RAJARAM KHANDIGE Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THIS petition is filed under Section 482 of the Code of Civil Procedure seeking to quash the proceedings in CR. No. 310/2005 pending on the Court of JMFC. Davanagere.

(2.) ACCORDING to the petitioner, he filed an application under Section 633 (2) of the Companies Act seeking to relieve him from the personal criminal liability with respect to the liability of Karnataka financial Service Limited (in liquidation ). It is the submission of the Learned Counsel for the petitioner that a complaint has been filed before the Extension Police Station, Davanagere in clime No. 310/2005 for the offences punishable under Sections 406, 420 read with Section 34 of indian Penal Code. He submits that the proceedings against him would be abuse of process of law.

(3.) IT is seen as per Section 633 (2) of the Company's Act, the court can grant relief in any proceedings for negligence, default, breach of duty and misfeasance or breach of trust against an officer of the Company, if it appears to the court on hearing the case, that he may be liable only in respect of negligence, default, breach of duty, misfeasance and that he had acted honestly and reasonably having regard to the circumstances of the case, then the court may drop proceedings. To arrive at some conclusion, on the exact nature of the conduct of the petitioner, the matter has to be examined in detail to see whether the conduct was reasonable so as to extend the benefit of exemption from criminal liability. It appears that there were several cases of dishonour of cheques, filed against the petitioner who is said to be the Executive director of the Company. Of course, winding up proceeding has been initiated against the company. Now the Petitioner is seeking for quashing the complaint filed. It is for the Learned magistrate to examine whether the petitioner was honest and reasonable in discharging his duties and to know whether it is only mere negligence, misfeasance and breach of duty. It is not the stage at which, the court can decide that the petitioner has acted honestly and reasonably, as it is a fact to be examined from a detailed enquiry.