Partly allowed

Rajesh Prasad Misra v. Union of India and Another

Allahabad HC15 Jul 2019A482/5023/1998

Case brief

AI extract

What is this about?

Single judge court allowed applications under Section 482 CrPC to quash income tax criminal proceedings against certain partners in a partnership firm who were not in-charge or in control of the business, finding their impleadment illegal.

What did the court decide?

Proceedings under Criminal Case No. 897 of 1997 quashed against applicants who were not in-charge or in control of the firm; proceedings remain against directly responsible applicants.

Rajesh Prasad Misra Vs Union of India and Another — Company and Corporate | Allahabad HC (2019)

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Court No. - 34

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(1) Case :- APPLICATION U/S 482 No. - 5023 of 1998

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Applicant :- Rajesh Prasad Misra Opposite Party :- Union Of India And Another Counsel for Applicant :- Shakeel Ahmad Counsel for Opposite Party :- S.N. Srivastava, A.G.A., Ashok Kumar, Krishna Agarawal

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(2) Case :- APPLICATION U/S 482 No. - 8055 of 2013

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Applicant :- M/S Adarsh Nirman Sansthan Ram Nath And Others Opposite Party :- Union Of India And Another Counsel for Applicant :- Shakeel Ahmad Counsel for Opposite Party :- Govt. Advocate, R.K. Upadhyaya

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Hon'ble Sudhir Agarwal,J.

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Both these applications i.e. Application u/s 482 No. 5023 of 1998 (hereinafter referred to as “First Application”) and Application u/s 482 No. 8055 of 2013 (hereinafter referred to as “Section Application”) are related to proceedings of Criminal Case No. 897 of 1997, hence, are being taken together and decided by a common judgment.

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Heard Sri Shakeel Ahmad, learned counsel for applicant in both applications and learned AGA for State of U.P.

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Applicants of both applications have invoked inherent jurisdiction of this Court under Section 482 of Code of Criminal Procedure, 1973 (hereinafter referred to as "Cr.P.C.") with a prayer to quash the proceedings of Criminal Case No. 897 of 1997, pending in the Court of Special Chief Judicial Magistrate, Varanasi arising out of Criminal Complaint Case No. 4560 of 1987, under Section 276(c), 277, 278 read with Section 278-B of Income Tax Act, 1961 (hereinafter referred to as “Act, 1961”).

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It is stated that a complaint was registered against applicant along with others under Sections 276(c), 277, 278 read with Section 278B of Act, 1961 in respect of Assessment year 1978-79. However, on the other hand, complainant said that all partners impleaded as accused nos. 2 to 10 were responsible for conduct of business of firm as stated in paras- 5 and 10 of First Application. It is said that partnership firm in which Sri Suresh Prasad Mishra and Sri Awadhesh Prasad Mishra were to be the sole in-charge of firm and in para-10, it is clearly said that they were the only persons who have full control in the execution and management of firm, therefore, impleadment of applicant as well as allegation of vicarious liability is clearly illegal. Since in complaint, it has not been shown that applicant was in-charge in the business of firm.

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Learned counsel for respondents could not dispute that averments made in paras- 5 and 10 that Sri Suresh Prasad Mishra and Sri Awadhesh Prasad Mishra were partners in the firm and in this regard, the law is well settled that vicarious liability on behalf of management of Firm/Company is only upon the persons who are in-charge of business and in control of regular functioning having vicarious liability and not others. Therefore, from the allegations made in complaint itself and particularly in paras- 5 and 10, it is evident that applicant Rajesh Prasad Mishra is not in-charge of business of firm and has been illegally impleaded.

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In view thereof, First Application i.e. Application u/s 482 No. 5023 of 1998 is allowed. Proceedings of Criminal Case No. 897 of 1997, pending in the Court of Special Chief Judicial Magistrate, Varanasi arising out of Criminal Complaint Case No. 4560 of 1987, under Section 276(c), 277, 278 read with Section

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278-B of Act, 1961, so far as it relates to applicant, Rajesh Prasad Mishra, are hereby quashed.

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So far as Second Application is concerned, I find that applicants- 1 and 3 are directly responsible and so far as applicants- 2, 4 and 5 are concerned, they are similarly placed as applicant, Rajesh Prasad Mishra of First Application.

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In view of above, Second Application i.e. Application u/s 482 No. 8055 of 2013 is partly allowed. Proceedings of Criminal Case No. 897 of 1997, pending in the Court of Special Chief Judicial Magistrate, Varanasi arising out of Criminal Complaint Case No. 4560 of 1987, under Section 276(c), 277, 278 read with Section 278-B of Act, 1961, in respect to applicants- 2, 4 and 5 are hereby quashed and so far as applicants- 1 and 3 are concerned, proceedings of aforesaid case shall remain unaffected.

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It is made clear that this order shall not have any effect so far as other accused persons are concerned and proceedings thereagainst shall continue in accordance with law.

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Order Date :- 15.7.2019 Siddhant Sahu

Rajesh Prasad Misra v. Union of India and Another

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Rajesh Prasad Misra v. Union of India and Another

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