Telangana High Court

Habib Abdul Razzaq Baghdadi , Hadi ... vs The State Of Telangana on 20 September, 2023

Bench: K.Surender

                HON'BLE SRI JUSTICE K.SURENDER

               CRIMINAL PETITION No.338 OF 2020
ORDER:

1. This Criminal Petition is filed to quash the proceedings against

the petitioners in FIR No.135 of 2017 on the file of Sultan Bazar

Police Station, Hyderabad now transferred to Economic Offences

Wing, registered for the offences under Sections 420, 471 r/w 34 of

IPC.

2. Brief facts of the case are that the 2nd respondent filed a

complaint with Sultan Bazar Police on 24.07.2017 which was

registered for the offences under Sections 420, 471 r/w 34 of IPC.

The said complaint was later transferred to Crime Investigation

Department, Economic Offences Wing and pending investigation.

The 2nd respondent in the complaint dated 24.07.2017 alleged that

the date of offence was in the year 2009 and the offence related to

the Registrar of Companies, Ministry of Corporate Affairs, Sultan

Bazar, Hyderabd. He alleged that there was huge financial fraud in

M/s.Hira Multi Constructions Venture Private Limited, which was

formerly known as M/s.Hira Management Consultants Private

Limited. The petitioners herein were Directors of the said company.

The 1st petitioner approached the 2nd respondent for investment in

the said company. An amount of Rs.3.00 lakhs was paid in the year

1999-2000 and Rs 20 lakhs subsequently. He was allotted 2750

equity shares of Rs.100/- each against payment of Rs.3.00 lakhs

initially which was shown and informed to the ROC. However, the

remaining amount, which was invested neither was updated nor

informed to the ROC. Several irregularities were committed in the

company for which reason, the 2nd respondent as

investor/shareholder had to take action.

3. It was further alleged that development agreement-cum-GPA

was entered into by the company in favour of M/s.Kancharla

Constructions Private Limited, wherein the company's property to

an extent of Acs.193.00 was given for development. Enquiry was

made and A1 informed that there were no shareholders in the

company and the share of the 2nd respondent was transferred in

favour of A2 who is A1's elder son. The said transfer was without

the knowledge of the 2nd respondent. The company records do not

to reflect that the 2nd respondent is shareholder.

4. Further, in the complaint it is alleged that on 15.11.2016,

complaint was lodged to the ROC for playing fraud by the

petitioners and transferring shares. Accordingly, notices were

issued by the ROC. However, the company failed to submit the

relevant documents before the ROC. The ROC having waited for

three months 13 days, passed order under Section 206(4) of the

Companies Act, 2013 directing the petitioners, who are directors in

the company to furnish information. In the said circumstances,

when no remedy was left open to the 2nd respondent in transferring

shares in favour of 2nd petitioner and also that the signatures in the

transfer documents were fabricated, the 2nd respondent approached

the police to take criminal action against the petitioners.

5. Sri D.V.Sitaramamurthy, learned Senior Counsel appearing for

the petitioners would submit that the allegations in the complaint

are disputes amongst directors in the company and the same can

be agitated before the ROC and complaint was already filed with

similar allegations. Further, a Civil Suit was also filed vide OS

No.613 of 2017 on the file of XX Junior Civil Judge, City Civil

Court, Hyderabad. However, the said suit was withdrawn. He

further submits that the issues were subject matter of the National

Company Law Tribunal. The Tribunal has passed orders in the said

Company Petition. He relied on the judgment of this Court in

Criminal Petition No.8025 of 2021 dated 06.06.2022 and argued

that under similar circumstances, the criminal proceedings were

quashed when it was found that the allegations are triable under

the Companies Act.

6. On the other hand, learned Public Prosecutor would submit

that there are several other crimes which are registered against

these petitioners and pending investigation before the Economic

Offences Wing of CCS, Hyderabad. Since the allegations specifically

make out offences under IPC, the proceedings cannot be quashed.

He relied on the judgment of Hon'ble Supreme Court in the case of

Ravindra Kumar Madhanlal Goenka and another v. Rugmini

Ram Raghav Spinners Private Limited ((2009) 11 Supreme Court

Cases 529), wherein the Hon'ble Supreme Court refused to quash

the proceedings on the ground that an opportunity should be given

to the prosecution to project their case. The defence raised by the

accused can be agitated before the trial Court. He also relied on the

judgment of Hon'ble Supreme Court in the case of State of Bihar

and another v. Md.Khalique and another (2002) 1 Supreme Court

Cases 652), wherein it is held that quashing of proceedings shall be

in rarest of rare cases and powers under Section 482 of Cr.P.C

should be sparingly used.

7. The grievance of the complainant-2nd respondent has already

been agitated before the Registrar of Companies. Proceedings have

been taken up by the ROC for the alleged acts constituting offence

under the Companies Act. The crux of the allegations is that shares

that were allotted to the 2nd respondent during the year1999-2000

but transferred in the name of A2. Further, no shares were allotted

for the amounts which were subsequently paid.

8. The alleged date of offence was in the year 2009 and the

complaint was filed after eight years. The transfer of shares is

already before the ROC. On the basis of the documents which were

filed into the ROC, the same can be adjudicated upon by the ROC

and if any offence is made out, complaint can be lodged in the

Economic Offences Court.

9. To attract an offence of cheating, a person must have been

induced by deception. The said person deceived should have parted

the property. In the present complaint, the 2nd respondent claims

that without his knowledge shares were transferred in favour of A2.

Though there is an allegation of wrongful loss occurred to the

complainant/2nd respondent, the said transactions are being

investigated by the ROC. In the said circumstances, the offences

alleged are punishable under the Companies Act.

10. The complaint appears to have been deliberately made after

eight years. The Hon'ble Supreme Court in the case of State of

Haryana and others v. Ch.Bhajan Lal and others (1992 AIR

604), had enunciated the principles for use of the extraordinary

power under Article 226 of the Constitution of India, wherein it is

held as follows:

"(7) where a criminal proceeding is manifestly attended with malafide 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 knowledge."

11. In view of the allegations being primarily offences under the

Companies Act, this Court deems it appropriate to quash the

proceedings against the petitioners more so in the back ground of

the issue being taken up before the National Company Law

Tribunal, Civil Court and also the ROC.

12. In the result, the proceedings against the petitioners/A1 to A4

in FIR No.135 of 2017 on the file of Sultan Bazar Police Station,

Hyderabad now transferred to Economic Offences Wing, are hereby

quashed.

13. Accordingly, the Criminal Petition is allowed. Consequently,

miscellaneous applications, if any, shall stand closed.

__________________ K.SURENDER, J Date: 20.09.2023 kvs