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2015 (11) TMI 1889 - HC - Indian LawsSeeking impunity from prosecution - public servants within the meaning of Section 197 of Cr.P.C - can be removed without the orders of the Hon'ble President of India or not - HELD THAT;- The complainant is a dismissed employee of BEML. The Division Bench of this Court headed by the then Hon'ble Chief Justice, while dismissing the writ petition filed against BEML of which complainant had represented the petitioners as his counsel observed that litigation is purely pursued out of personal motives. The Apex Court in State of Haryana and Others v. Bhajan Lal and Others 1990 (11) TMI 386 - SUPREME COURT , listed 7 categories of cases by way of illustrations wherein power of the High Court under Article 226 of Constitution of India/482 of Cr.P.C. can be exercised either to prevent abuse of process of the Court or otherwise to secure the ends of justice - The case on hand fits in both 1st category and also 7th category in not making out prima facie even after accepting the facts alleged in its entirety and also for being malicious prosecution with personal motive. Even if the petitioners have violated the provisions under Section 205 of the Act of 1956 then also offence under Section 447 of the Act of 2013, cannot be brought home for the sole reason, that fraud is not to be seen from the alleged act. The learned Magistrate while taking cognizance of the matter except epitomizing the complaint averments has not given independent application of his mind. As per Maksud Saiyed 2007 (9) TMI 400 - SUPREME COURT , the Magistrate has to carefully scrutinize the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused. Thus, it is fairly well settled that this Court under the extraordinary jurisdiction under Section 482 of Cr.P.C. quashing on going investigations/complaint or other proceedings to prevent abuse of process of law - petition allowed.
Issues Involved:
1. Alleged violation of Section 205 of the Companies Act, 1956 and Section 123 of the Companies Act, 2013. 2. Applicability of Section 447 of the Companies Act, 2013. 3. Requirement of sanction under Section 197 of Cr.P.C. 4. Prima facie case against the accused persons. 5. Abuse of process of law and malicious prosecution. Detailed Analysis: 1. Alleged Violation of Section 205 of the Companies Act, 1956 and Section 123 of the Companies Act, 2013: The complaint alleges that the company declared a 25% dividend for the financial year 2012-13 despite incurring a loss of Rs. 122 Crores, which is contrary to Section 205 of the Companies Act, 1956 and Section 123 of the Companies Act, 2013. However, Section 123 of the Act of 2013 was brought into effect from 01.04.2015 and is not applicable to the case since the dividend was declared in the AGM held on 13.09.2013. The equivalent provision, Section 205(1) of the Act of 1956, allows for the declaration of dividends out of profits from any previous financial year, provided certain conditions are met. The petitioners argued that the proposed dividend of Rs. 10.41 Crores was declared from the profit of the previous year not transferred to reserve, and the balance amount was transferred to the General Reserve. 2. Applicability of Section 447 of the Companies Act, 2013: Section 447 of the Act of 2013 deals with punishment for fraud but does not define fraud. The complainant contends that the violation of Section 205 of the Act of 1956 or Section 123 of the Act of 2013 amounts to an offence punishable under Section 447. However, the complaint lacks specifics on fraudulent acts. The court observed that the resolution to declare dividends was passed in a general body meeting of shareholders, and attributing criminality to the accused for this resolution is illogical. The complaint was found to be vague, ambiguous, and not making out the culpability of the petitioners. 3. Requirement of Sanction under Section 197 of Cr.P.C.: The petitioners argued that they are public servants appointed by the President of India and cannot be prosecuted without sanction under Section 197 of Cr.P.C. The court referred to the judgment in Mohd. Hadi Raja v. State of Bihar, which held that officers of public sector undertakings do not fall under the ambit of Section 197. Therefore, the protection under Section 197 of Cr.P.C. is not applicable to the accused persons. 4. Prima Facie Case Against the Accused Persons: The court emphasized that a criminal trial should not be based on mere hope and expectation of finding material to implicate the accused. A prima facie case must be established with definite allegations. The complaint in this case failed to disclose a prima facie case against the accused. The court cited the judgment in State of West Bengal v. Swapan Kumar Guha, which states that when a complaint fails to disclose the commission of an offence, the court must interfere and stop the investigation. 5. Abuse of Process of Law and Malicious Prosecution: The court noted that the complainant is a dismissed employee of the company and has a history of pursuing litigation out of personal motives. The case fits into the categories of cases listed in State of Haryana v. Bhajan Lal, where the court can exercise its power to prevent abuse of process or to secure the ends of justice. The complaint was found to be maliciously instituted with an ulterior motive for wreaking vengeance on the accused. Conclusion: The court concluded that the complaint failed to disclose a prima facie case and was an abuse of the process of law. The proceedings in C.C. No. 214/2013 were quashed, and the petitions were allowed. The court also disposed of the interim applications IA No. 2/2015 and IA No. 2/2014.
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