S P GUPTA Vs. STATE

JUDGEMENT

(1.) The moot point for consideration in this writ petition is whether recourse to investigation in the affairs of company under Section 235 to 242 of the Company Act is the only way to launch prosecution in respect of alleged/suspected commission of cognizable offences under IPC by the office bearers of the company or the police can investigate such allegations of its own or under orders of Court, if approached by the aggrieved person/shareholder.

(2.) Through this petition under Section 482 Cr.PC read with Article 226/227of the Constitution of India, the petitioners seek quashing of FIR bearing No. 99/2002, PS Connaught Place, New Delhi under Section 406/409/420/424/467/467/477-A read with Section 120-B IPC. The said FIR was registered in pursuance of order dated 19.2.2002 passed by learned Metropolitan Magistrate, New Delhi on a criminal complaint filed by the respondent against the petitioners who are Chairman-cum-Managing Director, Director, Chartered Accountants and Finance Controller respectively of M/s. Sunair Hotels Limited. It was alleged in the complaint that in or around December, 1994, petitioner nos 1 to 3 approached respondent company and requested it to subscribe to the equity share capital of M/s. Sun Air Hotels Limited to the tune of 25% equity share capital amounting to 70 lac equity shares @ Rs.10/- per share aggregating to Rs.7 crores. Induced by the assurances of the accused, the complainant company made payment of Rs.7 crores for the allotment of shares M/s. Sunair Hotels Limited, which in turn allotted and issued 70 lac shares to the respondent company. Apart from that 25,94,824 fully paid up equity shares of Rs.10 each aggregating to 2,59,84,240/1 were also issued to the respondent company. Thus at the time of filing of complaint, respondent company was holding 95,94,824 fully paid up equity shares of M/s. Sunair Hotels Limited. Besides, on the request of petitioners no. 1 to 3, the respondent company also provided interest bearing security deposit of Rs.8 crores, on the premise that its deposit was safe and the same would help in the early completion of the Hotel Project. After taking huge money from the respondent company, M/s. Sunari Hotels Limited also approached the financial institutions and banks for loan for the construction of hotel M/s. Sunari Hotels Limited thus raised a sum of Rs.42 crores as term loans from the financial institutions and bank i.e. Industrial Development Bank of India (Rs.10.5 crores). Tourism Financial Corporation of India (Rs. 21 crores) and Oriental Bank of Commerce (Rs.10.5 crores). It was alleged in the complaint that petitioners had fraudulently and illegally got allotted and issued equity shares worth Rs.21 crores of M/s. Sunair Hotels Limited, in the name of themselves, relatives and family members without having contributed any cash, for which the complainant has lodged a complaint with the Deputy Commissioner of Police (Crimes and Railway) and a case was registered vide FIR No. 90/2000 with the Police Station Connaught Place, New Delhi under Sections 406/409/420/424/467/467/477-A read with Section 120-B IPC. On further inquiry the complainant company came to know that the petitioners have manipulated the accounts of M/s Sunair Hotels Limited by making false documents, fabricating valuable securities and have used the said forged and fabricated documents and the books of accounts of M/s Sunair Hotels Limited with a view to illegally siphon off the funds of M/s Sunair Hotels Limited, borrowed by it from various agencies for the construction of the hotel. The funds illegally siphoned off from M/.s Sunair Hotels Limited were later on dishonestly used/utilized by the accused for subscribing to the additional share capital worth Rs.10.75 cores in M/s. Sunair Hotels Limited through bogus benami companies. The money received by these benami companies from M/s. Sunair Hotels Limited were allegedly shown to have been paid further on to various sub-contractors. When inquiries were made from the sub-contractors it was revealed that they had never carried out any construction work for M/s. Sunair Hotels Limited. In fact many of the so-called/alleged sub- contractors were employees of the petitioners or Sunair Hotels Limited and were earning meager salaries. In para 15 of the complaint, the respondent gave details of certain companies namely M/s. Bansal Estate Private Limited, M/s. Isha Metal Pvt. Limited, M/s. Atul Constructions and Finvest Private Limited. It was alleged that huge amounts were shown to have been paid to these companies which were controlled by either of the petitioners. Various instances of bogus expenditure shown in the books of accounts of M/s. Sunair Hotels Limited were also given in para 16 of the complaint. It was alleged that modus operandi adopted by the accused was that during the construction of the hotel project, the accused persons misappropriated the funds of M/s. Sunair Hotels Limited by creating false documents, fabricating valuable securities and falsifying the books of accounts of M/s. Sunair Hotels Limited. Other instances of alleged misdeeds of the petitioner were also given in paras 18, 19 and 20 of the complaint.

(3.) On receipt of this complaint, learned Metropolitan Magistrate passed the following order dated 19.2.2002 19.02.2002Present: