L. Ramakrishnappa S/o Kullappa and others v S. Kunjithamala W/o Late Ramamoorthi and another

Karnataka High Court

 21 May 2013

Criminal Petition No. 5506 of 2009 Connected with Criminal Petition No. 5636 of 2009 in Cr. P. No. 5506 of 2009 The Order of the Court was as follows : 1. These petitions are heard and disposed of together having regard to the fact that the petitioners and the respondents are common and the proceedings are said to have arisen under related circumstances. 2. The petitioner no.1 in both these petitions, Vivekananda, was an erstwhile employee of M/s HVAC Systems, Private Limited, of which the husband of the second respondent was the Managing Director. The said petitioner is said to have resigned from the company on 14.2.1998. On that very day, the husband of the second respondent is said to have died. It is the claim of the petitioner that respondent no.2 was totally at sea and was not in a position to take over the management of the company. Hence, out of goodwill and humanitarian consideration, the petitioner is said to have voluntarily assisted the second respondent in managing the affairs of the company for a period of six months from that point of time. It is claimed that petitioner no.1 had then received a lucrative offer of employment abroad and was making preparation to leave, when the second respondent pleaded with him to continue his association with the company and ultimately approached his father at Madanapalli, Andhra Pradesh to persuade him and also offered to sell a stake in the company to the petitioner. But, however, it is claimed that though the petitioner agreed to continue to work for the company, he had the wherewithal only to acquire 40 % of the shares of the company and that he did acquire the same, under an agreement dated 5.3.1999. It is stated that the net worth of the company, when he became a share holder was only about Rs.15 lakh, but after he was made a Director of the company, the petitioner claims that the company grew from strength to strength and was soon a major player in the air-conditioning industry. That the operations of the company commenced in other larger cities of India and abroad and that the net worth of the company grew a hundred fold. It is claimed that the second respondent was given to an extravagant life style, resulting in the said respondent siphoning off the funds of the company unauthorisedly. When the petitioner had objected to this, it transpires that bad blood developed between the two and the relationship had soured. This lead to a situation where the petitioner no.1 was not permitted to function as a Director of the company and was even denied access to his office chambers - this had constrained him to file a civil suit in OS No.3567/2005 before the City Civil Court, Bangalore, wherein an interim injunction was granted, restraining the second respondent from obstructing the petitioner no.1 from carrying on the day to day affairs of the company. The said order of the civil court was challenged in appeal before this court on the appellate side, in MFA 6626/2005, and which was disposed of with an observation that since the second respondent had approached the Company Law Board (CLB), in respect of the entire gamut of disputes between the parties - the same could be worked out before the said CLB. It transpires that the CLB, by its interim order dated 9.8.2005 had then permitted the second respondent to carry on the day to day affairs of the company, while it was held that the petitioner no.1 would be entitled to a salary. It is however, claimed that the second respondent had by then served an order on the petitioner no.1 relieving him from the services of the company as a Director. 3. It is contended that the second respondent thereafter started filing frivolous and false complaints on a continuous basis and that all the cases, except one, resulted in the police filing 'B' Final reports. This had also been brought to the notice of the CLB, which even directed the parties not to file criminal cases in respect of issues that clearly fell within its scope of consideration. However, the second respondent having filed the criminal complaints in Crime no.328/2009 for offences punishable under Sections 406, 408. 409, 420, 120 B, 477A, 381, 368, 384, 506 of the Indian Penal Code, 1860 (Hereinafter referred to as the 'IPC', for brevity) and S. 25 of the Telegraphic Wires (Unlawful Possession) Act, 1950 (Hereinafter referred to as the '1950 Act', for brevity) and Section 65, 66(A), 72 and 72A of the Information Technology Act, 2000 (Hereinafter referred to as the 'IT Act', for brevity) - as well as in Crime no. 281/2009 for an offence punishable u/s. 506 IPC, the present petitions are filed. It is the case of the petitioners that according to the complainant, the occurrence of the alleged offences is between the period 11.4.2005 and 13.6.2009, during which period the petitioner no.1 was not in control of the affairs of the company, by virtue of the Orders of the CLB dated 9.8.2005. It is shown that the second respondent had sought to relieve the petitioner no.1 from the services of the company, as on 11.4.2005. It is hence contended that on this ground alone, the complaint is liable to be quashed as the allegations are all rendered impossible. It is further contended that this court while disposing of the appeal mentioned hereinabove, had directed that all issues between the parties be sorted out before the CLB and hence no complaint could have been brought merely alleging criminal offences. 