## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
## **THE HONOURABLE MR. JUSTICE P.SOMARAJAN**
## **THURSDAY, THE 17TH DAY OF SEPTEMBER 2020 / 26TH BHADRA, 1942**
## **Crl.MC.No.437 OF 2019(D)**
## **CC 166/2017 OF CHIEF JUDL.MAGISTRATE COURT, ERNAKULAM**
## **PETITIONERS/ACCUSED 1 AND 2:**
**1 M/S KEYNOTE CAPITALS LIMITED THE RUBY,9TH FLOOR,SENAPATHI BAPAT MARG,DADAR(WEST),MUMBAI-400028, REPRESENTED BY ITS MANAGING DIRECTOR MR.VINEET SUCHANTI. 2 MR.VINEET SUCHANTI, M/S.KEYNOTE CAPITALS LIMITED,THE RUBY, 9TH FLOOR,SENAPATHI BAPAT MARG, DADAR(WEST), MUMBAI-400028.**
**BY ADVS. SRI.C.HARIKUMAR SRI.RENJITH RAJAPPAN**
## **RESPONDENTS/STATE AND DEFACTO COMPLAINANT:**
**1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM-682031. 2 V.M.KAREEM, AGED 58 YEARS S/O.MEERAN,VADAKKEKUDY HOIUSE, RAYONPURAM.P.O,PERUMBAVOOR, ERNAKULAM-683542.**
**R2 BY ADV. SRI.MATHEW B. KURIAN R2 BY ADV. SRI.K.T.THOMAS R1 BY PUBLIC PROSECUTOR.SRI.E.C.BINEESH**
**THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 17.09.2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
**Crl.MC.No.437 OF 2019 2**
## **CR**
## **ORDER**
Annexure A2 protest complaint and all further proceedings in C.C.No.166/2017 on the files of the Chief Judicial Magistrate Court, Ernakulam is sought to be quashed under Section 482 Cr.P.C.
2. Crime was registered on the allegation of offence punishable under Sections 409, 420 IPC against
accused 1 to 5. Accused No.1 is a company based at Bombay and accused No.2 is the Managing Director. Accused No.3 is another company, a franchise under accused No.1. They were doing the business of canvassing deposits in the form of trading shares. Accused No. 4 and 5 are the stock brokers assisting accused Nos. 1 to 3. Earlier dividends were released in the year 2012. Again certain other deposits were
made with the accused persons. For that also, dividends
were released on few occasions. The allegation against accused Nos. 1 to 5 is that deposits were received with the intention to cause unlawful loss to the depositors including defacto complainant and unlawful gain to the accused by playing a device under the guise
## **Crl.MC.No.437 OF 2019 3**
of shares. It is further alleged that dividends were
released with the ultimate intention and purpose to further deceive and to avoid immediate action against the accused persons.
3. A final report was submitted against the
defacto complainant which was objected by filing a protest complaint. It is at this stage some of the accused came up for quashing the protest complaint and
further proceedings initiated based on it. The petitioners relied on the legal proposition laid down in paragraph 16 of the decision of this Court in
## **Parameswaran Nair v. Surendran and another ( 2009 (1)**
**KHC 801)** .
4. Principally, a right to file protest complaint against a refer report under Section 173(2) Cr.P.C. is
to secure justice and to prevent failure of justice in the hands of investigating officer or under a defective investigation. It is well recognized that the
proceeding cannot be defeated or eschewed under Section 482 Cr.P.C. without satisfying an act of abuse of the process of court or existence of a necessity to secure the ends of justice. There cannot be any
Section 482 Cr.P.C. without satisfying an act of abuse
## **Crl.MC.No.437 OF 2019 4**
different treatment in the matter of exercise of
jurisdiction under Section 482 Cr.P.C. against a final report submitted under Section 173 Cr.P.C., an FIR registered or a protest complaint. The mere fact that the police has investigated and submitted a refer report by itself would not make any difference in the legal position, in the exercise of jurisdiction under Section 482 Cr.P.C. against a protest complaint. The
issuance of notice to the defacto complainant on submission of refer report, is not only precautionary in its nature, but a mandate to be complied with before accepting a refer report.
5. The inherent power under Section 482 Cr.P.C. is not a remedy or solution for redressing all kinds of grievances. But it can be exercised sparingly so as to prevent abuse of the process of court or for securing ends of justice. While exercising inherent powers of High Court under Section 482 Cr.P.C., it is not permissible to have a detailed enquiry or appreciation with respect to admissibility or sustainability of evidence collected or statement recorded during the course of investigation in the matter of a final report
## **Crl.MC.No.437 OF 2019 5**
submitted or to go into each and every details of a complaint or FIR registered and availability of any valid defence to the accused. The existence of valid grounds of defence may not be by itself sufficient to exercise the inherent power under Section 482 Cr.P.C.
