalities, the learned Magistrate had passed the orders impugned taking cognizance and issued process to the accused. From the material on record, it is also seen that the learned Magistrate has left sufficient material to show that he had applied his judicial mind and thereafter the orders impugned came to be passed. Such being the case, the contention of the learned counsel for petitioners is unacceptable. This view of mine gets fortified by a decision of this Court rendered in case of Hanumanthi v. PCH Marketing Services (Bangalore), reported in ILR (2002) 1 Kant 2429 : (2001 AIR--Kant HCR 2692 : 2001 Cri LJ 4438), wherein it has been held that the order of the Magistrate issuing process is challenged on the ground that order relating to taking cognizance is "commonly typed formats with blanks filled up". It is pertinent to mention that though this Court severely deprecated this practice, did not interfere with the orders impugned because, at the time, of issuing process, the learned Magistrate had left sufficient material to show that the orders impugned had been well reasoned out. Hence, this Court holds that the said averment of the learned counsel for petitioners cannot be acted upon.
28. So far as the second contention is concerned, it is the specific case of the learned counsel for petitioners that there is no specific averment in the complaint to the effect that the petitioners had been in charge of the affairs of the company and had been responsible for conduct of the business of the accused company. In this regard, it is necessary to mention that all these petitioners have been arraigned as accused, as they happened to be the Directors of the company. Moreover, there has been specific mention in the complaints to the effect that the petitioners had also been responsible for day to day business of the accused company and had been responsible for issuing the cheques in question in favour of the complainants. In this regard, it is also necessary to mention that the statutory provisions require that all the persons, who had been responsible for conduct of business and affairs of the company, will have to be arraigned as accused in cases of this nature. Moreover, it is an elementary principle of law that the Court, while considering a case of this nature, should go by substance of the complaint and should not be hyper-technical in. this regard. In this regard, it is also necessary to mention a decision of the Apex Court , rendered in the case of Rajesh Bajaj v. State NCT of Delhi, wherein it has been held that the complainant is not required to reproduce verbatim of the Ingredients of the offence alleged in the body of the complaint and when the averments in the complaint prima facie make out a case for investigation, quashing of FIR is not proper. In view of the facts and circumstances of the case and in view of the law laid down by the Apex Court in the said decision and in view of the discussion made supra, in the opinion of this Court, it would not be proper for this Court to act upon the submission of the learned counsel for petitioners. Moreover, there has been ample material to show that each of the said petitioners had been responsible for conduct of the business of the accused company and had also been in charge of the affairs of the company. Under these circumstances, this contention of the learned counsel for petitioners also cannot be acted upon. 29. Now, coming to the third and last contention raised for the petitioners, it is pertinent to mention that accused Prakash Jain in the first set of cases and accused A. S. Pattabhiraman and Smt. Jyotsna Pattabhiraman in the other bunch of cases have produced copies of Form 32 issued by the Registrar of Companies to substantiate this aspect. It is pertinent to mention that accused Prakash Jain happened to be the signatory of some of the cheques in question and likewise, accused Pattabhiraman happened to be the signatory of the cheques in question in the other bunch of cases. In other words, what is stated by the complainants in the complaints have been denied by the petitioners in these cases and they have sought for allowing the petitions on the said scores. On the contrary, the complainant in each of these cases has also raised serious dispute with regard to the contentions raised by the other side, and so far as accused Smt. Jyotsna Pattabhiraman, a Director in the second bunch of cases, is concerned, the complainants have produced the Ninth Annual Report of the Company, which shows that the said accused has been described as one of the Directors of the accused company in the said bunch of cases. In other words, the fact in issue raised in these cases in this regard will have to be thrashed out at the full dressed trial. So far as the other accused in the first-bunch of cases also are concerned, the fact in issue will have to be thrashed out at the full dressed trial, in this regard, it is necessary to mention a decision of the Andhra Pradesh High Court, reported in 2002 Crl LJ 4226, rendered in the case of S. P. Subramaniam v. Vasavi Cotton Traders, wherein it has been held that the question whether or not the petitioner was a Director of the Company by the date, the cheques in question had been issued is a question of fact and cannot be gone into by Court under Section 482 Cr. P.C. It has been further held that the petitioners, during the course of trial, will have to establish that they were not responsible for day to day business of the company. It is also necessary to mention another decision of this Court, rendered in the case of K.S. Jayantha Kumar v. P.N. Paribas, reported in 2004 (1) Kant LJ 651 : (2004 AIR -- Kant HCR 340), wherein this Court has held that a proceeding under Section 482 Cr. P.C. cannot be allowed and proceedings before the criminal Court cannot be quashed against some of the Directors on the ground that they cease to be the Directors of the Company, where there has been specific averment to the effect that all the accused had been in charge of and responsible for conduct of business of the company at the relevant time. Moreover, in these cases, in addition to the specific averment, there has been sufficient material in this regard. Having regard to the facts and circumstances of the case, taking cue from the ratio laid down in the said decisions, this Court is of the considered opinion that the facts in issue will have to be thrashed out at the full dressed trial and this would not be the stage for this Court to interfere with the proceedings before the trial Court and grant relief to the petitioners by exercising inherent powers.
30. Having regard to the peculiar facts and circumstances of the cases, in the opinion of this Court, the ratio laid down in the other decisions cited by the Bar cannot be pressed into service to spell out a case in favour of the petitioners. It is also necessary to mention the statutory provisions of Section 482 Cr. P.C. which specifically lay down that this Court could exercise inherent powers and quash the proceedings in cases of this nature for the purpose of giving effect to any order under this Code, to prevent abuse of process of any Court or to secure the ends of justice. Having regard to the facts and circumstances of the case, in the opinion of this Court, the petitioners have not been able to make out any of the said grounds.
31. It is also necessary to mention another settled principle of law to the effect that the Court should exercise inherent powers with great care, caution and circumspection and in rarest of rare cases. Even on this score, in the opinion of this Court, these petitions are devoid of merits 82. For the foregoing reasons, Crl, P. No. 3840/2003 stands allowed and the order Impugned is hereby set aside. Consequently, the proceedings against A-4 to A-6 in C.C. No. 34677/2002 on the file of the XVI Addl. C.M.M. stand quashed, and accordingly the order dated 7-5-2002 in this regard is hereby set aside. However, the trial Court shall proceed with the trial of the case against the other accused persons.
Crl. P. Nos. 2046, 2047, 3819, 3820, 3821, 3836, 3837, 3838, 3839, 3842, 3843, 3844, 3845, 3846, 3679, 3680, 3681, 3682, 3683 and 3684/2003 are dismissed and the orders Impugned in these petitions are hereby maintained.