Kumar upadhyay vs. union of rndia and anotherle, punit Beriwara vs Limited Vs. State of Uttar Pradesh and o

Order

The present criminal petition is Rled by the petitioner/accused No.4 under Section .l82 of Cr.P.C., seeking to quash the proceedings against her in CC No.410 of 2018 on the file of the tearned XII Addit'tonal Chief Metropolitan Magistrate at Nampally, registered for the offences under Sections 420, 403, 406 and 120(b) of IPC. Subsequently, vide orders in IA No.1 of 2025 calendar case number is amended as CC No.'1112 of 2024 instead of CC No.410 of 2018.

2. Heard Sri S.Niranjan Reddy, leamed senior counsel appearing on behalf of Sri A.Chandra Shaker, leamed counsel for the petitioner, Sri Nachiketa loshi, learned senior counsel appearing for Mrs.Manasvi Reddy lakka, learned

counsel for the respondent No.2 and Sri E.Ganesh, learned Assistant Public Prosecutor for the State/respondent No.1.

3. The case as projected by the 2"d respondent against the petitioner and other accused is that on 25.03.20L7 the 2d respondent, which engaged in the business of sporting and other recreational activities, lodged a complaint alleglng that the accused l{os.2 to 4, representing accused No.1 approached the complainant through a common friend viz. Chamundeshwari Nath and stated that the accused No.2 promoted a super car racing company by nan€ M/s.Machdar Motorsports ?rivate Limited (hereinafter referred to as "MMSPLI/AI and is allocating franchises in 9 cities and the accused Nos'3 and 4 misrepresented that the franchises are pretty much on demand and the accused No.2 stated that various celebrities and their business houses have SsLrght their a ') \ Page 2 of20 ( franchises quoting cine actor Mr.Nagarjuna for Hydr: rbad, Bollywood actor Mr.Shahrukh Khan for Mumbai and cricketer Mr.Sach r Tendulkar for Delhi. Stating thus the accused misguided and misrepresent d respondent No.z to invest in and opt for Chennai Franchise. Accordingly, tl"e complainant agreed to invest by taking Chennai Franchise. The subscription fee for one year was Rs.12,50,00,000/- payable in three stipulated instalmert . After deliberations, the complainant company was induced to pay an am()l nt of Rs.7,44,52,500/- towards opting Chennai Franchisee and accordingly, ttrt complainant paid the said amount through cheque bearing No.071494 date1 14.11.2011 drawn on Axis Bank, Film Nagar Branch, Hyderabad, which was er:ashed by the accused No.l company on 24.11.2017. Even after lapse of thrr:, months, the accused failed to start the business and postponed and d i ggedon the matter. Thereafter, upon conducting a little enquiry, the complair tnt came to know that not more than four franchises have been subscribed out c'the total 9 franchises and none of the remaining subscribers paid any ccr;iderable amount for subscription of franchise. A1 company never got the rerr lining franchises filled up nor started the i1 Car Racing Series even after a y:ar. Upon persistent demands of the complainant, 41 represented by A2 agrerr to refund an afnount of Rs.5,00,00,000/- in two instatments out of Rs.7,44,52 5OOl-. Accordingly, a memorandum of understanding was entered into c r O7.OZ.2OL2 fixing

10.04.2012 as first date for payment of Rs.2,50,00,000/- : nd remaining arnount of Rs.2,50,00,000/- to be paid on or befiore 10.06.2012. The copy of the said MOU was kept with the accused No.1. However, even after expiry of the said dates, the accused did not repay the amount as agreed. Hence, the complaint. 4. Basing on the above complaint, the responden(police registered FIR No.59 of 2017, dated 25.03.2017, conducted investigation, arrested accused No.2 on 24.01.2018, examined LWs.l to 14, collected documents and after completion of investigation laid charge-sheet against the accused Nos.1 to 5 before the trial court for the offences under sections 42o,403,406 and 120(b) of Irc. Accused No.6 was stated to be absconding. The accused No.3 obtained anticipatory bail. Accused Nos.4 and 5 were issued notices under section 41(A) of Cr.P.C. The trial Court took cognizance of the offences with which the accused were charge-sheeted and assigned calendar case.

