The court emphasized that the provisions of Sec.58AAA of the Companies Act have no application if the deposit was not made under Sec.58A or Sec.58AA, and rejected the argument that the initial lack of mens rea to cheat should prevent criminal proceedings.

(This criminal original petition is filed under Sec.482 of the Code of Criminal Procedure praying to call for the records in C.C.No.286 of 2004 on the file of the Judicial Magistrate No.II, Dindigul, and quash the charge sheet.)

This O.P. has been brought forth by the petitioner, who faces trial in C.C.No.286 of 2004 which was taken cognizance by the Judicial Magistrate No.II, Dindigul, under Sections 406 and 420 of I.P.C.

2. The de-facto complainant gave a complaint alleging that it rendered service to M/s. Sri Venkatesa Paper and Boards Ltd, for which there was a liability of Rs.7,47,500/- payable to the de-facto complainant; that on the request of M/s. Sri Venkatesa Paper and Boards Ltd., through its Directors, the same was deposited in the fixed deposit, on the promise to return the same on maturity; that the same was also matured on 8.5.2001; that there was a further promise of returning the same with interest; that it was again renewed for one year; that despite the maturity of the same, it was not repaid, and hence, it has become necessary to initiate proceedings. On receipt of the complaint, a case came to be registered by the State through the first respondent police under Sections 406 and 420 of I.P.C., and subsequently, it was taken cognizance by the Judicial Magistrate as Calendar Case referred to above.

3. While the matter stood thus, the accused has approached this Court for quashing the proceedings stating that M/s.Sri Venkatesa Paper and Boards Ltd., is a public limited Company; that it is governed by the special enactments namely The Companies Act; that it was a deposit made; that the company has been declared as a sick unit under Sec.22A of the Act; that it could not dispose of any of the assets without getting the consent of the Board for Industrial and Financial Reconstruction (BIFR); that apart from that, in view of the provision under Sec.22 of the Act, the de-facto complainant was barred from initiating any action, without the prior consent of the BIFR; that it was a deposit made to the Company in question, and thus, the provisions of the Companies Act would prevail the provisions of law as to the deposits made and accepted which are governed by Sections 58A and 58AA of the Act; that they are cognizable under the Code of Criminal Procedure; that Sec.58AAA of the Act would clearly reveal that every offence connected with or arising out of acceptance of deposits under Sec.58A or Sec.58AA would remain cognizable under the Code of Criminal Procedure, notwithstanding anything contained in Sections 621 and 624 of the Act; and that cognizance is possible only when a complaint is made by the Central Government or any Officer authorised in this behalf.

4. The learned Counsel appearing for the petitioner would further add that it was a deposit made; that there is nothing to indicate that at the time of making the deposit or getting the deposit, the petitioner had got any mens rea to cheat; that so long as it is not shown, the complaint for cheating has to fall; that there is no question of any entrustment, which would attract the provisions of the I.P.C., which would penalize the breach of trust, and thus, the penal provisions of Sections 406 and 420 of I.P.C. would not be attracted under the facts of the case, and hence, the proceedings pending in the hands of the lower Court, have got to be quashed.

5. Heard the learned Government Advocate for the first respondent on the above contentions.

6. The learned Counsel for the second respondent would submit that there was a deposit made by the petitioner herein, which would not fall within the ambit of the provisions of the Companies Act; that it was really an amount, to which the de-facto complainant is entitled by way of rendering services, and the same amount was deposited; that it became matured; that even after the date of maturity, there was a renewal; that at that time, it was well within the knowledge of the accused that the company has become sick and