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CR.MA/12539/2007 6/ 6 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL
MISC.APPLICATION No. 12539 of 2007
For
Approval and Signature:
HONOURABLE
MR.JUSTICE Z.K.SAIYED
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
SAURABH
C CHOKSI - Applicant(s)
Versus
STATE
OF GUJARAT & 1 - Respondent(s)
=========================================================
Appearance
:
MR
RAJU K KOTHARI for
Applicant(s) : 1,
MR
KC SHAH Ld. APP for
Respondent(s) : 1,
MRS
VASAVDATTA BHATT for
Respondent(s) :
2,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE Z.K.SAIYED
Date
: 02/09/2008
ORAL
JUDGMENT
1. The
facts of the present case stated briefly that the present application
is directed for quashing of Criminal Case No. 132/2001 pending in the
Court of Addl. Chief Metropolitan Magistrate, Ahmedabad, which was
filed against the present petitioner by respondent no. 2 under the
provisions of Sec. 220(3)of Companies Act. That the complainant ?
respondent no. 2 – Deputy Registrar, Registrar of Companies for
Gujarat, has filed the said complaint against the petitioner and then
the process was issued by the trial Court, therefore, the present
petitioner has filed this application under sec. 482 of Code of
Criminal Procedure.
2. It
is submitted by the petitioner that in the above Criminal Case,
accused no. 1 ? M/s. Pan India Forest & Land Development Ltd.,
is a limited company. The petitioner was Non-Executive Director of
the said company. It is also contended that the petitioner is a
Chartered Accountant by profession and also Principal of JG College
of Commerce. The petitioner was never in-charge of affairs of the
company and never attended any meeting nor signed any document on
behalf of the company and also not aware about the financial position
of the said company. It is also contended by the petitioner that he
has resigned from the Directorship of the said company on 1.4.1999
and Form No. 32 has been placed on record at Annexure-B to this
application. It is also the say of the petitioner that complaint
filed by respondent no. 2 for non-filing of the Annual Return which
was required to be filed with the complainant’s office on or before
30.11.1999. In view of this, the petitioner submitted that the
offence has been committed on 1.12.1999 and on the said date, the
petitioner was not Director of the said company. It is also contended
by the petitioner that he had resigned on 1.4.1999, that is, much
before the offence and, therefore, he cannot be booked under the said
offence. It is further contended by the petitioner that on 1.12.1999,
the petitioner had no relationship with the company, therefore,
complaint is not maintainable against the petitioner.
3. Learned
advocate Mr. Raju Kothari has vehemently argued that the petitioner
was a Non-Executive Director but not in-charge of day to day affairs
of the company, and therefore, criminal liability cannot be fastened
upon him. From the perusal of complaint at Annexure-A, and From No.
32 which is at page 10 of this application, it appears that from
Column No. 5 and 6 of the Form No. 32 that on the alleged date, he
was not a Executive Director of the said company.
4. Heard
Mr Mukesh Patel learned APP for respondent no. 1 ? State of
Gujarat. He has submitted that from the complaint, prima-facie case
is established against present petitioner. He has also opposed this
application. Ms. Vasavdatta Bhatt learned advocate appearing on
behalf of respondent no. 2 submitted that every Director is
responsible officer within the meaning of sec. 5 of the Companies
Act, 1956, whether appointed as technical, non-technical, executive
or non-executive for default committed by the company and its
officers as the case may be as he cannot be absolved his liability in
filing the return with the office of respondent no. 2 for the period
during which he was Director of the Company. Therefore, it is
contended by the learned advocate that criminal case has been filed
for non-filing Annual Return for the financial year ending on
31.3.1999, which was required to be filed with the office of
respondent no. 2 on or before 30.11.1999 as required under sec. 159
of the Companies Act, 1956. So, it is contended that when the
prima-facie case is made out against the petitioner, then the powers
under sec. 482 of Code of Criminal Procedure, cannot be exercised in
favour of the petitioner.
5. In
support of his submission, learned advocate Mr.Kothari for the
petitioner has placed reliance on the decision of this court in the
case of Jayesh More vs. State of Gujarat & Anr., reported in
2000(1)GLR p. 121, wherein, this Court has held that by 30th
November, income tax return is required to be submitted, failure to
do so is an offence. If before 30th November, a person has
ceased to be a Director of the Company, he cannot be prosecuted for
failure to submit the return. In para-12 of the above case, this
Court has observed as under:
?S12.
The outcome of the above discussion is that, on the date on which the
offence/default is said to have been committed, i.e. On 30th
November, 1996, of not submitting copies of the annual return, the
petitioner’s relationship with the company was not in existence. The
petitioner cannot be held responsible even otherwise as he does not
fall within the definition of officer in default as given in Sec. 5
of the Companies Act and sub-sec. (1) of Sec. 162 of the Companies
Act holds the company and every officer in default responsible for
such lapse and, therefore, the petition deserves to be allowed. No
offence against the petitioner can be said to be constituted and as a
necessary consequence the petition must succeed and complaint qua the
petitioner must be quashed.??
6. There
cannot be any dispute with the proposition of law laid down in the
decision cited above, on which, strong reliance has been placed by
the petitioner, however, the basic principles which are required to
be kept in mind while exercising the powers under sec. 482 of Code of
Criminal Procedure. The principle laid down by the Apex Court in the
case of State of Haryana vs. Bhajanlal, reported in 1992
Suppl.(1) SCC 335 would squarely applies to the facts of the
present case. From the Form No.32, it appears that allegations which
are made in the complaint on the said date when petitioner was not
Director of the Company, then, how he can be booked under the
provisions of Companies Act for criminal offence. It is true that in
the case of Jayesh More (supra), this court has also considered the
same issue that on the said date when the petitioner was not a
Director of the Company, then he cannot be prosecuted for the failure
to file return. From the allegations made by respondents no. 2 and
no. 1, I have not found any legality to convince that against whom
the complaint was filed was proper, legal and tenable in view of the
above observations and principles laid down by this Court as well as
Apex Court.
7. In
the result, this application is allowed. The complaint filed by
respondent no. 2 before the learned Addl. Chief Metropolitan
Magistrate, Ahmedabad being Criminal Case No. 132/2001 for the
offence punishable under sec. 220(3)of Companies Act, 1956, is hereby
quashed qua the present petitioner. Rule is made absolute.
(Z.K.
SAIYED, J.)
mandora/
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