5. While proceedings are still pending before the triat Court, the petitioner filed the present criminal petition. The principal contention advanced on behalf of the petitioner is that ttre very initiation of criminal proceedings against her. including the registration of the FIR, filing of the complaint and the subsequent filing of the charge-sheet, is not only unwarranted but also constitutes a gross and manifest abuse of the legal process. To provide necessary context, M/s. Machdar Motor Sporb private Limited, through its Director Mr.Darshan Uthappa Machamada (Accused No.2), approached Universal Collectabillia Private Limited (hereinafter "U-ff_.1 sometime around Juty, 2011, seeking investment into a motor sporE venture to be launched under the name and style "il Car Racing Series" (hereinafter rgferred to as..the League,,), which -t \ &rw-+..4!::€'.1rr€tz:i1.e sal, EEts*r@IB - Page 4 of20 ft; was to be launched in December, 2011. At that relev rnt point of time, the petitioner was serving as the Managing Director of UCPL. (a) In connection with the proposal for inve;tment, the petitioner received an email on 18.06.2011. Prior to finalizing an! nvestment or entering into any understanding the petitioner, acting in her offic i; I capacity on behalf of UCPL, prudently sought certain key clarifications fronr MMSPL and from 42 specifically. These clarifications pertained to the bus ness model, ongoino operations, list of existing investors and the nature o' the promoters behind MMSPL. Such queries were necessary and legitimate as t te petitioner, acting in her fiduciary capacity for UCPL. was expected to make ir lecision regarding any financial investment. In response, A2 assured and repres )nted to the petitioner that MMSPL was promoted by three individuals viz. tr r. Joy Varghese, Mr. Darshan himself, and Mr. Vinod Sudhindran Menon/A3 )n the basis of these assuEnces and representations, and in reliance on the *rr re, UCPL proceeded to invest in the League through MMSPL. It was mutually i( reed that UCPL would acquire a 20olo eQuit| stake in MMSPL. Belio/ing in goorl faith that such shares would indeed be allotted, UCPL proceeded with the in\( stment. A term s?"reet dated 11.07.2011 was accordingly executed between UCI'I and MMSPL, ouflining the terms and conditions governing the investment. lursuant to this, two cheques amounting to a total of Rs.4,00,00,000/- wrr : issued by UCPL to MMSPL, dated 12.07.2011 and 11.08.2011, respectively. PaBe 5 of20 (b) The Complaint, FIR and Charge-sheet are vague, indistinctive and do not set out any facts or grounds whatsoever, on which an offence of cheating and criminal breach of trust could be eraen prima facie made out against the Petitioner. The compraint, FIR and crurge-sheet fair to discrose any ingredients of the offences with which the petitioner is charge-sheeted. Even going by the averments made in the compraint, it is evident that the aileged investrnent made by respondent No.2 into MMSPL, was paid through a cheque, drawn on the personal account of Mr.Kanumuru Raghurama Krishnam Raju, which was encashed by MMSpL. If at all respondent l',10.2 or Mr.lcnumur are aggrieved, the only remedy ries as against MMspL in a civir craim and certainry not against the Petitioner. The respondent No.2 has initiated criminar proceedings against the petitioner with a view to brackmair and coerce her into making payments, even though the petitioner is not at all liable for the sarne. Respondent No.2 has also alleged in the complaint that respondent No.2 and MMSpL entered into the MOU for refund of amount of Rs.5 Crores. The petitioner is totally unaware of the said MoU and in any event going by the averments in tfre compraint itsert it would become evident that no representation wm made by the petitioner in any manner whatsoever as the agreement was entered into between MMSPL and respondent No.2. (c) The alleged investment said to have been made by the respondent No.2 into MMSPL was based on its own due diligence. In any event, prior to investing into MMSPL, the said respondent would have done sufficient due / \ \ Page 6 of20 , (-: diligence on the risks involved in making such invest'l ents. the growth and prospects of MMSPL and the League. The respondent No would have also been awarre at the time of making the investments said t(' have been made into MMSPI- that the investments into MMSPL were subject :t risks like in any other business, Therefore, merely because respondent No'2 m'l not have been able to reap profiB from its investment into MMSPL and/or rtx cver its investment in MMSPL,itdoesnotgiverespondentNo.2therighttocorl'ertacivilclaimagainst -- e Leamed Magistrate l'lMSiPL into a criminal c.lse against the Petitioner. eroneously referred the complaint for investigation witt( ut considering the fact that the same was investigated by the police and final r€ )ort was filed referring the dispute as civil in nature. The learned magistrate ir stead of following the procedure laid down under the code and criminal rules t I practice mechanically refened the complaint to police for investigation without ( lnsidering that the law does not permit such a measure when already complaint i ; closed' (d) It is submitted that the allegations made i r the Complaint are so absurd and inherently improbable on the basis of which ro prudent person ctln ever reach a just conclusion, therefore, the same are lia rle to be quashed' The Leamed Magistrate also ought to have noted that the dispute being of commercial in nature, the police ought to have conducle I a preliminary enquiry before even registering the same in terms of guidelint:r issued by the Hon'ble Supreme court in its recent judgments. The order of ttx trial court in directing registration of the subject complaint is non-speaking, blirr d and laconic and does Page 7 of20 not disclose applicaUon of mind. Respondent No.2 is a disgruntled element which is frustrated in its inability to recover its alleged investments in MMSPL on account tfre said company being liquidated pursuant to an order of the Hon'ble High Court of Karnataka. (e) It