The judgment established the principle that for criminal liability of an officer of a company, there must be sufficient evidence of their active role in the transaction, coupled with criminal intent, and highlighted the lack of scope for invoking vicarious liability under the Indian Penal Code.

JUDGMENT :

(Prayer: Criminal Original Petition filed under Section 482 of the Code of Criminal Procedure, to call for the records in C.C.No.3537 of 2015 on the file of Chief Metropolitan Magistrate, Egmore, Chennai-08 and quash the proceedings as against the petitioner.)

1. This Criminal Original Petition has been filed seeking to quash the proceedings in C.C.No.3537 of 2015, on the file of the Chief Metropolitan Magistrate, Egmore, Chennai 600 008.

2. The case of the prosecution is that M/s. Fidelity Industries Limited (hereinafter referred to as “the Company”) received deposits from the public by giving an impression that it belongs to the TVS Group of Companies and with a false representation that there will be assured returns of 12% to 15%. p.a. Based on this representation, the public started investing their hard earned money in the Company. A complaint came to be given by the 2nd respondent who was one of the depositors, to the effect that the Company and its Directors failed to repay the amount and an FIR came to be registered in Crime No.4 of 2002, against three accused persons (A-1 to A-3), who are the Directors of the Company for offence under Sections 409 and 420 of the Indian Penal Code, 1860 (hereinafter referred to as “I.P.C”).

3. In the course of investigation, the respondent Police identified that nearly 102 depositors were cheated to the tune of Rs.55,02,613/- (Rupees Fifty-five lakhs two thousand six hundred and thirteen only).

4. On completion of the investigation, the Final Report came to be filed against seven accused persons for offence under Sections 120(B), 420, 409 and 409 r/w 109, IPC. The petitioner who was working as a Company Secretary in the above said Company for the period 02.08.1995 to 31.07.1999, was arrayed as A-6 in the Final Report. The Final Report was taken cognizance by the Court below and aggrieved by the same, the present criminal original petition has been filed before this Court.

5. Mr.A.Ramesh, learned Senior Counsel appearing on behalf of the petitioner made the following submissions:

* As per the complaint, the offence is said to have taken place from 04.03.2000 to 05.03.2001 and during this period, the petitioner was not even working as a Company Secretary in the Company. To substantiate this submission, the learned Senior Counsel relied upon Form 32 issued by the Registrar of Companies which shows that the petitioner was working as a Company Secretary only from 02.08.1995 to 31.07.1999. This was also an admitted fact in the Final Report and therefore, the petitioner has nothing to do with the alleged offence.

* The petitioner merely holding a position as Company Secretary in the accused Company by itself cannot vicariously make the petitioner liable for the offence. To substantiate this submission, the learned Senior Counsel relied upon the judgment of this Court in N.Magesh v. State of Tamil Nadu and Another reported in (2019) 4 LW 289.

* The respondent Police have attempted to rely upon the statements of LW-65, LW-85, LW-93, LW-94 and LW-99 to give an impression as if, the petitioner instigated the depositors to deposit in the Company. Except for these witnesses, no other witness talks about the involvement of the petitioner. All these witnesses have deposited during the period 15.11.1999 to 19.07.2000. During this period, the petitioner seized to be the Company Secretary of the Company since he resigned the said post on 31.07.1999. Therefore, there was no way the petitioner could have instigated these witnesses to deposit in the Company.

* To constitute an offence of abetment, there must be an overt act of either instigating or intentionally aiding or engaging in a conspiracy with the other accused persons and in the present case, none of the ingredients are satisfied and therefore, the offence of abetment is not made out.

* There is absolutely no evidence to show that the petitioner has unjustly enriched himself through the deposits received from the general public, and the petitioner