Madras High Court
Dr.Philson Joseph Mukkada vs Dr.Rema Barathi.J on 21 November, 2023
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
Crl.OP.No.22015 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21.11.2023
CORAM:
THE HONOURABLE MR.JUSTICE G.K.ILANTHIRAIYAN
Crl.OP.No.22015 of 2021 and
Crl.MP.Nos.11944, 11945 of 2021 & 13552 of 2022
1.Dr.Philson Joseph Mukkada
2.Dr.Meenakshisundaram Soundaram
3.Dr.Nirmala
4.Dr.Franklin Teenu
5.Aloyce Franklin Fernandez ... Petitioners
Vs.
Dr.Rema Barathi.J ... Respondent
PRAYER: Criminal original petition is filed under Section 482 of Cr.P.C. to
call for the entire records in CC.No.7306 of 2021 pending on the file of the
learned II Metropolitan Magistrate, Egmore, Chennai and to quash the same.
For Petitioners : Mr.N.R.Elango,
Senior Counsel
for Mr.P.Ciridharan
For Respondent : Mr.Vimal Babby Crimson
ORDER
This Criminal Original Petition has been filed to quash the
proceedings in CC.No.7306 of 2021 pending on the file of the learned II
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Metropolitan Magistrate, Egmore, Chennai thereby taken cognizance for the
offence under Sections 420, 463, 405 r/w 120B of IPC as against the
petitioners.
2. The respondent filed the private complaint alleging that she is the
Director and shareholder of M/s.Reontgen Scans World Private Limited
(hereinafter called as 'company'). She is holding 22.5 % shares right from the
inception of the said company. She had invested Rs.45 lakhs in her name for
the commencement of business. The accused are the Managing Director and
other Directors of the Company. From the year 2014 onwards, she found
suspicious cash transactions that were being subjected to fraudulent billing and
also unacceptable accounting practices which were directly benefiting those
directors who were also working doctors at the company. False accounting and
intentional deletions of cash bills at the end of the day were projected to the
respondent in spite of complainant's objections, depicting as if huge cash
commissions were being made in the name of various referral doctors. The
other directors are having very less number of share and as such they are not
entitled to derive any extra benefit to themselves by denying the same to the
respondent. All the accused persons colluded with each other and conspired
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together along with the father in law of the first accused and dishonestly
misappropriated more than Rs.6,50,00,000/- which amount is lawfully entitled
by the respondent. There is consistent dishonest misappropriation by all the
accused persons for the past 10 years. The said amount was generated at the
only centre of the company at Nungambakkam. Therefore, the accused should
be put to strict proof to prove before this Court that the payments made to the
respondent were equal to similarly placed directors and shareholders. Further
alleged that they have sufficiently documented the same and minuted it from
time to time under the signature of the respondent. They also have forged the
respondent's signature on the documents and used the same as genuine for
filing forms and compliances before the Registrar of Companies. On receipt of
the said complaint, after recording sworn statement and on perusal of records,
the trial court had taken cognizance in CC.No.7306 of 2021 for the offence
under Sections 420, 463, 405 r/w 120B of IPC.
3. The learned Senior Counsel appearing for the petitioners
submitted that all the allegations are civil in nature. There were issues between
the Directors with regards to sharing their profits. The respondent mainly
alleged that she was not paid her share as per her investments since she has
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22.5% of shareholding with the company Therefore, if at all any issue with
regards to share their profits, she has to file appropriate suit before the civil
court. In order to attract any of the offence as alleged by the prosecution, there
are no prima facie materials even as per the allegations made by the
respondent. Further, she ought to have approached the Company Law Board
for oppression and mismanagement of the other Directors.
4. The learned counsel appearing for the respondent would submit
that the petitioners forged the signature of the respondent and filed so many
particulars before the Registrar of Companies. They also cheated the
respondent without giving her share by fabricating accounts. There are specific
allegations as against each petitioner and as such, the trial court rightly had
taken cognizance for the offence under Sections 420, 463, 405 r/w 120B of
IPC. That apart, the grounds raised by the petitioners can be considered only
before the trial court during the trial since all are mixed questions of facts.
5. Heard, the learned counsel appearing on either side.
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6. On perusal of records, revealed that there are totally five accused,
in which the petitioners are arrayed as A1 to A5. The first petitioner is the
Managing Director. The fifth petitioner is none other than the father in law of
the first petitioner and the father of the fourth petitioner. Except the fifth
petitioner, all are Directors and they are having respective shares in the
company. Their respective shares are as follows:
S.No. Name of Shareholder No. of shares % of
Shareholding
1 Meenakshisundaram 20,000 10%
Soundaram
2 Philson Joseph Mukkada 5,000 2.5%
3 Rema Barathi 45,000 22.5%
4 Umapathy Jayarama Mudaliar 45,000 22.5%
5 Vivekananthan Nirmala 45,000 22.5%
6 Teenu Philson 40,000 20%
Total 2,00,000 100%
7. As per the allegations, the petitioners failed to pay her share
properly. They have failed to account the money properly and cheated her. In
short, the respondent alleges mismanagement of the affairs of the company and
oppression of the respondent who is a Director and Shareholder of the
company. Though the respondent made allegations that the petitioners had
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forged her signature and filed so many accounts before the Registrar of
Companies, all the allegations are bald and vague and no documents produced
to show that the petitioners had forged her signature and filed documents
before the Registrar of Companies. There are no specific allegations as against
each petitioner. Further, it is also seen that the company was incorporated on
08.02.2010 and it is engaged in the business of healthcare and provides
radiology, imaging services like x-ray, ultrasound, MRI, flouroscopy,
interventional procedures, ultrasound and diagnostic mammography, computed
tomography (CD) with 3D etc. The entire company was managed by the first
petitioner as the Managing Director until his resignation from 15.02.2020.
