A company incorporated under the Companies Act cannot claim immunity from criminal prosecution, as established by the Supreme Court's interpretation of the legal position.

Being aggrieved by the judgment and order dated 23-10-2007 passed by the Adhoc Additional Sessions Judge, Nagpur in Criminal Revision No. 921/2006 by which the order dated 10-7-2006 passed by J.M.F.C., Nagpur in Criminal Case No. 1433/2006 issuing process against the respondent-company incorporated under the Companies Act was quashed and set aside, the instant application was filed.

2. Learned counsel for the applicant submitted that the learned revisional Court relied on a decision of the learned Single Judge of this Court in the case of Natural Sugar and Allied Industries Ltd. and anr. Vs. Razzak s/o Hazi Gaffar and ors. reported in 2006(4) Mh.L.J. 771 and passed the impugned order holding that there could not be order of issuance of process against the company incorporated under the Companies Act in accordance with the said decision in which reference was also made to the earlier Supreme Court decision. He then submitted that there is a Constitution Bench judgment in the case of Standard Chartered Bank and ors. Vs. Directorate of Enforcement and ors. Reported in 2005(4) SCC 530 which was noticed by the learned Single Judge but was not properly applied and therefore, according to him, the impugned order is liable to be quashed and set aside. He pressed into service the judgement in the case of Iridium India Telecom Ltd. Vs. Motorola Incorporated and ors. reported in (2011) 1 SCC 74 in which the Constitution Bench judgment of Standard Chartered Bank (supra) was considered and it was then held that the corporate companies can no longer claim immunity from criminal prosecution.

3. Shri Padhye, learned counsel for respondent no. 1 submitted that the impugned order is based on legal position and no fault, therefore, can be found with the impugned order.

4. Upon perusal of the impugned order and on hearing learned counsel for rival parties, I find that the decision of the learned Single Judge of this court shows that company could not be prosecuted in view of its juridical person status as such.

5. Shri Padhye, learned counsel then argued that the company being a juridical person cannot have the intention to deceive anybody and mens rea that is a prerequisite for any criminal offence, which the company cannot have. He therefore, prayed for dismissal of the criminal application.

6. I have perused the judgment in the case of Standard Chartered Bank (supra) delivered by the Constitution Bench of the Hon'ble Supreme Court. I have also perused the judgment in the case of Iridium India Telecom Ltd. (supra). The Constitution Bench judgment in the case of Standard Chartered Bank is considered by the Supreme Court while delivering the judgment in Iridium India Telecom Ltd. The Apex Court also considered the legal position existing in the USA as well as in England in that behalf. Finally, the Supreme Court found that in the case of Standard Chartered Bank the company cannot claim any immunity from the criminal prosecution. Therefore, in the case of Iridium India Telecom Ltd., the Supreme Court accepted the legal position that a company though being a juridical person cannot claim immunity from criminal prosecution. It would be useful to quote the following paragraphs from the judgment in the case of Iridium India Telecom Ltd. (supra).

50. The limits within which the jurisdiction under Section 482 can be exercised was again precisely stated in Divine Retreat Centre Vs. State of Kerala as follows : (SCC p.557, para 27)

“27. In our view, there is nothing like unlimited arbitrary jurisdiction conferred on the High Court under Section 482 of the Code. The power has to be exercised sparingly, carefully and with caution only where such exercise is justified by the tests laid down in the section itself. It is well settled that Section 482 does not confer any new power on the High Court but only saves the inherent power which the Court possessed before the enactment of the Code. There are three circumstances under which the inherent jurisdiction ma