BHAGBATI DEVI GOENKA Vs. SUNIL KUMAR GANGULY

JUDGEMENT

(1.) THIS Rule is at the instance of the two accused -petitioners and is against an order dated the 13th April, 1970 passed by Sri P.C. Chakrabortv. Presidency Magistrate, 4th Court. Calcutta, rejecting the petitioners' prayer for staying the criminal proceedings pending against them Under Section 628 of the Companies Act. 1956 and 628/109. I. P, C, respectively being case no. C/. 3179 of 1966, till the disposal of the civil suits nos. 1871 of 1966 and 2304 of 1966 in the High Court.

(2.) A short point is involved in the Rule as to whether the criminal proceedings pending in the Presidency Magistrate's court should be stayed till the disposal of the civil suits pending before the High Court. The background of facts leading on to the Rule though chequered can be put in a short com pass. The complainant opposite party. Sunil Kumar Ganguly filed a petition of complaint in the court of the Chief Presidency Magistrate. Calcutta Under Sections 120B, IPC and 628 of the Companies Act, 1956 against the two accused Sm. Bhagabati Devi Goenka and her brother Ram Autar Jalan on the 20th September, 1966 stating inter alia that the complainant is a shareholder and a director of M/s. Coal Products Private Ltd. having its city office at 119B, Chittaranian Avenue, Calcutta; that he was co opted as a director of the said company since the 30th October, 1963; that the accused No. 1, Smt. Bhagabati Devi Goenka is also one of the directors of the said company while the accused No. 2 is her brother; that besides the two directors mentioned above, Sri Kishorilal Goenka and Smt. Parameswari Goenka were the directors while Sri Nawratan Goenka was appointed to be an Additional Director on the 28th December, 1965; that on 12 -9 -64 the ac cused No. 1 submitted a return of alteration in the particulars of directors of the aforesaid company Under Section 303 of the Companies Act, 1956, with the Registrar of Companies and therein she falsely described the accused No. 2 as one of the directors of the company and further showed falsely that the complainant had ceased to be a director; that the said return was filed before the Registrar on 28 -9 -64 by the accused No. 2; that a copy of an alleged resolution authorising the accused No. 2 to operate the bank account with the United Commercial Bank, Barrabazar Branch, was submitted by the accused Nos. 1 and 2 and considerable amounts were withdrawn for which a suit was filed by the company in the High Court; that the accused along with others had entered into a conspiracy in pursuance whereof they had prepared a false return Under Section 303 of the Companies Act, 1956 and submitted the same before the Registrar of Companies; that the said return contained false statements to the knowledge of the accused No. 1 and the accused No. 2 abetted the accused No. 1 in fabricating and filing the said false return which was actually filled up in his own hand; that on coming to know about the same in June, 1967. the complainant made enquiries applying for a certified copy of the said return; that the accused persons had committed offences Under Sections 120 -B, IPC and 628 of the Companies Act, 1956; and that processes accordingly should be issued against them. On examination of the complainant the case was sent for judicial enquiry and report, On a consideration of the report of the judicial enquiry and the materials elicited therein the learned Chief Presidency Magistrate, Calcutta, by his order dated the 15th October, 1966 issued summons against the accused no. 1 Under Section 628 of the Companies Act, 1956 and the accused No. 2, Ram Autar Jalan Under Section 628 of the Companies Act, 1956/109, I P.C. Thereafter a protracted proceedings followed and on one ground or other the case was delayed. Nine witnesses were examined and cross -examined before charge before the learned Presidency Magistrate to whom the case was transferred and several documents were also proved. On 30 -8 -69 the learned trying magistrate observed that the case could not be dragged on indefinitely. On 29 -11 -69 the learned Presidency Magistrate framed charges Under Section 628 of the Companies Act, 1956 against the accused No. 1, Smt. Bhagabati Devi Goenka and Under Section 628 of the Companies Act, 1956 read with Section 109, IPC against the accused No. 2, Ram Autar Jalan and fixed dates for cross -examination. On 16 -1 -70 an application was filed on behalf of the accused No. 2, Ram Autar Jalan by the learned Counsel for staying the criminal proceedings stating inter alia that the return (ext. 1) which is the sheet -anchor of the criminal proceedings filed on the 20th September, 1966 is directly and substantially in issue in suit no. 1871 of 1966 filed earlier on the 12th September, 1966 and pending in the High Court and that on the 21st November, 1966 the accused No. 2 had filed suit No. 2304 of 1966 in the High Court for rectification of the share register of the company and praying accordingly that the criminal proceedings be staved or in the alternative be adjourned for a fortnight to enable the accused to move the High Court for appropriate directions and/or orders. On 17 -1 -70 the complainant filed a petition challenging the defence contentions. A spate of applications and affidavits followed and the learned trying magistrate started hearing the arguments on the 7th February, 1970. The arguments continued on the 14th February. 1970, the 21st February, 1970, 28th February, 1970. the 14th March, 1970, the 20th March, 1970. the 21st March, 1970. the 28th March, 1970, the 31st March. 1970, the 1st April, 1970. the 4th April. 1970 and the 11th April, 1970. Ultimately on the 13th April. 1970, Sri P.C. Chakraborty. Presidency Magistrate. 4th Court, Calcutta rejected the defence prayer for stay. This order was impugned and forms the subject -matter of the present Rule.

