The State Of Telangana Rep By Pp vs Chandra Prakash Mittal, Usa
2022 Latest Caselaw 569 Tel

           THE HON'BLE Dr. JUSTICE G. RADHA RANI

      CRIMINAL PETITION Nos.852, 853 and 887 of 2017

COMMON ORDER:

      These criminal petitions are filed by the State of Telangana

represented by the Public Prosecutor under Section 482 Cr.P.C. to set

aside the order dated 27.11.2015 passed by the VI Additional Chief

Metropolitan Magistrate, Hyderabad in Crl.M.P. Nos.2998 of 2015,

3595 of 2014 and 2997 of 2015 in C.C. No.268 of 2005 in discharging

the respondents-Accused Nos.15, 4 and 3, respectively for the charges

under Sections 420, 468, 471, 447-A and 120-B IPC of CID Police

Station, confirmed by the Special Judge for Economic Offences cum

VIII Metropolitan Sessions Judge, Hyderabad in Crl.R.P. Nos.4, 5 and

81 of 2016, dated 29.08.2016.

2. Since all the three matters arise out of the same CC on

identical facts and all the respondents stand on a similar footing, they

are being considered and disposed of vide this common order.

3. The case of the petitioner-complainant was that on

11.05.2001 one N.S.V.R. Naidu, President of Pal Gas Dealers

Association lodged a report in CID Police Station alleging that

M/s.Pal Refinery India Limited, represented by its Director/Promoter

viz., Javagal Bhavani Krishna Murthy and others by giving

advertisements in leading Newspapers, collected Rs.9.00 crores from

its dealers towards dealership deposits and towards registration fee for

supplying the domestic cooking gas and made the dealers and Dr.GRR,J

consumers believe that the company was genuinely pursuing the

objects for which it was incorporated. Subsequently, M/s.Pal Refinery

India Ltd. represented by its Directors/Promoters in a fraudulent

manner cheated the dealers and consumers and committed criminal

misappropriation. A1 to A18 had collected a sum of Rs.2,74,43,281/-

from the dealers/consumers on behalf of the Company on the pretext

of supplying domestic LPG cylinders and cheated the dealers/

consumers and misappropriated the said amount. The above complaint

was registered as Crime No.19 of 2001 for the offences under

Sections 420, 468, 471, 409, 447-A & 120-B IPC by the CID police

and charge sheet was filed against A1 to A18.

3. The respondents-A15, A4 and A3 filed discharge petitions

before the trial Court i.e. VI Additional Chief Metropolitan

Magistrate, Hyderabad stating that they were not responsible for the

day to day affairs of the company; the allegations referred in the

charge sheet were omnibus in nature; no specific allegations were

made against each of the accused and that they could not be

prosecuted without making the Company as an accused.

The State-complainant filed counter in the said petitions

contending that the said accused persons were appointed as Directors

of M/s.Pal Refinery India Limited, they were responsible for

collection of huge money from the dealers and consumers on behalf of

the Company on the pretext of supplying domestic LPG filled

cylinders and cheated the public by not doing so during their tenure.

As per the audit reports the total amount collected by the Company Dr.GRR,J

was Rs.7,48,50,288.73/- from various sources i.e. Security deposits

from the dealers/consumers on the pretext of supplying LPG filled

cylinders, but failed to do so. As the directors of the Company, they

were responsible for making the public believe that the Company

entered into an agreement with Denmark based company by name

"Kosan Crispiant" for setting up LPG bottling plants in India. The

accused persons colluded with other directors deliberately and caused

disappearance of all the important records pertaining to the Company

such as account books, ledger books etc. The respondents being close

associates of A3 were responsible for illegal transfer of Paradip Port

project in Orissa in the name of CM Power and Gas Limited which

was owned by A3. There was prima facie case against the

respondents-A15, A4 and A3. As per the statements given by the

Registrar of Companies, all the Board of Directors of the Company

were jointly and severally responsible for the day to day affairs of the

Company and prayed to dismiss the petition.

3. On hearing both the learned counsel for the respondents-

accused and the learned Assistant Public Prosecutor representing the

State, the trial Court framed five points for consideration such as:

i) Whether the petitioners (respondents-accused) were responsible for day to day affairs of the Company?

ii) Whether the petitioners (respondents-accused) were responsible for collection of deposits from the customers/dealers?

iii) Whether the prosecution against the petitioners (respondents-accused) who were only directors of the Company without arraigning the Company as accused in the charge sheet was tenable?

Dr.GRR,J

iv) Whether there was prima facie case against the petitioners (respondents-accused) to proceed against them in the above case?

v) Whether the petitioners (respondents-accused) were entitled for discharge?