must be emphasized here that the petitioner did not, at any point, invest personally in MMSPL. All investments were made by UCPL, a separate legal entity. Furthermore, the petitioner never agreed to act as a diredor in MMSPL, nor did she involve herself in the day-to{ay operations, management or administration of MMSPL in any manner whatsoever. Her role was strictly limited to representing UCPL as its Managing Director. However, her digital signature was procured by A2 on the pretext of facilitating the allotment of shares, and the same was later misused to show the petrtioner as a Director in MMSPL without her knowledge or consent. Official records of MMSPL show the petitioner as a non-executive Director. However, a bare perusal of the incorporation documents of MMSPL makes it abundantly clear that the petitioner was neither a founding member, nor an initial director, nor a promoter of MMSPL as alleged by respondent No.2. MMSPL was incorporated on 21.10.2010, much before UCPL was approached. The initial Directors listed were Mr. Darshan Machamada (A2), Mr. Vinod Menon (A3), and Mrs. Shivani Darshan (A5). The promoters of MMSPL, as mentioned in the Articles oi Association, were Mr. Darshan Machamada and Mrs. Shivani Darshan. When ttre petitioner realized that the prorn ises made by Mr.Darshan regarding the share allotnrcnt to UCPL were Page 8 of20 not honored and that neither shares were issued nor fri ds were refunded, she immediately chose to disassociate herself from MMSPL. 11 )wever, since her name had already been recorded as a Director without her cons Int, she had to formally tender a resignation letter dated 06.02.2012, which wes duly acknowledged by the board through Mr. Darshan. (D It is a settled legal position that a resigr i tion becomes effective upon tendering and does not require formal acceptan:, . Despite this, MMSPL failed to notiff the Registrar of Companies (ROC) atc rt the resignation. To safeguard her interests and to ensure accuracy in publ c records, the petitioner herself sent a letter dated ll.O4.21l2 to the ROC, Elange ore, informing them of her resignation. Ultimately, on 16.11.2012. MMSPL's brri rd passed a resolution formally accepting her resignation and filed Form-32 witir he ROC. (S) Despite all this, UCPL has still not recovere: its investrnent and has suffered significant financial loss. Eventually, MMSPL wes wound up by the High Court of Karnataka on 18.02.2014 in Company Petition t 0.18212012. Yet, more than six years later, respondent No.2 issued a notice rl ted 05.07.2016 to the petitioner demanding Rs.7.5 Crores as Franchise Sub:,( -iption Fees. This was promptly replied to by the petitioner's legal counsel on 2.06.2016, denying all allegations and any execution of an MoU. Subsequently, espondent No.2 filed a criminal complaint with the Central Crime Station, Hy,J rrabad on 02.05.2016. After due inquiry, the Detective Department of Hyderrr ad Police, through an endorsement dated 24.05.2016, rightly directed the corr rlainant to approach a Page 9 of20 civil court as tt* matter was of civir nature. unhappy with this, respondent No.2 filed a private compraint under section 200 cr.p.c. on 09.09.2016, repeating the same allegations. It was further aileged that the petitioner misappropriated funds to float a new company - universar sportsbiz private Limited by siphoning of the funds invested by the respondent No.2. These are false, baseless, and unsubstantiated ailegations made sorery to marign the petitioner. The alregations made in the Complaint, even if they were taken on their face value, do not prima facie constitute any offence or make out any case against the petitioner. (h) It is submitted that the petitioner has been a successfur enbepreneur in the fashion apparer industry and has buirt her business through heiown hard work and merit. she never received or deart with the monies paid by respondent No.2. The entire transaction concerning the chennai ftanchise was strictly between respondent No.2 and MMSPL. The petitioner responded to section 91 Cr.P.C. notices on 07.o1.2or7 and submitted detaired responses with documents. Despite this, a charge-sheet was fired without any credibre evidence. Fur$er notices from the Official Liquidator were replied to with supporting documentation, and on 04.03.2019, the office of the officiar Liquidator issued a final endorsement confirming that the petitioner was not a director, officer or promoter of MMSPL and had no statutory obligations under the Companies Act, The corqof the compraint, FIR and charge-sheet does not discrose commission of any offenb under sections l2oB, 403, 406 or 420 of the lpc. In fact, the so- called aggrieved party is Mr. Raghu Ramakrishna Raj u Kanumuru, who seems to I \ Page l0 of20 ,/\ have personally invested in MMSPL. His emails d ted 2l'12'2011 and l2.Ol.2ll2, addressed to MMSPL, show that the fur ls were given in his individual capacity. Even the bank statements annexed c )nfirm that the money originated from his personal arccount, and not from an" sccount of respondent No.2. (i) Nowhere in these communications is the petitioner even . is not a party to the mentioned, let alone accused of anything. The petitior€ alleged MoU, nor has she signed it. No affidavit support; :he complarnt' nor was any representation under Section 154(3) Cr'P'C' made 1 the Superintendent of Police prior to filing the private complaint, which is mar( atory' Considering that MMSPL has already been ordered to be wound up, nc rriminal liability can be imputed upon the petitioner or other directors post-lit1 idation' Under Section 456 of the Companies AcL once the Official Liquidator ii sppointed, all company assets are under his custody' Hence, any payment clains must be d irected solely to him. The complaint and charge-sheet are vague. un; bstantiated and do not make out even a prima hcie case. At best, the issu I is civil in nature' It is evident that respondent No.2 is using criminal procee(li rgs merely as a tool to harass, pressurize and extort the petitioner into mak r I payments she is not legally liable for. Page I I of20

