High Court of KeralaSingle Judge2019-11-11Petition dismissed

O.P. Achuthankutty and others v. The State of Kerala and ACP Premanandan

Case / Petition Number:Crl.M.C.No.2922 of 2019

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: R. Narayana Pisharadi
Judgment Date: 2019-11-11
Court Decision / Holding: Consequently, the petition is dismissed. It is made clear that the merit of the allegations has not been considered in this order; the decision concerns only whether the proceedings can be terminated on the basis of the settlement between the parties.
Final Disposition: Petition dismissed

Parties to the Case

Appellants / Petitioners

O.P. Achuthankutty
O.P. Babu
Unnikrishnen M.U
A.S. Dharman
M.K. Venugopal
V.K. Surendran
Sivaran K.R.
Sushama

Respondents

The State of Kerala represented by the Station House Officer, Thrissur East Police Station through the Public Prosecutor, High Court of Kerala
ACP Premanandan S/O. Chozhikutty, C-5 Alungal House, Kalindi Residency, Near North Bus Stand, Thrissur

Legal Representation & Advocates

Counsels for Petitioners

• C. Unnikrishnan (Kollam)

Counsels for Respondents

• S. Manu
• SMT V. Sreeja (PP)

Case Synopsis & Summary

This is a Kerala High Court criminal miscellaneous case under section 482 CrPC seeking to quash FIR Crime No. 799/2018 of Thrissur East Police Station. The petitioners, a group of eight individuals including seven directors of Punarjani Securities Ltd., Aswini Hospital Ltd., and Aswini Health Care Ltd., along with the chief accountant of Aswini Hospital, challenge the prosecution on the ground that the matter has been settled with the second respondent, who is a shareholder and de facto complainant. The crux of the allegations is a conspiracy to forge documents and misappropriate a substantial sum (Rs. 5,57,99,135) from the companies and use the funds for personal purposes. The petition asserts that a mediated settlement with the de facto complainant should warrant quashing the FIR and halting the investigation. The court, however, notes that the investigation is ongoing and that the dispute involves the interests of all shareholders, not merely one party. It emphasizes that the inherent power under Section 482 CrPC must be exercised sparingly, especially in economic offences where society’s interest is at stake; a settlement between some parties cannot justify termination of proceedings at this stage. The judge ultimately dismisses the petition, clarifying that the merit of the allegations has not been adjudicated and the order addresses only the question of quashing on the basis of settlement.

Provisions of Law Cited

Section 406 IPCSection 420 IPCSection 465 IPCSection 468 IPCSection 474 IPCSection 477A IPCSection 34 IPCSection 120B IPCSection 482 CrPC

Legal Doctrines & Maxims

Inherent power of the High Court under Section 482 CrPC should be sparingly used.
In economic offences, the interest of society is involved; prosecution should not be terminated at an early stage solely on settlement.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners submit that a mediated settlement with the second respondent, who filed the complaint, should enable quashing of the FIR under the court’s inherent jurisdiction. They contend the substantial misappropriation allegation affects shareholders broadly, not just the second respondent, and continued prosecution would amount to harassment and unwarranted interference in corporate affairs given the settlement.

