RATANLAL TAMAKHUWALA Vs. GUJARAT NRE COKE LIMITED

JUDGEMENT

(1.) This application under Section 482 of the Code of Criminal Procedure has been filed by one of the accused persons in Case No. C-26437 of 2008, under Section 63 of the Companies Act, 1956, and Section 199 of the Indian Penal Code, now pending before the learned Chief Metropolitan Magistrate, Calcutta praying fo'r quashing of the proceeding.

(2.) The opposite party No.1 M/s. Gujarat NRE Coke Limited, which is a Company registered under The Companies Act, 1956 was the complainant against this petitioner and five others. The petitioner and the accused Nos. 2, 3, 4 and 5 are said to be Directors of Austral Coke & Projects Limited (hereinafter referred to as ACPL), while accused No. 6 is a Chartered Accountant of the accused company. The complainant claims to be the largest Indian manufacturer of Met Coke and globally a reputed company in manufacture of Low Ash Metallurgical Coke. The present petitioner who is accused No.1 in this case was one of the directors of the complainant company appointed in the year 1993 as Managing Director and was in full-time employment of the complainant company until 1997 when he was dismissed from service in the year 1997. Similarly, accused No. 2 who was the Vice-president (Operations) of the complainant company was also dismissed from service as both the accused Nos. 1 and 2 defalcated and siphoned off crores of rupees from the complainant-company. Various litigations between two companies are said to be pending. In the year 2007, accused No.1 who is the petitioner herein and accused No.2 jointly floated a company called Gremach Infrastructure Equipment & Projects Limited (Gremach) and came out with a publiq issue in the stock market. They invited investors by making tall and unverified claims about their performance. Market price of this Gremach came down in July, 2008 in consequence of which public investors and mutual funds lost several hundred crores of rupees. Then the accused Nos.1 and 2 floated another company called ACPL, in 1995 and made a public offer to raise money. They issued Red Herring Prospectus, (RHP) on 18th July, 2000 and made themselves directors of ACPL. This ACPL entered into capital market through initial public offer, (IPO) of 72,60,000 equity shares in a price band of Rs.164/- to Rs. 196/- per equity share which was open for subscription from 7th August, 2008 and closed on i 3th August, 2008. Now in, their prospectus they made serious mis-statements some of which are in the language of the. complainant as follows :-

(3.) The accused persons thus committed offence under Section 63 of the Companies Act, 1956. The complainant having come to know of the misstatements issued a Press Release bringing the misstatements to the knowledge of the investors and public in general. Accused Nos. 1 and 2 issued a counter Press Release alleging that the complaint of the complainant was in the nature of a 'family dispute'. The complainant then issued a further Press Release on 8th August, 2008 with the following :-