6. Learned counsel for the petitioner relied upon the decisions rendered in State of Haryana Vs. Ch.Bhajan Lat1, Mukesh Vs. State of Uttar Pradesh2, Anand Kumar Mohatta Vs. State (I{CT of Dethi)3, shaileshbhai Ranchhodbhai pater vs. state of Gujarata, sunil Bharti Mittal vs. cBrs, Ravindranatha Bajpe vs. Mangarore speciat Economic Zone LU.r6, Maksud Saiyed Vs. State of GujaratT, pepsico India Holdings Art. Ltd., Vs. Food InspectorE, Delhi Race Club (1940) Ltd., Vs. State of Uttar Pradeshe, Srinivas Rao Vs. State of Telanganaro, Dipakbhai Jagdishchandra patet Vs. State of Gujaratlr, Thermax Ltd., Vs. KM.Iohnyt2, State of A.p. Vs. M.Madhusdhan Rao13, Mohd.Wajid Vs. State of UPra, Paramjeet Batra Vs. State of Uttarakhandls, Chandran Ratnaswama Vs. K.C.palanisamyl6. (a) The contentions advanced on behalf of the petitioner, relying on various judicial precedents, referred to above, are that the High court, under section 482 of the code of criminal procedure, is empowered to exercise ib.. I E 3 2 6 5 7 (1992) sCc (cr.) a26 SLP (Crl) No.12354 of2024 (2019) I I SCC 706 Crl.A.No.lE84 of 2013 (201s) 4 scc 60e (2022) r5 SCC 430 (2008) s scc 668 (20r l) I scc 176 (2q24) l0 scc 690 'o crl.P.No.ttot of 2022 " (zol9) l6 scc 5az '' 1201 l; r scc I t2 '' 1zoo8; Is scc saz " 2023 SCC Onl-ine sc gs r " 1zo r3; r r scc oz: 'u (20t3) 6 scc zno 9 Page 12 of20 inherent jurisdiction to secure the ends of justice and )revent abuse of the processoftheCourt.Itisarguedthatthescopeofanall,licationunderSection 482Cr.P.C.issignificantlybroaderthanoneUnderSecti()l227Cr.P.C.,allowing the High Court to consider documents produced by the rccused' even beyond thecharge-Sheet,todemonstratethattheproceedingseemaliciousorlegally unsustainable. It is fulther submifted that where the FIR ( r charge-sheet fails to disclose the essential ingredients of a cognizable offer:e, or appears to be motivated by harassment, the High court is well within i1 ; jurisdiction to quash suchproceedings.Thepetitionercontendsthatcrimralliabilitycannotbe fastened upon a director unless it is clearly established ttri t she was in charge of and responsible for the conduct of the company's busint:: ; at the relevant time. since offences under the IPc are not vicarious in nature, : pecific overt acts must be attributed to an accused; in the absence of sufficien naterial, directors and company officials cannot be prosecuted. It is also arguel that a mere breach of contract, regardless of its seriousness, does not amounl o cheating or criminal breachoftrustUnderSections42oor4o6IrcUnlessfaudulentordishonest intetpn is demonstrated at the inception of thr: transaction. Further, confessions made to the police are inadmissible ag I lst co-accused under Sections 25 and 26 of the Evidence Act. (b) The petitioner asserG that complaints lil rd to circumvent the jurisdiction of civil courts, particularly wtren barre I by limitation' are impermissible, and unexplained delay in lodging such con plaints raises concerns Page 13 of20 of ernbellishment and exaggeration. CourE must exercise caution not to rely solely on a weli{rafted FIR or complaint that appears to satisfy the ingredients of the offence on paper, and must consider the surrounding circumstances. Where a civil dispute is cloaked in criminal allegations, and civil remedies are available, the Court should not hesitate to quash the criminal proceedings to prevent abuse of the legal process. In support of these submissions, the learned counsel also places reliance on the orders passed by this Court in Criminal Petition No.8108 ot 2022 and Criminal petition No.2463 of 2019, wherein it was held that mere breach of contract cannot give rise to prosecution for cheating unless fraudulent or dishonest intent is established at the outset. In particular, the petition filed by Accused No.5 in Criminat petition No.2463 of 2019 was allowed by this= "c.ourt on the ground that the essential ingredients of misrepresentation or entrustment necessary to attract Sections .106 and 420 IPC were absent. In light of the above submissions and legal position, it is therefore prayed that the -pr€sent criminal petition be allowed and the impugned proceedings against the petitioner be quashed.

