Case: A.V. Mohan Rao  Vs. M. Kishan Rao

"We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice." 16. The same view was expressed by this Court in the case of Mahavir Prasad Gupta & Anr. vs. State of National Capital Territory of Delhi & Ors., 2000 (8) SCC 115. 17. In view of the principles of law it is to be considered whether on the allegations which applicants made in the complaint and the materials filed by the complainant a case for exercise of jurisdiction under Section 482 Cr. P.C. or Article 226 of the Constitution has been made out. As noted earlier, it is alleged in the complaint that the accused, appellants herein, have committed the offences under Section 60, 63, 68, 68-A read with Section 621 of the Act. 18. Section 60 provides that : No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless, on or before the date of its publication, there has been delivered to the Registrar for registration a copy thereof signed by every person who is named therein as a director or proposed director of the company or by his agent authorised in writing, and having endorsed thereon the documents enumerated in the section. 19. The expression ‘prospectus’ is defined in Section 2(36) of the Act to mean "any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate". 20. Section 63 of the Act makes provision regarding criminal liability for mis-statements in the prospectus. In sub-section (1) thereof it is laid down that "where a prospectus issued after the commencement of this Act includes any untrue statement, every person who authorised the issue of the prospectus shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to fifty thousand rupees, or with both, unless he proves either that the statement was immaterial or that he had reasonable ground to believe, and did up to the time of the issue of the prospectus believe, that the statement was true." 21. Section 68 of the Act makes provision regarding penalty for fraudulently inducing persons to invest money. It is laid down therein that : "Any person who, either by knowingly or recklessly making any statement, promise or forecast which is false, deceptive or misleading or by any dishonest concealment of material facts, induces or attempts to induce another person to enter into, or to offer to enter into - (a) any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting shares or debentures; or(b) any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of shares or debentures, or by reference to fluctuations in the value of shares or debentures;shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to one lakh rupees, or with both. 22. Section 68-A of the Act deal with personation for acquisition, etc., of shares and the action of any person who makes in a fictitious name an application to a company for acquiring, or subscribing for, any shares therein, or otherwise induces a company to allot, or register any transfer of, shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years. 23. Reading of the complaint petition and the materials produced by the complainant with it in the light or provisions in the aforementioned sections it cannot be said that the allegations made in the complaint taken in entirety do not make out, even prima facie, any of the offences alleged in the complaint petition. We refrain from discussing the merits of the case further since may observation in that regard may effect one party or the other. The allegations made are serious in nature and relate to the power company registered under the Act having its head office in this country. Whether the appellants were or were not citizens of India at the time of commission of the offences alleged and whether the offences alleged were or were not committed in this country, are questions to be considered on the basis of the evidence to be placed before the Court at the trial of the case. The questions raised are of involved nature, determination of which requires enquiry into facts. Such questions cannot be considered at the preliminary stage for the purpose of quashing the complaint and the proceeding initiated on its basis. It is relevant to note here that from Sections 4 and 188 of the Criminal Procedure Code it is clear that even if the offence is committed by a citizen of India outside the country the same is subject to the jurisdiction of courts in India. [See Central Bank of India Ltd. vs. Ram Narain, AIR 1955 SC 36 , Mobarik Ali Ahmed vs. The State of Bombay, 1958 SCR 328 and Ajay Aggarwal vs. Union of India & Ors., (1993) 3 SCC 609 ]. 24. On consideration of the matter, we are of the view that in the context of the facts and circumstances of the case, the High Court was right in declining to quash the complaint petition and the proceedings initiated on its basis.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]23. Reading of the complaint petition and the materials produced by the complainant with it in the light or provisions in the aforementioned sections it cannot be said that the allegations made in the complaint taken in entirety do not make out, even prima facie, any of the offences alleged in the complaint petition. We refrain from discussing the merits of the case further since may observation in that regard may effect one party or the other. The allegations made are serious in nature and relate to the power company registered under the Act having its head office in this country. Whether the appellants were or were not citizens of India at the time of commission of the offences alleged and whether the offences alleged were or were not committed in this country, are questions to be considered on the basis of the evidence to be placed before the Court at the trial of the case. The questions raised are of involved nature, determination of which requires enquiry into facts. Such questions cannot be considered at the preliminary stage for the purpose of quashing the complaint and the proceeding initiated on its basis. It is relevant to note here that from Sections 4 and 188 of the Criminal Procedure Code it is clear that even if the offence is committed by a citizen of India outside the country the same is subject to the jurisdiction of courts inare of the view that in the context of the facts and circumstances of the case, the High Court was right in declining to quash the complaint petition and the proceedings initiated on its basis.