CHITTA RANJAN GUHA Vs. MAMEEN

JUDGEMENT

(1.) The petitioner 1 before me, Ranjan Guha, is the Managing Director of a Bank, called the New National Bank limited and petitioner 2 N. Chakravarty, appsara to hold a multiplicity of offices, seeing that be describes himself as "Director, Chief Controller and Chief Auditor" of the Bank. The present role is directed against an order of the learned Chief Presidency Magistrate, refusing to stay certain proceedings which the petitioners asked stayed on the ground that they were covered by a stay order passed by this Court on its Original. Side under Section 153 (5), Companies Act.

(2.) The material facts are the following: On 20 May 1917, the New National Bank Limited made an application on the Original Side of this Court under Section 153, Companies Act and on the same day obtained a stay order from Edgley J. That order was in the following terms. And it is further ordered that until the final determination of this application or until the further order of this Court the commencement and or continuation of all suits and proceedings against the said Company, its Directors and officers in the meantime be and the same are hereby stayed. On 13 July 1947, the opposite party filed a complaint before the learned Chief Presidency Magistrate, Calcutta, charging the petitioners and one B. Mujamdar with offences under Secs.403, 406 and 409/114, Indian Penal Code. The substance of his complaint was that he had a current account with the Bank and the petitioners as officers of the Bank, had purchased a number of shares for him and on his instructions with money drawn from his current account. In spite, however of repeated requests they had not delivered the shares to him, although under the contract between the parties the shares were liable to be delivered on demand. On this application being made, warrants were issued against the accused persons under Section 409, Indian Penal Code, and a search warrant was also issued for the seizure of the shares concerned as also certain books of the Company. The petitioners surrendered on 26-7-1947 and were released on bail. On 30th September, they made an application, praying that the proceedings might be stayed and the search warrant recalled in view of the order passed by Edgley J. Thereupon the search warrant was recalled and a date was fixed for the hearing of the application. On 28-8-1947, the learned Magistrate, after hearing the parties, decided that the order of the High Court did not touch a case like the one he had before him and therefore it should proceed. He directed fresh search warrants to issue. Thereupon the petitioners moved this Court and obtained the present rule.

(3.) Mr. Basu, who appeared on behalf of the petitioners, contended that the proceedings before the learned Magistrate were clearly covered by the order made under Section 153, Companies Act, and the learned Magistrate had been in error in refusing to stay them. He placed his contention on the footing that the petition of complaint charged the accused persons with certain offences only in the capacity of bankers and agents and what had been alleged there was not so much criminal breach of trust as cheating by the bank as a bank. He relied upon the broad proposition of Company Law that any one having any kind of claim, be it even a claim for damages, had a right to intervene in a winding up or proceedings under Section 158 and contended that even if the opposite party had alleged criminal breach of trust, a liability sounding in damages had arisen against the Bank on the footing of which the opposite party would have his relief in the Section 153 proceedings as a creditor.