7. Per contra, the learned senior counsel appearing for respondent No.2 argued that the present petition is misconceived and devoid of merit, as it improperly seeks the C.ourfs extraordinary jurisdiction under Section 482 Cr.P.C., despite the existence of serious and disputed questions of fact. These issues, including the petitioner's alleged role in MMSPL, can only be adjudicated during trial through proper evidence. The petitioner is attempting to short-circuit the a \ r\\ _\\ Page 14 of20 trial process and prematurely seek an adjudication of di:'t Jted facts' The power under Section 482 of Cr.P.C., is not intended for such a I urpose and should be invoked sparingly, only in rare cases where continuing prc:eedings would clearly amount to abuse of process or miscarriage of justice. I: was further submitted that the petitioner's denial of involvement in MMSPL',s afle rs is a matter for trial. as her claims are neither supported by unimpeachable ev dence nor self-evident from the record. The veracity of allegations, her role an'l intent, and the overall context of the alleged offences must all be evaluarcd t 'ough full-fledged trial proceedings. The Court, at this stage, @nnot conduct a nini-trial or assess the reliability of the allegations. As long as the complaint arrt charge sheet disclose prima facie commission of cognizable offences, interfer: tce under Section 482 Cr.P.C., is unwarranted. The Hon'ble Apq Court in Iqbtrl vs.State of UP17 has reaffirmed that where a charge-sheet is filed, the appr() riate course is for the accused to seek discharge before the trial Court, mther t ran invoke Section 482 of Cr.P.C. Likewise, merely because a matter has civil al4 ects does not preclude criminal proceedings, especially where criminal intent is a leged. Delay in filing a complaint is also not, by itself, sufficient ground for quat ring when the offences involved are punishable with imprisonment beyond three ' ears. (a) Respondent No.2 also refuted the peti:i )ner's claim of being wrongfully shown as a director. It is submifted that sht tas formally appointed as a drrector on 01.09.2011 and resigned only in Februarl , 2012. The resignatton '(l0li)8s(cl14 /- Page l5 of20 itself shows she accepted her role at the time when key representations and payments were . maft. No prior communication requesting removal from directorship was fired arong with her petition. The resignation retter arso makes no mention of. unpaid dues, further weakening her claim of being misrepresented. Additionally, the Liquidator,s letter dated 04.03.2019 merely states that the petitioner ceased to be a director from 16.11.2012; it does not state that she was never a director, Her.appointment was during the rerevant period in 2011 when payments were made, and she was invorved in promoting the league and franchise activities. Therefore, she cannot escape criminar riabirity for actions taken during that period. It was arso pointed out that a sworn affidavit was indeed fired by respondent No.2 with the compraint. The petitioner,s selective filing of only the complaint, omitting the affidavit, is misleading. The contention that the comprainant rack. rocus standi since funds came from an individual account is also without merit. The complainant company was the intended franchise horder, and the Mou dated 01.02.2012 was executed between MMSPL and the complainant company. Therefore, the complainant company is the aggrieved party and has sufficient rocus to maintain the compraint. B. The learned counsel for the respondent No.2 relied upon the 6"s;5;enJ rendered in Kolusu partha Sarathy Vs. State of Ap18, Ashwini Kumar upadhyay vs. union of rndia and anotherle, punit Beriwara vs. '' z2 t scc online Ai 4466 re 20t8 scc onLine sC 3713 Page 16 of20 () State of NCT of Delhi and others2o, Kamal Shivaii t okarnekar Vs. State of Maharashtra and others2l, Priti Saraf and anoth :r Vs. State (NCT of Delhi) and another22, Naresh Aneja Alias Naresh l(i mar Aneja Vs. State of Uttar Pradesh and anothefB, Neeharika Infrar;l Maharashtra2o, HMT watches Ltd., Vs. M.A.Abida of M.P. vs., Surendra Kori26, skoda Auto Volksuti Limited Vs. State of Uttar Pradesh and others2T itt ructur€ Vs, State of rnd another2s, State gen (India) Private ,d Iqbal Vs. State of U.P. (supra).

