R S RATHORE Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) THESE are three petitions under Section 482 of the Code of Criminal Procedure ('crpc' ) seeking the quashing of a Criminal Complaint titled Reserve Bank of india v. Kuber Auto General Finance and Leasing Ltd. and Ors. and an Order dated 18th December 2003 by which the learned Metropolitan Magistrate, New Delhi ('mm' ) dismissed the application for recall of the summoning order dated 21st september 1999. Since the three petitions are directed against a common criminal complaint, summoning order, and the order dismissing the application for recall, they are being disposed of by this common judgment.

(2.) IN 1999, a complaint was filed by the Reserve Bank of India ('rbi ) against kuber Auto General Finance and Leasing Limited (hereafter the 'company ) and six others who are described in the complaint as its Directors as indicated in the annual Report of the Company for the year ending 31st March 1998. The complaint states that the Company submitted an application on 3rd July 1997 to the complainant RBI under Section 45 IA of the Reserve Bank of India Act, 1934 ('act ) for grant of a certificate of registration for carrying on business as a non-banking financial company (NBFC ). It is then stated that for the purposes of examining that application, the RBI sought to scrutinize the books of accounts of the Company. It is stated that although the Managing Director of the Company and its Directors did not allow such scrutiny, upon the persistence of the officials of the RBI, a few computer print outs and security documents were made available for scrutiny on 30th January 1999. It is stated in the complaint that the scrutiny of those documents revealed three specific violations:

(3.) THE complaint proceeds to aver that in terms of Section 58c of the RBI Act where the default is committed by a company every person who at the time the contravention or default was committed was in charge of or was responsible to the company for the conduct and business of the company, as well as the company, shall be deemed to be guilty for the contravention or default and shall be liable to be proceeded against and punished accordingly. In this regard, the key averment concerning the three petitioners here, who according to the RBI, were Directors of the Company reads as under: 10. In the present case, the offences have been committed by the first accused company. The accused Nos. 2 to 7 are the directors, who at the time the contravention or default was committed or in other words, when the offences were committed, were in-charge of and were responsible to the company for the conduct of business of the company. This position is supported by the responsibility of the directors to the conduct of the business of the company contained in the article 142 of the Articles of Association of the company and also by the specific provisions of Sec. 5 of the Companies Act, 1956. (emphasis supplied)