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M. Aramugham vs The State Of Kerala on 25 February, 2020

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

THE HONOURABLE MR. JUSTICE ASHOK MENON

TUESDAY, THE 25TH DAY OF FEBRUARY 2020 / 6TH PHALGUNA, 1941

Crl.MC.No.3605 OF 2018

CRIME NO.537/2018 OF Palarivattom Police Station , Ernakulam
PETITIONER/ACCUSED:
M. ARAMUGHAM, S/O.A.MARUTHA MUTHU, 2 4,
KAMAYA SAMY STREET, BODINAYAKANUR, TAMIL NADU.

BY ADVS.
SRI.BABU S. NAIR
SMT.PRIYADA R MENON
SRI.P.A.RAJESH
SMT.SMITHA BABU
SMT.SHAMSEERA. C.ASHRAF

RESPONDENTS/STATE COMPLAINANT:
1 THE STATE OF KERALA, REPRESENTED BY THE PUBLIC
PROSECUTOR,HIGH COURT OF KERALA, ERNAKULAM,
KOCHI, PIN-682 031 – FOR THE SUB INSPECTOR OF
POLICE, PALARIVATTOM POLICE STATION, ERNAKULAM
DISTRICT, PIN – 682 025.
2 SURESH KUMAR, MARKETING MANAGER, SPICES BOARD,
SUGANDHA BHAVAN, N.H.BYE PASS, PALARIVATTOM,
KOCHI, ERNAKULAM DISTRICT, PIN – 682 025.

R1 BY SRI.SURESH BABU THOMAS K., ADDL.DIRECTOR
GENERAL OF PROSECUTION
R2 BY ADV. SRI.K.K.DHEERENDRAKRISHNAN
R2 BY ADV. SRI.D.FEROZE
R2 BY ADV. SRI.S.RAJEEV
R2 BY ADV. SRI.V.VINAY

OTHER PRESENT:
SRI HRITHWIK C.S(SR) -P P

THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
15.01.2020, THE COURT ON 25.02.2020 PASSED THE FOLLOWING:
Crl.MC 3605/2018

2

O R D E R

[Dated this the 25th day of February, 2020]
Petition under Section 482 Cr.PC.

Petitioner is the Managing Director of
M/s.Cardamom Growersforever Pvt. Ltd. (‘the

company’, for short), who is arraigned as the

second accused along with the Company as the first

accused in Crime No.537/2018 of Palarivattom Police

Station for offences allegedly punishable under

Sections 406, 420, 465, 468 and 471 read with

Section 34 IPC.

2. The facts of the prosecution case as

mentioned in Annexure-E FIR in brief are thus:

M/s Cardamom Growers Federation (‘the firm’, for

short), a firm of which the petitioner was a

partner, holding a cardamom auctioneer licence

issued by the Spices Board (‘Board’, for short) in

the name of the firm, registered a new company, M/s

Cardamom Growersforever Pvt. Ltd., before the
Crl.MC 3605/2018

3

Registrar of Companies (‘RoC’, for short) with the

petitioner as the Managing Director, and in

furtherance of common intention with others

produced a forged Memorandum of Association (‘MoA’,

for short) of the aforesaid Company and submitted

it before the Palarivattom office of the Board,

falsely adding a clause that the Company is the

successor of the firm, and dishonestly induced the

Board to permit the Company to continue using the

cardamom auctioneer licence obtained in the name of

the firm for the years 2014-2017 thereby deprived

the Board of a licence fee of Rs.50,000/- essential

to be remitted for the purpose of obtaining a fresh

licence and illegally participated in the cardamom

auction using the licence obtained in the name of

the firm, and earned a sum of Rs.36 lakhs.

