Single-judge High Court of Madras quashed an FIR as abuse of process of court, holding the dispute to be civil in nature involving share transfer and payment.
The FIR in Crime No.224 of 2010 is quashed. It is open to the complainant to work out civil remedies before the appropriate forum.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 15.10.2014
CORAM
THE HONOURABLE MR. JUSTICE S.NAGAMUTHU
Crl.O.P.No.16109 of 2010
and
M.P.No.1 of 2010
Jayaprakash ... Petitioner/ Accused
Vs.
1.The State, rep.by Inspector of Police, Team 1, Central Crime Branch, Egmore, Chennai. 2.K.J.Suresh ... Respondents/ Complainant/ defacto Complainant
Criminal Original Petition filed under Section 482 Cr.P.C. to call for the records and quash the complaint in FIR No.224 of 2010, dated 10.5.2010 on the file of the first respondent police.
For Petitioner : Mr.A.Natarajan,Sr.counsel for M/s.A.Madhumathi For Respondents : Mr.Maharaja, Additional Public Prosecutor for R1 Mr.Kumar Talrejaa for R2
O R D E R
Seeking to quash the FIR in Crime No.224 of 2010, on the file of the first respondent police, the petitioner, who is the sole accused in the case, has come up with this petition. The second respondent is the de-facto complainant in the case. The said case has been registered for offence under Sections 406 and 420 IPC.
According to the prosecution, the petitioner/accused induced the second respondent/de-facto complainant during the month August 2007 to invest money to the tune of Rs.60 lakhs in a company to be promoted by the petitioner. He also assured the second respondent that he could be taken as a share holder. Believing the said inducement, it is alleged that the second respondent paid Rs.60 lakhs and he became a shareholder. Later on, the second respondent realised that the petitioner was not doing the business as it was expected of and instead he was going against the promise made. Therefore, according to the second respondent, he insisted for the return of the amount invested by him. It is further alleged that the petitioner accordingly took back the shares from the second respondent, but he did not pay the amount due under the shares to the tune of Rs.60 lakhs. The cheques issued by the petitioner also bounced back. These acts of the petitioner, according to the second respondent, amount to offence punishable under Sections 406 and 420 IPC. On these allegations, the FIR has been registered.
"2. In reply to the averments in paragraph 1 of the notice in reply, I hereby state that I am one of the promoters of M/s.Talent Capital India Pvt.Ltd (hereinafter referred to as 'the company') and had subsequently resigned as a director of the company solely based hon the false promise made by your client that he will purchase my shareholding in the company.
3.In reply to the averments in paragraphs 2, 3 and 4 of the notice in reply, I hereby state that it is surprising that you have been instructed to state that your client has acquired my shareholding in the company, the same is denied and I further state that I continue to own the 3,350 shares which was the subject matter of the Share Purchase Agreement dated 02.09.2009 due to the default of your client in paying me the consideration agreed to in the said Share Purchase Agreement. I further state that you were very much present at the Board Meeting of the Company
that was convened on 05.05.2009 wherein Mr.B.Parthasarathy was appointed as a Director and shares were allotted to him for the sums of money that he paid the Company and the same were minuted, needless to say that your client's baseless allegation now that the same have taken place without his knowledge coupled with his failure to pay me the agreed consideration for the 3,350 shares of the Company owned by me would clearly establish that he is laying the groundwork to hijack the Company from the other shareholders for his individual benefit to the detriment of the other shareholders.
5.In reply to the avermdents contained in paragraph 7 of the petition I reiterate that the appointment and resignation of Mr.B.Parthasarathy were matters that were decided at Board Meetings wherein your client was present and so to was the allotment of 40,000 equity shares to Mr.B.Parthasarathy, furthermore the reason stated by you in the notice for effecting "stop payment" towards the cheques issued by your client in my favour is nothing but an attempt to wriggle of his obligations under the aforesaid Share Purchase Agreement and the penal consequences for dishonouring of cheques. Needless to state that I continue to own 3,350 equity shares of the Company since as fairly admitted by your client he has failed to pay me the consideration payable as per the Share Purchase Agreement."
my considered opinion, it is a clear abuse of process of Court. An attempt has been made to convert a simple civil dispute into a criminal case. Therefore, as has been held by the Honourbale Supreme Court in the State of Haryana and Others vs. Bhajanlal and Others (1992 SCC (1) Suppl (1) 335), the FIR deserves to be quashed.
Sd/-
Asst.Registrar (CS II )
/true copy/
Sub Asst. Registrar
msk
To
1. The Inspector of Police,
Team 1, Central Crime Branch,
Egmore, Chennai.
2. The Public Prosecutor,
High Court, Madras
1 cc to M/s.A. Madhumathi, Advocate, sR. 49290
1 cc to Mr. Kumar Talreja, Advocate, sr. 49449
Crl.O.P.No.16109 of 2010
JS (CO) kk 27/10
2 issues framed by the court
Whether allegations of financial dispute and shareholding conversion constitute cognizable offences warranting criminal trial.
Whether Section 406 IPC and Section 420 IPC can be simultaneously invoked in this case.
Colour shows how this judgement treated each authority
State of Haryana and Others vs. Bhajanlal and Others (1992 SCC (1) Suppl (1) 335)Explained¶34
1 provisions across 1 enactments
Jayaprakash
The State
K.J.Suresh
S.NAGAMUTHU
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
