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CRIMINAL PROCEEDINGS AGAINST MANAGING DIRECTOR

Corporate Laws / Banking / SEBI / LLP - By: - Mr. M. GOVINDARAJAN - Dated:- 25-1-2016 - In Court Sharad Kumar Sanghi V. Sangita Range - 2015 (2) TMI 1117 - SUPREME COURT the appellant is the Managing Director of M/s Sanghi Brothers (Indore) Limited, a registered company under Companies Act, 1956. The company is engaged in the business of automobile sale, finance and shipping etc., The company is having branches at various places. The respondent obtained a quotation from the Bhopal branch of the .....

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he said vehicle had met with an accident as a result of which the engine was replaced by another engine. The respondent filed a criminal complaint under Section 200 of Criminal Procedure Code alleging that the company being represented by the appellant, the Managing Director had suppressed the information and deliberately cheated the respondent. The Magistrate took cognizance of the offence after the following procedure as contemplated under Section 202 of Criminal Procedure Code. Summons was is .....

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aintainable. The High Court dismissed the application for quashment of criminal complaint. Against the order of the High Court the appellant filed the present appeal before the Supreme Court. The Supreme Court found that there is no dispute that the vehicle was purchased by the respondent and the invoice contained a different engine number than the engine which was fitted into the vehicle. The Supreme Court analyzed where there has been any specific allegation against the appellant. The allegati .....

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ated that Sanghi Brothers Limited run by Mr. Sharad Snaghi committed cheating with the applicant by delivering accidented vehicle in place a new one and caused gross financial loss. The applicant is operating the vehicle after borrowing loan from bank and the vehicle is not worth operating at present due to the said defects. The Supreme Court observed that the allegations which find place against the Managing Director in his personal capacity seem to be absolutely vague. Where a complainant inte .....

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taching the vicarious liability on the part of the Managing Director or the Directors of the Company when the accused is the company. The Magistrate failed to pose unto himself the correct question viz., as to whether the complaint, even if given face value and taken to be correct, in its entirety, would lead to the conclusion that the respondents were personally liable for any office. The Bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided an .....

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