TMI Blog2014 (10) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... mplaint does not disclose any offence or is vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance is taken by the Magistrate it is open to the High Court to quash the same in exercise of power Under Section 482. The power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. The letter dated 14.12.2006 which is the basis of taking cognizance was allegedly sent from the office of Respondent No. 4 Company under the signature of one colleague of the Appellant without the knowledge or prior permission of the Appellant and the said letter was never signed by the present Appellant. In our view, if that is so, it is open to the Appellant to take a defense and prove their contention during trial. Needless to say that the trial court shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serving with M/s. Rallies India Ltd.. and his Company was dealing, producing and trading in the same products as manufactured by Respondent No. 4 company-M/s. Rallies India. When all the facts came to light, he resigned from M/s. Rallies India-Respondent No. 4. 4. Respondent No. 1 made two firms M/s. Sri Laxmi Agencies and M/s. Vaishnavi Chemicals through their partners to enter into and execute a Memorandum of Understanding dated 31.3.2004 with Respondent No. 4 Company (M/s. Rallies) wherein they admitted their entire liability of ₹ 7,94,70,517/- payable to M/s. Rallies and agreed to settle the same by payment of ₹ 4.05 crores. Thereafter in August, 2006, M/s. Rallies India through Mr. Ankur Sharma (recovery agent) lodged a complaint Under Section s 403, 405, 406, 408, 415, 420 r/w Section 34 of the Indian Penal Code against Respondent No. 1 and aforesaid two firms and their respective partners with the Economic Offences Wing, Mumbai. 5. Respondent Nos. 1 and 2 are the Managing Director and Chairman of the Company-M/s. Chemical Bio Tech Limited, respectively. Respondent's Company with an intention to go for public issue engaged Ashika Capital Limited, Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Respondent Company) and the directors of the proforma Respondent Company. The trial court took cognizance of the offence against present Appellant and proforma Respondent company and held that a prima facie case is made out Under Sections 499 and 500 of the Indian Penal Code making the proforma Respondent Company and the Appellant as necessary parties for the cause of action and they were accordingly summoned as accused Nos. 1 2. 9. Aggrieved by the order of the trial court the present Appellant and proforma Respondent-Company preferred a Criminal Petition No. 3917 of 2007 Under Section 482 Code of Criminal Procedure before the High Court of Andhra Pradesh praying inter alia to quash the complaint initiated against them. The High Court dismissed the said petition and observed that the contents of the letter dated 14.12.2006, authored by the present Appellant, prima facie contained defamatory statements. Hence, the present appeal by special leave. 10. We have heard learned Counsel for the parties appearing on either side and have gone through the impugned order passed by the High Court. 11. Dr. A.M. Singhvi, learned senior Counsel appearing for the Appellant, assailed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case and the law applicable thereto. Section 482 of the Code of Criminal Procedure empowers the High Court to exercise its inherent powers to prevent abuse of the process of court and to quash the proceeding instituted on complaint but such power could be exercised only in cases where the complaint does not disclose any offence or is vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance is taken by the Magistrate it is open to the High Court to quash the same in exercise of power Under Section 482. 14. So far as the complaint alleging offence Under Section 499 Indian Penal Code is concerned, if on consideration of the allegations the complaint is supported by a statement of the complainant on oath and the necessary ingredients of the offence are disclosed, the High Court should not normally interfere with the order taking cognizance. 15. In the case of Dhanalakshmi v. R. Prasanna Kumar and Ors. 1990 (Supp) SCC 686, a three Judge Bench of this Court held: 3. Section 482 of the Code of Criminal Procedure empowers the High Court to exercise its inherent powers to prevent abuse of the process of court. In p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 allegations made and charges levelled on their face value, the Court had come to conclusion that no offence under the Penal Code was disclosed 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 parall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inants 1 and 2 only with a malicious intention to cause wrongful loss to the complainant's company for the simple reason and fact that it has become a strong competitor in the State of Andhra Pradesh to the business of the Accused Company. The said letter is also forwarded by the 2nd Accused by marking a copy of the same to 1) Managing Director, Ashika Capital Limited, 2) The Secretary, Indian Banks Association, Mumbai, 3) The Chairman, Securities and Exchange Board of India, 5) Finance Minister, Government of India, New Delhi, 6) State Minister of Finance (Banking), Govt. of India, New Delhi, 7) Secretary, Ministry of Finance, New Delhi, 8) Secretary (Banking) Government of India, New Delhi, 9) Joint Secretary Banking, Government of India, New Delhi and 10) Joint Secretary (CM), Department of Economic Affairs, New Delhi. That the said letter is in turn forwarded by Ashika Capital Limited, Mumbai to the complainants to their Registered Office at Vijayawada, Andhra Pradesh on 21.12.2006 and the Complainants were shocked and surprised to read the contents of the same at Vijayawada. The allegations contained in the said letter in so far as it refers to the Complainants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.3 to A.9. It appears A.3 to A.9 are arrayed as parties only to cause harassment to them unnecessarily. No material is placed to substantiate their active participation in releasing the letter by A.2 on behalf of A.1 company. No prima facie case against A.3 to A.9 for the offences/ Section 499 and 500 Indian Penal Code. 21. Dr. Singhvi, for the first time before this Court tried to make out a case that the letter dated 14.12.2006 which is the basis of taking cognizance was allegedly sent from the office of Respondent No. 4 Company under the signature of one colleague of the Appellant without the knowledge or prior permission of the Appellant and the said letter was never signed by the present Appellant. In our view, if that is so, it is open to the Appellant to take a defense and prove their contention during trial. Needless to say that the trial court shall consider the said contention during trial and record its findings. 22. After giving our thoughtful consideration in the matter we are of the view that the High Court rightly refused to quash the criminal proceedings in exercise of power Under Section 482 Code of Criminal Procedure. 23. We find no merit in this case, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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