WITH CRIMINAL MISC.APPLICATION No. 201 of 1997 MANHARLAL CHUNILAL SHAH & 2 v. STATE OF GUJARAT & 1 & Ors.

7/12/1996. Being aggrieved by and dissatisfied with the same, the applicants have preferred both the applications for the aforesaid reliefs.

#7. Mr.S.V. Raju, learned advocate appearing on behalf of the respective applicants has vehemently submitted that the applicants have not committed any of the offences under sections 63, 68, 628 of the Companies Act, 1956. It is further submitted by him that there are no specific allegations against the respective applicants making out a case against them for the offences punishable under sections 63, 68, 628 of the Companies Act, 1956 as well as under sections 467, 471, 477A, 420, 34 and 120B of the Indian Penal Code.

#8. It is further submitted by Shri Raju that the dispute is of a civil nature and the complainant herself has resorted to civil remedy by filing a civil suit which is pending and CR.MA/590/1997 JUDGMENT therefore, the complaint filed by the respondent No.2 – original complainant is nothing but abuse of process of law and is the result of malafide intention of the complainant, which is filed for the purpose of harassing the applicants.

#9. It is further submitted by Shri Raju that the complaint does not disclose any offence nor does it alleges any specific allegation against the present applicants, save and except the vague allegations against all the accused and therefore, the complaint is required to be quashed and set aside and the impugned order of the learned Additional Metropolitan Magistrate, Ahmedabad issuing process / summons to the applicants vide order dtd.7/12/1996 is required to be quashed and set aside.

#10. It is submitted by Mr.Raju, learned advocate for the applicants that as held by the Hon'ble Supreme Court in catena of judgements that if the complaint is of civil nature, High Court shall exercise inherent powers by quashing the complaint.

#11. Mr.Raju, learned advocate has also relied upon the decision of this Court in the case of State of Gujarat Vs. Motibhai Jethabhai Makwana, reported in 1992 (2) GLH 306 submitting that the complaint against the applicants CR.MA/590/1997 JUDGMENT for the offences punishable under sections 467, 468, 471, 477A requires to be quashed and set aside.

#12. Mr.Raju, learned advocate for the applicants has relied upon the unreported decision of the learned Single Judge of this Court in the case of Sudhir Indravadan Nanavati Vs. State of Gujarat, rendered in the Criminal Misc. Application No.139 of 1997, whereby the learned Single Judge has quashed the impugned complaint qua original accused No.5 of the present complaint.

#13. Both these applications are opposed by Mr.R.C.Kodekar, learned Additional Public Prosecutor for the State and Ms.Megha Jani, learned advocate for the respondent No.2 – original complainant. While opposing both the applications, it is submitted by the learned advocates for the respondents that specific allegations against each of the applicants are made in the complaint and prima facie case is made out against the accused persons for the offences alleged against them. It is further submitted by them that merely because the complainant has resorted to civil remedy, it cannot be said that the applicants / accused persons have not committed the offence under the Companies Act and/or Indian Penal Code. It is further submitted that even in the order passed below the notice CR.MA/590/1997 JUDGMENT of motion, in the suit filed by the respondent No.2, the civil court has specifically observed that there is a misstatement in the prospectus by the accused persons. The learned advocates appearing on behalf of the respondents have heavily relied upon the decisions of the Hon'ble Supreme Court in the case of A.V. Mohan Rao and another Vs. M.Kishan Rao and another, reported in (2002) 6 SCC 174 and relying upon the said decision, it is requested to dismiss both the applications.

#14. Heard the learned advocates for the respective parties.

#15. This Court has considered the impugned complaint in detail and has gone through the averments and allegations made in the complaint. This Court has also considered relevant provisions of the Companies At more particularly sections 63, 68 and 628 of the Companies Act. It is not in dispute that all the applicants – original accused are signatories to the prospectus. There are specific allegations and averments against the respective applicants in the complaint, more particularly in para 10 of the complaint. Now, in the backdrop of the above, all the submissions made on behalf of the respective applicants are defences which are required to be considered and dealt with by the trial court on leading CR.MA/590/1997 JUDGMENT proper evidence at the time of trial. What is required to be considered at this stage is whether there is prima facie case against the applicants which requires further trial or and whether there are specific averments / allegations against the respective accused or not. At this stage, while considering the applications under sec.482 of the Code of Criminal Procedure, this Court is not required to consider in detail whether the accused persons are likely to be convicted or not. As held by the Hon'ble Supreme Court in the case of A.V. Mohan Rao (supra) power of quashing a criminal complaint and the proceedings initiated on its basis under sec.482 of the Code of Criminal Procedure is to be exercised very sparingly with circumspection that too in the rarest of rare cases. In the case before the Hon'ble Supreme Court the allegations against the accused persons were with regard to the commission of the offences under sections 60, 63, 68, 68A read with sec.621 of the Companies Act. Considering the decision of the Hon'ble Supreme Court in the case of A.V. Mohan Rao (supra) and averments and allegations in the complaint, the prayer of the applicants to quash the complaint cannot be accepted and the impugned complaint is not required to be quashed and CR.MA/590/1997 JUDGMENT set aside in exercise of the powers under sec.482 of the Code of Criminal Procedure.

#16. The main contention on behalf of the applicants is that the dispute is of civil nature and as the complainant herself has filed Civil Suit, the criminal proceedings should be quashed and set aside. As held by the Hon'ble Supreme Court in the case of Trisuns Chemical Industry Vs. Rajesh Agrwal and another, reported in (1999) 8 SCC 686, criminal prosecution cannot be thwarted merely because civil proceedings are also maintainable. Under the circumstances, merely because the original complainant has resorted to civil remedy by filing a civil suit, the impugned complaint for the offences under the Companies Act and Indian Penal Code is not required to be quashed and set aside.

#17. Now, so far as the reliance placed by the learned advocate for the applicants upon the unreported decision of the learned Single Judge by which the learned Single Judge has quashed the impugned complaint qua original accused No.5 is concerned, on going through the said judgement it is clear that in the said judgement, the learned Single Judge has specifically observed that the CR.MA/590/1997 JUDGMENT said decision is without entering into further details i.e. whether there is a civil dispute or not because other Criminal Misc. Applications (present applications) are pending in the court and if the court observes anything in the matter, it will affect the rights of the parties. Thus, the said decision will not be of any assistance to the applicants.

#18. Even otherwise, as stated above, there are specific allegations and averments against each of the applicants and whatever has been submitted on behalf of the applicants in support of their prayer to quash the complaint, all are defences which are required to be considered at the time of trial on leading proper evidence.

#19. For the reasons stated above, no case is made out to quash the impugned complaint in exercise of the powers under sec.482 of the Code of Criminal Procedure and/or to quash and set aside the summons / process issued by learned Additional Metropolitan Magistrate, Ahmedabad against the applicants and hence both the applications required dismissal and are accordingly CR.MA/590/1997 JUDGMENT dismissed. Rule is discharged and interim relief granted earlier, if any stands vacated forthwith, in both the applications. (M.R. SHAH, J.)