STATE OF TELANGANA Vs. RAJULAPATI YASHODA RAO

JUDGEMENT

(1.) This Criminal Petition is filed seeking to quash the order dtd. 23/12/2024 passed in Crl.R.P.No.57 of 2024 by the learned Principal District and Sessions Judge-cum-Family Court, Medchal-Malkajgiri District at Malkajgiri.

(2.) The brief facts of the case are that the Criminal Revision Petition was filed by the Inspector of Police, EOW Police Station, Cyberabad commissionerate under Sec. 438 of the BNSS, aggrieved by the order dtd. 10/12/2024 passed by the I Additional Junior Civil Judge-cum-XII Additional Judicial Magistrate of First Class, Medchal-Malkajgiri District at Kukatpally. The revision arose out of Crime No.43 of 2024, which was re-registered based on a report lodged by Smt. P. Rajeshwari, Director of Girija Builders Pvt. Ltd., against the accused, her sister's son. She alleged that the accused misused his position as Managing Director of the company without the consent of other directors by forging signatures, misappropriating funds, illegally executing sale deeds in favor of his daughters, and transferring company assets for personal use. Initially registered as Crime No.1005 of 2024 at Kukatpally Police Station, the case was transferred to the EOW Police Station, Cyberabad. During the investigation, the accused was arrested on 9/12/2024 and produced before the trial Court on 10/12/2024 for judicial custody. However, the Magistrate refused to accept the remand, citing lack of jurisdiction under the Companies Act as per the Central Government Notification vide S.O.945(E), dtd. 23/3/2017, which designated the Special Court for Economic Offences in Hyderabad as the competent Court.

(3.) On the other hand, the respondent/accused opposed the revision petition, contending that it was not maintainable as the impugned order of the Magistrate was interlocutory in nature and barred under Sec. 438(2) of the BNS, 2023 (analogous to Sec. 397(2) Cr.P.C.), as laid down by the Hon'ble Supreme Court in Gautam Navlakha v. National Investigation Agency,(2022) 13 SCC 542. The respondent argued that the FIR was a continuation of the earlier FIR No.921 of 2022 registered on a complaint by another director, P. Subba Rao, and that the present FIR was filed by P. Rajeshwari, representing the same company, based on similar allegations. He further submitted that the entire dispute pertained to company affairs and was already pending before the NCLT in Company Petition No.48 of 2022, where interim status quo orders were passed. The respondent asserted that the proceedings were an abuse of process of law, amounting to re-litigation of the same subject matter, and that the matter fell within the purview of the Companies Act, requiring prosecution by the Serious Fraud Investigation Office with approval from the Central Government and triable only by the designated Special Court under Ss. 435 and 436 of the Companies Act, 2013.