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REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL  APPEAL Nos. 516-518   OF 2010   

     S. SATYANARAYANA                   …. APPELLANT  

VERSUS

ENERGO MASCH POWER ENGINEERING & CONSULTING PVT. LTD. & ORS.            …. RESPONDENTS

JUDGMENT

S. A. BOBDE, J.

These Criminal Appeals are preferred by the complainant  

against  the  Judgment  of  the  High  Court  of  Judicature  of  Andhra  

Pradesh at  Hyderabad by which the High Court  has in exercise of  

powers under Section 482 of the Code of Criminal Procedure (in short  

Cr.P.C.) quashed the proceedings in CC No. 37 of 2008 on the file of  

the court of the Special Judge for Economic Offences at Hyderabad  

insofar as the accused Nos. A4, A5, A6, A9 and A10 are concerned.

2. The complainant i.e. the appellant herein lodged a private  

complaint in his capacity as a Promoter Director of Sri Satyanarayana  

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Power  Private  Ltd.  -  a  company incorporated to  generate  biomass  

based power project in the District of Warangal in the State of Andhra  

Pradesh  (hereinafter  referred  to  as  the  ‘Company’).  The complaint  

was filed in respect of the offences allegedly committed under Section  

628 of the Companies Act, 1956 (in short the ‘Companies Act’) and  

Sections 120B and 420 of the Indian Penal Code (in short the ‘IPC’).  

This complaint was filed in the Court of Special Judge for Economic  

Offences at Hyderabad.

3. The accused Nos. 1, 2 and 3 are Directors of the Company.  The  

accused no. 4 i.e. Energo Masch Power Engineering & Consulting Pvt.  

Ltd.  is  another  Company.   The  accused  Nos.  5,  6,  7  &  8  are  its  

Directors.  Accused No. 9 is the Manager of M/s Indian Renewable  

Energy  Development  Agency (in  short  ‘IREDA’)  a  financing agency  

and is brother-in-law of A5 and A6, and accused No. 10 is a private  

person, namely Mrs. Sudha Ramani who is said to have been given a  

fictitious authorization in respect of a Bank account by a resolution of  

the company.  

4. In brief,  it  was alleged that the accused entered into a  

criminal  conspiracy  to  cheat  the  complainant  and  the  Company.  

Further, accused A1 to A3 made false declaration in regard to record  

maintained under the provisions of the Companies Act,  and filed a  

false declaration purporting to be an extract of Board Resolution of  

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the  Company  before  Andhra  Bank,  Sowcarpet  Branch,  Chennai  in  

order  to  open a bank account.   According to  the  complainant  the  

signatory  to  the  Board  Resolution  was  not  even  a  Director  in  the  

Company on the date the bank account was opened.   A series  of  

events  alleged  in  the  complaint  show  how  the  complainant  was  

induced to invest in the Company by acquiring land for the Company  

at a cost of Rs. 20 lakhs and make payment for the front end fee to  

IREDA which had in collusion with the other accused sanctioned the  

financial assistance to the Company to the extent of Rs. 11.50 crores  

subject  to the condition that the promoters should invest Rs. 4.98  

crores as their contribution towards the total project cost of Rs. 16.48  

crores.   

5. According to the complainant, accused A9 - the Manager of  

IREDA, suggested that the company should appoint A4 Company as a  

contractor representing that the Directors of the said A4 Company i.e.  

A5  and  A6  in  reality  his  brother-in-law,  have  wide  experience  in  

executing such projects. The complainant believed that representation  

and allowed those persons and others to become Director as a result  

of which A1 along with his nominee Directors enjoyed a majority on  

the Board of the Company.  Thereafter, in order to obtain the first  

installment of loan the accused represented that they have spent an  

amount of Rs. 1,88,21,484/-, to the accused A4 Company as if the  

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amount  was  invested  from  the  Company’s  account  maintained  in  

