Dismissed

Jagadish Prasad Sarda and 2 Ors. v. the State of Tg., Rep. by P.P. and Another

Telangana HC4 Mar 2022CRLP/16372/2016

Case brief

AI extract

What is this about?

Telangana High Court dismissed an appeal seeking quashing of criminal proceedings under Section 482 Cr.P.C. The case involved allegations of cheating by family members during company directorship disputes. The court held that the offence preceded the 2013 Companies Act amendment and that the charge sheet disclosed prima facie evidence, precluding quashing.

What did the court decide?

Petition under Section 482 Cr.P.C. to quash the processings dismissed; incidental petitions closed.

Jagadish Prasad Sarda and 2 Ors. Vs the… — Contract and Commercial Disputes | Telangana HC (2022)

¶1

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

¶2

FRIDAY, THE FOURTH DAY OF MARCH TWO THOUSAND AND TWENTY TWO

¶3

PRESENT

¶4

THE HONOURABLE Dr. JUSTICE G.RADHA RANt

¶5

CRIMINAL PETITION NO: 16372 OF 2016

¶6

Betwee n:

¶7

Jagadish Prasad Sarda, S/o. Late Srr Ramnivas Sarda, aged about 4g years Occ. Business, Rio. Villa No.35, Pearl Colony Rambagh, Attapur, Hyderabad

¶8

I,4anchar Lal Sarda, Sio. Late Sri Ramnivas Sarda, aged 46 years Occ. Business, R/o. Villa No.35, Pearl Colony Rambagh, Attapui, Hyderibad

¶9

S.V. Narayanacharyulu,, S/o. Late S. Narsimha Charvulu. aoed maior Occ. Company Secretary, R/o. House No.55, SRT, SanathnSgar, Hideraba'd

¶10

...PETITIONERS/ACCUSED No.1 to 3

¶11

AND

¶12

The State of-Telangana, Through Public prosecutor, High Court at Hyderabad, for the state of Telangana And the State of-Andhra pradesh

¶13

...RESPONDENT/RESPONDENT

¶14

Ashok Sarda, S/o. Late Sri Ramnivas Sarda, Aged about 41 years, Occ. ryLallSinS^{Director BRS_Refineries P\i(. Ltd., havingits office'atSurveyNo.} 656, Satamrai Village, Shamshabad Mandal, Rang-a Reddy District

¶15

...RESPONDENTiDEFACTO COMPLAI NANT

¶16

Petition under section l4B2 of cr.p.c praying that in the circumstances stated in the Memorandum of Grounds of criminal petition, the High court may be pleased to quash the proceedings in cc No.B of 2016 on the file of ll Additional Chief Metropolita Magistrate, Hyderabad.

¶17

CRLPMP. NO: 18497 0F 2016

¶18

Petition under Section 482 of Cr,p.C praying that in the circumstances stated in the Memorandum of Grounds of criminal petition, the High cburt may be pleased to stay of all further proceedings including personal appearance of the petitioners/ accused no.1 to 3 in cc No.B of 2016 on the file of ll Additional chief Metropolitan Magistrate, Hyderabad.

¶19

This Petition coming on for hearing, upon perusing the l,4emorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri^B. Chandrasen Reddy, Advocate for the Petitioner and the^{PublicProsecutoron} behalf of the Respondent No.1 and of Sri N. Naveen Kumar,^{Advocatefor the} Respondent No.2.

¶20

The Court made the following: ORDER

¶21

// //

¶22

THE HOYBLE DT. JUSTICE G. RADHA RANI

¶23

CRIMINAL PETITION No.16372 of 2016

¶24

ORDER:

¶25

This petition is filed by the petitioners-Al to A,3 under Section 482 Cr.P.C. to quash the proceedings in C.C. No.8 of 2016 on the file of II Additional Chief Metropolitan Magistrate, Hyderabad.

¶26

2.1. The case of the petitioners in brief was that the petitioners I and 2 and the 2nd respondent - de facto cornplainant were own brothers and disputes arose between them out ol the business activities in relation to an oil company. The 3"r petitioner'- A3 was the Company Secretary. The 2'd respondent lodged a private complaint before the II Additional chief Metropolitan Magistrate, Hyderabad alleging that the complainant was the founder director of M/s.BRS Refineries Pfi. Ltd. The company was having share capital of Rs.1,00,000/- i.e. 10,000 shares of Rs. 10/- each. The petitioners No.l and 2 - Al and A.2 along with the complainant were running a company under the name and style of M/s.Sarda Agro Oils Ltd., and obtained a loan of Rs.143.00 crores from Allahabad Bank, Himayatnagar branch, Hyderabad and Bank of Baroda, Himayatnagar branch, Hyderabad. The complainant and his wife had given personal guarantee and also rnortgaged their properties. The complainant was holding major shares i.e. 9990 and the I't petitioner - Al was holding i0 shares worth Rs.10/- each in M/s.BRS Refineries Pvt. Ltd. on2l-12-2011 , the wife of