4. It is also pointed out that a perusal of the complaint would indicate that none of the provisions invoked are attracted for the plain reason that the petitioners are not shown to be in possession of any of the materials belonging to the company. To constitute an offence u/s. 381 IPC, the accused must be employed as a servant or clerk of the complainant. Similarly, to constitute an offence under Sections 384, 408, 409, 447A IPC, the accused should again be employees of the company. It is not in dispute that the petitioner no. 1 was a Director of the company and the other petitioners are his wife and father, who are not in any manner associated with the company. Further, in so far as the complaint as regards an offence punishable u/s. 506 IPC is concerned, the very allegations would indicate that the petitioner was not present at the place of the alleged offence and that it was some unknown persons, who are said to have been involved. But on the pretext that they were the henchmen of the petitioner no. 1, that a false case is sought to be foisted. Therefore, it is contended that having regard to the glaring circumstances in both the complaints, which would on the face of it indicate that the same can never be sustained, the petitioners seek that the proceedings be quashed. 5. On the other hand, it is contended on behalf of the second respondent as follows : Respondent no.2 has filed a complaint before Indiaranagar Police Station against the petitioners in Crime No.328/2009 and was registered by the respondent no.1 for the offence punishable under section 406, 408, 409, 420, 120(B), 477A, 381, 468, 384, 506 of the IPC read with S. 25 of the 1950 Act and Sections 65, 66(A), 72 and 72(A) of the IT Act, wherein petitioners 1 to 3 have been granted anticipatory bail before the I Additional Chief Metropolitan Magistrate at Bangalore. Petitioners 1 to 3 herein have come to this court with unclean hands and with malafide intentions by misleading this court regarding the truth in the matter. The petitioner no.1 herein started as an employee in the respondent no.2 company with a salary of Rs.2,000/- as a Sales Trainee Engineer and subsequently, appointed as a director for a salary of Rs.6000/-. It is now learnt that petitioner no.1 was misleading the husband of respondent no.2 in several matters regarding the company since 1994, which was not to the knowledge of the husband of the respondent no 2. It is further contended that petitioner no.1 was engaged in fraudulent activities even before the death of the husband of respondent no.2, who died in the year 1998, under inexplicable circumstances, at the young age of 36. After the death of the husband of respondent no.2, the petitioner no.1 and his family somehow wanted to grab the entire assets of the company incorporated by the husband of respondent no.2. The petitioner no.1 took advantage of the situation, since respondent no.2 was under depression, as she had lost her husband and was left with two small children to take care and was completely helpless. Taking advantage of the situation, the petitioner no.1 mischievously convinced respondent no.2 and her family members that he would assist in the company affairs, so that he could easily siphon off the entire wealth of the company by way of falsification of accounts, theft, misappropriation of funds, properties, forgery of documents, phone tapping and other types of harassment, since she was a lady, who is taking care of the home and family. 6. The petitioner no.1, taking advantage of the situation, made respondent no.2 to sign the alleged agreement dated 5.3.1999, that is within one year of the death of the husband of the second respondent, for the purchase of 40% of shares in M/s. HVAC Systems Private Limited, for an alleged consideration of Rs.2.4 Lakhs, along with an alleged share certificate showing that respondent no.2 is a holder of 6000 shares. The said share certificate however does not bear the seal of the company nor has the petitioner no.1 made any payment towards the share value, as also, there is no formal sale deed. The petitioner has not shown how he purchased 40% shares nor has he shown any proof towards the payment of Rs.2.4 lakhs as consideration for the purchase of the said shares. The petitioner no.1 has not shown any proof regarding the formalities for the purchase or the transfer of shares in accordance with law. Thereafter, the petitioner no.1 had indulged in various fraudulent activities and committed several criminal offences and filed 12 false cases against respondent no.2, wherein the petitioners 1 to 3 together filed false cases against respondent no.2 all over India. The respondent no.2, being a widow, was harassed by petitioner no.1 and his family in several ways, whereby she was not allowed to transact the day to day affairs of the company as well as in managing the company. It is further alleged that petitioner no.1 has committed the criminal offences with a view to grab the company, its business and to falsely extract money as value for shares allegedly purchased by him. The petitioners herein are also misusing and abusing the process of law by initiating false and vexatious litigation in order to harass the Respondent No.2 and to coerce her to accept his demands, since she is a widow struggling to maintain the business and protect her family. The respondent no.2, after coming to know that the petitioner no.1 was misappropriating the money and falsifying the accounts and committing fraud and mischief, questioned the petitioner no.1 in respect of the fraud being committed by him. The petitioner no.1 in a fit of rage and to blackmail the respondent No.2, submitted his resignation dated 11.04.2005, by citing 'personal reasons and subject to mutual settlement'. Thereafter, respondent no.2, after his resignation was accepted, issued legal notice to the petitioner no.1 dated 07.05.2005. Later, petitioner no.1 cooked up stories that his resignation was 'obtained for some tax saving purpose', with an assurance that it would be returned to him within two or three days and the same was not returned. The respondent no.2 herein was constrained to file a police complaint against the petitioner no.1 for misappropriating and committing theft of Company property, namely, corporate documents, financial documents, Minute Books, member books, fixed and movable asset register, telephone index books, letter heads, 220 back up Compact Discs, and all business related documents including Client lists, which he utilized towards the business of his parallel firm, namely, VK HVAC Systems. 