2025 (6) TMI 1826 - HC - Companies Law

Seeking grant of anticipatory bail - forgery and misappropriation of shares - no document signed to give her consent or authorize anyone to transfer her shares in favour of her husband - delay in lodging FIR - HELD THAT - It is an admitted fact that the Complainant is relative of the Applicants herein. It is also an admitted fact that there is an ongoing acrimonious matrimonial discord between the Complainant and her husband which is evident from the proceedings under the DV Act divorce proceedings maintenance disputes and mediation attempts pursuant to orders passed by this Court. The FIR was registered on 22.03.2025 pertains to an event of transfer of shares allegedly occurred on 30.07.2022 more than two years prior. There is no explanation offered for this delay in lodging the FIR particularly when the Complainant had already been engaged in extensive litigation against her husband since 2020. The Company appears to be a closely held family-run business and there is no public shareholding involved. FIR does not disclose as to when the Complainant became aware about the alleged share transfer. It only mentions about the report of independent auditor who conducted audit of the Company in 2023 - The FIR is silent about the exact details about the date on which the Complainant became the shareholder and when the Complainant became aware about the auditor s report and List of Share Transfer of 2023. The time gap between the incident of alleged forgery and misappropriation and filing the complaint is also not explained in the FIR. The FIR is based on an incidents of share transfer from the Complainant to her husband and then to Mr. Amanpreet Singh Malhotra the Applicant herein which are now transferred back to the Complainant. The Applicants have given justification for such transfers which will be considered during the trail. The fact remains that there have been transfers that have been documented and are admitted by the Applicants. Hence entire investigation revolves around the documentary evidence which is already with the IO as reflected in the Status Report. The investigation in the present case hinges entirely on documentary evidence comprising of the Board Resolutions of the Company List of Share Transfer and Form No. SH-4. The Applicants have provided all the documentary evidence and repeatedly asserted that no such Form No. SH-4 was ever executed - Notably the custodial interrogation is requested only to ascertain the possession of Form No. SH-4. When no such document exists as admitted by the Applicants there is no purpose of custodial interrogation of the Applicants. Conclusion - Considering the overall facts and circumstance of the case there is absence of necessity for custodial interrogation. Having carefully examined the contents of the FIR Status Report and oral submissions of the Applicants Complainant and the State this is a fit case for grant of Anticipatory Bail to the Applicants with necessary conditions to ensure cooperation and appearance before the IO for the purpose of investigation. The Applicants are directed to be released on bail on furnishing a personal bond in the sum of Rs. 1, 00, 000/- for each of the Applicant with two sureties of the like amount to the satisfaction of the IO/SHO on fulfilment of conditions imposed - bail application allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether anticipatory bail should be granted to the Applicants accused under Sections 420, 468, and 471 IPC in connection with alleged fraudulent transfer of shares without consent.

- Whether the alleged transfer of 18,000 shares from the Complainant to her husband was forged or fraudulent, involving non-execution of Form No. SH-4 and violation of company law provisions.

- Whether the Applicants have cooperated with the investigation and produced requisite documents, including Form No. SH-4.

- Whether the delay of over two years in filing the FIR and the matrimonial discord between the Complainant and her husband affect the credibility of the allegations.

- Whether custodial interrogation of the Applicants is necessary for investigation, particularly for recovery of documents.

- Whether the Applicants' apprehension of arrest is justified given the nature of allegations and the ongoing investigation.

- The applicability of principles governing grant of anticipatory bail, including the nature and gravity of the offence, antecedents of the Applicants, possibility of fleeing justice, and mala fide intentions behind the FIR.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Grant of anticipatory bail in light of allegations under Sections 420, 468, and 471 IPC

Legal framework and precedents: The Court considered the settled principles governing anticipatory bail applications, including factors such as the nature and gravity of the accusation, antecedents of the accused, likelihood of fleeing justice, and mala fide intentions behind the accusation, as laid down in Gurbaksh Singh Sibbia v. State of Punjab and Siddharam Satlingappa Mhetre v. State of Maharashtra.

Court's interpretation and reasoning: The Court noted that the FIR relates to alleged forgery and cheating in the transfer of shares valued at Rs. 2.7 crores. However, the Applicants have no prior criminal record, have cooperated by joining the investigation, and have provided all documents within their possession. The Court observed the FIR was filed after a significant delay of over two years from the alleged incident and in the backdrop of ongoing matrimonial disputes, which raises questions about the timing and motive behind the FIR.

Key evidence and findings: The Status Report and investigation reveal that the share transfers occurred without execution of Form No. SH-4, which is admitted by the Applicants and not found in RoC records. The Applicants have also disclosed that the shares were transferred back to the Complainant. The investigation is documentary in nature, and no evidence suggests tampering or threat to witnesses by the Applicants.

Application of law to facts: Given the documentary nature of the case and the absence of evidence indicating misuse of interim protection by the Applicants, the Court found no necessity for custodial interrogation at this stage. The Court emphasized that the merits of the case, including whether the Form No. SH-4 is a "valuable security" under Section 30 IPC and whether cheating or forgery is established, are matters for trial.

Treatment of competing arguments: The Complainant argued the shares were part of her streedhan and were unlawfully transferred without consent, constituting forgery and cheating. The Applicants countered that the shares were held in fiduciary capacity as part of family arrangements, no Form No. SH-4 was executed, and the FIR is motivated by matrimonial discord and monetary demands. The Court acknowledged the matrimonial context and the delay in filing the FIR, which undermines the Complainant's claim of immediate injury.

Conclusion: The Court concluded that the Applicants are entitled to anticipatory bail subject to conditions ensuring cooperation and appearance before the investigating officer.

