MP 1 APPLN4660_10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPLICATION NO. 4660 OF 2010 Joshi Shivshankar Jatashankar ... Applicant Versus Mr. Narendradasinghji Mansingji Chudasama and another ... Respondents Mr. Shivshankar J. Joshi, applicant in person. Mr. Nitin Pradhan, Senior Counsel i/b. Mr. Raju Yamgar for the Respondent No.1. Ms P. P. Shinde, APP for the Applicant State. CORAM : J. H. BHATIA, J. DATE : 14TH OCTOBER 2011 P. C. : Heard the applicant in person and the learned Counsel for the respondent No.1. 2. The applicant, who is the original complainant in Criminal Case No. 483/SW/2004, seeks leave to prefer appeal against the acquittal of the respondent No.1, who is the original accused No.2, for the offences punishable under Sections 408 and 420 of the Indian Penal Code. 3. It is the case of the complainant that the accused No.1 Atash Industries (India) Limited was a public limited company registered under the provisions of the Companies Act, while accused No.2 Nana Chudasama was a Director, accused No.3 Nasli Davar was a Chairman and accused No.4 N.B.Thakur and Company were the Chartered Accountant of the accused No.1 company. The complainant was holding 1000 equity shares having face value of Rs. 10/- each and his other family members were holding 1500 shares of the accused No.1 company prior to the year 1992. In the year 1993-1994, Annual Report of the company was published and the brochure was also issued showing the business in which the company was dealing. The company had also issued fully convertible debentures MP 2 APPLN4660_10 of Rs. 150/- each during the year 1992-1993 and these debentures were to be converted into five equity shares of Rs. 10/- each at a premium of Rs. 20/- per share on 01.07.1993. It is contended that on the basis of the said publication and the Brochure showing the growing prospects of the company, the complainant had also invested in the said debentures. Later on it was revealed that the company was not in a working condition because it had second hand machinery, which was defective and the company had never started production of artificial leather known as Atash Coatema Unit. It is contended that the accused persons had falsified the accounts, committed forgery and misappropriated huge amounts. The complaint was filed for the offences punishable under Sections 409, 420, 477-A, 465, 467, 468, 471 r/w. Section 34 of the Indian Penal Code. It was alleged that they had also committed certain offences under the Companies Act. The learned Trial Court issued process only against the accused No.2 under Sections 409, 420 and 477-A of the Indian Penal Code. Against the other accused persons, no process was issued. 4. After recording the evidence before charge, the learned Magistrate framed the charges under Sections 408 and 420 of the Indian Penal Code. The accused No.2 pleaded not guilty, and after trial, he was acquitted. 5. The admissions of the complainant in the cross-examination reveal that after he had purchased the debentures, an offer was made for conversion of said debentures into the equity shares on premium. He himself sold a large number of debentures in the market on premium without getting them converted into the shares, and out of that, he made profit. The accused was not the only person responsible for conducting the business nor he alone was responsible for the publication of the Annual Report or Brochure. Admittedly, it was a public limited company registered under the provisions of the Companies Act and the business was to be run as per the resolutions passed by the Board of Directors or in the Annual General Meeting of the shareholders. A person, who invests money in the shares of such company, may expect profit but at the same time, he also takes risk MP 3 APPLN4660_10 of losses. Merely because the complainant suffered some losses as the company could not function properly, one of the Directors cannot be held individually responsible for the offences under Sections 408 and 420 of the Indian Penal Code. There is no material to show that the accused himself had cheated and induced the complainant to invest his money in the debentures of the company. The complainant had decided to invest money in debentures of the company on the basis of the brochure and the other material published by the company and he also made profit out of it. Merely because at the end he suffered some loss, it cannot be said that he was cheated or that his funds were misappropriated or breach of trust was committed by the accused respondent No.1. The learned trial Court considered the whole evidence and admissions of the complainant and came to a conclusion that no offence is made out. In view of the facts and circumstances noted above, I do not find any fault in the findings of the trial Court. 6. In the result, leave to prefer appeal against the acquittal is refused and the application stands dismissed. (J. H. BHATIA, J)