2009 (11) TMI 512 - HC - Companies Law

Whether the case is covered under section 633(2) of the Companies Act, inasmuch as, that there are no charges against the petitioner in the F.I.R. directly? Held that - This Court comes to a definite conclusion that this petition under section 633 of the Companies Act is not maintainable in the present circumstances. The proceedings under sections 120B, 467, 468, 471 and 477A I.P.C. are definitely the proceedings outside of the purview of section 633(2) of the Companies Act. The petition is dismissed. Interim order, if any, operating in this writ petition, is discharged.

Issues Involved:
1. Maintainability of the petition under section 633(2) of the Companies Act, 1956.
2. Validity of the stay order against investigation and arrest.
3. Locus standi of the intervener.
4. Concealment of material facts by the petitioners.

Detailed Analysis:

1. Maintainability of the petition under section 633(2) of the Companies Act, 1956:
The petitioners filed under section 633(2) of the Companies Act, 1956, seeking exemption from prosecution related to case crime No. R.C. 1(S)/2006/CBI/SCB/Lucknow of 2006 under sections 120-B, 467, 468, 471, 477-A of the I.P.C. The petitioners argued that the FIR named only V.K. Gupta, and no direct charges were made against them. They contended that the inquiry report by the Central Government showed only suspicion and did not implicate them. They claimed that the re-investigation amounted to harassment, and the actions of V.K. Gupta fell under 'misfeasance' covered by section 633(2). However, the Court, referencing the Supreme Court judgment in Rabindra Chamria v. Registrar of Companies, concluded that section 633(2) does not apply to offenses under the I.P.C., and thus, the petition was not maintainable.

2. Validity of the stay order against investigation and arrest:
The petitioners had obtained a stay against their arrest and investigation. The Court noted that section 120B IPC was clearly mentioned in the FIR, and the offenses committed by V.K. Gupta were referable to sections 420, 467, 468, 471, 497 I.P.C., constituting forgery, cheating, and falsification of records. The Court observed that V.K. Gupta, as the Chartered Accountant, had no independent interest in committing forgery without benefiting the petitioners, the Company's Directors. Therefore, stopping the investigation at the behest of the Directors was unjustified. The Court emphasized that the investigation referred to the C.B.I. by the Central Government should not be hindered, and the stay order was discharged.

3. Locus standi of the intervener:
An application by Mr. Arvind Johari, initially an opposite party, was considered. The Court allowed him to address as an intervener, referencing the Supreme Court judgment in J.K. International v. State, Government of NCT of Delhi, which allowed an aggrieved person to be heard even if the police charge-sheeted the case. However, the Court ultimately decided the petition based on arguments from the primary counsels, without taking substantial cognizance of Mr. Johari's additional documents or arguments.

4. Concealment of material facts by the petitioners:
The Court noted that the petitioners had filed multiple petitions for the same relief and concealed material facts, including an anticipatory bail petition before the Delhi High Court and a writ petition before the Division Bench of the Allahabad High Court. The Division Bench dismissed the writ petition on grounds of multiple filings and concealment of facts. The Court found that the petitioners were avoiding investigation and abusing the process of law, further justifying the dismissal of their petition.

Conclusion:
The Court dismissed the petition under section 633(2) of the Companies Act, 1956, as it was not maintainable for offenses under the I.P.C. The stay order against the investigation and arrest was discharged, and the petitioners were found to have concealed material facts and abused the process of law. The intervener was allowed to address the Court but did not substantially influence the final decision.

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