Issue 2: Non-production and alleged forgery of Form No. SH-4 and compliance with Companies Act provisions

Legal framework and precedents: Form No. SH-4 is a prescribed document under the Companies Act, 2013, required for transfer of shares. Its execution and filing with the Registrar of Companies (RoC) are essential for valid transfer. The Court also referred to relevant provisions of the Hindu Succession Act and Articles of Association of the Company, including the Right of First Refusal clause.

Court's interpretation and reasoning: The Court noted that neither the Applicants nor the RoC had the Form No. SH-4 corresponding to the alleged transfer. The Applicants admitted non-execution, and the Company's CFO confirmed the absence of the document. The Court held that the absence of Form No. SH-4 raises legal questions about the validity of the transfer, but such issues are to be determined at trial.

Key evidence and findings: The List of Share Transfer dated 06.09.2023 and Board Meeting records show that shares were transferred without the Complainant's consent. The Company's filings and replies to notices confirm the absence of Form No. SH-4. The Complainant was not informed of subsequent rectifications in shareholding.

Application of law to facts: The Court observed that the transfer without Form No. SH-4 may be irregular or invalid under company law, but these are civil or regulatory issues distinct from criminal forgery or cheating. The Court emphasized that the investigation is documentary and the Applicants' assertion that the document does not exist negates the need for custodial interrogation to recover it.

Treatment of competing arguments: The Complainant submitted that the shares were her absolute property and transferred without consent, constituting forgery. The Applicants contended the shares were held in fiduciary capacity and transferred as part of family arrangements, with rectifications made subsequently. The Court found the Applicants' explanation plausible enough to warrant trial rather than custodial interrogation.

Conclusion: The Court held that the absence of Form No. SH-4 and its implications are legal questions for trial, and custodial interrogation is not justified solely for recovery of a non-existent document.

Issue 3: Effect of matrimonial discord and delay in filing FIR on the credibility of allegations

Legal framework and precedents: The Court referred to the principle that an FIR filed with mala fide intentions or to humiliate or injure the accused may be a ground for anticipatory bail, as expounded in Gurbaksh Singh Sibbia.

Court's interpretation and reasoning: The Court noted the ongoing acrimonious matrimonial disputes, including divorce and domestic violence proceedings, between the Complainant and her husband. The FIR was filed more than two years after the alleged transfer, with no explanation for the delay. The Court found the timing of the FIR suspicious, especially given the failed mediation and alleged monetary demands.

Key evidence and findings: The matrimonial proceedings and mediation records, the timing of FIR registration post-failed mediation, and the absence of earlier complaints despite ongoing litigation since 2020.

Application of law to facts: The Court considered that the FIR may be an afterthought motivated by matrimonial discord and monetary demands, which reduces the likelihood of mala fide prosecution but does not negate the need for investigation.

Treatment of competing arguments: The Applicants argued the FIR is a tool to exert pressure for monetary gains. The Complainant denied mala fide intentions and insisted on the genuineness of the complaint. The Court found the Applicants' submissions regarding timing and context credible enough to weigh in favor of anticipatory bail.

Conclusion: The Court took the matrimonial context and delay into account as factors favoring grant of anticipatory bail.

Issue 4: Necessity and justification for custodial interrogation of Applicants

Legal framework and precedents: The Court relied on the principle that custodial interrogation is an exception and must be justified by necessity, particularly when investigation is documentary and the accused have cooperated, as held in Pradip N. Sharma v. State of Gujarat.

Court's interpretation and reasoning: The Court observed that the Applicants have joined the investigation, responded to notices, and provided all available documents. The only document sought for custodial interrogation, Form No. SH-4, is admitted not to exist. The Court found no demonstrated necessity for custodial interrogation to recover documents or evidence.

Key evidence and findings: Status Reports, replies to notices, and absence of any evidence of tampering or threat to witnesses. The Applicants' cooperation and absence of prior criminal record.

Application of law to facts: The Court held that custodial interrogation is unwarranted where the accused have cooperated, the investigation is documentary, and the document sought does not exist. The Court emphasized that anticipatory bail should not be denied merely on the ground of non-production of a non-existent document.

Treatment of competing arguments: The State and Complainant argued custodial interrogation is necessary for recovery of documents and to prevent tampering. The Applicants denied possession or knowledge of such documents and asserted cooperation. The Court sided with the Applicants on this point.

Conclusion: Custodial interrogation of the Applicants is not necessary or justified at this stage.

3. SIGNIFICANT HOLDINGS

- "When it is admitted that Form No. SH-4 was not executed, the question of forgery on the said document does not arise. Whether the Form No. SH-4 is a 'valuable security' within the meaning of Section 30 of IPC and whether there was any cheating or misappropriation of shares of the Complainant was undertaken by the Applicants will be a matter of trial and, at this stage, it will not be appropriate to comment on the merits of the investigation, which is ongoing."

- "The mere non-production of a document not in the possession/existence of the Applicants cannot be equated with their non-cooperation."

- "Custodial interrogation is requested only to ascertain the possession of Form No. SH-4. When no such document exists as admitted by the Applicants, there is no purpose of custodial interrogation of the Applicants."

- "If the proposed accusation appears to stem not from motives of furthering the ends of justice but from some ulterior motive, the object being to injure and humiliate the applicant by having him so arrested, a direction for the release of the applicant on bail in the event of his arrest would generally be made."

- The Court emphasized the importance of balancing the gravity of the offence with the Applicants' right to liberty, presumption of innocence, and the absence of evidence of tampering or flight risk.

- The Court granted anticipatory bail to the Applicants subject to conditions including cooperation with investigation, furnishing personal bonds, prohibition on leaving the country without permission, and non-interference with witnesses or evidence.