Rajasthan High Court - Jodhpur

Prem Prakash Bidyasar vs State Of Rajasthan ... on 16 May, 2023

Bench: Manoj Kumar Garg

[2023/RJJD/015487]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Criminal Misc(Pet.) No. 778/2023

1. Prem Prakash Bidyasar S/o Sh. Gyanendra Singh, Aged About 72 Years, B/c Jat, Share Holder Of Regal Mines And Minerals Pvt. Ltd. Jaipur, R/o B-2/444, Chitrakoot Scheme, Vaishali Nagar, Jaipur

2. Mayank Bidyasar S/o Prem Prakash Bidyasar, Aged About 38 Years, Share Holder Of Regal Mines And Minerals Pvt. Ltd. Jaipur R/o H.no. 20/102, Mansarowar, Jaipur.

----Petitioners Versus

1. State Of Rajasthan, Through Pp

2. Pratap Ram Anwala S/o Ladu Ram Anwala, R/o Vill. And Post Borawar, Teh. Makrana, Nagaur (Raj.).

3. Regal Mines And Mineral Pvt. Ltd., Through The Board Of Director, C/o B-2/444, Chitrakoot Scheme, Vaishali Nagar, Jaipur

----Respondents

For Petitioner(s) : Mr. J.S. Choudhary, Sr. Adv assisted by Mr. Pradeep Choudhary For Respondent(s) : Mr. Vikram Sharma, PP Mr. G.R. Punia, Sr. Advocate assisted by Mr. Rajesh Punia

HON'BLE MR. JUSTICE MANOJ KUMAR GARG

Order

16/05/2023

Instant misc. petition has been filed by the petitioner for

quashing of FIR No. 288/2015 registered at Police Station

Ratanada, District Jodhpur for offence under Section 420, 467,

468, 471 & 120B IPC.

Brief facts of the case are that the complainant filed a

complaint in the court of Metropolitan Magistrate, Jodhpur to the

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effect that he is a shareholder of a registered company Regal

Mines and Mineral Pvt Ltd alongwith six other share holders. It

was alleged that the accused shareholders transferred the shares

without any application given by him by putting forged signatures

and transferred his share causing him huge financial loss. It was

further alleged that the accused illegally removed the Director

from the Board of Directors of the company.

Counsel for the petitioners submits that complainant has not

impleaded the parent company in this criminal case whereas, the

company should be made the accused as per Section 305 of

Cr.P.C. and without impleading it, the shareholder in his individual

capacity cannot be prosecuted for the act done by the company

and share holders cannot be held responsible in person for the

vicarious responsibilities of the company. It is argued that since in

light of Section 36 of Companies Act, a registered company works

for and on behalf of all the shareholders under the provisions of

the Companies Act as well as in consonance with the

Memorandum and Articles of Association of the Company,

therefore there cannot be any dispute whether Civil or Criminal

directly amongst the shareholders without involvement of the

parent company. Therefore, a shareholder of a registered

company cannot prosecute other shareholders of the company in

their individual capacity without impleading the parent company

which is a necessary party. It is argued that all the shareholders

of a registered company are under legal obligation to carry out

their contractual responsibilities for which they agreed to abide by

the Memorandum and Article of association of the company as

signatories. No share holder can wriggle out unilaterally from the

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contractual obligations and file a criminal case against the other

shareholders because of a civil dispute with the company and the

shareholders can move any subject matter of dispute with the

company before the National Company Law Tribunal as provided

in Section 397 and 398 of the Companies Act. It is submitted that

once an individual person joins to form a company, his individual

status, as far as company is concerned, comes to an end as a

juristic person and he, as an individual shareholder, cannot invoke

the jurisdiction of criminal law against other shareholders of the

company directly without involving the parent company. It is

submitted that the complainant has invoked the provisions of

criminal law against the petitioners without impelading the parent

company, which is not permissible. It is further argued that there

is no evidence on record on the basis of which the petitioners can

be said to have entered into a criminal conspiracy for the purpose

of cheating the respondent complainant. There is no element of

cheating against the petitioners which resulted in undue financial

gain and financial loss to anyone. Similarly, the accused

petitioners cannot be said to have forged any document so as to

establish the offence under Section 420, 467, 468, 471, 120B IPC.

Learned counsel placed reliance on the judgment of Hon'ble Apex

Court in the case of Sri Ramdas Motor Transport Ltd & Ors Vs.

Tadi Adhinarayana Reddy & Ors reported in AIR 1997 SC 2189

and Rohtas Industries Vs. S.D. Agarwal & Ors reported in AIR

1969 SC 707. Learned counsel also relied upon the judgment of

Karnataka High Court in the matter of Sri. M. Gopal Vs. Sri Ganga

Reddy in Criminal Writ Petition No. 3550/2017 holding that an

individual shareholder cannot prosecute the other shareholder

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directly without a FIR filed by the Government of India against the

company. In these circumstances, the FIR may be quashed.

Learned Public Prosecutor vehemently argued that offences

as alleged by the complainant has been prima facie proved after

thorough investigation by the police inasmuch the petitioners are

involved in illegal business of cheating the innocent persons and

several other criminal cases of similar nature have been registered

against the accused petitioners. It is submitted that prima facie

case is established against the petitioners, therefore, at this stage,

the FIR is not liable to be quashed.

I have considered the rival arguments and carefully gone

through the FIR and material on record.

