Case: Ashok Chaturvedi  Vs. Shitul H Chanchani

The appellants have been arrayed as accused persons along with others in a complaint petition filed by respondent No. 1 alleging offence committed by the appellants under Sections 406, 420, 467, 468 andof the Indian Penal Code, in respect of transfer of shares effected by Flex Engineering Ltd., a public limited company. The learned Magistrate on receipt of the petition of complaint examined the complainant on oath and also the witnesses produced by the complainant. On the basis of those materials the Magistrate took cognizance of the offence under Sections 406, 620, 467, 468 andIPC by his order dated 5.2.1996 and directed issuance of process against the accused appellants. The appellants then moved the the High Court under Section 482 of the Code of Criminal Procedre for quashing the cognizance, inter alia, on the ground that the allegations made in the petition of complaint even being accepted on its face value no offence can be said to have been made out against them. The High Court by the impuged judgment, however, being of the opinion that the allegations having been made that shares have been transferrred on the basis of forged and fabircated signatures a prima facie case has been made out, and therefore, it would not be appropriate to quash the order of cognizance in exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure, rejected the prayer of the appellants.

Court's reasoning:
We are clearly of the opinion that the necessary ingredients of any of the offence have not been made out so far as the appellants are concerned. The petition of complaint is a vague one and excepting the bald allegation that the shares of the complainant have been transferred on the forged signatures, nothing further has been stated and there is not an iota of material to indicate how all or any of these appellants are involved in theallegation of forgery. The statement of the complainant on oath as well as his witnesses do not improve the position in any manner, and therefore, in our considered opinion even if the allegations made in the complaint petition and the statement of complainant and his witnesses are taken on their face value, the offence under Sections 406, 420, 467, 468 andof the Indian Penal Code cannot be said to have been made out. This being the position the impugned order of the Magistrate taking cognizance of the offence dated 5.2.1996 so far as it relates the appellants are concerned cannot be sustained and the High Court also committed error in not invoking its power under Section 482 of the Code. In the aforesaid premises, the impugned order of the High Court as well as the order of the Magistrate dated 5.2.1996 taking cognizance of the offence as against the appellants stand quashed.5. It is true that out of 9 officials of the company who are the accused persons in the criminal case only 7 of them have preferred this special leave petition and R.K. Sharma, Whole Time Director, as well as Capt. G.P.S. Choudhary, Director of the Company have not preferred the special leave petition. But in view of our conclusion, allegations in the complaint petition do not make out any offence against any of the officers of the company it would be futile to allow continuance of the criminal proceedings so far as the said two officers of the company are concerned.