THE HONOURABLE SRI JUSTICE A.GOPAL REDDY Crl.P.No.2486/2002 Dt,15-7-2010 1. Dhimant Mehta and another. ..Petitioners V. 1. State of Andhra Pradesh, represented by its Public Prosecutor, High Court of A.P., Hyderabad. ..Respondent The Court made the following: THE HONOURABLE SRI JUSTICE A.GOPAL REDDY Crl.P.No.2486/2002 ORAL ORDER This petition is filed under Section 482 Cr.P.C., to quash the proceedings initiated against the petitioners in Cr.No.234/2001 of Central Crime Station, Hyderabad registered for the offence punishable under Section 420 IPC. The allegations levelled against the petitioners in the complaint would go to show that the petitioners who are Directors of Rhutu Udyog India Limited (formerly known as Rhutu Bearings & Estate (India) Ltd.,) along with D.Srinivas and B.Jagdish who are Directors of Rhutu Finance Private Limited joined hands with each other and committed fraud, breach of trust, misrepresentation with common intention of cheating the complainant and others by siphoning off money to a tune of Rs.12.50 lakhs, and also the family members of the defacto complainant, friends and others to a tune of Rs.40 lakhs. The accused came out with public issue of Rhutu Bearings and Estates (India) Limited and issued share certificates in fictitious names with the face value of R.10 each with partly paid for Rs.5/- on application and Rs.5/- on allotment. The accused offered to sell their shares at Rs.3-09 per share and duly transferred 2,17,900 shares with their covering letter and lured the complainant that the shares are sold because of their financial requirement and failed to deliver the balance 1,86,600 shares even though he has paid them a sum of Rs.12,50,000/-. The defacto complainant subsequently came to know that the said shares delivered to him are not recorded in the records of the company though it has been enclosed on the back of the shares, therefore they have manipulated the accounts and misappropriated the funds and transferred the properties of the company for a wrongful gain, which prima facie disclose cognizable offence, to be investigated into by the police. Learned counsel for the petitioners contends that having lost in the suit filed by the defacto complainant in OS No.132/1999 on the file of I Additional Chief Judge, City Civil Court, Secunderabad, against which the defacto complainant preferred appeal before the High Court, which is pending, the defacto complainant resorted to file the criminal complaint against the petitioners. He further contends that since the complainant made an application before the Securities and Exchange Board of India, the proceedings initiated against the petitioners cannot be continued. Whether the question on filing complaint before the Securities and Exchange Board of India, the proceedings cannot be continued is a matter to be taken note by the investigating officer while filing a report. Moreover, the complaint allegations, prima facie, disclose that the complainant has been cheated for not allotting shares by the petitioners, and in the process, they have parted with the money to a tune of Rs.12.50 lakhs of the complainant and others, which constitutes an offence under Section 415 IPC, which has to be investigated into by the police. It is not a fit case where this court can scuttle the investigation at the initial state. The Criminal Petition is accordingly dismissed. ______________ A.GOPAL REDDY,J Dt.15-7-2010 kmr