2013 (4) TMI 962 - HC - Companies Law

Summary

Issues Involved:
1. Quashing of the FIR registered as FIR No. I-1160/2004.
2. Allegations of cheating and misrepresentation against the Directors.
3. Legality of multiple complaints for the same set of allegations.

Summary:

Issue 1: Quashing of the FIR registered as FIR No. I-1160/2004

The petitioners sought to quash the FIR No. I-1160/2004 filed on 18/12/2004 with Navrangpura Police Station for offences u/s 403, 406, 416, 417, 420, and 424 of the IPC. The court noted that the petitioners had already resigned as Directors in 1996, and there was an inordinate delay of 8 years in filing the FIR. The court held that the second complaint (FIR No. I-1160/2004) was not maintainable as it amounted to abuse of the process of law. The court emphasized that there cannot be multiple trials for the same offences against the same person.

Issue 2: Allegations of cheating and misrepresentation against the Directors

The allegations were that the Directors of M/s. Lyons Industrial Enterprises Ltd. had floated a public issue of equity shares with false information in the prospectus, thereby cheating the public. The petitioners contended that they were non-active and non-executive Directors and had no role in the day-to-day affairs of the company. They also argued that they had resigned in 1996 and had not attended any board meetings or received any benefits from the company. The court found that the second complaint did not disclose any prima-facie evidence of cheating or misrepresentation by the petitioners.

Issue 3: Legality of multiple complaints for the same set of allegations

The court observed that the respondent no. 2 had already filed a complaint on 19/4/2002 (Criminal Case No. 91/2002) disclosing the names of the Directors and alleging the same set of facts. The court held that the second complaint filed on 18/12/2004 was an attempt to harass the petitioners and amounted to abuse of the process of law. The court relied on the decision in T.T. Antony v/s. State of Kerala, which held that there can be no second FIR for the same offence or occurrence. The court concluded that the second complaint deserved to be quashed.

Conclusion:

The court allowed the petitions and quashed the FIR No. I-1160/2004 pending with the Navrangpura Police Station. The court clarified that the quashing was with reference to the present petitioners only and that the original complainant had the right to take action against the company or its Directors in the first complaint in accordance with law. Rule was made absolute accordingly.