9. The contentions advanced, based on the alt rementioned decisions, are that the representative of the 2nd respondent we: not a Member of the Legislative Assembly (MLA) as on the date of the all: led cbmmission of the offence, and therefore, the present matter need not b3 referred to the Special Courts constituted for MPs and MLAS. Moreover, th': designated Courts are designated to try criminal cases against the pres( rt and former Public representatives and not for the complaints filed by thent, The above Proposition of law is very much fortified by the decision of the Hon't e Supreme Court in the matter of Ashwini Kumar Upadhyay Vs. Union tr India8. It is further j r" 2ol5 sa'c onLrne sC 981 t'11019) l-l SLprenre Coun Cases 350 " {20f1) l6 supr",.,e Coun Cascs 142 t'(20litl S:Lprenre Court Cascs 604 rr (201r)19 \{{ l0l "(201-;i sCC 776 -(20[)lo\cc155 r- (l0l I ) i \tC 795 rr Wp (C)\o.699 oil0t6 Page 17 of20 submitted that the alleged cognizable offence of fraud committed through misrepresentation warrants a full ancl proper investigation, irrespective of the existence of parallel civil suits or perceived delays in initiating proceedings. It is contended that criminal proceedings should not be prematurely scuttled at the threshold sbage and that quashing of a criminal complaint must remain an exception rather than the rule. The mere availability of a civil remedy in the context of a commercial transaction or breach of contract cannot, by itself, be a ground to quash criminal proceedings, especially when the allegations on the face of it disclose the commission of a criminal offence. Courts must remain mindful of the principle that in certain cases, both civil and criminal proceedings may validly coexist. (a) It is also argued that while exercising jurisdiction under Section 482 of Cr.P.C., the Court should not entertain ftctual defences raised by the accused involving disputed questions, as such defences can only be appropriately addressed during trial. The High Court, under its inherent powers, should ordinarily refrain from rendering any prima facie findings in cases where the factual matrix is incomplete or uncl@r, particularly when evidence is yet to be collected or produced before the Court, and tfre legal or factual issues involved are complex and wide-ranging. Additionally, the dehy in lodging the complaint cannot, by itself, be a ground for quashing ttre proceedings, as per Section 468 of Cr.P.C., there is no limitation perind for offences punishable with- im prisonment exceeding three years. \,. \ \ Page l8 of20

