JUDGMENT
J.M. Panchal, J.
1. By means of filing this application under section 482 of the Criminal Procedure Code, 1973, the petitioner who is the original accused has prayed to quash Criminal Case No. 760 of 1994 instituted in the court of the learned Additional Chief Metropolitan Magistrate, Ahmedabad, by respondent No. 2 regarding the alleged commission of offence punishable under section 621A of the Companies Act, 1956.
2. One Mrs. Pushpaben Sumantrai Nayak holds five equity shares of Rs. 10 each of Atul Products Ltd. jointly with her husband, Mr. Sumantrai Gopalji Nayak. On November 30, 1990. Mrs. Pushpaben executed four deeds for transferring one equity share each in favour of :
A. (1) Pushpaben Sumantrai Nayak herself, (2) Sumantrai Gopalji Nayak, (3) Dipak Jayantilal Shah,
B. (1) Pushpaben Sumantrai Nayak, (2) Dipak Jayantilal Shah, (3) Sumantrai Gopalji Nayak,
C. (1) Pushpaben Sumantrai Nayak, (2) Dipika Ramanlal Shah, (3) Sumantrai Gopalji Nayak, and
D. (1) Pushpaben Sumantrai Nayak, (2) Dipika Ramanlal Shah, (3) Sumantrai Gopalji Nayak.
Pushpaben Sumantrai Nayak retained one share with her. The transfer deeds were lodged with Atul Products Limited by respondent No. 2 on December 5, 1990, along with one share certificate No. 7407.
3. Atul Products Limited returned the said share certificate and four transfer deeds, vide letter dated December 5, 1990, to respondent No. 2, as the intended transfer amounted to splitting of the share certificate and it was not in consonance with article 24 of the articles of association of the company.
4. Feeling aggrieved by the action of the company, respondent No. 2 preferred Appeal No. 42(iii) CLB/WR/1990, before the Company Law Board (Western Region Bench), Bombay, under the provisions of section 111 of the Companies Act, 1956. The Company Law Board passed an order dated September 18, 1992 [See Dipakkumar Jayantilal Shah v. Atul Products Ltd. [1995] 82 Comp Cas 603 (CLB)], directing Atul Products Limited, to register the transfer. The said order dated September 18, 1992, was sent by the Company Law Board, vide its letter dated September 25, 1992, which was received by Atul Products Limited on September 30, 1992.
5. Being aggrieved by the order of the Company Law Board, Atul Products Limited, preferred First Appeal No. 2272 of 1992 on November 20, 1992, before the High Court under the provisions of section 10F read with section 10 of the Companies Act, 1956. The company also filed Civil Application No. 4751 of 1992 for stay. The court passed the following order on November 24, 1992 :
“Rule returnable on December 15, 1992. In the meantime, there shall be ad interim stay in terms of para 4(A) of the civil application”.
Paragraph 4(A) of the civil application is as under :
“Pending the hearing admission and final disposal of the accompanying first appeal your Lordships may be pleased to stay the operation, execution and implementation of the order dated September 18, 1992 [See Dipakkumar Jayantilal Shah v. Atul Products Ltd. [1995] 82 Comp Cas 603 (CLB)], passed by the Company Law Board, Western Region, Bombay.”
Thereafter, the following order was passed on December 28, 1992 :
“S.O. to January 20, 1993. Ad interim relief as granted earlier till further orders.”
On January 28, 1993, the High Court, after hearing learned counsel for Atul Products Ltd. and respondent No. 2, passed the following order :
“Having heard Mr. Gandhi, learned advocate, for the appellant and Mr. Deepakkumar Shah, the respondent, party-in-person, I think, the ad interim relief granted earlier deserves to be continued as interim relief pending the hearing and disposal of the first appeal. Rule is made absolute accordingly.”
Thereafter, respondent No. 2 filed a complaint on December 2, 1994, against the petitioner and others for the alleged commission of offence punishable under section 621A of the Companies Act, 1956, on the plea that the order dated September 18, 1992, passed by the Company Law Board, Western Region, Bombay, was not complied with.
6. The learned magistrate executed the evidence warrant against the petitioner and others giving rise to the present application.
7. I have heard learned counsel for the petitioner as well as respondent No. 2 who has appeared in person.
8. Section 621 of the Companies Act provides that no court shall take cognizance of any offence under this Act which is alleged to have been committed by any company or any officer thereof except on the complaint in writing of the Registrar or of a shareholder of the company or of a person authorised by the Central Government in that behalf. In the complaint, the respondent has nowhere averred that he is a shareholder of Atul Products Ltd. The complaint has not been filed by the Registrar nor by a person authorised by the Central Government in that behalf. In view of the bar created by section 621 of the Companies Act, 1956, the learned magistrate was not justified in taking cognizance of the offence alleged to have been committed by the petitioner in the complaint. Therefore, the relief prayed for in the petition deserved to be granted, as the complaint suffers from a fundamental legal defect, namely, absence of complaint by legally competent authority or person.
9. As noted earlier, the High Court has stayed the operation, execution and implementation of order dated September 18, 1992, passed by the Company Law Board, Western Region Bench, Bombay. The validity of the order passed by the Company Law Board is yet to be decided by the High Court in First Appeal No. 2272 of 1992 [See page 876 infra]. The operation, execution and implementation of the order dated September 18, 1992, passed by the Company Law Board, Western Region Bench, Bombay, was stayed by the High Court, vide order dated January 28, 1993, in Civil Application No. 4751 of 1992 after hearing respondent No. 2. The fact that the operation, execution and implementation of the order dated September 18, 1992, passed by the Company Law Board, Western Region, Bombay, is stayed was never brought to the notice of the learned magistrate by respondent No. 2.
10. Reading the complaint, it is evident that the fact that the order passed by the Company Law Board is stayed by the High Court is suppressed by respondent No. 2. Even in his statement which was recorded by the learned magistrate on oath, respondent No. 2 has not referred to the stay granted by the High Court. The respondent has thus abused the process of law and obtained orders from the learned magistrate without disclosing true facts. This indicates that the complaint filed by respondent No. 2 is vexatious and malicious and is filed with an oblique motive.
11. It is well settled that where a criminal proceeding is manifestly attended with mala files and/or where the proceeding is maliciously instituted with ulterior motive for wreaking vengeance on the accused and with a view to splitting, then the proceedings are liable to be quashed. There is no manner of doubt that respondent No. 2 has abused the process of law.
12. For the foregoing reasons, the application succeeds. Criminal Case No. 760 of 1994, filed in the court of the learned Additional Chief Metropolitan Magistrate, Ahmedabad, by respondent No. 2 for the alleged commission of offence punishable under section 621A of the Companies Act, 1956, is hereby quashed. Rule is made absolute as indicated hereinabove.