¶27

¶28

DTCRR,J Ctlp.No.l6372 of2atI

¶29

¶30

the complainant^{was appointed as Additional Director of the said company'} After her appointment,^{the 1't petitioner - A1 resigned fromthe post of Director} and his resignation^{was submittedwith the Registrarof companies in Form} No.32 on 22-12-2011^{by the 3'd petitioner- A3. The 1" petitioner- A1} transferred his 10^{sharesin favorof the complainant by signing on translerdeed'} The complainant^{had transferred 5000shares in favorofhis wife'}

¶31

2.2.Thecomplainantfurthersubmittedthat,thecomplainantleposed utmost trust and^{faith in 3'd petitioner - A3 and he entrustedhis digitalsignature} along with^{passwordto A.3 in good faith' In October2012' certa\n disputesarose} betweenthecomplainantandAi&A2andthecomplainantwascoercedto resign from^{the post of Directorin lWs'Sarda Agro Oils Ltd' Theshares heldby} thecomplainantwerenotyetsoldortransferred.Aland,A2withadishonest intention to usurp^{the companyof the complainant and his wife and to mount} pressuleonthem,conspiredwithA.3andinfurtheranceoftheirevildesign,43 submitted Form^{No.32 with the Registrar of Companies on 31-10-2012} appointing A1^{and A2 as Directors of the companyrvhich belonged to} complainantandhiswife,withoutseekinganyperrnissionordirectionfl.ornthe complainant^{and his wife. After coming to know the said fact, the cornplainant} and his wife^{enquired with A3 vide email dated 16-1-2013 and A3 gave a reply} mailon17.|-zol3thatthesamewasdoneundertheinstructionsofAl.

¶32

¶33

DTGRR.J Crtp^{Not6372 oI20t6}

¶34

¶35

2.3. The^{saidcomplaintwas refened to the Police under Section156(3)} cr.p.c.^{The same was registered as Crime 335 of 2013 by Sultan BazaarPolice} and after^{investigation,filed charge sheet againstthe petitioners- Al to A3} under^{Sections 406,420,506read with34 IPC'}

¶36

Heard^{the leamed counsel for the petitioners' the leamed counsel for} the 2nd^{respondentand the leamed AssistantPublic Prosecutor'}

¶37

The^{leamed counselfor the petitioners submittedthat the 2nd} respondent^{with an ill motive filed the complaintagainst them' The entire} allegations^{were governed by the provisions of the Companies Act 1956' A} National^{CompanyLaw Tribunalwas establishedwith effect from1-6-2016'A11} other^{proceedings rvere baned by law after amendmentto the CompaniesAct} 2013.^{The complainant withoutapproaching the Registrarof Companies or the} Regional^{Director of the Ministry of Corporate Affairs'filed a false and} frivorous^{compraint. The 3d petitioner was an employee and he acted on the} instructions^{of complainant' he had no personalinvolvementin the alleged} offence,^{even if the entire allegations were taken to be true' no offencewas} made out^{against the petitioners and prayedto quashthe proceedings against the} petitioners.

¶38

¶39

¶40

Dr.GNlJ crtP.No t63?2 of 2L)16

¶41

The lealned counsel for the 2nd respondent on the other hand contended that the alleged incident occumed on 31-10-2012 prior to the amendment of the Companies Act in the year 2013. The provisions of Section 241 of the Companies Act were not applicable, having an altemative remedy is no bar to continue the criminal proceedings, the charge sheet rvould disclose that tl.rere was prima facie evidence collected by the investigating officer against the petitioners herein and prayed to dismiss the petition.

¶42

The leamed Assistant Public Prosecutor also opposed the petition

¶43

Perused the record. With regard to the contention of the learned counsel for the petitioners that the proceedings were bared by 1aw after amendment to the Companies Act, 2013 and the complainant had to approach the Registrar of Companies or the Regional Director of Ministry of Corporate Affairs but could not lodge the complaint before the Court, it is to be noted that as rightly contended by the learned counsel for the 2nd respondent that the alleged offence was committed on 31 .10.2012 prior to the amendment of the Companies Act in the year 2013 and the provisions of Section 241 lo 246 of Companies Act,2013 had no primafacie application to the alleged offences as the said provisions were limited to prevention of oppression and mismanagement which were applicable when the business of the company rvas managed in a manner which was like!6 cause serious injury or damage to the

¶44

¶45

) Crlp.No.l6372 DI.GRR,J^ol20 !6

¶46

business or the companies^{affairs were conductedprejudicially to public interest} or to the interest ofthe^{company, but not pertainingto appointing the persons as} Directors of the company by^{submittinga forgeddocument. Hence, this court} does not find any merit in the^{contention of the leamed counsel for the} petitioners in this regard.

