IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF AUGUST, 2019 BEFORE THE HON’BLE MR.JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.8598 OF 2015 BETWEEN:
RAMNEEK S.BAKHSHI S/O.GURUPARKASH SINGH 66 YEARS, “CHAIRMAN”
AUSDIA PROJECT MARKETING PVT. LTD., (L.J.HOOKER), NO.201, RAHEJA PLAZA COMMISSARIAT ROAD BENGALURU – 560 025.
(BY SRI.S.G.BHAGAVAN, ADV.,) AND:
1. DHANAKOTE BUILDERS & LAND DEVELOPERS NO.799/B, 1-C MAIN, DOMLUR LAYOUT BENGALURU – 560 071 REPRESENTED BY ITS PARTNERS SRI.S.VIJAY AND SRI.D.NARAYAN …PETITIONER 2. THE STATE OF KARNATAKA BY THE STATON HOUSE OFFICER ASHOKNAGAR POLICE STATION BENGALURU – 560 025.
... RESPONDENTS (BY SRI R.NAGENDRA KUMAR, ADV., FOR R-1, SRI.VIJAYAKUMAR MAJAGE, ADDL. SPP FOR R-2) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.54106/2015 PENDING IN THE COURT OF THE XI ADDITIONAL C.M.M., BENGALURU, IN SO FAR AS THE AS ACCUSED NO.4 IS CONCERNED.
THIS CRIMINAL PETITION COMING ON FOR HEARING THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER Petitioner is accused No.4 in the charge sheet laid by respondent No.2 – State under Sections 120-B, 465, 468, 471, 420 read with Section 34 of IPC.
2. Heard learned counsel for the petitioner, respondent No.1 – complainant and learned Additional SPP for respondent No.2 – State. Perused the records.
3. The case of the prosecution is that Ausdia Project Marketing Pvt. Limited entered into a Procurement Agreement with the complainant – Dhankoti Builders and Land Developers Private Limited to procure 100 acres of land comprised in Sy.Nos.3, 4, 10, 11, 12, 14, 27, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27, 36, 37, 50, 73, 74, 75, 76, 77, 78 and 79 of Yedehalli and Honnenahalli Village, Sompura Hobli, Nelamangala Taluk, Bangalore District, and induced the complainant to part with Rs.50 lakhs on the promise of obtaining a consent letter from Karnataka Udyog Mitra; but it later transpired that the said consent letter was fabricated and signatures of the then Managing Director of Karnataka Udyog Mitra and the Principal Secretary of the Government of Karnataka were forged and thereby, committed the offences punishable under Sections 120-B, 465, 468, 471, 420 read with Section 34 of IPC.
4. Learned counsel appearing for the petitioner submitted that the FIR was initially lodged against Mr.Alexander Moore, CEO, Mr.Chaitanya Manohar, Director and Mr.Vijayananda, Regional Manager of Ausdia Project Marketing Pvt. Limited. There were no allegations whatsoever in the complaint / FIR that the petitioner herein made any such representation or entered into any transaction with the complainant. Even the Procurement Agreement dated 26.07.2010 discloses that the petitioner was not a party to the said agreement. On the other hand, the aforesaid Mr.Alexander Moore, had signed the said agreement as Managing Director of the said Company. Under the said circumstances, the implication of the petitioner as accused No.4 in the above charge sheet is illegal and baseless. Further, learned counsel submitted that the charge sheet does not contain any allegation whatsoever against the petitioner either in the alleged act of conspiracy or in the fabrication or falsification of records. According to the prosecution, the alleged forgery has been committed by the Company, but Company has not been arraigned as accused. Under the circumstances, even if the petitioner is holding any post or Officer of the said Company, the petitioner cannot be held vicariously liable for the acts of the Company. Thus, he contends that the prosecution of the petitioner based on the allegations contained in the FIR is illegal and abuse of process of Court.
5. Refuting the above contentions, learned counsel appearing for respondent No.1 / complainant strenuously contended that the allegations made in the complaint relate to the transaction entered into by Ausdia Project Marketing Pvt. Limited. Petitioner was the Chairman of the said Company. There are clear allegations that he was dealing with the accounts of the Company and he was responsible for the conduct of the day to day business of the Company and hence, he has been rightly sent up for trial for the above offences.
6. Learned Additional SPP appearing for respondent No.2 argued in line with the submissions made by the learned counsel for the respondent No.1 contending that prima facie material is available in proof of the involvement of petitioner in the alleged offences and thus, sought for dismissal of the petition.