Andhra  Bank,  Sowcarpet  Branch.   On  such  a  representation,  A9  

IREDA  released  the  first  installment  of  loan.   The  accused  again  

induced  A9  to  release  the  second  installment  of  loan  of  Rs.  2.85  

crores  without  the  knowledge  of  the  complainant  and  without  

submitting any Board Resolution of the Company.  A major amount of  

the loan was paid to the accused A4 Company, which had not done  

any substantial work.  Though Rs. 145 lakhs from the first installment  

of loan and Rs. 92 lakhs from the second installment of loan were  

paid to the A4 Company only a nominal amount of Rs. 30 lakhs was  

used  for  work  and  the  rest  was  swindled.   As  a  part  of  these  

transactions the complainant alleged that A1 to A3 had made a false  

declaration  as  records  in  a  purported  Board  Resolution  of  the  

Company in order to open a bank account and falsely authorised A10  

and thereby made a false declaration amounting to an offence under  

Section 628 of the Companies Act.  Thus, A10 was falsely authorized  

to operate the bank account.

6. It will thus be seen from the above that according to the  

complainant the transactions of all the accused persons in conspiracy  

with each other amounted to offences under Sections 120B and 420  

of the IPC and Section 628 of the Companies Act.

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7. Against  the  complaint,  the  following  accused-namely  A4  

Company; its Directors A5 and A6; A9 the manager of the IREDA; and  

A10 the private person approached the High Court under Section 482  

of the Cr.P.C..  The High Court took the view that the Special Judge  

could not have taken cognizance of the offences under Sections 120B  

and 420 of the IPC unless he could also try the accused under Section  

621 of the Companies Act.  As regards the accused Company A4 and  

its Directors A5 and A6, the High Court held that no cognizance could  

be taken against the said accused because the complainant did not  

belong to any of the categories or persons who were entitled to file a  

complaint under Section 621 of the Companies Act1 i.e. to say the  1 “621. Offences  against  Act  to  be  cognizable  only  on  complaint by Registrar, shareholder or Government-

   (1)   No court shall take cognizance of any offence against this Act   which is alleged to have been committed by any company or any   officer thereof, except on the complaint in writing of the Registrar,   or of a shareholder of the company, or of a person authorised by  the Central Government in that behalf:

Provided that nothing in this sub- section shall apply to a   prosecution by a company of any of its officers.

[Provided further that the Court may take cognizance of   offence  relating  to  issue  and  transfer  of  securities  and  non- payment  of  dividend  on  a  complaint  in  writing  by  a  person   authorized by the Securities Exchange Board of India].

   (1A)    Notwithstanding anything contained in the Code of Criminal   Procedure, 1898 , (5 of 1898) where the complainant under sub-   section (1) is the Registrar or a person authorised by the Central   Government, the personal attendance of the complainant before  the  Court  trying  the  offence shall  not  be  necessary  unless  the   Court for reasons to be recorded in writing requires his personal   attendance at the trial.]

   (2)   Sub- section (1) shall not apply to any action taken by the   liquidator of a company in respect of any offence alleged to have   been committed in respect of any of the matters included in Part   VII  (sections  425  to  560)  or  in  any  other  provision  of  this  Act   relating to the winding up of companies.

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8. As can be seen from the complaint the allegations are that  

the accused conspired with each other to cheat the complainant and a  

series of transactions gave rise to offence under Section 120B read  

with Section 420 of the Indian Penal Code as also Section 628 of the  

Companies Act.  It is, therefore, clear that if the Special Court has  

jurisdiction to try offences under both the aforesaid Acts then the trial  

can certainly continue in respect of the offences which do not require  

the complainant to belong to the categories specified under Section  

621  of  the  Companies  Act.  Thus  the  trial  could  certainly  continue  

against those accused under the IPC.

9. The High Court  completely  overlooked the fact  that  the  

complaint made allegations against the accused A4, A5, A6, A9 and  

A10 only in respect of Section 120B and 420 of Indian Penal Code and  

there was no reason in law to quash a complaint against them on the  

ground that they were immune from prosecution under Section 628 of  

the Companies Act by virtue of Section 621 of that Act.  

10. We accordingly set aside the findings of  the High Court  

that taking of cognizance against the accused A4, A5, A6 and A9 is  

without jurisdiction on the ground that the complaint does not make  

out  a  prima facie  case  for  the  offences  under  Section  628  of  the  

Companies Act, 1956 against the said accused.  At this stage, it may  

be noted that  the Special  Court  is  empowered  to  try  the offences  

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under  the  Companies  Act  alongwith  other  Acts  by  virtue  of  a  

notification issued by the erstwhile Government of  Andhra Pradesh  

dated 13.3.1981 which empowers such special Courts to try offences  

under specified enactments such as The Companies Act, 1956, The  

Income-tax Act, 1961, The Wealth-tax Act, 1957 etc., which reads as  

follows:-  

“even if  such cases include offences punishable under the   

Indian Penal Code, 1860 and any other enactments, if such   

offences form part of the same transaction.”

