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Judgment
Shivappa, J.—The Petitioner is the second accused in C.C. No. 215 of 1993 pending on the file of the Judicial Magistrate No. 1, Tuticorin.
The brief facts are:
The Petitioner herein and one Ashok, who wanted to gain control of administration of Tamil Nadu Mercantile Bank conspired with the first
accused Mugundan, an employee of the bank who was in charge of the ''Right Issues'' to commit criminal breach of trust, falsification of records,
theft of share applications and the offence of cheating. The bank decided in the year 1990 to raise the capital by about Rs. 28,00,000/- and hence
the Board proposed to raise the said capital by issuance of ''right issues''. Such shares were offered to the already existing shareholders at the
ration of 1:1 and such applicants should make necessary offer within the stipulated time i.e., on 30.5.1990 enclosing therewith a demand draft for
the shares. There was also one condition that the allotment of shares would not exceed the value of the demand drafts. This procedure has been
contemplated u/s 81 of the Companies Act. It was further decided that no such application shall be made after the deadline viz., 30.5.90. The
Petitioner, who is accused No. 2 and his brother accused No. 3, who were not able to get things done as per their wishes, wanted to gain control
of administration of the bank by adopting ingenious methods. This is spoken to by the witness Vetrivel and anticipating that there may be
shareholders would not have applied for fresh shares and given demand drafts for amounts more than what they applied. Thiru Chelliah, one such
applicant, who has not applied for fresh shares within the stipulated time, approached the General Manager, Thiru Balakrishnan, of the bank to
permit him to apply for right issues. The General Manager refused his request since the deadline was over. But, however, this Petitioner and
accused No. 3 managed to get Chelliah''s signature in the share application without mentioning the date in column relating to the mode of payment
which was left blank and have stealthily removed the original share application of accused No. 3, his wife and Boopathi Investments, which is a
family concern of die Petitioner herein, and has substituted the applications of Chelliah and fresh applications of accused No. 3 and Boopathi
Investment are wiped. The seal pertaining to the receipt of the said applications has been affixed in such a way that it will not be possible to
decipher the actual date of the receipt. The modus operand as to how the fabrication took place has been spoken to by witness O. Mallika and R.
Mallika, the staff of die bank who were assisting the first accused in the issuance of right issues. Annamalaisami, the Deputy Manager of the bank
conducted preliminary enquiry regarding the fraudulent transaction and he has in his report submitted that the Petitioner made an extra-judicial
confession about the malpractice and he even offered from stepping down if further action of malpractice are dropped On the materials available
after examining 23 witnesses and filing 12 documents a challan was filed for offence under Ss.l20-B, 420, 465, 468, 4.77-A and 381,1. P.C. The
Magistrate took cognizance and issued summons to the accused persons. The case is set down for trial and summons have been received by the
accused persons.
At this stage, the Petitioner is seeking quashing of the proceeding inter alia contending (i) that the dispute about the shares of the registered
company can be represented before this Court under its company jurisdiction; (ii) construing the alleged disputes as commission of criminal offence
is illegal in law; (iii) the complaint has no locus stand since the registered company alone can complain about the irregularity and not an individual
shareholder.
In view of these contentions the point that arises for consideration is:
whether this Court is justified in embarking upon an enquiry as to the probability, reliability or genuineness of the averments made in the complaint,
statements of witnesses, the preliminary report and such other material relied on by the prosecution?
In Mrs. Rupan Deol Bajaj and another Vs. Kanwar Pal Singh Gill and another, the Supreme Court has settled the law relating to the exercise of
power u/s 482 of the Code and held that ""such power should be exercised where the allegations made in the complaint even if they are taken at
their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. This Court can
exercise such a power where the criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted
with an ulterior motive or wreaking vengeance on the accused and with a view to spite him due to private and personal grudge and the power of
quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court
will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint, in the
statements of witnesses, or weighing the documents produced along with the challan. In State of Bihar v. Ramesh Singh (AIR 1977 S.C. 2016)
(para 4) and this Court in Jothilingam v. State has stated that the inherent power u/s 482, Code of Criminal Procedure, should be used very
sparingly. The test is that the allegation of the complaint should be taken as they are without adding or substracting anything and it is not proper to
evaluate the evidence or look into the documents meticulously.
Regarding locus standi to file the complain, in A.R. Antulay Vs. Ramdas Sriniwas Nayak and Another, the Supreme Court has held:
right of a party to represent matters before Court cannot be whittled down into a straight jacket formula of locus standi...
The complainant herein is one of the active Director of the bank and is purely interested in the upkeep and dignity of the bank and a complaint by
such a person cannot be said to be one without locus standi. Forgery, criminal breach of trust and falsification of records with a view to obtain
shares which he is not entitled to would come solely in the purview of Indian Penal Code. Section 621 of the Companies Act authorises the
shareholders or any authorised person to lay complaint for offences.
The offences in the instant case are those arising under the Indian Penal Code. Whether the accused 1 to 3 are involved in committing forgery,
falsification of accounts, cheating, breach of trust are all matters of facts. Even the question of jurisdiction can also be raised at the appropriate
stage. It cannot be said that the complaint is one without locus standi and not maintainable and it also cannot be said that there are no averments
touching the ingredients of the offences prima facie, and this Court is not justified in embarking upon the enquiry as to the probability, reliability or
genuineness of the allegations made in the complaint or in construing the contents of the documents produced along with the challan and all the
contentions are left open to be raised at the appropriate stage. I see no ground to quash the proceedings. The petition is dismissed.