3. The petitioner would contend that the

Company was incorporated with the intention to take

over the entire business of the partnership firm
Crl.MC 3605/2018

4

and therefore, a request was made to the Board to

transfer the licence obtained in the name of the

firm to the Company, which is the successor of the

firm in every aspect, and in consequence to that,

the Board issued a new auctioneer licence in the

name of the Company. Consequent to the auction, the

petitioner received a show cause notice on

11.04.2018 at Annexure-B from the Board stating

that on verification of the documents produced

along with the request made by the petitioner for

transfer of licence of the firm to the Company, it

was noticed that some changes have been effected to

the first and last pages of the MoA produced before

the Board. The MoA that was produced before the

RoC, did not contain the recital that the main

object of the Company was to succeed to the

business of the firm Cardamom Growers Federation. A

recital was fraudulently added to the MoA that was

produced before the Board, with the intention to

deceive. Hence, the petitioner was asked to show
Crl.MC 3605/2018

5

cause, why action should not be taken against him

for cancellation of the Auctioneer licence. The

petitioner approached the Board in person and

explained the circumstances under which the Company

was formed and also apprised them that due to an

inadvertent omission at the time of uploading the

documents on-line for the registration of the

Company, an unamended version of the MoA was

attached to the application instead of the amended

MoA which had the clause stating that the object of

forming the Company was to take over the business

of the firm, M/s.Cardamom Growers Federation. It

is explained by the petitioner that it was only an

inadvertent error which occurred on the part of the

professional engaged by the Company while uploading

the documents along with the changes brought about

to the firm and that there were no intentional

misleading by the petitioner representing the

Company.

Crl.MC 3605/2018

6

4. Annexure-A is copy of the notification

containing the Cardamom (Licencing and Marketing)

Amendment Rules, 2014 which had amended the

Cardamom (Lincencing and Marketing) Rules, 1987.

The petitioner points out that there is no

prohibition in transferring the licence under Rule

10(1)(n) of the Amended Rules, which states that on

transfer of the licence, the transferor must

intimate about such transfer to the Board and

obtain a fresh licence in accordance with the

provisions of the Rules. That is what the

petitioner and the Company have done.

5. Consequent to the issuance of the show

cause notice, the Board prevented the petitioner

from participating in the auction of cardamom and

the petitioner approached the Madurai Bench of the

Madras High Court and obtained an interim

injunction against such prevention of the

petitioner from participating in the auction. The
Crl.MC 3605/2018

7

said interim order obtained on 27.4.2018 in WP(MD)

No.9826/2018 is at Annexure-C. The petitioner also

gave a detailed reply to Annexure-B show cause

notice which is at Annexure-D. Despite the interim

order at Annexure-C, the petitioner was not

permitted to participate in the auction stating

that the Board officials did not receive the order

of the Madras High Court. The petitioner moved the

Madurai Bench of the Madras High Court by filing a

contempt application against the officials of the

Board. It is in retaliation of that action taken

by the petitioner that the criminal complaint was

lodged on 17.4.2018 by the Marketing Manager of the

Board, which was taken on file of the Palarivattom

Police Station as Crime No.537/2018 and the FIR is

at Annexure-E.

6. The petitioner would contend that none of

the offences as alleged in Annexure-E would be

attracted based on the allegations made in the
Crl.MC 3605/2018

8

complaint. It is also stated that the inadvertent

error by the petitioner while uploading the

documents along with the application for

registering the Company, and informing the Board of

about the transfer, has not resulted in any

wrongful loss to the Board or unlawful gain to the

Company. Under the circumstances, it is prayed

that the entire proceedings in the crime registered

against the petitioner be quashed invoking the

powers under Section 482 Cr.PC.

7. The learned counsel appearing for the

petitioner submits that though an inadvertent

mistake had occurred while uploading the MoA,

immediately the said mistake was corrected and

intimated to the RoC.

8. The second respondent filed a counter

statement contending that the petitioner was

holding Annexure-R2(a) licence having validity up

to 31.08.2017, and extended till 30.06.2018. while
Crl.MC 3605/2018

9

so, the Board received Annexure-R2(b) letter dated

25.09.2017 from the petitioner representing the

firm innocuously seeking change of the name of the

firm to a company with effect from 01.10.2017. The

Board issued a new certificate on 01.12.2017 in the

name of the company, believing that it was a just

change of name, as stated. The Board received a

complaint from a third party revealing the deceit.

During the course of processing the complaint, it

was noticed that not just the name, but entire

constitution was changed. It amounted to a transfer

of the business by the firm to the newly

constituted company as contemplated under Rule 10

(1)(n). The company was not a successor of the firm

as alleged. The MoA submitted to the Board is at

Annexure-R2(d), while the one filed before the RoC

is at Annexure-R2(e). They are entirely different

on the objects of the company. That would reveal

that the document produced before the Board was

fabricated to circumvent the issuance of a new
Crl.MC 3605/2018

10

licence. Hence the complaint Annexure-R2(f) and the

consequent FIR at Annexure-R2(g). The offences as

alleged are clearly made out, and there is no

ground to quash the FIR.

