Inderjit Singh, J. - (1.) PETITIONER S.C. Kumar has filed this petition against ITO and other respondents under s. 482 CrPC for quashing of complaint Annex. P -2 filed by the respondent on 26th March, 1987 in the Court of Chief Judicial Magistrate, Chandigarh, the same having disclosed no offence being against law and facts and the order of summoning Annex. P -3 dt. 26th March, 1987 passed by CJM, Chandigarh and the subsequent order issuing non -bailable warrants against the petitioner being abuse of the process of the Court. It is stated in the petition that petitioner is employed with the Industrial Finance Corporation of India and the petition is being filed by the petitioner in his individual capacity as an employee of the said Corporation while he was acting as Director of M/s. Sukhna Paper Mills Ltd., which was incorporated as public limited company.
(2.) IT is further stated in the petition that Industrial Finance Corporation of India advanced huge amounts to the said company with a view to look after the financial interest of the Industrial Finance Corporation of India. The brief facts are that earlier the petitioner as Asstt. Manager of the said Corporation was appointed as a nominee Director on the Board of Directors of M/s. Sukhna Paper Mills Ltd., w.e.f. 30th June, 1980. By letter dt. 9th Nov., 1984, Sh. J.C. Malhotra was appointed as a Member of the Board of Directors. By another letter dt. 15th Jan., 1987, the nomination of Sh. J.C. Malhotra from the Board of Directors of M/s. Sukhna Paper Mills was withdrawn by the Industrial Finance Corporation of India. M/s. Sukhna Paper Mills had deposits with its various parties and while making the payment of interest to the depositors, it was required to deposit tax at source for the accounting year 1984 -85 amounting to Rs. 44,036 within specified time in Government account. However, the said amount was not deposited in time and consequently, ITO gave a notice to the company. Reply was given by the company that, as no interest was paid to the parties and only a provision had been made in the account, the amount was not deposited. It is further stated in the petition that ITO -respondent filed a complaint before CJM, Chandigarh alleging that during the course of assessment proceedings, it was found that for the period from 1st Jan., 1983 to 31st Dec, 1983 relevant to the asst. yr. 1984 -85, M/s. Sukhna Paper Mills Ltd. accused No. 1 had paid interest amounting to Rs. 4,40,360 to various persons and as such was liable to deduct tax at source amounting to Rs. 44,036 within stipulated time in the Government account i.e., upto 28th Feb., 1984. In reply to the notice, details of amount of interest and the amount of tax deducted at source were submitted and it was further submitted that during the period relevant to the asst. yr. 1986 -87, the assessee neither credited the interest to the accounts of the parties nor paid interest to them but only made a provision in the final accounts. However, in the profit and loss account, the company claimed this amount of Rs. 4,40,360 as financial expense on account of interest to others. It was also stated in the complaint that by opening a separate account under head Interest Payable' the account of individual parties indirectly becomes credited on account of interest payable and as such the company was liable to deduct the tax at source and pay the same as per provisions of s. 194A of the Act. It is further stated in the complaint that the company deposited the tax deducted at source late. It is also stated that the learned CJM, Chandigarh without adverting to the facts of the case and appreciating the position of the nominee Directors appointed by Industrial Finance Corporation of India, summoned the petitioner along with others by passing a non -speaking and cryptic order. It is further stated that the petitioner was only a nominee Director appointed by Industrial Finance Corporation of India with a view to look after the financial interest. He attended only the meetings of the Board of Directors, as a nominee Director. In fact, he was not at all concerned with the day to day working of the company for the conduct of affairs of the company.
(3.) NOTICE of motion was issued in this case and respondents appeared through their counsel and filed reply contesting the petition.;