Sushil Kumar Khowala @ Sushil Kumar and anr. Vs. State of Jharkhand and anr. - Court Judgment

Excerpt:
criminal - indian penal code, 1860 - sections 420/468/472/120 (b) - cheating, forgery and conspiracy - purchase of share - stoppage of transfer by petitioner no. 1 in favour of complainant on telephonic communication from uti bank - suit in connection with present matter pending before civil court - question as to whether petitioner no. 1, managing director of company, acted illegally or improperly gives rise to a cause of action for civil action - until suit is decided, petitioner cannot be faulted and subjected to criminal proceeding - no sufficient material on record for taking cognizance of alleged offences against petitioners - impugned order taking cognizance quashed - petition allowed. - motor vehicles act, 1988[c.a.no.59/1988] section 166; [a.k. patnaik, cj, a.k. gohil & s. samvatsar, jj] application for compensation for personal injury death of injured claimant subsequently for some other reasons held, claim for personal injury will abate on the death of claimant. claim will not survive to his legal representative except as regards claim for pecuniary loss to estate of claimant. - 1 is the managing director) that though the shares were transferred to ravikar prasad in good faith, the delivery instruction slip did not contain the signature of the account holder banke lal gupta and the same was not valid. stopped the transaction on the basis of the complain made by uti bank which was followed by lodging of the fir and initiation of the criminal/civil cases.ordern.n. tiwari, j.1. in this cr.m.p. the petitioners have prayed for quashing the order taking cognizance dated 5.3.2003 passed by the learned s.d.j.m. jamshedpur in complaint case no. 364/03 as also the entire criminal proceeding of the said complaint case. by the said order the learned s.d.j.m. has taken cognizance of the offences under sections 420/468/472/120(b), ipc against the petitioner. it ha? been stated that the allegations made in the complaint do not constitute any penal offence.2. the short fact leading to the complaint case is that one revikar prasad had d. mat account in depository participant firm m/s. g. raj & co. of which the petitioner no. 1 is the managing director. the complainant had inquired from the petitioner no. 1 regarding the genuineness of the shares. in reply, the petitioner no. 1 (accused no. 3) had confirmed the position of shares of the accused no. 1 in his d. mat account and had convinced him for purchasing the shares. on that basis the complainant had purchased the shares. he, thereafter, sold the shares. in the open market on current rate. the accused no. 1 issued transfer slip of his d.p. account of the firm m/s. g. raj & co. in favour of the complainant. but the accused no. 3 stopped the transfer without having any authorization letter from any authority and without any just reason on the pretext that the share belonged to some other and not to the accused no. 1. the petitioner no. 1 (accused no. 3) has stopped transfer of share in favour of the complainant on the alleged telephonic communication from the uti bank.3. the learned magistrate, on the said allegation, has taken cognizance of the aforesaid offences against the petitioner.4. the petitioner has stated that m/s. g. raj & co. is the depository participant of national security depository limited (nsdl) and they only maintain the d. mat accounts and they are not concerned with the transaction of the shares. the company being a depository participant of nsdl is only authorized to maintain d. mat accounts where share holders keep their shares in electronic form. they are controlled and authorized by securities and exchange board of india (sebi). the share was transferred to the account of ravikar prasad from the account of one banke lal gupta who had d. mat account with the uti bank. on 5.4.2002 uti bank had written to g. raj & co. (the company of which the petitioner no. 1 is the managing director) that though the shares were transferred to ravikar prasad in good faith, the delivery instruction slip did not contain the signature of the account holder banke lal gupta and the same was not valid. the said act was also reported to the police station with request for taking action against ravikar prasad who had committed the said fraud. the complainant-o.p. no. 2 had also filed a title suit, being title suit no. 54/02 in the court of the munsif, jamshedpur praying for permanent injunction restraining the m/s. g. raj & co. from transferring the aforesaid shares to any other person except the complainant.5. the petitioner had appeared in the said suit and filed show cause stating therein that the shares are still lying in the account of ravikar prasad and the company has not transferred the share to any other person. they are also not concerned with the transaction between the accused no. 1 and the complainant. the company is only the custodian of the shares which are in electronic form and it simply acts as a bank. the petitioner no. 2 (accused no. 4) is only an introducer of ravikar prasad at the time of opening of the account with g. raj & co. and he has also got no concern with the said transaction. it has been stated that in view of the said factual position, no penal offence is constituted against the petitioners. the matter is still sub-judice before the competent court of civil jurisdiction and the impugned order taking cognizance of the said offences is wholly illegal and is an abuse of the process of the court.6. learned counsel appearing on behalf of the o.p. no. 2 as also learned a. p.p. opposed the cr. m.p. and submitted although the civil suit regarding the same subject-matter is pending, the criminal proceeding is not barred. there is criminal penal element in the allegations made against the petitioners. it has been stated that the respondent no. 3 being the managing director of the company is solely responsible for stopping the transaction illegally and is also liable for the penal offences and there is no illegality in the order taking cognizance.7. i have heard learned counsel for the parties and perused the facts and materials on record. the point for consideration in this case is as to whether g. raj & co., of which the petitioner no. 1 is the managing director, had acted illegally or improperly. the said question gives rise to a cause of action for civil action. a suit to that regard, between the parties, is pending before the civil court. on perusal of the complaint petition, it appears that g. raj & co. stopped the transaction on the basis of the complain made by uti bank which was followed by lodging of the fir and initiation of the criminal/civil cases. in view of the above, until it is decided that whether g. raj company had acted illegally in stopping the transaction, he cannot be faulted and subjected to a criminal proceeding. since the petitioner no. 2 is admittedly an introducer of ravikar prasad for opening his account, there is substance in the submission of learned counsel for the petitioner that the said fact itself does not constitute any alleged offence and the cognizance taken against him for the said offences is without any basis. ,8. for the reasons aforementioned, i find no sufficient material on record for taking cognizance of the alleged offences against the petitioners. the order taking cognizance by the learned magistrate is not legally justified. the impugned order taking cognizance dated 5.3.2003 as also the entire criminal proceeding based thereon are, thus, quashed.this cr. m.p. is allowed.

