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2001 (4) TMI 821 - HC - Companies Law

Issues:
Quashing of a first information report under sections 406, 420, and 468 of the Indian Penal Code based on the alleged wrongful withholding of company property and unauthorized use of a company vehicle.

Analysis:
The appeal challenged the dismissal of a writ petition seeking to quash a first information report (FIR) against the appellants for not returning a car allegedly belonging to the respondent company after resigning as directors. The appellants argued that the FIR should be quashed as they had only committed an offense under section 630 of the Companies Act, 1956. The FIR accused them of not only withholding the company's property but also forcibly taking company stamps and letterheads to transfer the vehicle to their names. The court noted that the FIR contained serious allegations beyond just property withholding.

The court emphasized that lodging an FIR does not violate fundamental rights, and the court can only quash a complaint if it fails to make a case for investigation even when taken at face value. Referring to legal provisions under sections 630 and 634 of the Companies Act, the court highlighted the seriousness of the allegations in the FIR, including the unauthorized transfer of the company vehicle by using company stamps. The court cited previous judgments to establish that quashing an FIR is not warranted until the investigation is completed and all evidence is gathered.

In light of a Full Bench decision and a Supreme Court judgment, the court reiterated that quashing criminal proceedings should be done sparingly and only in rare cases. The court rejected the appeal, stating that there was no merit in challenging the dismissal of the writ petition seeking to quash the FIR. The judgment concluded by dismissing the appeal without costs, upholding the decision to allow the investigation to proceed without quashing the FIR based on the serious allegations made against the appellants.

 

 

 

 

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