LAWS(SC)-1998-8-143

ASHOK CHATURVEDI Vs. SHITUL H CHANCHANI

Decided On August 13, 1998
ASHOK CHATURVEDI Appellant
V/S
SHITUL H.CHANCHANI Respondents

JUDGEMENT

(1.) Leave granted.

(2.) The appellants have been arrayed as accused persons along with others in a complaint petition filed by respondent No. 1 alleging offences committed by the appellants under Sections 406, 420, 467, 468 and 120-B of the Indian Penal Code, in respect of transfer of shares effected by Flex Engineering Ltd., a public limited company. The learned Magistrate on receipt of the petition of complaint examined the complainant on oath and also the witnesses produced by the complainant. On the basis of those materials the Magistrate took cognizance of the offence under Sections 406, 420, 467, 468 and 120-B, I.P.C. by his order dated 5-2-1996 and directed issuance of process against the accused-appellants. The appellants then moved the High Court under Section 482 of the Code of Criminal Procedure for quashing the cognizance, inter alia, on the ground that the allegations made in the petition of complaint even being accepted on its face value no offence can be said to have been made out against them. The High Court by the impugned judgment, however, being of the opinion that the allegations having been made that shares have been transferred on the basis of forged and fabricated signatures a prima facie case has been made out, and therefore, it would not be appropriate to quash the order of cognizance in exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure, rejected the prayer of the appellants.

(3.) Mr. Ashok Desai the learned Senior Counsel appearing for the appellants submitted that accused Nos. 1 to 9 are Chairman, Directors and Secretary of the Company and no allegation whatsoever having been made against them either in the petition of complaint or in the evidence adduced before the Magistrate, the High Court committed serious error in not quashing the cognizance merely because there is an allegation of forgery and being of the opinion that the same could be substantiated only during trial. Mr. Desai also contended that in a company having share capital of 5 crores of 50 lakh shares of Rs. 10/- each at the point when the alleged transfer of share of the complainant took place, it is unimaginable that the 100 equity shares of the complainant could be transferred against the wishes of the complainant at the connivance of the Director to the company. Mr. Desai also contended that the dispute, if at all any, is a dispute of civil nature and the complainant himself has already filed a claim petition before the Consumer Forum and the criminal proceedings, therefore, cannot be permitted to be continued as that would amount to an abuse of the process of Court. The learned Counsel appearing for the complainant-respondent on the other hand contended that on the materials on record, the High Court was fully justified in coming to the conclusion that a prima facie case has been made out, and therefore, it is not a fit case for quashing the order of cognizance in exercise of the inherent jurisdiction of the Court under Section 482 of the Code which has to be exercised sparingly and only when a conclusion is arrived at that non-exercise of the power would ultimately lead to abuse of the process of Court.