LexMAKSUD SAIYED versus STATE OF GUJARAT AND ORS.
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MAKSUD SAIYED A v. STATE OF GUJARAT AND ORS. SEPTEMBER 18, 2007 (S.B. SINHA AND HARJIT SINGH HEDI, JJ.) B Penal Code, 1860-ss. 120B, 425, 191, 192, 177, 188 and 500- Transaction between a Bank and a Company-Suit in Civil Court by company against Bank for recovery of certain amount-Floating of public issue by the C Bank vide a prospectus-Prospectus wrongly stating pendency of suit to be before Debt Recovery Tribunal-However other particulars of the prospectus were correct-Criminal complaint by Director of Company-Against the Bank, its Directors and Managing Director-Alleging false information in the prospectus-Judicial Magistrate finding case of defamation directing Police Investigation-Application for quashing complaint and Police D Investigation-Allowed by High Court-On appeal, held: Mentioning of pendency before a Court wrongly, being a bonafide mistake, does not give rise to a cause of action for filing a complaint petition-No case of defan:::ition is made out-The acts of omission and commission on the part of Bank would, at the most, give rise to tortuous liability and statutory violation- Vicarious liability could not be attached to the Managing Director and E Directors of the Bank because no such provision exists in this behalf in the statute-Hence they are not liable-Code of Criminal Procedure, 1973-s. 482. Code of Civil Procedure, 1973-s. 482-Jurisdiction under-Scope F of-Held: The Court, under such jurisdiction should not enter disputed question of fact-It may, however, take note of allegations in complaint petition vis-a-vis conduct of the parties. Appellant was Director of a Company. Respondent No. 2 was the Chairman-cum-Managing Director of a Bank. Respondent Nos. 3 to 11 were G Directors of the Bank. The company took loan from the Bank. As the Company did not repay the loan, the Bank filed a recovery application before Debts Recovery Tribunal. There were also transactions between the Bank and the Company. Company filed a Civil Suit against the Bank for recovery of a 1113 H 1114 SUPREME COURT REPORTS [2007] 9 S.C.R. A certain amount which allegedly the Company suffered due to negligence and deliberate fraudulent acts of the Bank. The Bank floated a public issue vide a prospectus mentioning therein about pendecy of a suit by the Company before Debts Recovery Tribunal; the nature of claim and amount of claim against the Bank. Appellant-Director of B the Company filed a criminal complaint alleging false information in the Prospectus. Directors and Chairman-cum-Managing Director were made accused as they were actively involved in preparation of the prospectus and were linked with day to day affairs of the Bank. Magistrate directed police investigation on the basis of the complaint. Respondents filed an application C u/s 482 Cr.P.C. for quashing the complaint and the investigation. High Court allowed the application. Hence the present appeal. · Dismissing the appeal, the Court HELD: 1. The court may not enter into determination of a disputed D question of fact at the stage of exercising jurisdiction u/s. 482 Cr.P.C for quashing an FIR. It may, however, take note of the allegations made in the complaint petition vis-a-vis the conduct of the parties. It is not disputed .that the bank had filed an original application before the Debts Recovery Tribunal and a civil suit was filed by the Company. Prospectus issued by the Bank for E F the purpose of Public issue mentioned that a suit by the Company was pending before Debts Recovery Tribunal. It also mentioned the amount claimed and nature of claim against the Bank. It is not in dispute that in the year 2003, the matter was pending before the City Civil Court Other relevant facts stated in the prospectus were not incorrect. Throughout the complaint petition, no allegation had been made as against any of the respondents herein that they had any thing to deal with personally either in discharge of their statutory or official duty. In the prospectus, a bona fide mistake had been committed. The fact that such a mistake had been committed stands accepted. In any event, the statement that the matter was pending before the ORT instead and in place of the City Civil Court, per se, cannot be said to be defamatory as the fact that a suit was pending for recovery of the huge amount is neither denied nor G disputed. Whether such a suit was maintainable and/ or is ultimately to be decreed or disposed of is
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