J.Ramesh Kamath & Ors vs Mohana Kurup & Ors

2. Respondents nos.4 to 7 herein describing themselves as members of the All Kerala Chemists and Druggists Association (hereinafter referred to as `the Association’), filed a written complaint to the City Police Commissioner, Ernakulam against respondent nos.1 to 3. Respondent No.1 – Mohana Kurup was the President of the Association during the relevant period from 2004 to 2006 and thereafter from 2006 to 2008. Respondent No.2 – Raveendran was the Secretary of the Association during the same period, and respondent no.3 – Sayed was the Treasurer of the Association during the relevant period. It was alleged in the complaint filed by respondent nos.4 to 7, that respondent nos.1 to 3, in furtherance of a criminal conspiracy, and with common intention, misappropriated huge amounts of funds of `the Association', by misusing their position as office bearers of `the Association'. On the basis of the complaint preferred by respondent nos.4 to 7, First Information Report bearing Crime No.675/2008 was registered at Central Police Station, Ernakulam.

4. The police filed a final report before the Chief Judicial Magistrate, Ernakulam, on 22.03.2009, based on an affirmation during investigation, for offences under Sections 406, 408, 409, 477A and 120B of the Indian Penal Code. Needless to mention, that the aforesaid chargesheet was based on the complaint addressed by respondents nos.4 to 7 on 09.04.2008, and not the complaint made by the appellants before this Court.

6. Along with the aforesaid Criminal M.C.No.4154 of 2009, respondent nos.1 to 9 filed a joint petition seeking compounding under Section 320 of the Criminal Procedure Code. At this juncture, it would be relevant to mention, that respondent nos.4 to 7 were the original complainants on whose complaint, the case came to be registered against respondent nos.1 to 3. Respondent nos.8 and 9 herein, were the General Secretary and Treasurer of `the Association', at the time when Criminal M.C.No.4154/2009 was filed.

7. According to the assertions made before this Court, the High Court was informed, that the matter had been settled between the parties, and that, no useful purpose would be served in continuing the prosecution. The High Court, in the above view of the matter, passed the impugned order dated 22.12.2009, whereby, proceedings in CC No.90/2009, pending before the Chief Judicial Magistrate, Ernakulam, were quashed. Paragraph 2 of the impugned order is extracted herein:-

17. We shall now venture to determine the above issue. A perusal of the complaint on the basis of which criminal prosecution came to be initiated against respondent nos.1 to 3 reveals, that the accused persons were described as office bearers of `the Association', during the period from 2004 to 2008. During the course of hearing, it was not disputed, that at the relevant time, respondent no.1 – Mohana Kurup was the President of `the Association'; respondent no.2 – Raveendran was the Secretary of `the Association'; and respondent no.3 – Sayed was the Treasurer of the Association. It was alleged, that during their tenure, as office bearers of the State Committee of `the Association', they had exclusive access to the funds of `the Association'. They, at their own, managed the funds, for and on behalf of `the Association'. Consequent upon their resignation in 2008, when an ad hoc Committee took up charge of the State Committee, it discovered serious misappropriation of funds of the State Committee, which were in the name of the State Committee, and were not accounted for. Even the account books maintained by the State Committee, made no reference to the receipt of such amounts. A specific reference was made to M/s Micro Labs Ltd., Bangalore, which paid a sum of Rs.19,00,000/- two demand drafts being D.D.No.718573 and D.D.No.718574 in the sum of Rs.9,50,000/- each, drawn on the Canara Bank, both dated 17.04.2007. It was also asserted in the complaint, that `the Association' issued two receipts dated 30.04.2007 and 15.05.2007 in acknowledgement of the receipt of the said amounts. It was alleged, that the said amount was never incorporated in the account books of `the Association'. It was also alleged, that respondent nos.1 to 3 dishonestly misappropriated the said amount to themselves, in violation of bye-laws and other regulations/directions of the State Committee, by creating false and fictitious accounts, by altering, destroying and mutilating the original accounts of the State Committee, with a willful intention to obtain illegal financial gains, and to defraud the State Committee. It is also relevant to mention, that consequent upon completion of investigation, the chargesheet dated 22.03.2009, filed against respondent nos.1 to 3, stated thus:-

22. For the reasons recorded hereinabove, we allow the appeal and set aside the impugned order passed by the High Court. CC No.90 of 2009 is accordingly restored on the file of the Chief Judicial Magistrate, Ernakulam. We direct the trial court to proceed further with the matter, in accordance with law.

23. In the peculiar facts and circumstances of this case, we cannot endorse or appreciate the stand adopted by respondent Nos.4 to 9. We accordingly direct further investigation in this matter, pertaining to the role of respondent nos.4 to 9, and direct initiation of proceedings against them, if made out, in accordance with law.