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2010 (8) TMI 171 - SC - Indian LawsWhether there is investment by the petitioner or not, when he was appointed as a director, when he resigned and whether the alleged incident has taken place during his directorship Whether there is a prima facie case against him and whether he has participated in the proceeding or not as in charge and managing affairs keeping in view the various decisions and pass orders in accordance with law? Held that:- Appeal allowed. In the instant case, the appellant ceased to be a director of the company from December 27, 1997, whereas the alleged offences, if any, were committed during the periods from May 24, 1998 to September 17, 1999. Admittedly, there are no allegations against the appellant in the first information report. The company had invited investment from the depositors to invest in the business/benefit funds after receiving due approval of the scheme from the Reserve Bank of India. Therefore, in any event, the element of cheating as alleged cannot be made out by any stretch of imagination. Even assuming that there could have been a vicarious liability thrust on the appellant; even then there cannot be any such vicarious liability in absence of any allegations and material to show that the appellant was in charge of or responsible for the conduct of the company's business which had given rise to the offence. From any angle of the matter, the appellant cannot be compelled to face the criminal trial in this case. The inherent power should not be exercised to stifle the legitimate prosecution but at the same time no person be compelled to face criminal prosecution if basic ingredients of the alleged offence against him are altogether absent. Thus the impugned judgment of the High Court is set aside and the appeal is allowed and the proceedings initiated against the appellant on the basis of the complaint registered.
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