ASHIM KUMAR ROY versus BIPINBHAI VADILAL MEHTA AND ORS.

Citation: [1997] SUPP. 4 S.C.R. 446 · Decided: 14-10-1997 · Supreme Court of India · Bench: A.S. ANAND · Disposal: Dismissed
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Judgment (excerpt)

A 
ASHIM KUMAR ROY 
v. 
BIPINBHAI VADILAL MEHTA AND ORS. 
OCTOBER 14, 1997 
B 
[DR. A.S. ANAND AND K. VENKATASWAMI, JJ.) 
Indian Penal Code, 1860-Sections 409 and 120-B-Code of Criminal 
Procedure, 1973-Section 482-/nherent jurisdiction of High Court-
Criminal case registered against the respondent and committed to the Sessions 
C Court for proceeding farther-Complaint prima facie jailed to disclose any 
case under Section 409 or I 20-B /PC-Respondents were not even Directors 
of the company on the relevant dates of which the transaction complained 
of-Held, it would be unjust to allow proceedings to continue and as such, 
High Court rightly exercised its inherent jurisdiction to quash the proceeding. 
D 
The appellant-complainant made a complaint that as per the 
memorandum of understanding, the contesting respondents had to discharge 
certain liability prior to takeover of the management and control of the 
companies and the respondents in order to discharge the said liability, entered 
into a conspiracy to commit criminal breach in relation to the funds of the 
E company and thereby dishonestly siphoned the public funds of the company. 
F 
The Magistrate on the complaint registered a criminal case under 
Section 120..B and 409 IPC read with section 77 of the Companies Act against 
the respondent and committed the case to the Sessions Court. 
The respondent moved the High Court against the order of the 
Magistrate and the High Court in its inherent jurisdiction quashed the 
complaint and the charge against the contesting respondents on the grounds 
that on the day on which the offence was said to have been committed by the 
contesting respondents, they were not even ordinary Directors much less 
G Managing Directors of the company having control and management of the 
affairs the company. Hence these appeals. 
H 
Dismissing the appeals, the Court. 
HELD : 1. The accused respondents No. 1 and 2 could have come into 
446 
A.K. ROY v. B.V. MEHTA [K. VENKATASWAMI, J.] 
447 
picture only after the transactions complained of had taken place. It was the A 
father of the first respondent, who was the Managing Director of the company 
when the transactions took place. Respondents No. 1 and 2 could have played · 
no part in that transaction as ·they were not even ordinary Directors at that 
time in the company. Therefore the allegations made in the complaint, even if 
it is teken in its entirety, do not constitute an offence either under section B 
120-B or under Section 409 IPC. Hence it would be manifestly unjust to allow 
proceedings in the criminal complaint to be proceeded with against contesting 
respondents No. 1 and 2. As such, the High Court has rightly exercised its 
inherent jurisdiction under Section 482 Cr. P.C. in quashing the complaint. 
(454-F-GJ 
c 
R.P. Kapur v. State of Punjab, AIR (1960) SC 866, held applicable. 
State of U.P. v. O.P. Sharma, (1996) 7 SCC 705 and State of Bihar v. 
Rajendra Agarwal/a, (1996( 8 SCC 164, relied on. 
Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre and D 
Ors., AIR (1988) SC 709, referred to. 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal Nos. 486-
487of1995. 
From the Judgment and Order dated 2.12.94 of the Gujarat High Court E 
in Cr!. Misc. A. No. 4216/94 with Cr!. R.A. No. 247/1989. 
R.K. Jain and S. Sanjanwala and Anil Shrivastava for the Appellant. 
Shanti Bhushan, Arun Jaitley, Levang S. Nanavati, Yashank Adhyaru, 
V.K. Bhatt, Saurin A. Mehta, Mrs. Nirmala Gupta and Mrs. V.D. Khanna for F 
Mis I.M. Nanavati Associates for the Respondents. 
Ms. Hemantika Wahi for the State. 
The Judgment of the Court was delivered by 
K. VENKA T ASW AMI, J. These appeals arise out of a complaint filed 
by the appellant which was subsequently registered as Criminal Case No. 262/ 
89. Brief facts leading to the filing of these appeals are given below :-
G 
TI1e appellant who was a General Secretary of Hind Mazd:ior Kisan 
Panchayat to which Gujarat Mazdoor Panchayat, a recognised trade union of H 
448 
SUPREME COURT REPORTS (1997) SUPP. 4 S.C.R .. 
A a limited company, originally known as Mis. Sayaji Mills Ltd, now known as 
Sayaji ·Industries Ltd, is affiliated. According to the appellant/complainant; 
respondents I & 2 (hereinafter called the "contesting respondents") have 
committed offences under Sections 120-B and 409 !PC read with Section 77 
of the Companies Act. The contesting respondents are father and son. One 
B Vadilal Lalbhai Mehta was the father of the firs
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