Shri Arun Wadikar vs Official Liquidator and Others

A.B. Chaudhari, J.—Heard.

Admit. Taken-up for final disposal with the consent of learned Counsel for the rival parties.

In the present appeal, there is a challenge to the judgment and order dated 18th December, 2009, whereby the learned Company Judge discharged accused Nos. 2 to 5 in a Criminal Case registered as Company Complaint No. 8 of 2001 under the Companies Act, 1956. Learned Counsel for the appellant restricted his submission saying that after the registration of the said Criminal case, no application for discharge from the criminal case was at all filed.

However, the learned Company Judge has discharged accused Nos. 2 to 5 recording finding that they did not have any involvement. According to him, in absence of any application and opportunity to oppose any such move for discharge, impugned order could not have been made.

Per contra, Smt. Shinde, learned Counsel for the respondents, opposed this appeal and argued that the learned Company Judge had come to conclusion, though before the end of trial looking to the affidavit, that there was no involvement of respondent Nos. 2 to 5 and therefore, no fault can be found out with the impugned order, even if there was no application for discharge in the criminal case that was registered.

Having heard the learned Counsel for the rival parties, we find that the learned Company Judge recorded his conclusion of non-involvement of accused Nos. 2 to 5 on the basis of affidavit namely that accused Nos. 2 to 5 had resigned as Directors much before and hence they were not involved. We find that it is not legal and proper to rely on such a bald statement in the affidavit without insisting for documentary evidence. Further, since the criminal case was registered by the learned Company Judge and the trial was on, in the absence of any application for discharge, appellant and others had no notice of proposed discharge. If the accused Nos. 2 to 5, who wanted to say that they should be discharged, they could have done so only by filing regular application with notice thereof to all concerned which could have been contested and then learned Judge could have made adjudication as to whether discharge could be made or not. We, therefore, find that this minimum procedure of adjudication before making order of discharge in the absence of application for discharge was not followed. Reliance placed on mere affidavit to hold that there was no involvement, without putting the appellant on notice by application for discharge is violation of principles of natural justice. In the result, we find merit in the present appeal. We, therefore, make the following order.

Company appeal is allowed.

The impugned order dated 18/12/2009 passed by the Company Judge in Company Complaint No. 8 of 2001 is set aside relating to only to discharge of accused Nos. 2 to 5. We reserve liberty to accused Nos. 2 to 5 to apply for discharge if so advised.

Costs of the Company Appeal be paid by respondent Nos. 2 to 5 to the appellant.