It can be sparingly exercised only to prevent abuse of the process of court or to secure the ends of justice.
The expression 'to secure the ends of justice' should
not be misunderstood with any valid defence available, though wide jurisdiction given within the compass of Section 482 Cr.P.C.. The second limb of Section 482 Cr.P.C.- 'to secure the ends of justice', can be exercised only when there is no provision for redressing the grievance of the aggrieved, which would otherwise result in injustice or illegality. The
salutary principle behind it is to avoid a situation not to leave any aggrieved person without any remedy, when there is patent illegality or injustice, which cannot be cured or redressed under any existing provisions of law. On the other hand, the expression 'to prevent abuse of the process of court' stands for
to prevent any attempt made to abuse the authority of a
## **Crl.MC.No.437 OF 2019 6**
court. The first limb of Section 482 Cr.P.C. - to prevent abuse of the process of court - is also resting on the principle of promoting justice and to prevent injustice. An attempt to oppress or harass without any lawful cause with any oblique motive or illegitimate aim in the hands of a vindictive litigant would attract the first limb of Section 482 Cr.P.C.. When there is no provision for redressing the grievance, the second limb- 'to secure the ends of justice' engrafted under Section 482 Cr.P.C. would come into play. It can be exercised _ex debito justitiae_ to do real and
substantial justice, but cannot embark upon an enquiry whether the allegation in the complaint are likely to be established by evidence or not or whether the evidence in question are reliable or not.
6. In the instant case, the complaint was forwarded for investigation under Section 156(3) Cr.P.C. by the Chief Judicial Magistrate, Ernakulam. A crime was registered in crime No.306/2015 of Central Police Station. After investigation, a refer report was submitted on the ground that what is involved is a civil dispute. It is thereafter a protest complaint
## **Crl.MC.No.437 OF 2019 7**
was filed. It is at this stage, the petitioners came up under Section 482 Cr.P.C. to quash the protest complaint. It is a case of collection of huge amount under the guise of shares by canvassing prospective depositors and in one or two occasions dividends were released. The allegation is that all these done with the dishonest intention to gain unlawful enrichment by causing unlawful loss. The conclusion arrived at by the investigating officer under Section 173(2) Cr.P.C. by filing a refer report that the dispute is of civil nature prima facie appears to be not sustainable. When
the transaction is not transparent and without any statutory authority intended to cause unlawful loss to various depositors and canvassed deposits under the guise of shares by constituting a limited company by the accused themselves, it would prima facie reveal the deception played on the defacto complainant and others. The conclusion arrived at by the investigation under Section 173(2) Cr.P.C. without going into the question of transparency of the business done and constitution of a limited company with the intention to wriggle out of personal liability by the accused prima facie
## **Crl.MC.No.437 OF 2019 8**
appears to be defective. The creation of a limited company by the accused themselves, according to the defacto complainant is an attempt to wriggle out of the personal liability and it was used as yet another
device of deception played on the defacto complainant. The submission of refer report under Section 173(2)Cr.P.C. treating the dispute as of civil nature is not a valid ground of attack as against a protest
complaint. Mere existence of civil liability will not itself take away the criminal liability arising out of the transaction. So the matter would not come under any of the limbs of Section 482 Cr.P.C.
7. Whether accused No. 4 and 5 would be
vicariously liable to the act of accused No. 1 to 3 is
a question to be adjudicated after evidence and it may be a defence available to them. But that may not be a ground to exercise the inherent power under Section 482 Cr.P.C.
Crl.M.C. is dismissed accordingly.
## **Sd/-**
## **P.SOMARAJAN**
sv
## **JUDGE**
**Crl.MC.No.437 OF 2019 9**
## **APPENDIX**
## **PETITIONER'S/S EXHIBITS:**
**ANNEXURE A1**
**THE CERTIFIED COPY OF THE SWORN STATEMENT IN C.M.P.NO.3126 OF 2015 IN CRIME NO.306 OF 2015 DATED 13.2.2017.**
**ANNEXURE A2 THE CERTIFIED COPY OF THE PROTEST COMPLAINT IN C.C.NO.166 OF 2017 ON THE FILE OF THE CHIEF JUDICIAL MAGISTRATE'S COURT,ERNAKULAM FILED BY THE 2ND RESPONDENT.**
**ANNEXURE A3**
**THE TRUE COPY OF THE SUMMONS ISSUED TO THE 2ND PETITIONER DIRECTING APPEARANCE ON 01.12.2017.**
/TRUE COPY/
Sd/-
P.S. TO JUDGE