Admittedly, the respondent does not professionally contribute anything to the
company and she is being a shareholder, she is entitled to get dividend as
declared by the company. The respondent alleged that she was not paid her
share and not divided properly in respect of the profits from the company.
8. Insofar as the offence under Section 420 of IPC, It is relevant to
extract the provisions under Section 420 of the Penal Code as follows :-
420. Cheating and dishonestly inducing
delivery of property — Whoever cheats and
thereby dishonestly induces the person deceived to
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deliver any property to any person, or to make,
alter or destroy the whole or any part of a
valuable security, or anything which is signed or
sealed, and which is capable of being converted
into a valuable security, shall be punished with
imprisonment of either description for a term
which may extend to seven years, and shall also
be liable to fine.
The ingredients to constitute an offence under Section 420 of IPC are as
follows :-
(i) A person must commit the offence of cheating
under Section 415 and
(ii) The person cheated must be dishonestly
induced to (a) deliver property to any person or (b) make,
alter or destroy valuable security or anything signed or
sealed and capable of being converted into valuable
security.
Cheating is an essential ingredient for an act to constitute an offence under
Section 420.
9. It is relevant to rely upon the judgment made by the Honourable
Supreme Court of India in the case of M/s. Indian Oil Corporation Vs. NEPC
India Limited and others reported in (2006) 6 SCC 736, held that the civil
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liability cannot be converted into criminal liability and it is necessary to take
notice of a growing tendency in business circle to convert purely civil dispute
in criminal case. This is obviously on account of prevalent impression that
civil law remedies are time consuming and do not adequately protect the
interest of lender/creditors. Such a tendency is seen in several family disputes
also, leading to irretrievable breakdown of marriages/families. There is also an
impression that if a person could somehow be entangled in a criminal
prosecution, there is a likelihood of imminent settlement. Any effort to settle
civil disputes and claim which do not involve any criminal offence by applying
pressure through criminal prosecution should be deprecated and dishonoured.
10. In the case of G.Sagar Suri Vs. State of Uttar Pradesh reported
in 2000 (2) SCC 636, the Honourable Supreme Court of India held as follows:-
“It is to be seen if a matter, which is essentially of
civil nature, has been given a cloak of criminal offence,
criminal proceedings are not a short cut of other remedies
available in law. Before issuing process a criminal Court has
to exercise a great deal of caution. For the accused it is a
serious matter. This Court has laid certain principles on the
basis of which High Court is to exercise its jurisdiction under
Section 482 of the Code. Jurisdiction under this Section has to
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be exercised to prevent abuse of the process of any Court or
otherwise to secure the ends of justice.”
11. Therefore, there is no prima facie material available to attract the
offence under Section 420 of IPC. As rightly pointed out by the learned Senior
Counsel appearing for the petitioners, instead of filing a petition before the
Company Law Board for mismanagement of affairs of the company and
oppression of the respondent, the respondent filed private complaint. It is also
seen that she lodged complaint before the City Crime Branch. On receipt of the
said complaint, detailed enquiry was conducted and found that all the
allegations are civil in nature and closed the complaint by the proceedings
dated 18.12.2020. Further, the trial court failed to follow the procedure laid
down under Section 202 of Cr.P.C. since the fifth petitioner is residing at
Nagerkoil and not within the jurisdiction of the trial court. Though it is curable
defect, the learned Magistrate without even perusal of the allegations and
supporting materials, mechanically had taken cognizance as against all the
accused persons and issued summons. Insofar as the other offences are
concerned, all the allegations are bald and vague and essential requirements for
the offences are not forthcoming in the complaint. Further all the allegations
made in the complaint are civil in nature which have been given a cloak of
criminal offence. Therefore, the present complaint is nothing but arm twisting
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method to extract more money from the petitioners. In the absence of any
shred of material against the petitioners, it would prejudice them if further
proceedings are allowed to be continued before the trial court in CC.No.7306
of 2021. Therefore, the present complaint is nothing but clear abuse of process
of law and it is liable to be quashed.
12. Accordingly, the entire proceedings in CC.No.7306 of 2021
pending on the file of the learned II Metropolitan Magistrate, Egmore, Chennai
is quashed and this criminal original petition is allowed. Consequently,
connected miscellaneous petitions are closed.
21.11.2023
Index :Yes/No
Internet : Yes/No
Speaking order/non-speaking order
lok
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To
The learned II Metropolitan Magistrate,
Egmore, Chennai
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G.K.ILANTHIRAIYAN, J.
lok
21.11.2023
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