2000 (3) TMI 916 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the complaint.
2. Jurisdiction of Indian courts over alleged offences committed outside India.
3. Whether the allegations constitute offences under sections 60, 63, 68, and 68A of the Companies Act, 1956.

Detailed Analysis:

1. Maintainability of the Complaint:
The petitioners argued that the complaint is not maintainable on the grounds that they are citizens of the United States of America (U.S.A.) and thus not governed by the Companies Act of India. They contended that even if the facts alleged in the complaint are true, they cannot be tried under the Companies Act as it does not apply to them. The court examined the petitioners' status and noted contradictory statements regarding their citizenship. The petitioners were of Indian origin, and there was no clear evidence of a change in their citizenship status. The court held that the objection to the maintainability of the criminal case on the grounds of citizenship cannot be sustained in these proceedings.

2. Jurisdiction of Indian Courts Over Alleged Offences Committed Outside India:
The petitioners argued that the alleged offences were committed outside Indian territory, and therefore, Indian courts do not have jurisdiction. The court referred to Article 245(2) of the Constitution of India, which declares that no law made by Parliament shall be deemed invalid on the ground of extra-territorial operation. Section 4(2) of the Code of Criminal Procedure (the Code) mandates that all offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions. Section 188 of the Code deals with offences committed outside India and asserts jurisdiction over Indian citizens committing offences abroad. The court noted that the petitioners' exact citizenship status needed to be established, and if they were Indian citizens, the Indian law could be enforced against them. Additionally, the court found that one of the elements of the alleged crime was situated in India, thus bringing the case within Indian jurisdiction.

3. Whether the Allegations Constitute Offences Under Sections 60, 63, 68, and 68A of the Companies Act, 1956:
The court examined whether the allegations in the complaint, if accepted as true, would constitute offences under the Companies Act. The allegations were that the petitioners issued a prospectus inviting investment in the Indian company without appropriate authority and due process. The court noted that all documents supporting the complaint were not placed before it, and only select documents were available. The court emphasized that it could not conclude whether the offences were made out without examining all the documents, which could only be done after appropriate proof. The court further stated that it would not appreciate or assess the sufficiency of evidence in the exercise of jurisdiction under section 482 of the Code.

Conclusion:
The court concluded that it was inappropriate to quash the case against the petitioners at this stage. The allegations, if ultimately proved, could constitute a violation of the law. Therefore, the criminal petition was dismissed, and the proceedings in C.C. No. 24 of 1999 would continue in the Court of the Special Judge for Economic Offences at Hyderabad.