R RAMAKRISHNAN Vs. V S DHANASEKAR

JUDGEMENT

(1.) THE respondent herein filed a private complaint numbered as C.C. No. 3286 of 1981 before the IV Metropolitan Magistrate, Saidapet, Madras against the petitioners under sections 120-B, 408, 409 read with sections 34 and 109, Indian Penal Code, contending that the Management of the Madras Race Club, under Article 34 of the Articles of Association vests with the members of the Committee of Management, who would constitute as Directors of the Madras Race Club under the Companies Act, 1956, and they control the funds of the Club. THE members of the Committee of Management were bound in law by the Companies Act, 1956, by the licence granted to the Club by the government of India, and by the Memorandum of the Articles of Association, to apply the income and its property solely for the promotion of the objects of the Club, so that no portion of the funds were paid or transferred either directly or indirectly by way, of profit to the members. It was contended by the respondent in the private, complaint, that between November, 1980 and March, 1981, the petitioners herein, who are the members of the Committee of Management, entered into a conspiracy to enrich themselves and misappropriated large sums of money from the funds of the Madras Race Club and with this view and with a common intention to enrich themselves, their relatives and friends, the petitioners have dishonestly and fraudulently misappropriated or converted to their own use the said monies of the Club. THE respondent has also stated in the complaint, that on 24th November, 1980, the Committee of Management sanctioned the granting of loans to the Club Members who would include petitioners 1 to 6, and the petitioners knowing fully well that they could not utilise the loans without the permission of the Company Law Board, passed a resolution authorising the Secretary of the Club to apply to the Company Law Board for permission, for the Committee members to utilise the loans, that the act of the petitioners is in direct violation of the trust imposed on them and the petitioners have conspired and drew several amounts as and by way of loans from the funds of the Club. In addition, a sum of Rs. 36,250 was given to the relations of the first petitioner, Rs. 30,000 to the relations of the third petitioner, Rs. 1,36,500 to the relations of the fourth petitioner and Rs. 60,000 to the relations of the fifth petitioner. In short, in the complaint, the respondent herein contends, that the petitioners acting in conspiracy between 14th November, 1980 and 23rd March, 1981, acted dishonestly to obtain for themselves pecuniary benefits and misappropriated for, their own use a sum of Rs. 4,77,750 which, according to the respondent, is illegal. This complaint was filed on 20th April, 1981. THE IV Metropolitan Magistrate took the complaint on file on the allegations levelled by the respondent against the petitioners in the complaint and issued summons. It is only to quash the aforesaid proceedings in C.C. No. 3286 of 1981, the above petition in Crl. M.P. No. 2196 of 1981 has been filed by the petitioner under section 482, Criminal Procedure Code.

(2.) IN the affidavit filed before me in Crl. M.P. No. 2196 of 1981 by the Secretary of the Madras Race Club, the seventh petitioner herein, it is contended, that the Madras Race Club is registered under the INdian Companies Act and was established in the year 1922. Under the Articles of Association, there shall be a Committee of Management consisting of 12 members elected from amongst the members of the Club and 4 members were nominated by the Government of Tamil Nadu. One-third of the elected members of the Committee of Management is to retire once a year and there shall be an election every year to fill up the vacanies of the members retiring by rotation. Under the Articles of Association, the Madras Race Club is entitled to invest funds not immediately required by the Club, in such a manner, as may be determined from time to time and the object of the Club is to carry on the business of the Race Club in all its branches and to conduct, hold and promote race meetings, etc. It was also contended in the affidavit filed by the Secretary of the Madras Race Club, that under the Scheme known as M. R. C. Scheme, the club grants loans to the members for the purchase of two year old INdian Bloodstock at the auction sales. This loan is granted to the Committee members as well as to other members of the Club. Likewise, for the year 1980-81, loans were granted in accordance with the resolution of the Committee in its meeting held on 26th December, 1980. The complainant respondent is a party to the said resolution dated 26th December, 1980, and has not raised any objection for the grant of loans.

(3.) INTER alia, it was contended by the petitioners that the practice of granting loans to the members of the Committee of Management for purchase of race horses has been in vogue for the past several years and in fact the complainant-respondent herein and his father have also obtained such loans from the Club on previous occasions without demur. There is no deprivation of the property of the Club in contravention or in violation of any of the provisions of the Law or contract. No wrongful loss is occasioned by the Club nor any wrongful gains to the petitioners herein as alleged in the complaint and that on the face of the complaint and on the facts, no criminal offence is made out. In any event, since the loans have been repaid by the petitioners 1 to 6 as early as 11th April, 1981, even before instituting the complaint, there is no question of any criminal breach of trust involved and that the complaint filed by the respondent against the petitioners is an abuse of process of Court and is motivated by ill-feelings to wreak vengeance with the petitioners and also to harass and blackmail them. Hence the above petition to quash the proceedings.