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2024 (8) TMI 798 - HC - SEBIOffences by companies - liability of directors/person responsible - resignation of the present petitioners - Criminal Complaint pending qua the petitioners - HELD THAT - As petitioners has placed on record the certified copy of Form-32, which had been placed before the learned Trial Court by SEBI itself. The Form-32, as placed on record, clearly reflects that the petitioners had resigned on 23.02.1998, which was much before the cause of action alleged to have arisen in the present complaint. There is no other record. Respondent no. 2 does not dispute the authenticity of the said document as the same has been filed by them. The contention of the learned counsel for respondent no. 2 is that the letter dated 27.04.1998 reflecting the names of the petitioners as directors was issued much after the alleged date of resignation, again, is not tenable as the document-Form 32, has been recognised in law to be a public document to be regarded as evidence regarding whether a person is a director of a company or not. The said letter dated 27.04.1998 cannot override Form-32. In the present case, Form-32, has been placed by respondent no. 2 itself before the learned Trial Court. In view of the above, the present petition is allowed. The Criminal Complaint pending qua the petitioners is hereby quashed.
Issues:
1. Jurisdiction of the court to try the complaint. 2. Bar of limitation under Section 468 of the Cr.P.C. 3. Resignation of petitioners from directorship and their liability. Analysis: Jurisdiction of the Court: The petitioners argued that the complaint was not within the jurisdiction of the Delhi court as no cause of action took place there. They contended that the complaint did not specify any role for them and that they had resigned from directorship before the alleged offences. The court examined the SEBI Act and noted that SEBI had to establish that the petitioners were directors "at the time of commission of offence." The court found that the petitioners had resigned before the cause of action arose, thus the proceedings could not continue against them. Bar of Limitation: The petitioners claimed that the complaint was time-barred under Section 468 of the Cr.P.C. They cited a Supreme Court judgment to support their argument. However, the court did not delve into this issue as it found in favor of the petitioners based on their resignation from directorship. Resignation of Petitioners and Liability: The key contention was whether the petitioners were liable as directors of the company at the time of the alleged offences. The petitioners provided Form-32 showing their resignation, which SEBI had also submitted to the Trial Court. The court emphasized that Form-32 is a public document and is considered evidence of directorship status. Referring to previous judgments, the court concluded that the resignation of the petitioners before the cause of action absolved them of liability. SEBI's argument that a subsequent letter listing the petitioners as directors was not tenable as Form-32 took precedence. In conclusion, the court allowed the petition, quashing the criminal complaint against the petitioners. The court highlighted the importance of Form-32 in establishing the resignation of the petitioners and their lack of liability due to not being directors at the time of the alleged offences. The judgment was communicated to the Trial Court for compliance and uploaded on the High Court's website.
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