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CR.MA/4958/1997 2/ 4 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL
MISC.APPLICATION No. 4958 of 1997
With
CRIMINAL
MISC.APPLICATION No. 5428 of 1997
With
CRIMINAL
MISC.APPLICATION No. 5329 of 1997
For
Approval and Signature:
HONOURABLE
MR.JUSTICE JAYANT PATEL
=========================================================
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 ?
=========================================================
CHANDANSINH
CHAMPAVAT - Applicant(s)
Versus
STATE
OF GUJARAT & 2 - Respondent(s)
=========================================================
Appearance
:
MR
PR NANAVATI for
Applicant(s) : 1,
MR KP RAVAL Ld. APP for Respondent(s) : 1,
MR
AJ PATEL for Respondent(s) :
2,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 12/04/2010
COMMON
ORAL JUDGMENT
1. As
the facts are common, all the applications are being considered by
this common Judgment.
2. The
short facts relevant for the present petitions are as under:
3. The
original complainant filed a complaint before the learned Magistrate
for the offence under sec. 406, 420, 465, 467, 471 read with section
34 and 120(B) of IPC as well as for the offence under sec. 63 and 68
of the Companies Act.
4. The
allegations in the complaint is that the payment of the application
money for purchase of the share was made by the private placement
and, there was A buy-back agreement by the Promoters and Financier of
the Company. Thereafter, as per the buy-back agreement, the cheque
was issued but the same has not been honoured, for which, the
complaint is filed by Vinodkumar Hiralal Patel under sec. 138 of the
Negotiable Instruments Act. The accusation in the complaint is that
since the buy-back agreement has not been acted upon for the payment
as per the cheque has not been made the offence as constituted. The
second accusation in the complaint is that there were certain
declaration in the prospectus which as per the complainant were false
and no details are available about the place at which the amount of
public issue is kept, therefore, the offence is under the Companies
Act, are constituted as well as it would also result into for
constitution of the offence under sec. 465, 467, 471 of IPC read with
sec. 63 and 68 of the Companies Act. It appears that the learned
Magistrate directed for investigation under sec. 156(3) of CrPC, and
accordingly, the complaint was registered as M. Case No. 20/1997 at
Sidhhpur Police station. Under the circumstances, the present
petitions for quashing of the complaint.
5. The
first accusation for not honouring the buy-back agreement, even if
considered as it is, it would not constituted the offence and it
would be essentially a civil dispute for enforcement of buy-back
agreement against the Finance Company who sold the share by private
placement. It further appears that based on the buy-back agreement,
the cheque was given in favour of Vinodbhai Hiralal Patel and the
said cheque has been dishonoured, therefore, when there is a civil
liability created on account of buy-back agreement of the share and
if such an agreement is not honoured, it cannot be said that the
basic ingredients of the offence under sec. 406 or 420 of IPC would
be satisfied.
6. The
second accusation made for the mis-statement in the prospectus and
not proper accounting of the share money in the account of the
company, even if considered as it is, it would be an offence under
the Companies Act, for which, the competent authority to file the
complaint, would be Registrar of the Companies. The status of the
complainant is not mentioned by the applicant as that of the
share-holder of the company who has been conferred right as
share-holder by allotment of the shares, but it appears that the
statement made in the complaint is that the petitioner applied for
shares by payment of the subscription amount in part. Under the
circumstances, for the alleged offence under the Companies Act are
concerned, the original complainant can at the most approach to the
Registrar of Companies who may examine the matter and if the
complaint is filed by the Registrar of Companies, then only the
cognizance could be taken or in any case, the complaint could be
maintained. Sec. 621 of the Companies Act makes the aforesaid
position clear. It further appears that by way of short circuit a
civil remedy for enforcement of the buy-back agreement of the shares,
the present complaint is filed though there is no offence constituted
as per the allegation made in the complaint under IPC.
7. In
view of the above, no useful purpose will be served in further
investigation of the complaint which may also result into the abuse
of power. Hence, the complaint being M. Case No. 20/1997 of Sidhhpur
Police Station is quashed. Rule is made absolute to the aforesaid
extent in Criminal Misc. Application Nos. 4958/1997 and 5428/1997.
8. In
view of the order passed in main matter, no further order would be
required to be passed in Criminal Misc. Application No. 5329/1997
and the same stands disposed of accordingly.
(JAYANT
PATEL, J.)
mandora/
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