The specific averments in a complaint against a director, as a person in charge of the company's affairs, may be sufficient to make out a case against the director, and the question of liability should be adjudicated in trial.

JUDGMENT

Amit Sharma, J.

1. The present petition under Section 482 of the Code of Criminal Procedure 1973 ('CrPC') seeks quashing of Criminal Complaint No. 343/2002 (renumbered as CC No. 66/5) pending before the Court of Additional Chief Metropolitan Magistrate (Special Acts), Tis Hazari Courts, Delhi and all proceedings emanating therefrom, including the order dated 23.04.2002 whereby the present petitioner was summoned for the offences under Sections 24(1) and 27 of the Securities Exchange Board of India Act, 1992 ('SEBI Act') and the order dated 07.10.2005 whereby non-bailable warrants were issued qua the petitioner and other accused persons.

2. A complaint bearing number 343/2002 (renumbered as CC No. 66/5) under Section 200 of CrPC read with Section 24(1) and Section 27 of SEBI Act, was filed against the company, Aim Plantation Ltd along with its directors, including the petitioner herein. As per the said complaint, it had been alleged by SEBI (the complainant therein) that the aforesaid company was running a Collective Investment Scheme (C.I.S.) and had raised an aggregate amount of Rs. 0.532 crores from the general public, but had not applied to the former for registration of the collective investment schemes allegedly being operated by it. It is further alleged that the aforesaid company never initiated any steps for winding up of the schemes and for repayment to the investors despite notices. In view of the above allegations, SEBI, by way of the aforesaid mentioned complaint alleged that the company along with its directors violated Sections 11B, 12(1B) of the Securities and Exchange Board of India Act, 1992 read with Regulations 5(1), 68(1), 68 (2), 73 and 74 of C.I.S. Regulations 1999.

3. Learned counsel for the petitioner restricted his submissions only to the extent that the alleged complaint made no specific averments qua the present petitioner. In support of the aforesaid submission, the learned counsel for the petitioner drew the attention of the court to the decision in Rashima Verma v. SEBI, (2009) 157 DLT 417, and stated that in the said case, a similar complaint, in almost identical circumstances had been quashed by a Learned Single Judge of this High Court. Learned counsel for the petitioner referred to para 24, 26 & 27 of the aforesaid judgment which stated as below:

"24. It is the paramount responsibility of a Magistrate to carefully examine the complaint and the pre-summoning evidence before issuing summons. Summoning of an accused in a criminal case is a serious matter and not a mere formality. The Court issuing process under Section 204 Cr.P.C. has to be satisfied on the basis of the averments of the complaint, documents, evidence and other material available on record that there are sufficient grounds for proceeding against the accused. In a criminal complaint, it is the duty of the complainant to allege and make out all the ingredients of the offence before calling upon the court to proceed against the accused. Only legally permissible presumptions can be raised against the accused whereas the factual aspect of the allegations in the complaint are to be established by the complainant before seeking summoning of the accused, before a Magistrate sets into motion the criminal law as a matter of course."

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26. In the present case, only Mr. G.S. Verma was the Chairman-cum- Managing Director of the Company at the time of commission of the alleged offence and therefore, was the person responsible for the business of the company. However the summons have been issued against all the accused persons who are impleaded as Directors despite prime accused being the company in the absence of a specific averments against the petitioner. Even without taking care of requirements of law whether prima facie case was made out against the petitioner, the Magistrate acted mechanically in passing the impugned order against the petitioner.

27. In view of my detailed discussion as above, the complaint as against the petitio