IMPORTANT POINT
High Court was right in not quashing the complaint for offences under Sections 60, 63, 68 and 68A, Companies Act, 1956 as a prima facie case was made out by the complainant against accused persons.

Headnote:Companies Act, 1956-Sections 2(36), 60, 63, 68 and 68A-Offences under-Complaint about economic offences - Criminal Procedure Code, 1973-Sections 4, 188 and 482-Petition to quash the complaint-Dismissed by High Court-Appeal against to Supreme Court-Complaint found making out a prima facie case-Whether High Court was right in declining dismissal under Section 482 Cr.P.C.? (Yes)-Appeal dismissed-Case law discussed.
Held (after case law) : Reading of the complaint petition and the materials produced by the complainant with it in the light of provisions in the aforementioned sections it cannot be said that the allegations made in the complaint taken in entirety do not make out, even prima facie, any of the offences alleged in the complaint petition. We refrain from discussing the merits of the case further since any observation in that regard may effect one party or the other. The allegations made are serious in nature and relate to the power company registered under the Act having its head office in this country. Whether the appellants were or were not citizens of India at the time of commission of the offences alleged and whether the offences alleged were or were not committed in this country, are questions to be considered on the basis of the evidence to be placed before the Court at the trial of the case. The questions raised are of involved nature, determination of which requires enquiry into facts. Such questions cannot be considered at the preliminary stage for the purpose of quashing the complaint and the proceeding initiated on its basis. It is relevant to note here that from Sections 4 and 188 of the Criminal Procedure Code it is clear that even if the offence is committed by a citizen of India outside the country the same is subject to the jurisdiction of courts in India. [See Central Bank of India Ltd. vs. Ram Narain, AIR 1955 SC 36, Mobarik Ali Ahmed vs. The State of Bombay, 1958 SCR 328 and Ajay Aggarwal vs. Union of India & Ors., (1993) 3 SCC 609]. On consideration of the matter, we are of the view that in the context of the facts and circumstances of the case, the High Court was right in declining to quash the complaint petition and the proceedings initiated on its basis. In the result, this appeal being devoid of merit is dismissed. (Paras 23 & 24)

JUDGMENT

D.P. Mohapatra, J.-Leave granted.

2. The question that arises for determination in this case is whether on the facts and circumstances emerging from the averments in the complaint petition and the materials filed with it a case for quashing the complaint filed under Section 482 of the Code of Criminal Procedure (for short Cr.P.C. ) is made out or not.

3. This appeal filed by the accused persons is directed against the order dated 1.3.2000 of the High Court of Andhra Pradesh in Criminal Petition No. 3052/99 declining to grant the prayer of the appellants for quashing the proceedings in CC No. 24/99 on the file of the Court of Sub-Judge, Economic Offences at Hyderabad. The proceeding was instituted on the complaint petition filed by respondent No.1. The appellants and the respondent No. 1 are stated to be Directors of a Company-M/s Spectrum Power Generation Limited (hereinafter referred to as "the Power Company") incorporated under the Indian Companies Act, 1956 (for short the Act ), having its registered office at Secundrabad, in the State of Andhra Pradesh. The respondent No. 1 filed the complaint alleging offences under Sections 60, 63, 68, 68-A read with Section 621 of the Act, against the appellants, alleging inter alia that the accused persons by making false, deceptive and misleading statements and by suppressing relevant facts induced various persons to pay them money for purchase of shares of the Power Company; raised millions of Dollars from Non-Resident Indians (NRIs); siphoned off those funds into bogus companies exclusively owned by them in off-shore companies and purchased shares of the Power Company in India in the names of bogus off-shore companies owned/controlled by them. The matter came to the notice of the complainant when some of the prospective NRI investors made correspondence with the Power Company demanding share certificates for which they had paid substantial amounts to the appellants. The off-shore companies through which the appellants purchased the shares of the Power Company in Hyderabad are - M/s Spectrum Technologies, USA, M/s Spectrum Infrastructures Ltd., Jersey, Channel Islands and M/s Spectrum Infrastructures Ltd. at Mauritius. In this process the original investors who were promised shares in Power Company were never allotted any shares. On the other hand shares were allotted to off-shore companies which have nothing to do with the Power Companies and which are exclusively owned and controlled by the accused persons. It was specifically alleged in the complaint petition that the accused persons have in effect committed fraud on the Power Company in whose name they collected money, invested that in their own companies and those companies in turn applied and got shares at the instance of the accused persons with the result that all these overseas investors are left high and dry. These acts, it is alleged by the complainant, constitute offences under Sections 68 and 68-A of the Act. It is further alleged in the complaint petition that the appellants issued a document in the name of the Spectrum Infrastructures Ltd., Jersey, Channel Islands, styled as "Project Overview". The said company issued a letter dated 30th September, 1994 by the first accused. The relevant portions of the said "Project Overview" and the letter are extracted hereunder:

"SPECTRUM POWER

208 MEGAWATT POWER PLANT AT KAKINADA, ANDHRA PRADESH, INDIA

PROJECT

OVERVIEW"

The letter dated 30.9.94 reads as follows:

"Re: Private Sector Power Generation Project in Kakinada, Andhra Pradesh

I am enclosing a high level overview of the investment opportunity for the above project. Though I am introducing to you to this opportunity now, we have done extensive groundwork for this project for the last two years. Today, we have reached the point where we can now make the foreign currency investment in the project.

As you are probably aware, this is clearly the best time for investing in India s economic future. The economic liberali

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2002 Supreme(SC) 687

IMPORTANT POINTHigh Court was right in not quashing the complaint for offences under Sections 60, 63, 68 and 68A, Companies Act, 1956 as a prima facie case was made out by the complainant against accused persons.

Cases Referred (5)

IMPORTANT POINT
High Court was right in not quashing the complaint for offences under Sections 60, 63, 68 and 68A, Companies Act, 1956 as a prima facie case was made out by the complainant against accused persons.