B R BAJAJ Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) This petition filed under Article 227 of the Constitution read with section 482 of Cri. P. C. press for quashing the process issued in Criminal Case No. 764/s/2000 by the learned Additional Chief metropolitan Magistrate, 37th Court, Esplanade, mumbai for an offence punishable under section 63 of the Companies Act, 1956.

(2.) M/s. Omega Ag-Seeds (India) Limited and M/s. Punjab Agro Industries Corporation (PAIC) signed a Financial Collaboration agreement on 22-10-1992 and as per the same PAIC was entitled to nominate three directors on the Board of Directors of Omega ag-Seeds (India) Limited (hereinafter referred to as the Company) and accordingly the present petitioners came to be nominated by paic as its nominee directors on the Board of the Company. The petitioners are the public servants in as much as they are the employees of the Punjab State Government and PAIC being a State undertaking which agreed to be collaborated for the formation of the Company came to be nominated as the directors.

(3.) The Securities and Exchange Board of India (SEBI) is a statutory body created under section 3 of the of the Securities and exchange Board of India Act, 1992, inter alia, to protect the interest of the general investors in securities and to promote the development of and regulate such securities and also to deal with all matters connected therewith or incidental thereto. The company floated a public issue of 30,00,000/- equity shares of Rs. 10/- each for cash at par, aggregating to Rs. 30,000,000/- in terms of the prospectus dated 11th April, 1994 and the issue opened for subscription on 16th May, 1994 with the earliest closing date was 19th May, 1994. Section 56 of the Companies Act 1956 stipulates that all material facts specified in Part-I of Schedule-II and the report specified in Part-II of that Schedule was set out in the prospectus. Accused No. 1-Company being a joint venture project of Omega Agseeds (India) Limited and the Corporation and the Company was required to disclose all material facts in the prospectus of the promoter-company. The promoter-company was placed in caution list of RBI vide their caution advice No. 186 dated 13-4-1993. The accused No. 8 Mr. M. M. Parekh is one of the directors of the promoter-company and is the sole proprietor of M/s. Mayur M. Parekh, accused No. 7 N. M. Parekh was also shown as one of the directors of accused no. 1-company and he is a partner in M/s. Ketan M. Parekh and both the firms are placed in the caution list of RBI as per the letter dated 13-4-1993. Accused Nos. 6 and 7 were directors of the accused No. 1-company at the material time and were also directors of the promoter-company. The said company had dues to repay to the Bank of india for an amount of approximately Rs. 6,45,76,396,79/ -. All this information was not disclosed in the public issue and, therefore, the SEBI filed the said complaint under section 63 of the Companies Act, 1956 and impleaded the present petitioners as accused Nos. 2, 4 and 5.