The resignation of the accused from the Directorship of the companies before the alleged offences took place was a key factor in the court's decision to quash the proceedings against them.

JUDGMENT

(Prayer: Criminal Original Petition filed under Section 482 of the Code of Criminal Procedure, to call for the entire records in E.O.C.C.No.47 of 2014, on the file of the Additional Chief Metropolitan Magistrate, (E.O.-I) Egmore, Chennai and quash all further proceeding against the accused.

Criminal Original Petition filed under Section 482 of the Code of Criminal Procedure, to call for the entire records in C.C.No.4345 of 2016, on the file of V Metropolitan Magistrate, Egmore, Allikumal Campus, Chennai and quash all further proceeding against the accused.)

Common Order:

1. The Petition Crl.O.P.No.9939 of 2015 has been filed seeking to quash the proceedings in E.O.C.C.No.47 of 2014, pending on the file of the learned Additional Chief Metropolitan Magistrate, (E.O.-1), Egmore, Chennai, against the accused.

2. The Petition in Crl.O.P.No.5385 of 2017 has been filed to call for the entire records in C.C.No.4345 of 2016, on the file of V Metropolitan Magistrate, Egmore, Chennai, and quash all further proceeding against the accused.

3. Since the issue involved in both the Criminal Original Petitions are one and the same, both the petitions were taken up together, heard and a common order is being passed.

4. The gist of the case against the petitioners in E.O.C.C.No.47 of 2015 is as follows:-

The Respondent / Serious Fraud Investigation Office, has filed a private complaint before the learned Additional Chief Metropolitan Magistrate, Egmore, Chennai, for the offence punishable under Sections 628 & 629 of the Companies Act, along with Sections 477(a), 409 r/w. Section 120-A of IPC., alleging that the petitioners/ accused, on 27.12.2010, falsified the accounts of the first accused Company and submitted the same. Aggrieved over the same, the present Criminal Original Petitions filed by the petitioners / accused, for quashing the private complaint, primarily on the ground that persons, who were shown as Directors of the Company, resigned from the Directorship of A1 Company, long before the commission of alleged offence.

5. The case of the respondent in C.C.No.4345 of 2016 is as follows:-

(i) The Director, SFIO ordered for investigation under Section 235 of the Companies Act, 1956, (now under Section 210 of Companies Act, 2013) against M/s.Goldquest International Private Ltd (Gold Quest) and M/s.Questnet Enterprises India Private Ltd (Questnet) vide Order dated 28.07.2010. The Investigation reveals that the Gold Quest was registered on 18.01.2001 with ROC, Chennai. The business of the Company was of selling numismatic products in the form of specially crafted gold / silver coins, which claimed to be limited edition, import from Germany. It was a direct sale through personal approach and based on referral system. Questnet was incorporated on 25.11.2004, in which, Gold Quest had substantial share capital. Further, it had increased the share capital in the year 2002. Initially, the shareholders of Gold Quest were U.K.Venkatrao, Nitai Panchmatya and N.S.Narayanan, thereafter, eight members made as Directors from the year 2002 to 2007 and some of them ceased to be the Directors on various dates.

(ii) Likewise, Questnet at the time of incorporation Pushpam Appalanaidu and Joseph Augustine are Major shareholders. Thereafter, five more persons were appointed as Directors and some of them ceased to be the Directors on various dates. Investigation further reveals that the Managing Director of both the companies was Pushpam Appalanaidu, who was directed to submit complete details about sales made by the Companies both Gold Quest and Questnet and commission paid by them from the date of inception. The data was submitted in a CD along with documents. On examination of the same, it came to light that in unfair manner the transaction had taken place. During investigation, additional data for sales was submitted stating that in the earlier data there was some mistake. There was lot of mismatch with the bank entries, without any Independent Representative (