IN THE HIGH COURT OF JUDICATURE AT PATNA Cr. Misc. No.296 of 2008 SHYAM SINGH @ CHOUDHARY SHYAM SINGH @ SHYAM SINGH CHOUDHARY, S/O LATE KARAN SINGH, EX-DIRECTOR OF M/S RISHABH FOOD PRODUCTS LIMITED, RESIDENT OF C-90, AANAND NIKETAN, DELHI .. PETITIONER Versus 1. THE STATE OF BIHAR 2. SHASHI KANT PRASAD SINGH, PROPRIETOR, M/S HARCULOUS INTERPRISES, NEW YARPUR, GARDANIBAGH, ROAD NO. 1, P.S. GARDANIBAGH, DIST-PATNA, AT PRESENT GARDANIBAGH, ROAD NO. 2, QUARTER NO. 14, P.S. GARDANIBAGH, DIST- PATNA .. OPPOSITE PARTIES **** /7/ 30.04.2010 Heard the counsel for the parties. 2. This application is directed for quashing the order, dated 01.08.1997, passed by Sri Ajay Kumar Srivastava, Judicial Magistrate, 1st Class, Patna, in Complaint Case No. 537(C) of 1997 by which the learned Magistrate has taken cognizance for offence under Sections 406 and 420 of the Penal Code against the petitioner and others as Ex-Director of M/S Rishabh Food Product limited, New Delhi, for quashing the proceeding has filed Complaint Case No. 537(C) of 1997. The complainant during exchange of talk between the Managing Director and the Regional Sales Manager to do business with the company deposited Rs.50,000/- for super dealership of the 2 company all over Bihar and on the said assurance Rs.50,000/- was paid in favour of M/S Rishabh Food Product Limited, New Delhi, and even got information that said amount accepted and then there was, again, exchange to forward a demand draft of Rs.1,50,000/- so that the formal agreement may be done between the Managing Director of the company. However, it is alleged that Sri Ram Agency, Jamal Road, Patna, has been given the dealership of super distributor. However, there is no mention about the demand of Rs.1,50,000/- by the M/S Rishabh Food Product Limited, New Delhi, i.e., the company. However, it has been alleged that no satisfactory explanation was given by the company why he has not been given the authorized super dealership and though it was assured to the complainant that the said amount of Rs.50,000/- shall be refunded. However, it is alleged that in spite of several letters and reminders the money has not been returned. 3. The learned counsel for the petitioner submits that on these facts cognizance has been taken. It has been held that there is no date of demand and it has been mentioned that when the demand was made by the company Rs.1,50,000/- for giving the dealership was paid as security money to the company 3 and the complainant admits that the said money was paid to the company and further a demand of Rs.1,50,000/- was made, but, it was not paid by him. It has further been contended that Rs.50,000/- was paid in 1994 and this complaint petition was made in 1997 and there is no mention about the date. 4. Learned counsel for the petitioner submits that the company become a sick company in the year 1997 and a case vide Case No. 79 of 1997 with the Board for Industrial and Financial Reconstruction and, hence, the accused company protected under the provisions of sick industrial company. The learned counsel for the petitioner, however, submits that in the complaint petition there is no specific averment about any criminal intent and there is no material at all to suggest of any criminal mens rea. It has further been contended that according to Section 446 of the Companies Act, 1956, when a winding up order has been made or the official liquidator has been appointed as provisional liquidator no suit or other legal proceeding shall commence or if pending on the date of the winding up order shall proceed with against the company except on leave of the Court. It is clear that once the company went for liquidation no legal proceeding shall be proceeded or commenced against the firm. 4 However, here the company and his Managing Director and Regional Sales Manager have been made accused. However, under the facts and circumstances the amount said to have been misappropriated, as alleged, is Rs.50,000/- which was paid as security money for the dealership. However, the company has been liquidated and, hence, the petitioner unable to pay the amount on behalf of the company and, hence, the amount can be only claimed, at this stage, from the liquidator and the said amount alleged to have been paid was really paid in the account of the company as apparent from the complaint petition itself and under the facts and circumstances the impugned order taking cognizance is not sustainable in the eye of law as no mens rea for criminal intent can be inferred from alleged fact, hence, the impugned order is set aside. However, the complainant is at liberty to realize the dues through the liquidator. 5. With these observations and directions, this application is allowed. S.A. ( Gopal Prasad, J. )