Allowed

P. Ravindranath Reddy v. the Registrar of Companies for Telangana and A.P

Telangana HC5 Jul 2022CRLP/7860/2015

Case brief

AI extract

What is this about?

Justice A. Santhosh Reddy, exercising inherent powers under Section 482 Cr.P.C, quashed criminal proceedings against a Chartered Accountant accused of falsifying information in E-form 32. The court held that allegations of not verifying the meeting's authenticity due to reliance on the Director's signed copies did not establish conspira

What did the court decide?

Criminal proceedings under CC No. 21 of 2015 against the petitioner are quashed.

P. Ravindranath Reddy Vs the Registrar of Companies… — Company and Corporate | Telangana HC (2022)

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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TUESDAY, THE FIFTH DAY OF JULY

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TWO THOUSAND AND TWENTY TWO

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PRESENT

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THE HONOURABLE SRI JUSTICE A.SANTHOSH REDDY

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CRIMINAL PETITION NO: 7860 OF 2015

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Between:

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P-Ravindranath Reddy, S/o. P.Pola Reddy Age: 63 years, Occ: Chartered Accountant, Rt/o. Flat No.201 , Royal Ville, 3:4-52615, Street No.10, Bharkathpura, Hyderabad - 500027

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AND

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...PET|T|ONER/ACCUSED

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The Registrar of Companies for Telangana and A.p, 2nd Floor, Kendriyasadan, Sultanbazar, Koti, Hyderabad, Rep.byStanding Council for Central G6vt, / Assistant Solicitor General

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...RESPONDENT/COMPLAINANT

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Petition under Section 482 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 all the proceedings against the accused in CC No.21 of 2015 on the file of Special Judge for Economic Offences, Hyderabad.

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CRLPMP. NO: 7787 OF 201 5

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Petition under Section 482 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 stay further all proceedings including the personal attendance of petitioner/ accused in C.C.No.2112015 on the file of the Special Judge for Economic Offences, Hyderabad.

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CRLPMP. NO: 6202 OF 2017

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Between:

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Registrar of Companies,.Hyderabad for Andhra pradesh and Telangana, 2nd Floor, Corporate Bhavan, Bandlag{da, Thattiannaram Village, Hayathnag6r Mandal, Nagole, Hyderabad-500068 Telangana

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AND

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...PET|T|ONER/ RESPONDENT

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P.Ravindranath Reddy, S/o. P.Pola Reddy Age: 63 years, Occ: Chartered Accountant, R/o. Flat No.210, Royal Ville, 3-4-52615, Street No.10, Bharkathpura, Hyderabad - 500027 ' Telangana

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...RES'.NDENT/^pETrroNER

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Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the lvlemorandum of Grounds of Criminal Petition, the High Court may be pleased to vacate the interim order dated 10.9.2015 in Crl. P. No.786012015.

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This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of STi.M.JAGADISH KUMAR, Advocate for the Petitioner and of Sri N.Rajeshwara Rao, SC for ASGI, for the Respondent.

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The Court made the following: ORDER

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TIIE HONOURAIII-1, SRI JUS'IICE A.SANTITOSI{ REDDy

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CRL.P.No.7860 OF 2015

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ORDER:

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This criminal petition is filed ur.rder Section 482 Cr.P.C to quash the proceedings against the petitioner/accused in C.C.No.2l of 2015, on the file of the Special Judge lor Economic O{fences, Hyderabad.

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Heard learned counsel for the petitioner and leamed Assistant Solicitor General of India for the respondent. Perused the record.

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The brief lacts of the case are that the petitioner is a Chartered Accountant by profession. IIe is facing charge for the offence punishable under Section 628 of the Companies Act. It is alleged in the complaint that the petitioner herein ceftifled E-form 32, signed and filed by Mr.Polasa Ravi Kumar, Director of M/s Kadambari Consultants Private Limited before the Registrar of Companies for appointment of seven Directors in the board meeting held on 31.01 .2012. It is alleged that no such board meeting was held in regard to appointment of seven Directors and

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that the Directors have^{not givenany conflmration lettersand} that they have not received^{any noticc of board meeting.Hence,} the petitioner is charged for^{lurnishing false infonnation by} cerlifying E-form 32^{signed, filed by Mr.PolasaRavi Kunar for} appointment of seven directors.^{Aggrieved, the prcsent criminal} petition is frled.

