The Karnataka High Court has quashed the petition of United Spirits in shares misappropriation case.
Facts
The Petitioner, United Spirits Limited (USL) claims to be a leading liquor manufacturer in India, originally incorporated as ‘McDowell Spirits Limited’ under the Companies Act, 1956, listed on the National Stock Exchange Limited and the Bombay Stock Exchange Limited.
The complainant had filed a complaint seeking prosecution of the accused and certain officials employed by the accused, alleging that they had systematically carried out a planned conspiracy for cancelling the complainant’s valuable shares by generating duplicate share certificates worth about Rs.90 lakhs to Rs.1 crore and thereby have committed offences under Sections 477, 467, 418, 416, 405, 403, 197 and 198 read with Sections 34 and 120A of IPC. The Magistrate, having recorded the sworn statement, issued process vide order dated 23.12.2016. Upon service of said process, the petitioner is before the Court seeking for the reliefs.
In that background, it is alleged that the accused have committed offences of fraudulent cancellation and destruction of valuable security under Section 477. Forgery of valuable security made, which is an offence under Section 467. This forgery, having been committed for the purpose of cheating, is an offence under section 468. The offence of cheating has been committed by the accused, knowing fully well the wrongful loss would be caused to the complainant and his family, which is an offence under Section 418. A dead person has been impersonated, which would amount to an offence under Section 416.
The petitioner Companies stated that they have nothing to do with it. Accused of being the agent, all actions have been taken by the accused. It is under the instructions of accused that other accused has acted, there is no mens rea, motive or intent on part of accused in any of the alleged offences. There is no participation of the accused in any of these alleged offences. Only the companies having been made parties, no person having been made a party, the Complaint is lacking on material particulars as to who is responsible for what crime, and mere omnibus allegations have been made against the accused, which are not borne out by records.
Court’s Observation
The court observed that requisite averments and allegations have been made placing on record that the complainant’s father was the owner of the shares. The complainant has obtained a succession certificate. On the basis of the succession certificate, when the complainant approached the accused, he was informed that the shares had already been transferred, and it is on that basis that the Complaint was filed not only suspecting but also alleging malafide and criminal actions.
The court held that merely because the Complaint does not specify as to which of the officers of the accused are involved in the wrongdoing would not be sufficient for the accused now to contend that the allegations are bald and omnibus inasmuch as all the actions on part of the accused have happened behind the back of the complainant are part of the indoor management of the accused and these aspects would have to be ascertained during the course of investigation.
The court noted that the power of attorney holder is the mother of the complainant, wife of the deceased shareholder who was entitled to the shares but on account of her concession, the shares are now to be transferred to the complainant. She has had correspondences with the accused companies. She is aware of the holding of the shares by her husband and, subsequent to his death, the entitlement of the complainant. Thus, she cannot, at this stage, be said to have no knowledge of the allegations made in the Complaint. Be that as it may, it is also available for the complainant to tender his evidence in the matter after investigation; at present, for the record of the sworn statement and issuance of the process, the knowledge of the power of attorney is sufficient. At present, for the purpose of recording of the sworn statement and issuance of process, it cannot be said that the power of attorney holder mother of the complainant does not have sufficient knowledge for the Court to consider her sworn statement. Hence, this submission is also rejected.
Case Name : United Spirits Limited Versus Neel Rajesh Shah
Judicial Level & Location : Karnataka High Court
Case Number : Criminal Petition No. 697 Of 2018 (482)
Date Of Ruling : 16-07-2024
Ruling In Favour Of: Respondent
Coram: Justice Suraj Govindaraj
Petitioner Advocate: Raghuram Cadambi & Sri. Vinay J.S., Advocate
Respondent Advocate: M.B. Anirudh