[vide Notification reproduced in Criminal Petition No. 5846 of 2014   

The  Superintendent  Of  Customs  Vs.  Kannur  Abdul  Kader   

Mohammed Haneefa reported in 2014 (310) ELT49(A.P.)]

11. Thus, even if a number of persons are accused of offences  

under a special enactment such as ‘the Companies Act and as also the  

IPC’  in respect of the same transaction or facts  and even if  some  

could not be tried under the special enactment, it is the special court  

alone which would have jurisdiction to try all the offences based on  

the same transaction to avoid multiplicity of proceedings.  We make  

this  observation  because  at  some  stage  in  the  hearing  learned  

counsels addressed us on this point.  We make it clear that in the  

present case all the accused are liable to be tried by the special court  

in respect of the offences under the IPC as well as the Companies Act  

as alleged in the complaint.

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12. Appeals are allowed in above terms.

…………………………….…..........…..J.                                                   [JAGDISH SINGH KHEHAR]

…...................................………J.                                          [S.A. BOBDE]

NEW DELHI,    MARCH 26, 2015

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ITEM NO.101        COURT NO.4               SECTION II

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              S U P R E M E  C O U R T  O F  I N D I A

                    RECORD OF PROCEEDINGS

Criminal Appeal  No(s).  516-518/2010

S. SATYANARAYANA                                   Appellant(s)

                               VERSUS

ENERGO MASCH POWER ENGG.&CONST.P.L.&ORS.     Respondent(s)

(for directions)

Date : 26/03/2015 These appeals were called on for hearing               today.

CORAM :  

        HON'BLE MR. JUSTICE JAGDISH SINGH KHEHAR

        HON'BLE MR. JUSTICE S.A. BOBDE

For Appellant(s) Mr. Vikas Singh, Sr. Adv.

Mr. Vivek Singh

                   Ms. Deepika Kalia, Adv.

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Mr. Kapish Seth, Adv.

for Mr. Lakshmi Raman Singh,AOR

For Respondent(s)Mr. Suresh Babu, Adv.

                   Mr. Ravi Kumar Tomar,AOR

                   Mr. V.Senthil Kumar, Adv.

Mr. K. Muthu, Adv.

Mr. M. A. Chinnasamy,Adv.

                   Mr. V. N. Raghupathy,Adv.(NP)

         UPON hearing the counsel the Court made the following

                            O R D E R

Heard learned counsel for the appearing parties.

Registry is directed to list the appeals today (26.03.2015)  for pronouncement of judgment at 2.00 p.m.

(Parveen Kr. Chawla) (Renu Diwan)

   Court Master Court Master

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ITEM NO.1D        COURT NO.4               SECTION II

              S U P R E M E  C O U R T  O F  I N D I A

                      RECORD OF PROCEEDINGS

Criminal Appeal  No(s).  516-518/2010

S. SATYANARAYANA                                   Appellant(s)

                               VERSUS

ENERGO MASCH POWER ENGG.&CONST.P.L.&ORS.     Respondent(s)

[HEARD BY HON'BLE JAGDISH SINGH KHEHAR AND HON'BLE  S.A.BOBDE, JJ.]

Date : 26/03/2015 These appeals were called on for judgment              today.

For Appellant(s) Mr. Vivek Singh

                   for Mr. Lakshmi Raman Singh,AOR

For Respondent(s)Mr. Ravi Kumar Tomar,AOR

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Mr. M. A. Chinnasamy,AOR

                  Mr. V. N. Raghupathy,Adv.(NP)

Hon'ble Mr. Justice S.A. Bobde pronounced the judgment of  the Bench comprising Hon'ble Mr. Justice Jagdish Singh Khehar and His  Lordship.

For  the  reasons  recorded  in  the  Reportable  judgment,  which is placed on the file, the appeals are allowed.

(Parveen Kr. Chawla) (Renu Diwan)

   Court Master Court Master

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