Contentions of Respondents

The respondents oppose quashing, arguing that the alleged misappropriation involves a huge sum (Rs. 5,57,99,135) and concerns corporate governance and investor interests. They contend the matter requires full investigation, and settlement between the complainant and some accused cannot bar the state from pursuing the case where public and shareholder interests are at stake. They invoke the principle that economic offences warrant cautious use of 482 CrPC and rely on the societal interest in prosecution, as discussed in CBI v. Maninder Singh.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Central Bureau of Investigation v. Maninder Singh	AIR 2015 SC 3657	Positive	Cited to emphasize that economic offences involve broader societal interests and that settlements alone should not automatically terminate prosecutions; the court should exercise restraint and consider public interest.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI** **MONDAY, THE 11TH DAY OF NOVEMBER 2019 / 20TH KARTHIKA, 1941** ## **Crl.MC.No.2922 OF 2019(E)** **FOR QUASHING FIR IN CRIME NO.799/2018 OF East Police Station , Thrissur ON HE FILE OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT, THRISSUR** ## **PETITIONERS/ACCUSED:** - **1 O.P.ACHUTHANKUTTY AGED 64 YEARS S/O. GOVINDA MENON, XV/183. SHANTHI, PRETH LANE, GURUVAYOOR POST, THRISSUR - 680 103** - **2 O.P. BABU, AGED 55 YEARS S/O. GOVINDA MENON, NARAYANEEYAM, LAKSHMI ENCLAVE, KIZHAKUMPATTUKARA, THRISSUR - 680 005** - **3 UNNIKRISHNEN M.U AGED 55 YEARS S/O. UNNERI, MELEPURACKAL HOUSE, GREEN PARK AVENUE NO. 31, THIRUVAMPADY POST, THRISSUR - 680 022** - **4 A.S.DHARMAN AGED 53 YEARS S/O. SANKARANARAYANAN, ARUKETTY HOUSE, ENGANDIYUR P.O., THRISSUR** **5 M.K. VENUGOPAL AGED 66 YEARS S/O. KUNJAN, ALUNGAL HOUSE, MANATHALA BABY ROAD, CHAVAKKADU P.O., THRISSUR** Crl.M.C.No.2922/2019 2 - **6 V.K. SURENDRAN VADKKUMPATTU HOUSE,CHITTILAPPALLY P.O., PURANATTUKARA ROAD, PERAMANGALAM, THRISSUR** - **7 SIVARAJAN K.R. AGED 59 YEARS S/O. RAMAKUTTY, ARUKETTY HOUSE, KUNDALIYOOR P.O., THRISSUR - 680 656** - **8 SUSHAMA** **AGED 64 YEARS** **CHIEF ACCOUNTANT, ASWINI HOSPITAL, KARUNAKARAN NAMBIAR RAOD, THRISSUR** ## **BY ADV. SRI.C.UNNIKRISHNAN (KOLLAM)** ## **RESPONDENTS/DE FACTO COMPLAINANT & STATE:** - **1 THE STATE OF KERALA REPRESENTED BY STATION HOUSE OFFICER, THRISSUR EAST POLICE STATION THROUGH THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA** - **2 A.C.PREMANANDAN S/O. CHOZHIKUTTY, C-5 ALUNGAL HOUSE, KALINDHI RESIDENCY, NEAR NORTH BUS STAND, THRISSUR** **R2 BY ADV. S.MANU SMT V SREEJA-PP** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 07.11.2019, THE COURT ON 11.11.2019 PASSED THE FOLLOWING:** Crl.M.C.No.2922/2019 3 ## **R.NARAYANA PISHARADI, J** ************************ Crl.M.C.No.2922 of 2019 -----------------------------------------------Dated this the 11[th] day of November, 2019 ## **O R D E R** This is a petition filed under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'the Code') for quashing the proceedings against the petitioners in the case registered as Crime No.799/2018 of Thrissur East police station. 2. The offences alleged against the petitioners are punishable under Sections 406, 420, 465, 468, 474 and 477A read with 34 I.P.C and 120B I.P.C. The petitioners 1 to 7 are the directors of the companies by name Punarjani Securities Limited, Aswini Hospital Limited and Aswini Health Care Limited. The 8[th] petitioner is said to be the Chief Accountant of Aswini Hospital at Thrissur. The case against the petitioners was instituted on the basis of the complaint made by the second respondent, who is a shareholder of the aforesaid companies. Crl.M.C.No.2922/2019 4 3. The crux of the allegations against the accused in the case is that, pursuant to a conspiracy hatched by them, they have forged documents and misappropriated a total amount of Rs.5,57,99,135/- which belonged to the companies, of which they were the directors, and that they used the money for their personal purposes. 4. The prayer for quashing Annexur-A1 first information report in the case is made on the ground that the matter has been settled between the petitioners and the second respondent/de facto complainant. 5. Heard learned counsel for the petitioners and the second respondent and also the learned Public Prosecutor. 6. I have perused the affidavit filed by the second respondent, who has entered appearance through counsel. It is stated in the affidavit filed by him that the issue has been completely settled between him and the petitioners through mediators and that he has no intention to continue the prosecution of the case and also that he has no objection to quash the proceedings in the case. Crl.M.C.No.2922/2019 5 7. If the allegations raised against the petitioners in the complaint filed by the second respondent are true, it would mean that the petitioners have misappropriated huge amount which belonged to the companies of which they are the directors and they have cheated the shareholders. The investigation of the case is in progress. Whether the allegations in the complaint filed by the second respondent are true or not could be found out only on completing the investigation. At this stage of the case, merely on the basis of the settlement of the matter between the petitioners and the second respondent, who is only one of the shareholders of the companies, the proceedings against the petitioners cannot be quashed. It is significant that it is not a matter which involves the interest of the second respondent alone. It is a matter which involves the interest of all the shareholders of the companies of which petitioners 1 to 7 are the directors. 8. The inherent power of this Court under Section 482 of the Code should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or there Crl.M.C.No.2922/2019 6 would be abuse of the process of the Court if such power is not exercised, the Court may quash the proceedings. In economic offences, interest of the society is also involved. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved (See **Central Bureau of Investigation v. Manider Singh : AIR 2015 SC 3657** ). 9. In cases of financial fraud involving huge amount of money, this Court should be slow to terminate the criminal proceedings at an early stage on the basis of the settlement between the accused and the person who has given information regarding the offences. In these circumstances, I find that this is not a fit case in which the power of this Court under Section 482 of the Code can be exercised to quash the proceedings against the petitioners on the basis of any settlement or compromise. 10. Consequently, the petition is dismissed. It is made clear that, the merit of the allegations raised against the petitioners in the complaint filed by the second respondent, has not been considered in this order and what is considered is only Crl.M.C.No.2922/2019 7 whether the proceedings initiated against the petitioners could be terminated on the basis of the settlement between the parties. (sd/-) **R.NARAYANA PISHARADI, JUDGE** jsr/08/11/2019 Crl.M.C.No.2922/2019 8 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **ANNEXURE A1 TRUE COPY OF THE FIR IN CRIME NO.799/2018 OF THRISSUR EAST POLICE ANNEXURE A2 TRUE COPY OF THE AFFIDAVIT SWORN BY THE DEFACTO COMPLAINANT /2ND RESPONDENT** RESPONDENTS' EXHIBITS : NIL TRUE COPY PS TO JUDGE