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TMI Blog1991 (2) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners who are accused in the same C. C. and against the same order of issuing process by the learned Presiding Officer of the Special Court for Economic Offences, Bangalore, I have heard these petitions together and I am passing a common order in these cases. I have heard learned counsel for the petitioners and learned counsel for the respondent fully in these petitions and also perused the records of the case. Petitioner No. 1 in Criminal Petition No. 916 of 1988 is a firm called Messrs. Shankar and Co. and petitioner No. 2 is the managing partner of that firm. The petitioner in Criminal Petition No. 917 of 1988 is an auditor of that firm who appeared before the respondent as the authorised agent having a power of attorney t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under section 200, Criminal Procedure Code, in the Special Court for Economic Offences at Bangalore against all the three petitioners as accused Nos. 1 to 3 alleging that they have committed the offences punishable under sections 276C, 277 and 278 of the Income-tax Act. The complaint came to be registered as C. C. No. 365 of 1987 and the learned Presiding Officer, after taking cognizance of the offences, issued summons to the petitioners. Being aggrieved by this order of issuing summons to them, they have preferred these petitions under section 482, Criminal Procedure Code. Learned counsel for the petitioners contended that accused No. 1 is company and, therefore, it cannot be prosecuted. He relied on Vijaya Commercial Credit Ltd. v. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entative for the purpose of the inquiry or trial and such appointment need not be under the seal of the corporation. In view of section 305, Criminal Procedure Code, even a company or a firm or a juristic person can be an accused and it will have to appoint a representative for the purpose of inquiry or trial to represent it. Even in the ruling that is relied upon by learned counsel for the petitioners, it has not been held that no prosecution can be launched against the company. But all it has stated is that there is no statutory compulsion to prosecute a company alongside the officers or persons in charge of, and responsible to, the company. In Sheoratan Agarwal v. State of Madhya Pradesh, AIR 1984 SC 1824, the Supreme Court, while deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of emphasis : "Naturally, before the person in charge or an officer of the company is held guilty in that capacity it must be established that there has been a contravention of the order by the company. " The Supreme Court, in its recent judgment in T. J. Stephen v. Parle Bottling Co. (P.) Ltd. [1988] 64 Comp Cas 151, has reiterated the principle enunciated in the case of Sheoratan Agarwal v. State of Madhya Pradesh, AIR 1984 SC 1824. In view of this pronouncement of the Supreme Court, it cannot be said that, under no circumstances, a company or a firm or a juristic person can be prosecuted. The company, firm or juristic person may not be subjected to the punishment of imprisonment. But, certainly, for the purpose of provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of assessment passed by the respondent and that appeal came to be partly allowed and the petitioners have preferred further appeal against the order of the appellate authority to the Income-tax Tribunal and that appeal is pending and, therefore, the prosecution launched against the petitioners during the pendency of the appeal instituted by them is bad in law. In P. Jayappan v. S. K. Perumal, First ITO [1984] 149 ITR 696 (SC), this question came to be considered. The question was whether the pendency of the reassessment proceedings' can be a bar to the institution of criminal prosecution for offences punishable under section 276C or section 277 of the Incometax Act or sections 193 and 196 of the Indian Penal Code. Their Lordships o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that whenever the assessee or any other person liable under the Act has failed to convince the authorities in the proceedings under the Act that he has not deliberately made any false statement or that he has not fabricated any material evidence, the conviction of such person should invariably follow in the criminal court." In view of this position of law, it is difficult to accept the contention of learned counsel for the petitioners. Learned counsel for the petitioners also contended that the discrepancies on the basis of which the respondent has given the complaint can be explained and accused No. 3 who is after all an auditor of the firm cannot be made liable to answer the criminal charges levelled against accused No. 1. The powers to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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