SESA GOA LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THESE petitions impugn the order passed on 4. 10. 2006 by the additional Chief These petitions impugn the order passed on 4. 10. 2006 by the additional Chief Metropolitan Magistrate, 40th Court, Girgaum and by the Sessions Court in Criminal Revision Application No. 509 of 2004. After the Writ Petition No. 2739 of 2006 was argued, an application was made on behalf of Respondent No. 2 in Writ Petition No. 254 of 2008 that the writ petition should be adjourned in order to permit the Counsel appearing for Respondent No. 2 to address the Court. The petitions involve the same issue. The parties were aware that they were being heard together and therefore, ought to have been ready to argue the matter immediately after the first petition was over. I have, therefore, refused the adjournment.

(2.) THE Petitioner Nos. 1 and 2 are public limited companies; Petitioner No. 2, being a subsidiary of Petitioner No. 1. Petitioner No. 2 (for short, hereinafter referred to as the `sil') was incorporated in 1993 whereas Petitioner No. 1 (for short, hereinafter referred to as the `sgl') has been in existence for well over two decades. SGL currently holds 88. 25% of the shares of SIL.

(3.) RESPONDENT No. 2 claims to own 57450 shares of SIL and contends that she is a shareholder of both SGL and SIL. She filed a complaint on 8. 7. 2003 against both the companies and the Directors of SGL, some of whom were also on the Board of SIL. The allegations made in the complaint were that the Companies had committed offences under section 73 of the Companies Act, 1956 as well as u/s 403 and 406 r/w section 34 of the Indian Penal Code. Four transactions have been set out in the complaint on the basis of which the allegations have been made. It is contended that monies were paid by the complainant to SIL in 1993 pursuant to a 'preferential offer' document dated 28. 8. 1993. It is contended that the "preferential Offer" document indicated that the shares of SIL would be listed on the stock exchange. The complainant had believed the promise held out in the preferential offer document issued by SIL in 1993 and was induced into purchasing its shares. It is alleged that SIL had breached this promise and had thereby committed criminal misappropriation and criminal breach of trust. Besides that, according to the complainant, these acts or omissions of the petitioners" amount to a violation of section 73 of the Companies Act (for short, hereinafter referred to as 'section 73' ). The second transaction spoken of in the complaint is that on 5. 6. 2003, SGL had sought to buy the shares of SIL at a price of Rs. 30/- knowing full well that SIL had failed to list its shares on the stock exchange. This according to the complainant was in breach of the statutory requirements of section 73 as that section contemplates return of monies with interest @ 15%, in case of failure to list the shares on the stock exchange. This meant that the rate ought to have been approximately Rs. 57/- per share instead of which shares were purchased at a value of Rs. 30/- by SGL. The third transaction which is objected to by the complainant is the sale of pig iron and the iron ore plant of SGL to SIL at an exaggerated price. The complainant claimed that money was siphoned out from SIL into SGL, resulting in offences of criminal misappropriation and criminal breach of trust. The fourth transaction which is objected to is the sale of pig iron ore by SGL to SIL at a price which according to the complainant was steep, resulting in siphoning of monies from SIL to SGL which constituted offences u/s 403, 406 r/w section 34 of the Indian Penal Code. The Directors of SGL, some of whom were also the Directors of SIL have been accused by the complainant as they were 'officers in default' within the meaning of the Companies Act which could be seen by piercing the corporate veil of the two companies, SGL and SIL.