Judgment:
ORDER

N.N. Tiwari, J.

1. In this Cr.M.P. the petitioners have prayed for quashing the order taking cognizance dated 5.3.2003 passed by the learned S.D.J.M. Jamshedpur in Complaint Case No. 364/03 as also the entire criminal proceeding of the said complaint case. By the said order the learned S.D.J.M. has taken cognizance of the offences under Sections 420/468/472/120(B), IPC against the petitioner. It ha? been stated that the allegations made in the complaint do not constitute any penal offence.

2. The short fact leading to the complaint case is that one Revikar Prasad had D. Mat account in Depository Participant Firm M/s. G. Raj & Co. of which the petitioner No. 1 is the Managing Director. The complainant had inquired from the petitioner No. 1 regarding the genuineness of the shares. In reply, the petitioner No. 1 (accused No. 3) had confirmed the position of shares of the accused No. 1 in his D. Mat account and had convinced him for purchasing the shares. On that basis the complainant had purchased the shares. He, thereafter, sold the shares. In the open market on current rate. The accused No. 1 issued transfer slip of his D.P. account of the Firm M/s. G. Raj & Co. In favour of the complainant. But the accused No. 3 stopped the transfer without having any authorization letter from any authority and without any just reason on the pretext that the share belonged to some other and not to the accused No. 1. The petitioner No. 1 (accused No. 3) has stopped transfer of share In favour of the complainant on the alleged telephonic communication from the UTI Bank.

3. The learned Magistrate, on the said allegation, has taken cognizance of the aforesaid offences against the petitioner.

4. The petitioner has stated that M/s. G. Raj & Co. is the Depository Participant of National Security Depository Limited (NSDL) and they only maintain the D. Mat accounts and they are not concerned with the transaction of the shares. The Company being a Depository Participant of NSDL is only authorized to maintain D. Mat accounts where share holders keep their shares in electronic form. They are controlled and authorized by Securities and Exchange Board of India (SEBI). The share was transferred to the account of Ravikar Prasad from the account of one Banke Lal Gupta who had D. Mat account with the UTI Bank. On 5.4.2002 UTI Bank had written to G. Raj & Co. (the company of which the petitioner No. 1 is the Managing Director) that though the shares were transferred to Ravikar Prasad in good faith, the delivery instruction slip did not contain the signature of the account holder Banke Lal Gupta and the same was not valid. The said act was also reported to the Police Station with request for taking action against Ravikar Prasad who had committed the said fraud. The complainant-O.P. No. 2 had also filed a title suit, being Title Suit No. 54/02 in the Court of the Munsif, Jamshedpur praying for permanent injunction restraining the M/s. G. Raj & Co. from transferring the aforesaid shares to any other person except the complainant.

5. The petitioner had appeared in the said suit and filed show cause stating therein that the shares are still lying in the account of Ravikar Prasad and the company has not transferred the share to any other person. They are also not concerned with the transaction between the accused No. 1 and the complainant. The Company is only the custodian of the shares which are in electronic form and it simply acts as a Bank. The petitioner No. 2 (accused No. 4) is only an introducer of Ravikar Prasad at the time of opening of the account with G. Raj & Co. and he has also got no concern with the said transaction. It has been stated that in view of the said factual position, no penal offence is constituted against the petitioners. The matter is still sub-judice before the competent Court of civil jurisdiction and the impugned order taking cognizance of the said offences is wholly illegal and is an abuse of the process of the Court.

6. Learned Counsel appearing on behalf of the O.P. No. 2 as also learned A. P.P. opposed the Cr. M.P. and submitted although the civil suit regarding the same subject-matter is pending, the criminal proceeding is not barred. There is criminal penal element in the allegations made against the petitioners. It has been stated that the respondent No. 3 being the Managing Director of the Company is solely responsible for stopping the transaction illegally and is also liable for the penal offences and there is no illegality in the order taking cognizance.

7. I have heard learned Counsel for the parties and perused the facts and materials on record. The point for consideration in this case is as to whether G. Raj & Co., of which the petitioner No. 1 is the Managing Director, had acted illegally or improperly. The said question gives rise to a cause of action for civil action. A suit to that regard, between the parties, is pending before the civil Court. On perusal of the complaint petition, it appears that G. Raj & Co. stopped the transaction on the basis of the complain made by UTI Bank which was followed by lodging of the FIR and initiation of the criminal/civil cases. In view of the above, until it is decided that whether G. Raj Company had acted illegally in stopping the transaction, he cannot be faulted and subjected to a criminal proceeding. Since the petitioner No. 2 is admittedly an introducer of Ravikar Prasad for opening his account, there is substance in the submission of learned Counsel for the petitioner that the said fact itself does not constitute any alleged offence and the cognizance taken against him for the said offences is without any basis. ,

8. For the reasons aforementioned, I find no sufficient material on record for taking cognizance of the alleged offences against the petitioners. The order taking cognizance by the learned Magistrate is not legally justified. The impugned order taking cognizance dated 5.3.2003 as also the entire criminal proceeding based thereon are, thus, quashed.

This Cr. M.P. is allowed.