7. I have considered the submissions and perused the records.
8. The material averments made in the complaint read as under:-
“ We submits that, the Ausdia Project Marketing Pvt. Ltd., rep. by C.E.O, Sri.Alexander Moore and Sri.Chaitanya Manohar, Director and Regional Manager Sri.Vijayanand has forged, created concocted fake documents and cheated us and also they have taken security cheque and threatening our life day and night. We further submits that, they have created concocted by forging signature of Principal Secretary of Government Sri.V.P.Baligar and Sri.K.S.Shiva Swamy, M.D., Karnataka Udyog Mitra, and issued the same to Rajalaxmi Logistics Ltd., and our financier, thereby we have lost credit in the market because of the illegal, unlawful activities of the said persons.”
The further averment read as under:-
“We submits that, in total we have paid an amount of Rs.50,00,000/- to the above said company by name Ausdia Project Marketing Pvt. Ltd., Subsequent to that, our financier found out that the said sanction letter issued by above said company is forged, created, concocted for the purpose of getting money. Immediately, our financier has started troubling, then we went to KIADB and found out that he said Ausdia Project Marketing Pvt. Ltd., has created this sanction letter in the name of Vijay Enterprises and Narayan Enterprises showing that KIADB has sanctioned 50 acres of land each in the name of Vijay Enterprises and Narayan Enterprises by forging signature of Principal Secretary of Government Sri.V.P.Baligar and Sri.K.S.Shiva Swamy, MD, Karnataka Udyog Mitra.”
9. From the above averments, it can be gathered that the transaction was entered into by the respondent No.1 / complainant with Ausdia Project Marketing Pvt. Limited. According to the complainant, as on the date of the alleged transaction, the Company was represented by its CEO – Alexander Moore, who has signed the Procurement Agreement as Managing Director of the said Company. There is nothing in the said complaint or agreement to indicate that the petitioner was holding any position of Chairman of Ausdia Project Marketing Pvt. Limited at the relevant point of time. No material is produced along with charge sheet to show that the petitioner had any involvement in the aforesaid transaction. It is not the case of the complainant or prosecution that the petitioner induced the complainant to part with the money. There is no material to show that he has received any part of the amount either under the agreement or independently. In the absence of any such material, in my view, the prosecution of the petitioner for the alleged offences is wholly illegal and cannot be sustained.
10. The contention of the learned counsel for respondent No.1 that transaction in question having been entered into by the Company, of which the petitioner was the Chairman cannot be accepted, for the reason that no material is available to show that at the time of the alleged transaction, the petitioner was the Chairman of the said Company. Even otherwise, in the absence of the Company itself having not been made accused, vicarious liability cannot be fastened on the petitioner.
11. Law on this point is well settled that, in the absence of any provision under the statute, a Director of the Company or employee cannot be held to be vicariously liable for any offence committed by the Company itself.
12. In S.M.S. Pharmaceuticals vs. Neeta Bhalla, (2005) 8 SCC 89, the Hon’ble Supreme Court has laid down as under:-
8. … There is no universal rule that a Director of a company is in charge of its everyday affairs. We have discussed about the position of a Director in a company in order to illustrate the point that there is no magic as such in a particular word, be it Director, manager or secretary. It all depends upon the respective roles assigned to the officers in a company. A company may have managers or secretaries for different departments, which means, it may have more than one manager or secretary.”
13. In Keki Hormusji Gharda vs. Mehervan Rustom Irani, (2009) 6 SCC 475, at para 17, it is held that:
“17. The Penal Code, 1860 save and except in some matters does not contemplate any vicarious liability on the part of a person. Commission of an offence by raising a legal fiction or by creating a vicarious liability in terms of the provisions of a statute must be expressly stated. The Managing Director or the Directors of the Company, thus, cannot be said to have committed an offence only because they are holders of offices. The learned Additional Chief Metropolitan Magistrate, therefore, in our opinion, was not correct in issuing summons without taking into consideration this aspect of the matter. The Managing Director and the Directors of the Company should not have been summoned only because some allegations were made against the Company.”
14. Thus, the prosecution of the petitioner, in the facts and circumstances of the instant case cannot be sustained. However, having regard to the contentions urged by respondent No.1 that the transaction in question has been entered into by the Company, liberty is reserved to respondent No.1 to take appropriate steps in the matter during the course of trial.
15. With these observations, the petition is allowed. Charge sheet laid against petitioner namely, accused No.4 in C.C.No.54106/2015 on the file of XI Additional Chief Metropolitan Magistrate, Bengaluru for the offences punishable under Sections 120-B, 465, 468, 471, 420 read with Section 34 of IPC are quashed only insofar as petitioner herein namely, accused No.4 is concerned.
In view of disposal of the main matter, I.A.No.1/2019 does not survive for consideration. Accordingly, it is disposed of.
Sd/- JUDGE VMB