TMI Blog1993 (3) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... osed the matter would have been different. This court has repeatedly pointed out that the High Court should not while exercising power under section 482 of the Code usurp the jurisdiction of the trial court. The power under section 482 of the Code has been vested in the High Court to quash a prosecution which amounts to abuse of the process of the court. But that power cannot be exercised by the High Court to hold a parallel trial, only on the basis of the statements and documents collected during investigation or enquiry, for purpose of expressing an opinion whether the accused concerned is likely to be punished if the trial is allowed to proceed. The trial court should proceed with the case in accordance with law. We make it clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lders were either informed or repaid. It was also alleged that money lying in the bank, on account of the share applications, was transferred to another account of the company. The circumstances were pointed out in the complaint made to the CBI as to how the acts of the appellants clearly indicated their dishonest intentions to convert the share application money for their own benefit, and as such they had committed the offence under section 409 read with section 405 of the Indian Penal Code. After investigation of the allegations made in the complaint aforesaid, the CBI submitted a charge-sheet against the appellants along with some others for their trial for the offence under section 409 of the Penal Code. When the Special Judicial Magi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid within time, in the manner specified and if default is made in complying with the same the company and every officer of the company who is in default is liable to be punished with a fine which may extend to Rs. 5,000. In other words, the provisions of the Companies Act take care of the investors and they put restrictions on the misbehaviour of the promoters and the directors of the company and for any lapse on their part in such matters, they cannot be summoned to stand trial for offences under the Indian Penal Code. It is true that the Companies Act contains provisions regarding the issuance of prospectus, applications for shares and allotment thereof and provides different checks over the misuse of the funds collected from the publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... latter's detriment and for their own wrongful gain. In this process the public becomes the victim of the evil design of the promoters who enrich themselves by dishonest means without there being any real intention to do any business, from time to time amendments have been introduced in the Companies Act to safeguard the interest of the shareholders and to provide regulatory and penal provisions for misuse of power by those who are in charge of the management of such companies. But, if the promoters or those in charge of managing the affairs of the company are found to have committed offences like cheating, criminal breach of trust, criminal misappropriation or the like, then whether the only remedy to which the investor is entitled is to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overlooked that there is a basic difference between the offences under the Penal Code and acts and omissions which have been made punishable under different Acts and statutes which are in the nature of social welfare legislations. For framing charges in respect of those acts and omissions, in many cases, mens rea is not an essential ingredient ; the concerned statute imposes a duty on those who are in charge of the management, to follow the statutory provisions and once there is a breach or contravention, such persons become liable to be punished. But for framing a charge for an offence under the Penal Code, the traditional rule of existence of mens rea is to be followed. In the facts of the present case itself, the prosecution has to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending against the appellants only on the ground that it was open to the applicants for shares to have recourse to the provisions of the Companies Act, cannot be accepted. It is a futile attempt on the part of the appellants, to close the chapter before it has unfolded itself. It will be for the trial court to examine whether on the materials produced on behalf of the prosecution it is established that the appellants had issued the prospectus inviting applications in respect of shares of the company aforesaid with a dishonest intention, or having received the moneys from the applicants they had dishonestly retained or misappropriated the same. That exercise cannot be performed either by the High Court or by this court. If accepting the alle ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
