This petition is filed by the petitioner/accused

accused under Section 482 of Cr.P.C for quashing

criminal proceedings in CC No.34/2012 pending on

the file of Special Court for economic offences

Bangalore to set aside the order of the trial court

dated 23.02.2012 for the offence punishable under

section 209A and 240(3) of the Companies Act,

1956.

2. The case of the petitioner is that the

respondent is Serious Fraud Investigation (officer

herein referred as SFIO) filed complaint under

section 200 of Cr.P.C against the petitioner for

violation of Section 240 (3) of Companies Act,

alleging that they issued summons to the petitioner

on 16.06.2011 and he has not replied to the notice.

Again one more summons issued on 20.06.2011 to

3

be appeared on 28.06.2011 and it is also alleged the

final summons was issued on 01.07.2011 to appear

before them on 07.07.2011 and he has not appeared

and he has sent a reply that he was not employed

as Auditor of the Company. Therefore private

complaint came to be filed and the trial court took

the cognizance of the offence against the petitioner,

which is under challenge.

3. Learned senior counsel appearing for the

petitioner has mainly argued on the ground, the

petitioner was not employed by the Company as per

Section 240 of Companies Act. The petitioner was the

partner in the firm in which the petition was appointed

as Auditor. Such being the case, without making the

firm

as

an

accused

the

petitioner

cannot

be

prosecuted and he cannot be vicariously be held liable

for the penal provisions. Therefore, prayed for

quashing the proceedings.

4

4.

Per

Contra

learned

counsel

for

the

respondent has objected the petition and contended

that the petitioner is the Auditor. The eligibility

criteria for appointing the Auditor is that he must be a

Chartered Accountant as per Section 226 of the

Companies Act and the partner who is practicing in

India and if the firm is appointed as Auditor then he

has to sign as an Auditor of the Company. Therefore,

the petitioner being a Accountant was appointed as an

Auditor and he is running the firm, therefore even

without making firm as party he is liable for the

responsibility of answering the questions, as he was

appointed by the resolution of the Company. Further

contended that the petitioner himself signed the Audit

Report as per Section 229 of Companies Act and as

per 240 of Companies Act, it is the duty of all the

Officers, employees and Agents of the Company and

where the affairs of any other body corporate are

investigated

by

the

virtue

of

Section

239

of

5

Companies Act, they have to furnish the details

requested by the investigating agency, in view of the

powers of this Section 239 of Companies Act.

Therefore, the petitioner has been appointed as

Auditor

with

eligibility

criteria

of

Chartered

Accountant, he is responsible person to submit the

information to the investigating agency, failure to

furnish the information, he has to be prosecuted.

Therefore, the petitioner is liable to be prosecuted for

the offence punishable under Section 240 (3) of

Companies Act, 1956. Therefore the special counsel

prayed for dismissal.

5. The learned counsel for the petitioner, in

support of his arguments relied upon the following

judgments:

1.

Central

Bureau

of

Investigation,

Hyderabad Vs K. Narayana Rao reported

in (2012) 9 SCC 512.

6

2.

Sunil Bharti Mittal Vs. Central Bureau of

Investigation reported in (2015) 4 SCC

609.

3.

Rafel Del Riyo Vs The State of Karnatak

through Agricultural Officer and Seeds

Inspector, Haveri

reported in 2022(2)

KCCR 1071.

4.

Aneeta Hada Vs Godfather Travels and

Tours Pvt. Ltd. reported in (2012) 3 SCC

(Cri) 241.

6.

Learned counsel for the respondent also

relied upon the judgment of the co-ordinate bench in

the case of K.Janardhan Reddy Vs State by

CBI/ACB

in

Crl.P.No.7847/2018

dated

03.06.2019.

7. Having heard the arguments and perused the

records. On perusal of the same, it reveals that the

respondent SFIO filed private complaint against the

peti