¶47

The charge sheet^{woulddisclose that "as per the evidencerecord of} Registrar of companies, A1^{and A2 were inducted as directors on 31-10-2012} and the same was^{processedby 43 through Form-32 using the digitalsignature} of the complainant^{and as per the email given by 43 to the complainant,it was} evident that he acted^{upon the instructions of A1. Duringintenogationalso 43} admitted the said fact.^{Therebyall the accusedwith a commonintention cheated} the complainant and^{committed criminal breach of trust and threatenedthe} complainant with dire^{consequences and committed the offences underSections} 406,420,506 r/w 34 IPC."

¶48

lt is settled^{principal of Iaw that the power under Section 482Cr.P.C.} is to be exercised sparingly^{not to smother the legitimate prosecution.The power} has to be exercised^{with circumspection in the rarest of rarecases.The power of} the police to investigate^{into a cognizableoffenceis ordinarilynot to be} interfered by the^{judiciary. The High Court should be extremely cautious and}

¶49

l--

¶50

¶51

slow to interfere with the investigation/trial of criminal cases and should. not stall the investigation or prosecution except when it is convinced beyond doubt that the FIR or charge sheet does not disclose commission of offence or prosecution is barred by law or it is necessary to interfere to prevent the abuse of process of the Court.

¶52

The charge sheet would discrose that the poiice coilected the evidence as per the record of Registrar of companies, which was a statutory record. They also collected the e-mair given by 43 to the complainant wherein he admitted that he acted upon the instructions of A1. Thus, there was prima facieevidence collected by the investigating officer to prove the offences against the petitioners under Sections 406 and 420 rpc. The statements of the witnesses recorded also would' prima facie prove the other offences. The truth or otherrvise ol these allegations can be decided only after a full-fledged trial. This Court ordinarily would not embark upon an enquiry whether the evidence in question is reliable or not or whether the accusations would be sustained or not. It was the function of the trial court. The inherent power under Section 4g2 cr.p.c. should not be exercised to stifle a regitimate prosecution. Hence, it is considered not fit to quash the charge sheet against the petitioners.

¶53

¶54

DT,CRRJ C^p.No 16372 of20l6

In the result, the petition is dismissed. Miscellaneous petitions

¶59

pending, ifany, shall stand closed.

¶60

SD/- L.SIVA^PARVATHI ASSISTANT^REGISTRAR

//TRUE^COPY//

FICER ,r"r*ffi,

To,

The^{ll Additional Chieflt/etropolitan tvlagistrateat Nampally' Hyderabad'}

¶66

The^{Station HouseOfficer'Sultan Bazar PoliceStation'Hyderabad'}

¶67

One^{CCto Sri B. ChandrasenReddy' Advocate [OPUC]}

¶68

One^{CCto Sri N NaveenKumar' Advocate [OPUC]}

¶69

5.TwoCCstothePublicProsecutor,HighCourtfortheStateofTelanganaat HYderabad. [OUT]

¶70

Two^{CD CoPies}

¶71

One^SPareCoPY gbr

<.]x

HIGH COURT

DATED: 0410312022

i, )
ii:
r$ I [4i']i 2i:ti

¶76

ORDER

¶77

CRL.P.No.16372 of²⁰¹⁶

¶78

DISMISSING THE CRIMINAL^PETITION

¶79

q
>6 V
\'

Jagadish Prasad Sarda and 2 Ors. v. the State of Tg., Rep. by P.P. and Another

Case brief

What is this about?

What did the court decide?

Jagadish Prasad Sarda and 2 Ors. v. the State of Tg., Rep. by P.P. and Another

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

M/s. Emaar India Limited Vs The State of Telangana and another

Palle Mallesham Vs The State of Telangana,.,rep.,Pp

K.Prem Sagar Rao Vs the State of Telangana and Another

Mandula Prabhu and Another, Vs State of a.P., Rep by Spl. Pp.

Zargar Surjeel Gull Vs The State of Telangana.,rep,.Pp

Mr. Sushil Vs The State of Telangana.,rep.,Pp