4. The trial Court answered each and every point supported by

the precedential law and observed that there were no specific

allegations against the petitioners (respondents-accused) that they

collected the deposits and it was A1 as Chairman and Managing

Director, A2 and A5, who promoted the Company and A17 and A18

who collected the security deposits from the customers/dealers

responsible for the alleged fraud and the petitioners who were

directors of the company or Board of Directors could not be held

responsible since the Penal Code did not contain any provision

attaching vicarious liability on the part of the Directors and as per the

settled law it was the Managing Director, whole time Directors,

Manager and Secretary of the company who were responsible for the

day to day affairs of the Company and were liable for the acts

committed on behalf of the Company and it was the duty of the

Directors for making them responsible for the affairs of the company

and further observed that the company was not shown as an accused

and relied on the judgment of the Hon'ble Apex Court in Aneeta

Hada v. Ms/.Godfather Travels & Tours Pvt. Ltd. [AIR 2012 SC

2795] on the said aspect. It also considered that the High Court

quashed the proceedings against A13 and A14 who were also placed

on similar grounds and discharged the respondents-A15, A4 and A3.

Dr.GRR,J

5. Aggrieved by the discharge of respondents-A15, A3 and

A4, the State-complainant preferred revisions petitions before the

Special Judge for Economic Offences cum VIII Additional

Metropolitan Sessions Judge, Hyderabad, vide Crl.R.P. Nos.4, 5 and

81 of 2016. The learned Sessions Judge dismissed the revision

petitions vide separate orders dated 29.08.2016 confirming the orders

of the trial Court in discharging the respondents-accused. Learned

Sessions Judge observed that there were no valid grounds to interfere

with the orders impugned in the revisions.

6. Aggrieved further, the State filed these criminal petitions to

set aside the orders of the Courts below in discharging the

respondents-A15, A4 and A3 contending that the charge sheet would

reveal that the Board of Directors and the office bearers in connivance

with each other deliberately caused disappearance of valuable records

i.e. original books of accounts, original minute books and original

balance sheet for the year 1994-95 and its connected records to

conceal and screen the offences committed by them. A1 in

connivance with other Board of Directors had committed dishonest

mis-appropriation and criminal breach of trust. The charge sheet and

the oral and documentary evidence collected during the course of

investigation revealed that A1 to A16 who were Board of Directors of

M/s.Pal Refinery India Limited and its office bearers i.e. A7 and A18

collected a sum of Rs.2,74,43,281/- from the dealers/consumers on

behalf of the Company on the pretext of supplying the domestic LPG

filled cylinders and cheated the said dealers/consumers and mis-

Dr.GRR,J

appropriated the amounts and prayed to set aside the orders of the

courts below.

7. Heard the learned Public Prosecutor. There is no

representation by the learned counsel for the respondents-

A15, A4 and A3. Learned Public Prosecutor reported to decide the

petitions on merits.

8. Perused the record. The record would disclose that both the

learned VI Additional Chief Metropolitan Magistrate, Hyderabad as

well as the learned Special Judge for Economic Offences cum VIII

Additional Metropolitan Sessions Judge, Hyderabad discussed each

and every aspect and found that there were legal infirmities in the

charge sheet like non-arraigning the Company as accused and no

specific allegations were made against the respondents-accused that

they were responsible for the day to day affairs of the Company and

observing that they had not collected any deposits personally from the

customers/dealers and the charge sheet would not disclose the actual

role played by them in the company, discharged them. By repeating

the same allegations made in the charge sheet, the complainant filed

the revision petitions before the Special Judge for Economic Offences

cum VIII Additional Metropolitan Sessions Judge and again before

this Court to set aside the said orders, without any new grounds to

consider. As all these points were examined by the Courts below and

came to the conclusion that there was no prima facie case made out

against the respondents-A15, A4 and A3, it is considered that there is

no reason to set aside the orders of the Courts below.

Dr.GRR,J

9. In the result, all the criminal petitions are dismissed

confirming the order dated 27.11.2015 passed in Crl.M.P. Nos.2998

of 2015, 3595 of 2014 and 2997 of 2015 in C.C. No.268 of 2005 by

the VI Additional Chief Metropolitan Magistrate, Hyderabad as

confirmed by the Special Judge for Economic Offences cum VIII

Metropolitan Sessions Judge, Hyderabad in discharging respondents-

A15, A4 and A3 for the offences alleged against them.

Miscellaneous petitions pending, if any, shall stand closed.

_____________________ Dr. G. RADHA RANI, J February 11, 2022 KTL