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Learned counsel for the^{petitionersubmitsthat Mr.Polasa} Ravi Kumar, Director of Mi s^{Kadambari Consultants Private} Limited had approached the^{petitionerwith the extractsof the} minutes of the board meeting^{held on 31.01.2012with regard to} appointment of seven^{Directors,digitally signed by Mr.Ravi} Kumar and requested the^petitioner to^{E-certify tbrm 32 for the} purpose of filing the same before the^Registrar of^Companies, Hyderabad; that the^{petitionerhas only certified E-form 32 and the} MCA instruction do not^{prescribe any guidelinesor checklist} which the professional is supposed^{to follow at the time of} E-attestation of E-form 32. No offence is^{madeout against the} petitioner and a false complaint is filed against him.

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The learnecl Assistant Solicitor Gcncral of India submits that the petitioner had lurnislred false infbrmation to the l{egistrar of Companies by certifying E-Form 32 knowing fully well that the inlbnnation contained in E-fornr 32 is talsc and is without any copy of board resolution and thereby committed the^offence alleged.

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A perusal ol the allegations in the complaint tiled by thc Registrar of Companics Ilyderabad would reveal that they received a complaint ll'om Mr.M.V.Bhaskar, Alternate Director of M/s Kadambari Consultants Private Limited alleging that one Mr.Polasa Ravi Kumar. Director of M/s Kadambari Consultants Private Limited had filed E-form 32 before the Registrar of Companies for appointment of seven Directors on^26.02.2012 mentioning the appointment date as^31.01 .2012.^{The allegationsin} the complaint further^goes to show that^no such^{board meeting was} held on 31.01.2012 and all the four directors have^given conflrmation letters that they have not^{received any noticeofboard} meeting and have not attended the same on^{3 I .01 .2012.}

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In pursuance of^{the above, the RegionalDirector (SER)} conducted an enquiry^{and later prosecutionr'vasinitiatedagainst} the petitioner under^{Section 628 of the Act by duly serving a show} cause notice^{on him.The petitionerrepliedto the said showcause} notice stating that^{one Mr. Polasa Ravi Kutnar, Directorof} M/s Kadambari Consultants^{PrivateLimited hadapproachedhim} for certification of^{E-form 32 by producing a copy of the board} resolution dated^{31.01.2021and digitally signed E-form 32} and basing on the^{same, the petitioner had digitallycertified} E-form 32 in^{good faithafter exercising due diligencebelieving it} as genuine and^{not hctitious. The allegationsin the complaint} reveal that the^{petitioneris required to verify the records of the} company before^{givinghis certificationand that he failed to do so} leading to filing of^{the complaint.}

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After considering^{the explanation submitted by the petitioner} in reply to the show^{cause noticeand particularly the allegations} made in the complaint,^{I am of the view that the allegationsdo not} make out any offence,^{much less the offence under Section628 of} the Act, to^{proceed againstthe petitioner.}

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For the sake olconvenience.^{Section628 ol'the Act readsas}

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undcr:

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Penalty for false statements.

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lf in any return, report,^{certificate,balance sheet,} prospectus, statement or other document^{required by or} for the purposes of any of^{the provisionsof this Act, any} person makes a statement-

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(a) which is false in any material^particular, knowing it to be false; or (b) which omits any material fact knowing^it to be material;

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he shall, save as otherwise^{expressly provided in this Act'} be punishable with imprisonment^{for a termwhich may} extend to two^years, and shall^{also be liable to fine".}

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The above section^{prescribespunishmentfor falsestatementand}

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also what is false statement.

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The Hon'ble Apex^{Court in CFI,NTRAL BUREAUOF} INVESTIGATION,^{I{YDERABADV' K.NARAYANA RAOI iN}

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a similar situation^{on the view takenby this court heldthatunless} there is material to show^{that the petitioner had eitherconspired}

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with the bonowers or^{the other accusedor abettedthe commission}

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, 2012 cRL.t-.J 4610

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ol'off'ence, he cannot be^{prosccutedtbr the off-encc. In the case on} hand, the allegations levelled^against the^{pctitioncr,u'ho is a} Charlere<l nccountant, appears to be^{not suff-rcicrltto proceed} against him for the alleged offence^{and continuationof the samc} rvould amount to abuse of^process of court.^Moreovcr,the allegations do not specify that^{the petitioner has intentionally} certified E-form 32 without a copy of^{board resolution and the} same would not amount to^{giving a false statement in view of his} coveted position and duties as a Chartered^{Accountant.So faras} false certification of E-form 32 is concerned,^{the Director} might have created a false board resolution^{copy and prescntedthe} same before the petitioner for^{which the petitionercannotbe} made responsible on mere certification of^{the same.Theinherent} powers of this court have to be exercised in the event^{of abuse of} process of court or to meet the ends ofjustice or^{to carryout the} orders passed by this court. Under^{these circumstances,it is} considered a fit case to invoke the inherent^powers of^{this Court} under Section 482 Cr.P.C and quash further^{proceedings against} the petitioner/accused.