9. Heard the learned counsel appearing for

the petitioner, Sri.Babu S. Nair and the learned

Additional Director General of Prosecutions,

Sri.Suresh Babu Thomas K.

10. To attract an offence punishable under

Section 406 IPC, it must be alleged and proved by

the prosecution that there was a criminal breach of

trust with regard to property that was entrusted to

the accused as defined under Section 405 IPC. Even

going by the complaint, the ingredients made

necessary to attract Sections 406 IPC are not made

out as there was no entrustment of property by the

complainant to the petitioner which was

misappropriated or converted by the accused to his

own use nor was there any alienation in breach of
Crl.MC 3605/2018

11

trust.

11. Likewise, to attract an offence punishable

under section 420 IPC, there must be dishonest

inducement made by the petitioner to the

complainant to deliver any property or to make,

alter or destroy the whole or any part of a

valuable security, or anything which is signed or

sealed, and which is capable of being converted

into a valuable security.

12. That apart, the complainant has also

alleged forgery and making of a false document as

defined under Sections 463 and 464 IPC. The

allegedly inadvertent mistake on the part of the

Company in uploading the MoA cannot be described as

an act of forgery or an act of making of a false

document, submits Sri. Babu S. Nair. The

contention of the petitioner is that officials of

the Board have taken action against the petitioner

to wreak vengeance for his approaching the Madras
Crl.MC 3605/2018

12

High Court with the contempt application. Filing

of such a complaint against the petitioner is only

an abuse of process of law.

13. The learned counsel for the petitioner,

Sri.Babu S.Nair, relies on two decisions in support

of his contentions and arguments. In Mathew v.

George [1989(1) KLT 470], K.T.Thomas J., it is

observed thus:

“7. There can possibly be no contention that
the questioned document in this case would ever
fall within the purview of the second and third
divisions. Hence, the only question to be
considered is whether the first division in
Section 464 would apply to exhibit P-4. In order
to constitute a false document as per the first
division, the document must be purported to have
been signed, made or sealed by a person who did
not in fact do it. The mere fact that a document
contains some false recitals or untrue statements
would not make it a false document within the
meaning of the section. For example, a plaint, or
a written statement, or an application may very
often contain averments which may be untrue. Such
untrue statements in pleadings or applications
would not be sufficient to make them forged
Crl.MC 3605/2018

13

documents. Similarly, the affidavits, though
supposed to contain only true statements, may
contain untrue statements. The deponents in such
cases may perhaps, be liable for other offences,
but not the offence of forgery.”

The argument of the learned counsel is that merely

making a false statement in a document would not

come within the purview of Section 464 IPC to

attract an offence of forgery. In the instant

case, the accused had allegedly uploaded a MoA

without mentioning that the main object of the

Company was to take over the business of the

erstwhile firm. The MoA was not amended at that

point in time and soon thereafter the actual

amended MoA was uploaded for the RoC to register

it.

14. The submission is that mere assertion of a

false claim in a document will not by itself

constitute the document false, since there is no

intention of causing a belief that it was executed

with ulterior motives or was fictitious. In order
Crl.MC 3605/2018

14

to commit forgery, the document must contain a

recital of certain facts which were apparently

false and untrue. In the instant case, no such

recital is made in the earlier MoA uploaded

mistakenly and inadvertently by the petitioner,

argues Sri.Babu S. Nair, the learned counsel for

the petitioner.

15. The learned counsel also relies on a

recent decision of this Court in Manmohan Shenoy v.

State of Kerala [2019(3) KLT 939], wherein it is
observed thus:

“13. The section defines a false document by
descriptive enumeration of the processes by which it
may be rendered false. To bring the case within clause
(1) of Section 464 of the IPC, it is necessary to
establish that the accused intended to induce a belief
that a document was made, signed, sealed or executed
by the authority of a person who did not make, sign,
seal or execute it or that it was made signed or
sealed or executed at a time when it was not so done.

In other words, the document must purport to have been
made, signed or sealed by a person who did not in fact
make it. It is the essence of making a false document
that the signature, seal or date shown on it should be
Crl.MC 3605/2018

15

false. The mere making of a false statement in a
document would not come within the ambit of Section
464 of the IPC and would not amount to forgery.”

