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Criminal Appeal No. 488, 489, 490, 491, 492, 493, 494 of 2013, (Arising out of SLP (CRL.) No.3086, 3091, 3112, 3113, 3120, 3213, 3217 of 2010). Case: M/s. GHCL Employees Stock Option Trust Vs 1. M/s India Infoline Limited, 2. Nilesh Shivji Vikamsey, 3. Venkataraman Rajamani, 4. Nimish Ramesh Mehta, 5. Arun Kumar Purwar, 6. Nirmal Bhanwarlal Jain, 7. Kranti Sinha. Supreme Court (India)

Judgment Cited in 18 Precedent Map Related
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Case NumberCriminal Appeal No. 488, 489, 490, 491, 492, 493, 494 of 2013, (Arising out of SLP (CRL.) No.3086, 3091, 3112, 3113, 3120, 3213, 3217 of 2010)
CounselFor Appellant: Rakesh Tiku, Sr. Adv., Manjusha Wadhwa and M.A. Venkata Subramanian, Advs. and For Respondents: A.M. Singhvi, Jayant Bhushan, Sr. Advs., Ajay Bhargava, Vanita Bhargava, Ankur Khandelwal and Vinam Gupta, Advs. and Khaitan and Co.
JudgesP. Sathasivam and M.Y. Eqbal, JJ.
IssueIndian Penal Code - Sections 415, 409, 34, 120B, 406, 420, 477A; Code of Criminal Procedure - Section 482
Citation2013 (2) ACR 1947, 2013 (IV) AD 186 (SC), AIR 2013 SC 1433, 2013 (81) AllCC 924, 2013 AllMR 4423 (Cri), 2013 (114) CLA 245 (SC), 2013 (177) CompCas 527 (SC), 2013 CriLJ 2044, 2013 (2) Cri 233 (SC), 2013 (135) DRJ 257, 2013 (2) JCC 1347, JT 2013 (4) SC 567, 2013 (2) LW 245 (Crl), 2013 (2) MLJ 534 (Crl), 2013 (2) RCR 519 (Crl), 2013 (3) RLW 1965, 201
Judgement DateMarch 22, 2013
CourtSupreme Court (India)

Judgment:

M.Y. Eqbal, J.

  1. Leave granted.

  2. Since these seven appeals arose out of the common order passed by the Delhi High Court in seven Criminal Miscellaneous Cases filed by the respondents, the same have been heard and disposed of by this common judgment.

  3. The aforesaid seven Criminal Miscellaneous Cases were filed in the High Court challenging the order dated 27th September, 2008 passed by the Metropolitan Magistrate, New Delhi whereby he had summoned the respondents to face trial under Sections 415, 409, 34, 120B of the Indian Penal Code (IPC) on a complaint filed by the appellant. These Criminal Miscellaneous Cases were filed separately in the High Court on behalf of the Company, namely, India Infoline Limited, and by the Managing Director, Company Secretary and other Directors of the said Company. 4. The appellant had filed a complaint before the Metropolitan Magistrate alleging commission of offences under the aforementioned Sections of IPC. The brief facts of the case as set out in the complaint are as follows: The complainant opened a Demat Account with respondent No. 1 Company, namely, India Infoline Limited in 2007 and placed orders from time to time for purchase of shares and also made payments against its running account with the Company. The Company allegedly claimed outstanding debit of Rs.10.48 crores against the complainant in its Demat Account with it. The said Company was having a lien on 20,46,195 shares purchased by the complainant in that account. The respondent-Company being accused No. 1 informed the complainant about the aforesaid debit. The complainant cleared the amount outstanding against it by making payment of Rs.10.48 crores by a cheque. Later on, it transpired that the correct debit against the complainant was Rs.10,22,77,522/-. It was alleged that the respondent-Company dishonestly received a sum of Rs.25,22,477.53 from the complainant by making false demand. It was further alleged by the complainant that on receipt of the amount of Rs.10.48 crores the respondent-accused were under legal obligation to transfer the shares purchased by the complainant from the Pool Account to its Demat Account but instead of doing that and refunding the excess amount of Rs.25,22,477.53, they, vide letter dated 14th May, 2008 asked the complainant to clear the debit of 5 companies, namely, (i) Carissa Investments Pvt. Ltd. (ii) Altar Investments Pvt. Ltd.

    (iii) Oval Investments Pvt. Ltd. (iv) Dalmia Housing Finance Ltd. (v) Dear Investment Pvt. Ltd. in terms of its letter dated 1st March, 2008 failing which they would regularize the aforementioned 5 accounts by selling the stock of the complainant. The complainant alleged that since no letter dated 1st March, 2008 had been written by the complainant to the accused, it denied the averments made in their letter dated 14th May, 2008. The complainant further alleged that they met respondents Nos. 2 to 7, namely, the Managing Director, the Company Secretary and the Directors of respondent No. 1 Company and requested to refund the excess amount and transfer its shares to Demat Account but nothing was done. The complainant, therefore, alleged that the respondents have committed criminal breach of trust and cheating, inasmuch as they have sold off 8,76,668 shares of the complainant on 23rd June, 2008 and misappropriated the entire sale proceeds. 5. The Metropolitan Magistrate after considering the allegations made in the complaint, documents placed on the record and the evidence led by the witnesses, and after being satisfied that a prima facie case is made out, directed issuance of summons against the respondents to face trial under the aforementioned Sections of IPC.

  4. Aggrieved by the said order passed by the Metropolitan Magistrate, New Delhi, the respondents filed separate petitions before the Delhi High Court challenging the issuance of summons against the Company, the Managing Director, the Company Secretary and the Directors of the Company. The High Court by the impugned order held that issuance of summons against respondents Nos. 2 to 7, namely, the Managing Director, the Company Secretary and the Directors of the Company cannot be sustained and the same are liable to be set aside. So far as respondent No. 1 Company is concerned, the High Court held that issuance of summons as against the Company under Section 415 IPC also cannot be sustained. The learned Magistrate has been directed to proceed with the trial against respondent No. 1 M/s. India Infoline Limited under other Sections of IPC.

  5. Dissatisfied with the aforesaid order passed by the High Court, the complainant has preferred these appeals by special leave.

  6. Mr. Rakesh Tiku, learned senior counsel appearing for the appellant assailed the impugned order passed by the High Court as being illegal and wholly without jurisdiction. Learned counsel first contended that the High Court has gravely erred in law in taking into consideration probable defence of the accused, which was tendered at the time of the hearing of the petitions under Section 482 Cr.P.C. questioning the legality of the summoning order passed by the learned Magistrate. Learned counsel submitted that the High Court has failed to appreciate that the allegations against the Managing Director, Company Secretary and other Directors of the Company (accused Nos. 2 to 7) in the original complaint were not based on any vicarious liability but on the specific allegations of their having conspired together to cheat and commit breach of trust, which is supported by documentary evidence. According to the learned senor counsel, the High Court exceeded its jurisdiction...

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