Vijay Kumar Vs State of Telangana (Telangana High Court)
Summary: The Telangana High Court dismissed a criminal petition seeking quashing of proceedings against accused Nos.1 and 2 concerning alleged unauthorised director appointments and submission of forged documents to the Ministry of Corporate Affairs. Respondent No.2 and his wife had incorporated M/s.Shreemukh Namitha Homes Private Limited and together held 75% of its shares. The petitioners, who had been appointed directors, were not re-appointed at the annual general meeting held on 30 November 2021 because a majority of shareholders voted against the resolution.
It was subsequently alleged that they appointed two other persons as directors through a surreptitiously conducted extraordinary general meeting on 1 December 2021 and uploaded forged documents to the Ministry. The petitioners argued that several civil proceedings were pending between the parties and that the criminal case constituted misuse of the process of law. Respondent No.2 opposed quashing, submitting that the grave allegations required trial. The Court considered the alleged false statements before statutory authorities and the alleged attempt to usurp company management through unauthorised appointments. It held that the relevant inquiry under Section 482 Cr.P.C. was whether the complaint prima facie disclosed the alleged offences. Relying on State of Madhya Pradesh vs. Surendra Kori, (2012) 10 SCC 155, the Court reiterated that inherent jurisdiction must be exercised sparingly, carefully and cautiously. It could not conduct a mini-trial to resolve the allegations concerning forged documents and director appointments. Finding that the serious allegations required trial to elicit the true facts, the Court dismissed the criminal petition and closed pending miscellaneous applications.
Cases Discussed
- (2012) 10 Supreme Court Cases 155 — State of Madhya Pradesh vs. Surendra Kori (Supreme Court): Paragraph 14 was quoted and relied upon for the principle that the High Court, exercising jurisdiction under Section 482 Cr.P.C., does not function as an appellate or revisional court; its inherent powers must be exercised sparingly, carefully and cautiously, particularly where the facts and evidence are incomplete. Applied in declining to conduct a mini-trial and refusing to quash the proceedings.
Read SC Final Judgment: Private Complaints Barred for Company Fraud Without SFIO Approval: SC
Read SC Order on Review: Private Individuals Cannot Bypass SFIO Complaint Requirement: Supreme Court
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
This Criminal Petitions is filed under Section 482 of the Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) to quash the proceedings against the petitioners/accused Nos. 1 and 2 in C.C.No.S8 of 2022 on the file of VIII Additional Metropolitan Sessions Tide-Cum-Special Judge for Economic Offences, City Criminal Courts at Nampally, Hyderabad, for the offences punishable under Sections 448, 451 of the Companies Act (for short the Act and Sections 464, 468, 47L, l2O-B of the Indian Penal Code (for short ‘IPCJ.
2. The brief facts of the case are that respondent No.2 and his wife incorporated a company namely M/s.Shreemukh Namitha Homes Private Limited on 19.O8.2015 under the Act. Accused Nos. I and 2 appointed as directors of the said company on 03.09.2016 and 27.O8.2O15, respectively. As per the altered articles of association of the Company dated 02. 1 1.202 1, during the Annual General Meeting held on 30.11.2021, the said company proposed resolution for re-appointment of accused Nos.1 and 2 as directors of the said company. However, accused Nos. and 2 were not re-appointed as directors of the said company as majority of the shareholders including respondent No.2 and his wife voted against the resolution. Thereafter, it came to light that without the knowledge of respondent No.2 and his wife, who are the 75% shareholders of the said company, accused Nos.1 and 2 illegally appointed Ms. Yerram Vanitha and Mr. Kaleshwar Vasgi as directors of the said Company by surreptitiously conducting Extra Ordinary General Meeting on 01.12.2021 and uploaded the same with forged documents in Ministry of Corporate Affairs. Hence, a case was registered in C.C.No.58 of 2022 before the C.C.No.58 of 2022 on the file of VIII Additional Metropolitan Sessions Judge-Cum Special Judge for Economic Offences, City Criminal Courts at Nampally, Hyderabad
3. Heard Sri D. Madhava Rao, learned counsel for the petitioners as well as Sri S. Ganesh, learned Assistant Public Prosecutor for respondent No. l-State and Sri S. Ravi, learned senior counsel for respondent No.2.
4. Learned counsel for the petitioners submitted that there are civil disputes between the parties, for which, several civil cases are pending before the concerned Civil Court. He further submitted that though the disputes between the parties are civil in nature, respondent No.2 filed criminal case only to misuse the process of law. Hence, he prayed the Court to allow the Criminal Petition by quashing the proceedings against the petitioners.
5. On the other hand, learned counsel for respondent No.2 opposed the submissions of learned counsel for the petitioners stating that there are grave allegations against the petitioner which requires trial Hence, he prayed to the Court to dismiss the Criminal Petition.
6. In view of the rival submissions made by both the parties, this Court has perused the material available on record. The main allegations are that the petitioners made false statements before the statutory authority including Ministry of Corporate affairs apart from illegally appointing third parties through surreptitious board resolutions only to usurp the management of the said company. Furttrer, due to civil disputes between the parties, the petitioners filed civil suits O.S.No. SS of 2022 belore the III Junior Civil Judge, Kukatpally; O.S.No.99 of 2022 before the XV Additional District Judge, Kukatpally and C.P.No. 1O of 2022 betore the National Company Law Tribunal. It is evident that this Court vide orders dated Oa.O6.2O22 in C.R.P.No. 1126 of 2022 allowed the revision petition and passed orders in favour of respondent No.2 by setting aside the interim orders passed in O.S.No.99 of 2022. It is pertinent to note that to quash the proceedings under Section 482 of Cr.P.C, the Court has to see whether the averments in the complaint prima facie shows that it constitute the offence as alleged by the Police.
7. At this stage, it is pertinent to note the Judgment of the Hon’ble Supreme Court in State of Madhya Pradesh vs. SurendraKori1, wherein in paragraph No.14 it is held as follows:
“The High Court in exercise of its powers under Section 482 Cr.P.C. does not function as a Court of appeal or revision. This Court has, in several judgments, held that the inherent jurisdiction under Section 482 Cr.P.C., though wide, has to be used sparingly, carefully and with caution. The High Court, under Section 482 Cr.P.C., should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of wide magnitude and cannot be seen in their true perspective without sufficient material.”
8. In the case on hand, the allegations are that without any authority the petitioners appointed directors to the said company and uploaded the same in the Ministry of Corporate affairs with forged documents. This Court cannot conduct mini trial while dealing with the petitions filed under Section 4g2 of Cr.P.C., as such, the allegations requires trial. In view of the same and the law laid down by the Apex Court in Surend.raKori (supra), since the offences alleged against the petitioners are serious in nature, it requires trial in order to elicit the true facts of the case. Hence, this Court does not hnd any merit in the criminal petition to quash the proceedings against the petitioners and the same are liable to be dismissed.
9. Accordingly, the Criminal petition is dismissed Miscellaneous applications, if any pending, shall also stand closed.
Notes:
1 (2012) 10 Supreme Court Cases 155