16. The indication by the prosecution in the

FIR is that the petitioner had dishonestly or

fraudulently made an amended MoA with the intention

of causing it to be believed that the document

which was originally made was subsequently altered

changing the objects of the Company as to become

the successor of the erstwhile firm.

17. Per contra, the learned Additional

Director General of Prosecutions (ADGP) argues that

the police authorites are bound to register an FIR

upon receiving an information relating to

commission of a cognizable offence because

registration of an FIR is mandatory under Section

154 Cr.PC. If information discloses commission of

a cognizable offence, there is no preliminary

enquiry permissible in such a situation, argues the

learned ADGP. The learned ADGP relies on the two
Crl.MC 3605/2018

16

decisions of the Honourable Supreme Court in Lalita

Kumari v. Government of U.P. and Others [2013 (4)
KHC 552] and in State of Haryana Others v.
Ch.Bhajan Lal and Others [1992 KHC 600] in support
of his arguments. In Ch.Bhajan Lal (supra), it is

observed that when allegations in the FIR or the

complaint clearly constitute a cognizable offence

justifying registration of a case and an

investigation thereon, there is no reason to

exercise the extraordinary or inherent powers of

the High Court to quash the FIR. The Hon’ble

Supreme Court has extracted and reproduced category

of cases by way of registration, wherein powers

under Section 482 Cr.PC could be invoked to

interfere with the investigation of the case. They

are enumerated in Ch.Bhajan Lal (supra) as thus:

“1.Where the allegations made in the First
Information Report or the complaint, even if they
are taken at their face value and accepted in
their entirety do not prima facie constitute any
offence or make out a case against the accused.

Crl.MC 3605/2018

17

2. Where the allegations in the First Information
Report and other materials, if any, accompanying
the F.I.R. do not disclose a cognizable offence,
justifying an investigation by police officers
under Section 156(1) of the Code except under an
order of a Magistrate within the purview of
Section 155(2) of the Code.

3. Where the uncontroverted allegations made in
the FIR or ‘complaint and the evidence collected
in support of the same do not disclose the
commission of any offence and make out a case
against the accused.

4. Where the allegations in the FIR do not
constitute a cognizable offence but constitute
only a non-cognizable offence, no investigation
is permitted by a police officer without an order
of a Magistrate as contemplated under Section
155(2) of the Code.

5. Where the allegations made in the FIR or
complaint are so absurd and inherently improbable
on the basis of which no prudent person can ever
reach a just conclusion that there is sufficient
ground for proceeding against the accused.

6. Where there is an express legal bar engrafted
in any of the provisions of the Code or the
concerned Act (under which a criminal proceeding
is instituted) to the institution and continuance
of the proceedings and/or where there is a
Crl.MC 3605/2018

18

specific provision in the Code or the concerned
Act, providing efficacious redress for the
grievance of the aggrieved party.

7. Where a criminal proceeding is manifestly
attended with mala fide and/or where the
proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the
accused and with a view to spite him due to
private and personal grudge.”

18. The learned ADGP argues that the

reasonableness or credibility of the information

received under Section 154 Cr.PC is not a condition

precedent for registration of a case. Relying on

the decision of Lalita Kumari (supra), the learned

ADGP would argue that Section 154(1) Cr.PC uses the

word “shall” and therefore it is mandatory for the

Police to register FIR and investigate, unless the

complaint itself is so absurd that the offence is

not attracted. A preliminary enquiry is not

contemplated before registering of an FIR and

therefore the mere allegation about the attracting

of the offence alone would suffice to start an
Crl.MC 3605/2018

19

investigation into the matter. The learned ADGP

submits that in Mathew (supra), the acquittal of

the accused was challenged and the court was

observing into the veracity of the allegations made

resulting in confirming the acquittal, and

therefore that decision would not apply to the

instant case.

19. The petitioner had allegedly made a

request to change the name of the Company from

Cardamom Growers Federation to Cardamom

Growersforever Pvt. Ltd. together with certain

documents which include the certificate of

auctioneer licence, the Board resolution and

appointment of the Managing Director, PAN, TAN,

MoA, list of Directors and GST. The petitioner

contends that the MoA produced before the Board was

the actual MoA. The one uploaded along with the

application for registration of the company was an

unamended MoA. Subsequently, the amended MoA was
Crl.MC 3605/2018

20

also uploaded.