10. Upon a perusal of the records and the mat rrials placed on file, it is evident that the petitioner seeks quashing of the proce(x ings on the ground that she was not a director of the company at the time of (c nmission of the alleged oftnce and that she had no role in the alleged inves ment made bY the 2"'r respondent in A1 company and that she had nothin(l to do with the alleged liability of the accused No.1 and hence she cannot be !i Id liable. However, the recitals of complaint and other allied documents relied rr on by the complainant, prima Facie indicate the involvement of the petitioner i1 the alleged t"nsaction of investment by the 2tu respondent in the accused N(r. . company. However, they have to be tested on the touchstone of the trial. At :he stage of quashing, the Court is not required to embark upon a meticu ( rs examination of the eviderrce or conclusively determine the veracity of the se i, allegations.

11. The settled legat position is that if the corr6 aint discloses the basic ingredients of the offence and the role of the accusel then the Proceedings ought not to be quashed in limine. The contentions a(\ lnced on behalr of the petitioner are the matter of defence that can only be rr appreciation of evidence. The petitioner has r ( iudicated uPon trial on : demonstrated anY unimpeachable and incontrovertible material to conclus r :ly show that she was not in charge or responsible for the conduct of the busir ess of the company at the material time. Whether the petitioner was Formalh, rolding the Position of director or was acting in a de facto or shadow capacity ; a matter of evidence that cannot be conclusavely determined at this stage. The Honble Supreme - , Page l9 of 20 court has consistenuy herd that whire exercising powers under section 4g2 cr.P.c., the court must be cautious not to stifle legitimate prosecution, especially where the allegations discrose the commission of a cognizabre offence and the role of the accused is supported by prima Facie material.