(3.) IN order to determine the first point raised by Mr. Banerjee, it is necessary to find out whether in fact the issues in the criminal proceedings as well as in the two civil suits are the same The risk of embarrassment or of conflicting decisions is only dependant upon the determination of the above point, It is therefore pertinent to refer to the records of the two civil suits and of the criminal proceedings, including the affidavits filed by the parties in this behalf, to find out the nature of the said cases and the issues involved therein. In the Civil Suit No. 1871 of 1966, filed 8 days before the criminal proceedings were instituted, the plaintiff Kishorilal Goenka prayed for a declaration that the defendant therein Ram Autar Jalan was not entitled to act as a director and should be restrained from acting as such till the disposal of the said suit. The appellate Court by its judgment dated 1 -3 -68 injuncted Ram Autar Jalan from acting as a director allowing him to operate the bank account of the G. L. Group with the United Commercial Bank Burrabazar Branch, Calcutta subject to the control of the Special Officer. The decision of the appellate Court was affirmed by the Supreme Court of India on an appeal filed by Ram Autar Jalan being Civil Appeals Nos. 1412 and 1413 of 1968. In the Civil Suit No. 2304 of 1966 filed by Ram Autar Jalan in the High Court against M/s. Coal Products Private Ltd., a prayer was made for the rectification of the shares registered in the company in respect of 1,000 shares purchased from Sm. Bhagabati Devi Goenka, The allegations contained in the criminal proceedings on the other hand, are inter -alia that the two accused along with others had entered into a conspiracy in pursuance whereof they had prepared a false return Under Section 303 of the Companies Act, 1956 and submitted the same before the Registrar of Companies, that the said return contained false statements to the knowledge of the accused No. 1 and the accused no. 2 abetted the accused no. 1 in fabricating and filing the said false return which was actually filled up in his own hand and that thereby the accused persons had committed an offence Under Section 120B, IPC read with Section 628 of the Companies Act, 1956. It is abundantly clear therefore that neither the parties in the criminal and civil proceedings are the same nor the points at issue therein are identical, ruling out any likelihood of conflicting decisions and embarrassment. The scope and ambit of the issues are quite different and the relief prayed for is also entirely distinct. It is expedient also to consider in this connection the time factor, more so, in view of the considerable delay that had already taken place in the carriage of the proceedings. Neither suit no. 1871 of 1966 nor suit no. 2304 of 1966 pending before the High Court is ready for hearing and a considerable time is likely to elapse before the same may be placed for hearing in the daily list. It appears from the affidavits that in the suit No. 1871 of 1966 only discovery of documents has been made but no inspection uptil now and in suit no. 2304 of 1966 only written statement has been filed. Apart from the point of relevancy therefore the question of time is also very much necessary in order to decide whether the criminal proceeding which was started so far back as on the 20th September, 1966 should be stayed any further. Criminal proceedings cannot be held up indefinitely or be adjourned sine die. I hold therefore that in the facts and circumstances of the case and in view of the considerable lapse of time the present criminal proceedings should not be stayed any further till the disposal of the two civil suits. The first ; contention of Mr. Banerjet' accordingly' fails.