IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 05.11.2009 CORAM: THE HONOURABLE MRS.JUSTICE ARUNA JAGADEESAN Crl.A.No.560.2008 MP.No.1/2008 & 1/2009 K.Padmavathy Appellant/3rd Accused/Petitioner Vs State by Inspector of Police Economic Offences Wing II Coimbatore Respondent/Complainant/Respondent Prayer:- This Criminal Appeal is filed against the order dated 9.1.2008 passed in Cr.MP.No.1228/2006 in CC.No.24/2005 by the learned Special Judge under TNPID Act, 1996, Chennai. For Appellant : Mr.K.Govi Ganesan For Respondent : Mr.Hasan Mohammed Jinnah, APP ORDER This Criminal Appeal is filed against the order dated 9.1.2008 passed in Cr.MP.No.1228/2006 in CC.No.24/ 2005 by the learned Special Judge under TNPID Act, 1996, Chennai. 2. As per the final report filed by the Respondent, the Appellant, who has been arrayed as A3 in CC.No.24/2005, along with three other accused were running a Financial Establishment in the name of M/s.Sri Kandiamman Finance at Coimbatore/A1 and canvassed the depositors offering higher rates of interest and collected deposits from about 7 depositors to the tune of Rs.25,30,000/- and defaulted to pay the interest on the deposit of a sum of Rs.13,27,700/- totaling Rs.38,57,700/- and defaulted to repay the deposit and interest after maturity to the depositors. 3. The said finance Company/A1 had been registered before the Registrar of Firms at Coimbatore on 29.3.1996 in Registration No.273/1996. A2 to A5 were the partners of the said finance Company. It is stated by the Prosecution that A2 to A5 had canvassed and collected deposits in the name of A1 from the year 1996 till it was closed. The further allegation is that even https://hcservices.ecourts.gov.in/hcservices/ before accepting the money deposits, A2 to A5 conspired together with fraudulent intention to default the repayment of money and to misappropriate the said amount converting the same for their own use and thus caused sufferance and loss to the depositors. 4. The Appellant/A3 filed a petition for discharge before the Trial Court on the ground that she has not participated in the day-to-day affairs of the said finance Company and her name was included in the Partnership firm only on sentimental reasons and she had retired from the said firm as early as on 25.2.1997 i.e. within a year of her induction into the partnership, whereas the complaint had been lodged only in the year 2004 and she had ceased to be a partner on the said date and therefore, there is absolutely no evidence to connect the Appellant with the case and to proceed against her and hence, she has to be discharged from the offence. 5. The learned trial Judge after considering the materials placed by the Prosecution and after hearing the submissions made on either side held that there is a prima facie case and sufficient ground to further proceed against the Appellant for the alleged offence under Section 5 of the TNPID Act and dismissed the petition. As against the said order, the 3rd accused has preferred this appeal. 6. The learned counsel for the Appellant reiterated the same arguments in this appeal and filed the copy of Form-A notice submitted by the Appellant to the Registrar of Firms as defence document to substantiate the contention that she ceased to be a partner from 25.2.1997 onwards. 7. On the other hand, Mr.Hasan Mohammed Jinnah, the learned Additional Public Prosecutor for the Respondent submitted that the materials collected in the course of the investigation, the complaint and the statements of the witnesses recorded implicate the Appellant, who is one of the partners of the 1st accused Company and hence, a prima facie case has been made out to proceed with the Appellant and the materials submitted by the Appellant that she had retired from the partnership as early as on 25.2.1997 could be considered only at the time of trial and the court below rightly dismissed the petition. 8. The learned counsel for the Appellant contended that the copies of Form-A submitted to the Registrar of Firms to substantiate the resignation and the same being a public document can be looked into for the purpose of deciding as to whether the criminal proceedings could be proceeded against the Appellant. He relied on the decisions of this court rendered in the cases of M.M.Sabharwal Vs. R.P.Billimoria [2007-1-LW-Crl-179] and Lachman P.Udhani and others Vs. M/s.Redington (India) Limited by V.S.N.Muthy, Senior Executive Accounts, Chennai-32 [2006-2-LW-Crl- 956] in support of his contention that the Form-A being a public https://hcservices.ecourts.gov.in/hcservices/ document can be looked into for the limited purpose of quashing the proceedings. 9. Both the above said decisions arise out of the Negotiable Instruments Act, wherein to substantiate the contention that though the complainant was aware of the resignation tendered by the Executive Director of the Company, the complainant mechanically impleaded them as the accused and in the quash proceedings. Form-32 submitted to the Registrar of the Company was pressed into service to show that the accused resigned from the directorship of the Company and in the said view of the matter, it was held that though Form-32 is a defence document, such a material can be looked into for the purpose of quashing the proceedings against the said accused, who ceased to be the Director in view of his resignation. 10. To launch Prosecution under Section 138 of the Negotiable Instruments Act and to fasten the liability on a Director of a Company, it should be shown that the said Director was involved in the day-to-day affairs of the Company or he was in charge or responsible for the conduct of the affairs of the Company. So an advertence to Sections 138 and 141 of the Negotiable Instruments Act shows that on the other elements of an offence under Section 138 being satisfied, the burden is on the Board of Directors or the Officers in charge of the affairs of the Company to show that they are not liable to be proceeded with in view of any restriction on their power or existence of any special circumstances that makes them not liable. In the said context, this court has held that if it is shown that a Director of a Company against whom Prosecution is launched is ceased to be the Director of the said Company in view of his resignation, then no criminal liability could be fastened against the said person. It then held that for the purpose of deciding as to whether the accused was the Director at the time of issuance of cheque, the defence document which is a public document of unimpeachable and sterling quality could be looked into. 9. But, in the instant case, there are specific allegations against the Appellant that she along with the other partners canvassed and got deposits from the depositors and defaulted to repay the amount with fraudulent intention to defraud the depositors. The crystallized judicial view is that at the stage of framing of charges, the court has to prima facie consider as to whether there is sufficient ground for proceeding against the accused and the court is not required to appreciate evidence to conclude as to whether the materials produced are sufficient or not for convicting the accused. The materials collected during investigation do suggest that the Appellant has got complicity in the commission of the offence and the specific assertion of the witnesses to the investigating officer cannot be ignored. The veracity of the different statements made by those witnesses cannot be considered at the stage of framing of charges. https://hcservices.ecourts.gov.in/hcservices/ 10. That apart, the documents relied on by the defence cannot be looked into at the stage of framing of charges except under exceptional circumstances. The Honourable Supreme Court in the case of Hem Chand Vs. State of Jharkhand [2008-2-SCC-Crl-537] has held that the documents relied on by the accused in support of his defence cannot be looked into at the stage of framing of charges. Therefore, the court at the stage of framing of charges could exercise only a limited jurisdiction and at this stage the Trial Court will not delve deep into the matter for the purpose of appreciation of evidence. The Appellant is at liberty to canvass all those contentions before the Trial Court and submit all those materials relied upon by her before the Trial Court. 11. In view of the reasons stated above, this court is of the considered view that there is no merit in this Criminal Appeal and the same is liable to be dismissed. 12. In the result, this Criminal Appeal is dismissed. Consequently, the connected MPs are closed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar Srcm To: 1. The Special Judge under TNPID Act, 1996, Chennai 2. The Public Prosecutor, High Court, Madras 3.The Section Officer, Criminal Section,High Court,Madras. 4.The Inspector of Police, Economic Offences Wing II, Coimbatore. +1cc to Mr.K.GoviGanesan, Advocate Sr 59695 PUR(CO) km/18.11. Crl.A.No.560/2008 https://hcservices.ecourts.gov.in/hcservices/