The allegation against the present petitioners is that the

petitioners committed fraud with the complainant and other share

holders by conducting bogus meetings and transferring

shareholdings on the basis of forged and fabricated signatures.

The basic contention of the petitioners is that the company should

be made the accused as per Section 305 of Cr.P.C. and without

impleading it, the shareholder in his individual capacity cannot be

prosecuted for the act done by the company and share holders

cannot be held responsible in person for the vicarious

responsibilities of the company. In the instant case, allegations of

fraudulent transfer of share of the complainant and forging

transfer documents to effect such transfer of shares have been

brought against the accused persons named in the FIR including

the present petitioners and not against the company or its officer.

Therefore, it is hard to say that allegation of fraudulent transfer of

share and making of forged transfer document to effect such

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purported transfer shall not constitute a distinct offence under the

Indian Penal Code. Even the offence of fraud u/s 447/448 of the

Companies Act are cognizable offence in view of sub-section (6) of

Section 212 of the Companies Act. Therefore, when an FIR is

lodged alleging a distinct cognizable offence under the Indian

Penal Code, police is not only competent, rather obliged to

investigation is concluded and the stage of taking cognizance

arrives, it would be inappropriate, to pre-empt the investigating

agency from taking the investigation to its logical conclusion.

Since the matter is at the investigation stage, it cannot be said

that the FIR is liable to be quashed.

Hon'ble Supreme Court in the case of State of Haryana &

Ors. Vs. Choudhary Bhajanlal & Ors. : 1992 Suppl. (1) SCC 335],

laid down guidelines for exercising inherent powers under Section

482 Cr.P.C. to quash FIR and criminal proceedings. The Court

held:

"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined `and

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sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

1. Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima- facie constitute any offence or make out a case against the accused.

2. Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

4. Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non- cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

5. Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

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6. Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

7. Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.

103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice."

Yet again, Supreme Court, in case of Janta Dal Vs. H.S.

Choudhary : (1992) 4 SCC 305], while relying on Choudhary

Bhajanlal's case (supra), held:

"This inherent power conferred by Section 482 of the Code should not be exercised to stifle a legitimate prosecution. The High Court being the highest Court of a State should normally refrain from giving a premature decision in a case wherein the entire facts are extremely incomplete and hazy, more so when the evidence has not been collected and produced before

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the Court and the issues involved whether factual or legal are of great magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to the cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceedings at any stage. This Court in State of Haryana v. Ch. Bhajan Lal and Ors., to which both of us were parties have dealt with this question at length and enunciated the law listing out the circumstances under which the High Court can exercise its jurisdiction in quashing proceedings. We do not, therefore, think it necessary in the present case to extensively deal with the import and intendment of the powers under Sections 397, 401 and 482 of the Code."

In another decision in the case of Pratibha Vs. Rameshwari

Devi & Ors, JT 2007 (11) 122, the Hon'ble Apex Court held that

while exercising the extraordinary jurisdiction under Section 482

Cr.P.C., the High Court cannot go beyond the allegations made in

the F.I.R or rely upon extraneous consideration. For the purpose

of finding out the commission of a cognizable offence, the High

Court is only required to look into the allegations made in the

complaint or the F.I.R.

In another case of N. Soundaram Vs. P.K. Pounraj & Anr. :

(2014) 10 SCC 616], Supreme Court, while reiterating the

principles laid down in Bhajan Lal (supra) on scope of exercise of

powers under Section 482 Cr.P.C., held:

"It is well settled by this Court in a catena of cases that the power under Section 482 CrPC has to be exercised sparingly and cautiously to prevent the abuse of process of any Court and to secure the ends

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of justice [See State of Haryana v. Bhajanlal]. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court should refrain from giving a prima facie decision unless there are compelling circumstances to do so. Taking the allegations and the complaint as they were, without adding or subtracting anything, if no offence was made out, only then the High Court would be justified in quashing the proceedings in the exercise of its power under Section 482, CrPC [See MCD v. Ram Kishan Rohtagi]. An investigation should not be shut out at the threshold if the allegations have some substance. [See Vinod Raghuvanshi v. Ajay Arora]."

In the case of M/s. Neeharika Infrastructure Pvt. Ltd.

Vs. State of Maharashtra, 2021 CRILJ 2419, Hon'ble Apex Court, on scope of exercise of powers under Section 482 of Cr.P.C., in Para 23 (xii) & (xv) observed as under :-

"xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. After investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;

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(xv) When a prayer for quashing the FIR is made by the alleged accused, the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether the allegations in the FIR disclose the commission of a cognizable offence or not. The Court is not required to consider on merits whether the merits of the allegations make out a cognizable offence or not and the court has to permit the investigating agency/police to investigate the allegations in the FIR."

So far as the judgments cited by counsel for the petitioners

are concerned, it cannot be applied as a uniform standard to each

and every case, but each case will have to be decided on its own

facts and they are distinguishable on facts and does not help the

petitioner.The present case is not an isolated one but criminal

cases of similar nature have been registered against the

petitioners which smacks deep rooted conspiracy of the

petitioners in misappropriating money of shareholders.

In the facts and circumstances of the case so also in the light

of the judicial pronouncements of Hon'ble Apex Court, no case for

quashing of FIR No. 288/2015 registered at Police Station

Ratanada, District Jodhpur is made out. Hence, the misc. petition

is hereby dismissed. Stay petition is also dismissed.