D K KAPUR Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) This appeal is against the order dated 27/10/1998 passed by the Company Judge, on the application of Reserve Bank of India (hereinafter the complainant/RBI) under Section 446(1) of the Companies Act 1956 read with Rule 117 of the Companies (Court) Rule 1959 (for short 'the Rules') granting leave to pursue its criminal complaint for the offences under Sections 58B(5)(aa), 58B(6) read with Section 58C of the Reserve Bank of India Act 1934 (for short RBI Act), against JVG Finance Limited (Respondent company) and directing the trial court to consider the objections raised on behalf of the appellant.

(2.) We have heard Sh. Kapil Sibal and Sh. Rajeev Dhawan, learned Senior Advocates, for the appellant and Sh. Rajeev Nayar, learned Senior Advocate for the complainant/RBI and have been taken through record. Learned Counsel for the parties argued that in the appeal maintainability of the criminal complaint against the appellant is questioned therefore, appeal be finally heard and disposed of at this stage itself. We propose to do so accordingly.

(3.) Facts in brief necessary for the disposal of this appeal are: that on 4/06/1998 complainant-RBI filed the petition under section 433 of the Companies Act read with Section 45 of the RBI Act for winding up of JVG Finance Limited (Respondent Company), before the learned Company Judge. On 5/06/1998, official liquidator attached to this Court was appointed as provisional liquidator. The complainant-RBI also filed a criminal complaint under Sections 58B(5) (aa) read with Section 58C of the RBI Act against the said company and others alleging that it was a non-banking company governed by the provisions of Chapter IIIB of RBI Act and Non-Banking Financial Companies (RB) Directions, 1977 and that it was prohibited from accepting deposits from the public by an order dated 10/10/1997. The respondent company and others violated these directions and thereby committed the said offences punishable upto three years imprisonment and fine. The Magistrate took cognizance on the complaint, and issued summons against accused persons except the appellant; Process against the appellant was not issued on the ground that there was no material to show that the appellant was working in the capacity of an Executive Director (Finance) of the said Company. Feeling aggrieved against the order complainant-RBI filed two Revisions which came up for hearing before Justice M S A Siddiqui, who vide orders dated 24/04/2000 accepted both Revision Petitions and set aside the order passed by the trial court declining to issue summons against the appellant. While passing the order learned Judge took note of the Audit Report filed in support of the complaint containing allegations against the appellant. Para 2.4 of the Audit Report reads as under:-