TMI Blog2022 (7) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... no intention on the part of the petitioners to appoint him as an Independent Director nor any attempt was made to project him as Independent Director . One single statement that his consent was taken as Independent Director cannot be construed that the board of Directors had actually appointed him as Independent Director and not as additional Director . Accordingly, the allegations levelled in the complaint appears to be absurd and inherently improbable and if a prudent person tests is applied then the inevitable conclusion would be that there is no chance of conviction as there is nothing to show that the alleged false statement was made knowing it to be false or any omission of material fact was made knowing it to be material in order to deceive someone or to gain any undue advantage from the company or it s share holders or it s creditors, in order to attract the relevant sections. The ultimate conclusion is that if the present proceeding is allowed to be continued in view of the aforesaid facts and circumstances of the case, that will be an abuse of process of court because the allegations levelled in the complaint is absurd and inherently improbable in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and made an incorrect declaration in the aforesaid Form DIR-12 that Mr. Bakshi was appointed as Additional Director. Based on this, the opposite party issued show cause notice on 30th August, 2018 to the present petitioners. Pursuant to the said letter dated 20th September, 2018, the petitioner nos. 1 and 2 explained to the opposite party that (a) the one sentence in the Board Minutes was an inadvertent typographical error. (b) Mr. Bakshi was in fact appointed as an additional director and not as an independent director . (c) The Board Minutes in at least four places record unequivocally that Mr. Bakshi was appointed as an additional director , detailed as under: (i) At the top of the Board Minutes recording the attendance of the members it is noted that: Present . Mr. Ajaybir Singh Bakshi Director (Appointed as an Additional Director during the meeting) (ii) The heading to the relevant Item No.5 for discussion, records as under: ITEM NO. 05 APPOINTMENT OF MR. AJAYBIR SINGH BAKSHI AS AN ADDITIONAL DIRECTOR ON THE BOARD (iii) The paragraph immediately preceding the incorrect and inadvertent sentence records as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty ignored the Form DIR-12 and the letter dated 9th December, 2014 issued to Mr. Bakshi in relation to his appointment as an additional Director and unfortunately, the opposite party has started the proceeding emphasising on one, inadvertent typographical error in one sentence in the Board minutes which referred to Mr. Bakshi as Independent Director . In fact, the proceeding has been initiated ignoring the reply given by the petitioners dated 20th September, 2018 and reply dated 4th October, 2018. The complaint does not even refer to the reply dated 20th September, 2018 and the reply dated 4th October, 2018 filed by the petitioner and without applying its mind to the explanation submitted by the petitioners in their reply to show cause notice, opposite party is continuing with the present proceeding, which is nothing but an abuse of process of court. 5. Learned counsel for the petitioners argued that the criminal complaint ex-facie does not bring out any case against the petitioners Under Section 149 of the Companies Act as Section 149 is generally in relation to appointment of directors on the Board of a company and Sub-sections (6) to (10) of Section 149 are specific to Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia and others Vs. Sambhajirao Chandrojirao Angre and others, reported in AIR 1988 SC 709, Mr. Ghosh, learned advocate for the petitioners argued that the legal position is well settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court as to whether the allegations has prima facie established any offence or not. The court cannot be utilised for any oblique purpose specially when the conviction is bleak. Accordingly, he submitted that no useful purpose is likely to be served by allowing the present criminal prosecution to continue and as such prayed for quashing the proceeding. 8. Learned counsel appearing on behalf of the opposite party Mr. Rajdeep Mazumder submits that Section 448 or Section 447 of the Companies Act makes it clear that when any person makes any false statement which he knows to be false, these Sections attract. Whether the said statement mentioning Mr. Bakshi as Independent Director was made intentionally or not, will be adjudged at the time of trial and not at the time of issuing the process. In this context, referring State of Haryana and others Vs. Bhajan Lal and others, reported in 1992 Supp (1) SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused . 11. Needless to say that the well settled principle of law is that the final purpose of a criminal proceeding is to secure justice and to prevent the abuse of process of law. The subsequent documents along with the resolutions if taken at its face value makes, it is abundantly clear that Mr. Bakshi was appointed as an Additional Director and there was no intention on the part o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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