T. RAJANI, J.

Criminal Petition No.8618 of 2013 is filed by A6 in CC.No.124 of 2013, while Criminal Petition No.8835 of 2013 is field by A3 in CC.No.125 of 2013 seeking for quash of the proceedings against the petitioners in CC.Nos.124 and 125 of 2013 respectively on the file of Special Judge for Economic Offence-scum-Additional Metropolitan Sessions Judge, Hyderabad.

2. The grounds, on which the petitions are filed, are almost the same. Hence, they are taken up for a common consideration and disposal.

3. A perusal of the complaint in the foremost would be profitable, in order to understand the allegations against these petitioners. M/s. Global Trust Bank is Banking Company and obtained Certificate of Incorporation on 29.10.1993 vide registration No.01-16502 of 1993-94 issued by the Registrar of Companies, Hyderabad and the Certificate of Commencement of Business on 10.11.1993. A1 to A3 are the Directors of the Company at the relevant point of time and A4 is the Company Secretary and signatory to the balance sheet of the company, for the relevant period. The balance sheet in C.C.No.8835/2013 pertains to the year 2002-03 and in C.C.No.8618/2013 it is for the years 1998 to 2002. A6 in CC.No.124 of 2013 and A3 in CC.No.125 of 2013 are stated to be the Auditors of the Company and signatories to the balance sheet at the relevant point of time.

4. The facts of the case, as narrated in the complaint, are that e-GTB, under the Chairmanship of one Ramesh Gelli, acquired a reputation for aggressive growth. Lending/advances was made in volatile and risky sectors, including the Capital Market, often at the cost of prescribed norms, guidelines and procedures. The stock market scam of 2001, led by one Ketan Parekh group, further hit at the fundamentals of the Bank. With the crisis of banking operations coming to a halt, Mr. Ramesh Gelli, came under increasing fire and was removed as CMD, to be replaced by Mr. R.S. Hugar. Consequent to mounting troubles, the bank was placed under moratorium, by the Reserve Bank of India (RBI) in July 24, 2004 up to October 23, 2004 and subsequently was amalgamated with the Oriental Bank of Commerce (OBC) in August 2004. Subsequent to the amalgamation, the OBC came across, in its view, serious irregularities in the prior working of e-GTB management. There was an investigation by the Serious Fraud Investigating Office (SFIO). Prior to the said investigation, e-GTB has been subject to scrutiny by the various agencies. RBI has conducted periodical Annual Financial Inspection (AFI) and it observed number of irregularities. It was found during investigation by SFIO, that the promoters, along with their relatives and associates, were found to have concealed material facts. From the records, it was seen that e-GTB committed various irregularities. It is evident that RBI, during Annual Financial Inspection, also noticed several irregularities in A6 and A3 audit period, such as the Bank not maintaining the real value of the minimum capital prescribed. The auditors report annexed with the relevant balance sheet was silent on certain issues, though it was the duty of the statutory auditor to report such matters in the auditors report.

5. With the allegation that A6 and A3, being auditors, did not submit auditors report and that they also signed the balance sheet, the complaint was filed against them also.

6. Now in these quash petitions, the petitioners counsel raises several technical grounds which do not permit the sustenance of the prosecution against A3 and A6. He submits that A3 is not a signatory to the balance sheet and the same is admitted and is evident from the balance sheet. He submits that in spite of A6 being a signatory to the balance sheet, prosecution cannot be launched against him under the Companies Act (for short ‘the Act’), as Section 211 is not applicable to the Banking Company.

Section 211 of the Act reads as under:

“211. (1) Every balance sheet of a company shall give a true and fair view of shall,