7. Thereafter petitioner no.1 filed O.S.3567/2005 seeking an injunction order against respondent no.2, who allegedly was preventing him from functioning as a director of the company. The said O.S. 3567/2005 was subsequently dismissed for non- prosecution vide order dated 29.07.2008. Later, the respondent no.2 initiated proceedings in MFA.No.6626/2005 before this court and obtained a favourable order, wherein both the parties were directed to appear before the Company Law Board for further consideration. The Company Law Board, in its order dated 09.08.2005, directed respondent no.2 to manage the day to day affairs of the company and the petitioner no.2 was directed not to interfere in the day to day transaction of the Company. Even Company Law Board directed both the parties not to engage in any other similar competing business and directed that "Neither of the parties shall canvass any new business against the interest of the Company but only for the purpose of the company and not for any other agency". The petitioners kept on filing false cases and also created mischief in the business, which led to the filing of complaints by other companies at the instigation of the petitioner against respondent No.2. As a result of this, the respondent No.2 and her employees were constrained to continuously bring to the notice of the police the various instances of harassment and criminal offences committed by the petitioners herein. The respondent no.2, in order to protect herself and her company, filed various police complaints against the petitioners in the local Police Station, since the petitioners continuously harassed respondent No.2, because the Police failed to prevent them from further commission of offences. The respondent No.2 received the Audited Balance sheet and the Profit and Loss Account Schedule for the year ended 31st March 2009 from the Statutory Auditor of the Company in the month of August 2009. As per the Audit Report, the petitioner no.1 was held responsible for the loss of Rs.150 Crore to the company, by siphoning the entire wealth of the company. The respondent no.2 thereafter sought legal opinion and gathered all the requisite documents for this purpose in order to piece together the entire game plan of the petitioners herein. The petitioner no.1 and his family members created a parallel enterprise, by the name of M/s VK HVAC Systems, which again mischievously and fraudulently diverted the business of respondent no.2's company, namely M/s HVAC Systems Pvt. Limited. Several contracts worth crores of rupees have been diverted and grabbed by this parallel illegal entity being run in the name of petitioner no.3 Mr. L.Ramakrishnappa, aged father and petitioner no.2, namely, his wife L.Rajani. It is further contended that what is most shocking is that the petitioner no.1 denies any contact with M/s VK HVAC Systems, which is run by petitioner Nos.2 and No.3, while petitioner no.2, the wife of petitioner no.1, appears to have suddenly acquired technical knowledge of the business and is executing the diverted contracts of HVAC Systems, worth of crore of rupees. Similarly, petitioner no.3, a retired primary school teacher in Madanapally, aged about 70 years, also seems to have acquired modem business knowledge after retirement. Meanwhile, neither has petitioner no.1 stated what he has been doing since 2005 nor can he suppress his involvement with M/s VK HVAC Systems. Further, petitioner no.1 fraudulently engineered the cancellation of the dealership of Carrier Aircon of the Company (HVAC Systems Pvt. Limited). Then he also made an application for acquiring the dealership of Carrier Aircon on behalf of VK HVAC Systems. This is established by the e-mail communication sent by the petitioner no.1 to Carrier Aircon. The respondent no.2, thereafter filed a complaint dated 29.07.2009 on the basis of supporting documentation regarding the various criminal offences continuously being committed by the petitioners herein, so that police may take necessary action. Inspite of the repeated complaints by respondent No.2, the police under the undue influence of the petitioners, harassed the respondent no.2, without registering the complaints since 2005. After the media publication in six papers, the Commissioner of Police, Bangalore, forwarded the publication to the Assistant Commissioner of Police, Bangalore East, Ulsoor. The police after having carefully gone through the supporting evidence and documentation, provided along with complaint dated 29.07.2009 registered FIR No.328 dated 25.08.2009. The learned counsel has placed reliance on the following authorities: 1. Renu Kumari vs. Sanjay Kumar and Others, 2008 AIR SCW 3771 2008 Indlaw SC 315, 2. Superintendent of Police, CBI and others vs. Tapan Kumar Singh, (2003) 6 SCC 175 2003 Indlaw SC 340, 3. State of Bihar and another vs. Md.Khalique and another, (2002) 1 SCC 652 2001 Indlaw SC 19920, 4. Sanjeevi Naidu vs. State of Madras and another, 1970(1) SCC 443 1970 Indlaw SC 297. 8. It is clear from the rival contentions and the material placed before this court that it is not possible to arrive at a prima facie decision as to no case having been made out against the petitioners , especially as the facts are incomplete and hazy and especially when the evidence is still to be placed before the trial court. The factual and legal aspects cannot be seen in their true perspective at this point of time. It is the material collected during the investigation and evidence led in the court which would decide the fate of the accused , the allegations of mala fides against respondent no. 2 are of no consequence and cannot by itself be the basis to quash the proceedings. It is appropriate if the investigation by the police is permitted to be completed and the prosecution cannot be thwarted. This is also the consistent view of the apex court in cases involving circumstances as in the present case on hand. Hence these petitions are dismissed. The interim order of stay of further proceedings before the court below, granted in these petitions, stands vacated. Petitions dismissed