IMPORTANT POINT
Even if a number of persons are accused of offences under a special enactment such as ‘the Companies Act and as also the IPC’ in respect of the same transaction or facts and even if some could not be tried under the special enactment, it is the special court alone which would have jurisdiction to try all the offences based on the same transaction to avoid multiplicity of proceedings.

JUDGMENT

S. A. Bobde, J.

These Criminal Appeals are preferred by the complainant against the Judgment of the High Court of Judicature of Andhra Pradesh at Hyderabad by which the High Court has in exercise of powers under Section 482 of the Code of Criminal Procedure (in short Cr.P.C.) quashed the proceedings in CC No. 37 of 2008 on the file of the court of the Special Judge for Economic Offences at Hyderabad insofar as the accused Nos. A4, A5, A6, A9 and A10 are concerned.

2. The complainant i.e. the appellant herein lodged a private complaint in his capacity as a Promoter Director of Sri Satyanarayana Power Private Ltd. - a company incorporated to generate biomass based power project in the District of Warangal in the State of Andhra Pradesh (hereinafter referred to as the ‘Company’). The complaint was filed in respect of the offences allegedly committed under Section 628 of the Companies Act, 1956 (in short the ‘Companies Act’) and Sections 120B and 420 of the Indian Penal Code (in short the ‘IPC’). This complaint was filed in the Court of Special Judge for Economic Offences at Hyderabad.

3. The accused Nos. 1, 2 and 3 are Directors of the Company. The accused no. 4 i.e. Energo Masch Power Engineering & Consulting Pvt. Ltd. is another Company. The accused Nos. 5, 6, 7 & 8 are its Directors. Accused No. 9 is the Manager of M/s Indian Renewable Energy Development Agency (in short ‘IREDA’) a financing agency and is brother-in-law of A5 and A6, and accused No. 10 is a private person, namely Mrs. Sudha Ramani who is said to have been given a fictitious authorization in respect of a Bank account by a resolution of the company.

4. In brief, it was alleged that the accused entered into a criminal conspiracy to cheat the complainant and the Company. Further, accused A1 to A3 made false declaration in regard to record maintained under the provisions of the Companies Act, and filed a false declaration purporting to be an extract of Board Resolution of the Company before Andhra Bank, Sowcarpet Branch, Chennai in order to open a bank account. According to the complainant the signatory to the Board Resolution was not even a Director in the Company on the date the bank account was opened. A series of events alleged in the complaint show how the complainant was induced to invest in the Company by acquiring land for the Company at a cost of Rs. 20 lakhs and make payment for the front end fee to IREDA which had in collusion with the other accused sanctioned the financial assistance to the Company to the extent of Rs. 11.50 crores subject to the condition that the promoters should invest Rs. 4.98 crores as their contribution towards the total project cost of Rs. 16.48 crores.

5. According to the complainant, accused A9 - the Manager of IREDA, suggested that the company should appoint A4 Company as a contractor representing that the Directors of the said A4 Company i.e. A5 and A6 in reality his brother-in-law, have wide experience in executing such projects. The complainant believed that representation and allowed those persons and others to become Director as a result of which A1 along with his nominee Directors enjoyed a majority on the Board of the Company. Thereafter, in order to obtain the first installment of loan the accused represented that they have spent an amount of Rs. 1,88,21,484/-, to the accused A4 Company as if the amount was invested from the Company’s account maintained in Andhra Bank, Sowcarpet Branch. On such a representation, A9 IREDA released the first installment of loan. The accused again induced A9 to release the second installment of loan of Rs. 2.85 crores without the knowledge of the complainant and without submitting any Board Resolution of the Company. A major amount of the loan was paid to the accused A4 Company, which had not done any substantial work. Though Rs. 145 lakhs from the first installment of loan and Rs. 92 lakhs from the second installment of loan were paid to the A4 Company only a nominal amount of Rs. 30