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2015 (4) TMI 414 - SUPREME COURT OF INDIA

2015 (4) TMI 414 - SUPREME COURT OF INDIA - TMI - Appeal against order of high court to quashed the proceedings - Power of Special Courts - Cognizance of the offences under Sections 120B and 420 of the IPC or Section 621 of the Companies Act - Multiplicity of proceedings - Held that:- AS can be seen from the complaint the allegations are that the accused conspired with each other to cheat the complainant and a series of transactions gave rise to offence under Section 120B read with Section 420 .....

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the complaint made allegations against the accused A4, A5, A6, A9 and A10 only in respect of Section 120B and 420 of Indian Penal Code and there was no reason in law to quash a complaint against them on the ground that they were immune from prosecution under Section 628 of the Companies Act by virtue of Section 621 of that Act.

At this stage, it may be noted that the Special Court is empowered to try the offences under the Companies Act along with other Acts by virtue of a notificatio .....

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so the IPC’ in respect of the same transaction or facts and even if some could not be tried under the special enactment, it is the special court alone which would have jurisdiction to try all the offences based on the same transaction to avoid multiplicity of proceedings. We make this observation because at some stage in the hearing learned counsels addressed us on this point. We make it clear that in the present case all the accused are liable to be tried by the special court in respect of the .....

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dv. and Mr. V. N. Raghupathy,Adv.(NP) JUDGMENT S. A. BOBDE, J. These Criminal Appeals are preferred by the complainant against the Judgment of the High Court of Judicature of Andhra Pradesh at Hyderabad by which the High Court has in exercise of powers under Section 482 of the Code of Criminal Procedure (in short Cr.P.C.) quashed the proceedings in CC No. 37 of 2008 on the file of the court of the Special Judge for Economic Offences at Hyderabad insofar as the accused Nos. A4, A5, A6, A9 and A10 .....

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d 420 of the Indian Penal Code (in short the IPC ). This complaint was filed in the Court of Special Judge for Economic Offences at Hyderabad. 3. The accused Nos. 1, 2 and 3 are Directors of the Company. The accused no. 4 i.e. Energo Masch Power Engineering & Consulting Pvt. Ltd. is another Company. The accused Nos. 5, 6, 7 & 8 are its Directors. Accused No. 9 is the Manager of M/s Indian Renewable Energy Development Agency (in short IREDA ) a financing agency and is brother-in-law of A5 .....

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oard Resolution of the Company before Andhra Bank, Sowcarpet Branch, Chennai in order to open a bank account. According to the complainant the signatory to the Board Resolution was not even a Director in the Company on the date the bank account was opened. A series of events alleged in the complaint show how the complainant was induced to invest in the Company by acquiring land for the Company at a cost of ₹ 20 lakhs and make payment for the front end fee to IREDA which had in collusion wi .....

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aw, have wide experience in executing such projects. The complainant believed that representation and allowed those persons and others to become Director as a result of which A1 along with his nominee Directors enjoyed a majority on the Board of the Company. Thereafter, in order to obtain the first installment of loan the accused represented that they have spent an amount of ₹ 1,88,21,484/-, to the accused A4 Company as if the amount was invested from the Company s account maintained in An .....

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installment of loan were paid to the A4 Company only a nominal amount of ₹ 30 lakhs was used for work and the rest was swindled. As a part of these transactions the complainant alleged that A1 to A3 had made a false declaration as records in a purported Board Resolution of the Company in order to open a bank account and falsely authorised A10 and thereby made a false declaration amounting to an offence under Section 628 of the Companies Act. Thus, A10 was falsely authorized to operate the .....

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the Special Judge could not have taken cognizance of the offences under Sections 120B and 420 of the IPC unless he could also try the accused under Section 621 of the Companies Act. As regards the accused Company A4 and its Directors A5 and A6, the High Court held that no cognizance could be taken against the said accused because the complainant did not belong to any of the categories or persons who were entitled to file a complaint under Section 621 of the Companies Act [ 621. Offences against .....

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ed further that the Court may take cognizance of offence relating to issue and transfer of securities and nonpayment of dividend on a complaint in writing by a person authorized by the Securities Exchange Board of India]. (1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 , (5 of 1898) where the complainant under subsection (1) is the Registrar or a person authorised by the Central Government, the personal attendance of the complainant before the Court trying the off .....

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the company, within the meaning of sub- section (1). ] i.e. to say the complainant was neither (a) the Registrar, (b) a shareholder of the company, or (c) a person authorized in that behalf. Thus, the High Court held that taking of cognizance by the Special Court in so far as accused nos. A4, A5 and A6 is without jurisdiction. This finding is sought to be supported by the provisions of Section 621(1) of the Companies Act. However, without giving any special reasons as regards accused Nos. A9 an .....

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at there was no allegation that the accused Nos. A4, A5, A6 and A9 have committed an offence under Section 628 of the Companies Act. Such an allegation of commission of an offence under Section 628 of the Companies Act was only against the accused A10 (vide para 19 and 20 of the complaint). It may be recalled that the allegation as regards Section 628[2 628. Penalty for false statements.- If in any return, report, certificate, balance sheet, prospectus, statement or other document required by or .....

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th regard to the record that is maintained in accordance with Section 193 of the Companies Act by filing an extract of the Board resolution of the company before the Andhra Bank, Sowcarpet Branch, Chennai in order to open a bank account the said Board resolution being a false declaration, since a bank account in the said bank was already opened even before A1 had obtained consent of the complainant to open the said account and further since the said Board resolution is signed by Hari Sesha Reddy .....

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int the allegations are that the accused conspired with each other to cheat the complainant and a series of transactions gave rise to offence under Section 120B read with Section 420 of the Indian Penal Code as also Section 628 of the Companies Act. It is, therefore, clear that if the Special Court has jurisdiction to try offences under both the aforesaid Acts then the trial can certainly continue in respect of the offences which do not require the complainant to belong to the categories specifi .....

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