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TMI Blog2000 (6) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... aint. 3. The complainant in support of his petition for issuance of search warrant has filed his affidavit. It is stated that the complainant filed a complaint against A1 to A4 for the offences under sections 409 and 411 of IPC and also for the offences of contravention of sections 297, 299 and 300 of the Companies Act and the same was taken cognizance and summons were issued to the accused. It is stated in the affidavit that in order to prove the said offence for contravention of offences under sections 299 and 300, it is necessary to show that there was no resolution as required under the Companies Act, which constitute an offence. For this purpose, the minutes book of Accused No. 4 company for the period November, 1992 to December, 1996 are necessary. Similarly, it is stated that the cash book of A4 company for the period November, 1992 to March, 1996 along with the correspondence, vouchers and bank statements were also necessary to prove the offences under sections 409 and 411 of IPC. It is stated that cash book of Kris Engineers together with correspondence, vouchers and bank statements are also necessary to prove the offence against the accused in the above case. It is st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... represented to the court that notice may be ordered to the accused and they may be permitted to file counter and may be heard. It is stated that the court passed over the matter to hear the counsel for the complainant. The first accused s counsel waited till 3 p.m. but the matter was not called and neither the complainant nor her counsel was present. As the learned Judge was in his Chambers, the first accused s counsel left the premises and on 29-1-2000 when the first accused s counsel verified the court diary, it came to light that the petition to appoint Commissioner was allowed but no details have been mentioned in the said diary. On that day, the first accused s counsel filed a petition for certified copies and on verification of the said copies, it came to light the issuance of search warrant in respect of the documents mentioned therein. This grievance about the order of search warrant having been issued without hearing the petitioner does not assume any significance inasmuch as notice was not ordered in the petition and the order in question was passed ex parte. Mere chance presence of the petitioner s counsel in the court and his having mentioned the matter to the judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this provision, it is contended by Sri B. Audinarayana Rao, the learned counsel for the petitioner that inasmuch as the accused in this case are sought to be prosecuted for various offences of contravention of the provisions of the Companies Act and for misappropriation of company funds, which are offences in connection with the management of the company s affairs, an order in the nature of search and seizure for production of records could only be passed under section 627 and that section 94 of the Code cannot be pressed into service in such circumstances. 11. The learned counsel for the respondents Sri C. Padmanabha Reddy on the other hand contends that there is nothing in the language of the section 627 of the Companies Act to show that it abrogates the provisions in section 94 and that a Judge of the High Court is vested with exclusive jurisdiction to issue warrant in the nature of search and seizure and production of records from the office of the company where an officer of a company is sought to be prosecuted for the offences relating to the management of a company. It is pointed out that section 627 of the Companies Act does not start with a non obstante clause which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construed as a provision enacted for regulating the manner or place of investigation, inquiring into, trying or otherwise dealing with the offences under the Companies Act, the provision under sub-section (2) of section 4 of the Code will come into play and all provisions in the Code in respect of investigation, enquiry or trial etc. shall be applicable. Issuing of search warrant is undoubtedly one of the modes of investigation or enquiry into an offence. Section 627 enables special access to public prosecutor of a State, Central Government and Company prosecutor to make an application to a Judge of High Court for an order for production of records from the specified officers of the Company. It excludes a shareholder from such a privilege. 14. In the result, I have no hesitation in holding that section 627 is not a substitute for issuing a search warrant and cannot have the effect of annulment of section 94 of the Code in respect of investigation, enquiry or trial of offences committed by the officers of the company in connection with the management of the company. 15. It is further contended by Sri B. Audinarayana Rao, the learned counsel for the petitioner that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g him to attend and produce it, or to produce it at the time and place stated in the summons or the order. 18. The contention is that search warrant issued under section 93(1)( a ) is illegal inasmuch as summons or an order under section 91 could not have been issued against the petitioners who are the accused as it violates article 20(3) of the Constitution of India. This contention is supported by the judgment of the Supreme Court in the case of State of Gujarat v. Shyamlal 1 . It has been clearly held in this case that section 94 of CR. PC, 1898, equivalent of which is section 91, does not apply to an accused. 19. However, after the impugned order was passed, it is relevant to note that along with this petition for quashing the said order under which the learned Special Judge ordered search warrant, another criminal petition i.e., Crl. P. No. 874 of 2000 has been filed in this court for quashing the proceedings in the relative C.C. No. 3 of 2000 on the file of the Special Judge for Economic Offences, Hyderabad, which has been separately disposed of. It has been held in the said criminal petition seeking quashing of the criminal proceedings against the petitioners t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the quashing of the proceedings against the said company, the search warrant must be deemed to have been issued against the company for production of the documents in its custody and not against Al to A3. The order of the learned Special Judge specifically directs the search of the premises of the company (Accused No. 4) as seen from the following in para 2 : "Sri M. Jagadish Kumar, Advocate is appointed as Commissioner to search the premises of the registered office of M/s. Spectrum Power Generation Ltd. (A4) situated at premises No. 6-28 and 6-29, near LB Nagar Municipal Office, Saroornagar, Hyderabad. . . ." 23. This makes it abundantly clear that the search warrant was in fact directed against the company for search of the premises of its registered office. The learned Special Judge has recorded his finding of satisfaction for existence of grounds for issuing search warrant in the following words : "The material on record disclose that this court has reason to believe that the persons against whom search warrant to be issued are not likely to produce the documents mentioned in the petition which are in their possession by invoking the provisions of section 91 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 93(1)( c ) also. 28. The contention is that the affidavit filed by the petitioner in support of the petition specifically mentions in para 7 that a general search warrant is necessary to search the premises of the registered office of accused No. 4 company. Thus, the petitioner prayed for issuance of search warrant under section 93(1)( c ) also. Under section 93(1)( c ), the court may issue a search warrant when it considers that the purpose of enquiry, trial or other proceedings under the code will be served by general search or inspection to search, seize and produce the documents mentioned by the petitioner. 29. It has been held by the Supreme Court in the case of V.S. Kuttan Pillai v. Ramakrishnan 2 that when such a general search warrant was issued, in execution of it, the premises even in possession of the accused can be searched and the documents can be seized irrespective of the fact that the documents may contain some statements made by the accused upon personal knowledge, which when proved may have the tendency to incriminate the accused. 30. Thus, the legal position is that such a search and seizure pursuant to search warrant issued under section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lying. Under these circumstances, though the learned Special Judge has purportedly issued search warrant under section 93(1)( a ), the facts and circumstances of the case appear to justify the issuance of the general search warrant under section 93(1)( c ) also. 33. The important allegations as stated in the complaint against the accused 1 to 3 are that they have contravened certain provisions of the Companies Act which is punishable under the relative provisions and section 629A of the said Act. It is obvious that information about such contravention which includes absence of a resolution authorizing the accused to enter into a contract, omission on the part of the accused to inform their personal interest in the contract etc. could be secured from the records maintained by the company like minutes books and the accounts books. The crucial allegation against the petitioners-accused 1 to 3 are that they entered into a sham contract with Kris Engineers and used it as a device for siphoning the funds of the SPGL Company to Kris Engineers and ultimately to A1 to A3. Account books of the company are relevant material which would furnish evidence in respect of this allegation. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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