12. The petitioner's craim that she was not a director is a factuar assertion that necessitate trial and it cannot be a ground for quashing when the complaint discloses active participation or compricity. In the absence of incontrovertible material demonstrating the petitioner,s complete dissociation from the company's operations or decision makrng process, the mere denial of directorship cannot be a basis for exercising inherent jurisdiction to quash the proceedings. The petition appears to be an attempt to stifle the legitimate investigation and should not be entertained under section 482 cr.p.c. In the instant case, the FIR discloses specific allegations that the petitioner along with other accused dishonesfly induced the comprainant to part with money, failed to fulfill the assurances, and subsequently misappropriated the funds. whether the accused had the requisite intention at the time of the transaction, or whether it was a mere civil dispute, is a matter of evidence and cannot be determined conclusively at this stage.

13. It has been repeatedry herd that the Hrgh Court shourd not inteffere where the allegations disclose a cognizable offence, or where there is a factual Foundation for the prosecution. That there are triable issues requiring investigation/trial, and this Hon'ble court may not exercise its extraordinary I a fsr'r'!Ta-" 1_-'.!!.!Tq5 '. powers at this preliminary stage to stifle legitimate l osecution. There is nothing on record to show that the petitioner was not a dir€c or or responsible for day to day affairs of the accused No.1 company and on t le other hand, she herself admitted that she resigned as a director from accu; )d No.1 company. There is nothing on record to show that the petitioner took easonable steps to prevent the wrongful conduct of accused No.1 company.

14. When the above factual matrix are c; r :fully scrutinized, this Court is of the considered opinion that this is not a Irl case where to quash the proceedings against the petitioner and the allegatio 1 ; leveled against her require full-fledged trial and before letting the petitioner :o such a litmus test, she cannot be declared either way at the threshold. Acr r rdingly, the present criminal petition is liable to be dismissed.

15. In the result, the present crim t al petition is dismissed. Miscellaneous applications, if any pending, shall starl dismissed. SD/.B.REKHA RANI ASSISTANT REGISTRAR //TRUE COPY// \ecrroru oFFrcER One Fair Copy to the Hon'ble SRI JUSTICE l: y. VENUGOPAL (For His Lordships kind Peru:;; l) To,

1. The Xll Additional Chief Metropolitan Magistrate ( ourt, at Nampally, Hyderabad

2. The station House Officer, Central Crime Station F,r lrce Station, Hyderabad 3. 11 LR Copies 4. The Under Secretary, Union of lndia, Ministry of L;r I. Justice and Company Affairs, New Delhi C'r'L"' l It. ET 1 I

5.TheSecietary,AdvocatesAssociationLibrary'HighCourtfortheStateof 6. Two Cts to the publiC prosecutor, High court for the state of Telangana at Telangana, High Court Buildings at Hyderabad Hyderabad (OUT)

7. One CC to Sri A Chandra Shaker, Advocate [OPUC] B. One CC to Mrs. Mansvi Reddy Jakka, Advocate [OPUC] 9. Two CD CoPies ADK w _-- -- @ M*ss, I'r-:!9t xFttt?F"*' - - HIGH COURT DATED: 1210812025 ,- ORDER CRLP.No.3829 of 2019 r,,rK6 , ' '. .ri

1.. 1 + I l0 )s 6)\, * n ,: . . .,: rO ' DISMISSING THE CRL.PETITION !l:-J-t s sftfze