20. The amended Rule 10(1)(n) of the Rules

reads thus:

“On transfer of his business to another person,
the auctioneer shall intimate the same to the
Board and surrender his licence and the
transferee shall obtain a fresh licence in
accordance with the provisions of these Rules.”

A reading of the aforesaid amended Rule would

indicate that there is no embargo on the transfer

of the business licence by the auctioneer. What is

required is only an intimation to the Board. The

contention of the Board whether transformation of

the firm into a Company is a transfer of business

requiring intimation and whether a fresh licence

has to be obtained under the provisions of the

Rules in accordance with the seniority and the

waiting period etc; are all matters to be

considered by a court of competent jurisdiction.

Whether the mere mentioning of the petitioner
Crl.MC 3605/2018

21

regarding the objects of a Company would amount to

forgery is the only question that arises for

consideration before this Court. I am not going to

find whether the conversion of the firm into a

Company would require a fresh application for

obtaining licence and whether the Company would

have to stand in the queue as required under the

Rules are all matters to be considered by a

competent forum. The only question that arises

here is whether prima facie it would amount to
forgery, misappropriation or cheating on the part

of the Company to have uploaded two MoAs, the first

one without mentioning about the taking over the

business by the Company as the successor of the

firm, and the subsequent, uploading another MoA

indicating the said purpose as the main objective

of the Company. Going by the decisions relied upon

by both sides, I have no hesitation to find that an

offence under Section 406 or 420 or 464 IPC for

forgery, misappropriation and cheating may not
Crl.MC 3605/2018

22

arise in the instant case even if the allegations

made in the complaint and in the FIR are to be

accepted. Under the circumstances, this Court is

competent to interfere in the matter and quash the

FIR.

In the result, the Criminal MC is allowed and

the entire proceedings as against the petitioner in

Crime No.537/2018 of Palarivattom Police Station

shall stand quashed under Section 482 Cr.PC.

Sd/-

ASHOK MENON

JUDGE

jg
Crl.MC 3605/2018

23

APPENDIX
PETITIONER’S/S EXHIBITS:

ANNEXURE A: TRUE COPY OF THE CARDAMOM (LICENSING
AND MARKETING) AMENDMENT RULES, 2014.
ANNEXURE B: TRUE COPY OF THE SHOW CAUSE NOTICE
ISSUED TO THE PETITIONER BY THE SPICES
BOARD DATED 11/04/2018.

ANNEXURE C: TRUE COPY OF THE INTERIM ORDER PASSED
BY THE MADURAI BENCH OF MADRAS HIGH
COURT DATED, 27/04/2018 IN WP(MD)
NO.9826/2018.

ANNEXURE D: TRUE COPY OF THE REPLY GIVEN BY THE
PETITIONER BEFORE THE SECRETARY, SPICES
BOARD DATED, 04/05/2018.

ANNEXURE E: TRUE COPY OF THE F.I.R. IN CRIME
NO.537/2018 OF THE PALARIVATTOM POLICE
STATION DATED, 17/04/2018.

RESPONDENT’S EXHIBITS
ANNEXURE R2(A): TRUE COPY OF THE LICENCE
NO.AU/CS/C580/010/2015 DATED 1.12.2017
ANNEXURE R2(B): TRUE COPY OF THE LETTER DATED 25.9.2017.
ANNEXURE R2(C): TRUE COPY OF THE LETTER DATED 3.4.2018
ALONG WITH THE ENCLOSURES.

ANNEXURE R2(D): TRUE COPY OF THE MEMORANDUM OF
ASSOCIATION SUBMITTED BY THE COMPANY
ALONG WITH REQUEST FOR CHANGE OF NAME.
Crl.MC 3605/2018

24

ANNEXURE R2(E): TRUE COPY OF THE MEMORANDUM OF
ASSOCIATION OBTAINED BY THE PETITIONER
FROM THE REGISTRAR OF COMPANIES.

ANNEXURE R2(F): TRUE COPY OF THE COMPLAINT FILED BY
THIS RESPONDENT BEFORE THE STATION
HOUSE OFFICER, PALARIVATTOM POLICE
STATION.

ANNEXURE R2(g) TRUE COPY OF THE FIR IN CRIME
NO.537/2018 OF PALARIVATTOM POLICE
STATION.

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