1988 (3) TMI 370 - SC - Companies Law

Whether there exist sufficient grounds for proceeding with the case? Held that - Once the order of the High Court is vacated the order of the learned Magistrate would revive and the prosecution as directed by the learned Magistrate has now to continue. We accordingly direct the case to be closed against respondent No. 2 without further delay. Ordinarily in a criminal case of this type there would have been no order for costs. But keeping in view the background of the case the manner in which respondent No. 2 has behaved and the fact that he is squarely responsible for delaying the proceedings by reiterating the same contention twice over we are of the definite opinion that respondent No. 2 should be made to suffer exemplary costs. We accordingly direct that he shall be called upon to pay a sum of Rs. 10, 000 by way of costs and the said amount is to be deposited in the trial court within one month hence failing which the trial court shall have a direction to recover the same as fine and pay the amount to the complainant. Compliance shall be reported to the registry of this court.

Summary

Issues:
- Allegation of offence under section 5 of the Imports and Exports (Control) Act, 1947.
- Application for recall of summonses and dismissal of the complaint.
- Discharge of the managing director from the trial.
- Quashing of the process issued against the managing director.
- Decision on continuation of prosecution after a significant delay.
- Imposition of exemplary costs on the managing director.

Allegation of Offence:
The appellant, Deputy Chief Controller of Imports and Exports, filed a complaint alleging an offence under section 5 of the Imports and Exports (Control) Act, 1947. The case was transferred to the Additional Chief Metropolitan Magistrate, where cognizance was taken without examining the appellant. The respondents, a private limited company and its managing director, were accused of the offence.

Application for Recall and Dismissal:
Respondents filed an application for recall of summonses and dismissal of the complaint, which was initially dismissed by the Magistrate and later by the High Court. The case proceeded to trial after charges were framed.

Discharge of Managing Director:
During the trial, an application was made to discharge the managing director, arguing that the company was willing to admit guilt, and the managing director had no allegations of criminal conduct. However, the Magistrate dismissed the application, directing the trial to proceed against both accused.

Quashing of Process Against Managing Director:
The High Court, in an impugned order, quashed the process issued against the managing director. The High Court criticized the trial judge for not properly scrutinizing the complaint and for issuing process without sufficient grounds. It was held that the managing director could not be charged as a principal offender without specific allegations of aiding or abetting in the offence.

Decision on Prosecution Continuation:
The Supreme Court reversed the High Court's order, allowing the appeal and vacating the High Court's decision. The Court noted the significant delay in the case, dating back 20 years, and decided not to allow the trial to proceed due to the interest of justice. The managing director was directed to be discharged without further delay.

Imposition of Exemplary Costs:
In light of the managing director's behavior causing delays and reiterating contentions, the Supreme Court imposed exemplary costs of Rs. 10,000 on the managing director. Non-compliance with the cost payment directive would result in the trial court recovering the amount as a fine to be paid to the complainant.

This judgment highlights the procedural and substantive aspects of a criminal case involving allegations under the Imports and Exports (Control) Act, emphasizing the importance of due process, scrutiny of complaints, and considerations of justice and equity in legal proceedings.