AI Structured Summary
Not yet generated for this judgment
Judgment
P. Sathasivam, J.—Tamilnad Mercantile Bank Limited, Tuticorin and their Chairman S. Krishnamurthy, questioning the filing of Civil Suit in
O.S.No.419 of 2001 pending on the file of the Principal District Munsif, Tuticorin, have preferred C.R.P.No. 4203/2001 under Article 227 of the
Constitution of India.
In C.R.P.No. 11 of 2002, S. Krishnamurthy, Chairman, Tamilnad Mercantile Bank Limited challenges the filing of complaint in unnumbered
C.C.No. /2001 on the file of the Judicial Magistrate, No.II, Tuticorin and prays for quashing of the same.
The case of the petitioner in C.R.P.No. 4203/2001 is as follows:-
The first petitioner is a banking company incorporated under the provisions of the Companies Act, 1956. The company is governed in its
functioning by the Banking Regulation Act, 1949 and is a Board Managed Banking Company. The first respondent herein filed the said suit
(O.S.No. 419/2001) on the file of the Principal District Munsif, Thoothukkudi to declare the withdrawal of the monthly salary and enjoyment of
perks by the 2nd defendant in the absence of ratification by the Annual General Meeting of the 1st defendant bank is illegal and consequently to
restrain the 1st defendant by an order of permanent injunction from imposing the salary and perks to the 2nd defendant, and to order the 6th
defendant by an order of mandatory injunction not to grant extension of time for convening the Annual General Meeting. The main allegations of the
first respondent in the above suit is that the 73rd Annual General Meeting of the first petitioner bank took place on 1-7-97 and thereafter no
meeting was convened. The second petitioner is the cause for non-holding of Annual General Meeting and further drawing higher salary without
ratification/approval of the shareholders in the Annual General Meeting, hence suit is filed for the said relief. The first respondent and its Secretary
are habitual in filing civil suit and criminal complaints against the petitioners and the Directors/Officers of first petitioner. The allegations, averments
and the alleged cause of action in the said suit (O.S.419/2001) is verbatim of earlier suits filed by the first respondent and its Secretary. Those suits
are C.O.S.No. 2/2000 on the file of District Judge, Thoothukkudi, filed by the first respondent and the same was subsequently withdrawn;
C.O.S.No. 24/1998 the file of the District Munsif, Thoothukkudi, filed by the Secretary of the first respondent in his individual capacity and was
subsequently withdrawn as not pressed; and C.C.No. 543/1998 on the file of the Judicial Magistrate-II, Thoothukkudi filed by the Secretary of
the first respondent in his individual capacity for the offences under Sections 420, 480 and 406 I.P.C. read with Section 168 of Indian Companies
Act, on the same set of allegations and was subsequently compounded for the reasons as ''settled our of court''.
The second petitioner who is Chairman of the first petitioner bank has been appointed and approved by the Reserve Bank of India under the
provisions of 35B of the Banking Regulation Act, 1949. As per the said Regulation, no amendment of any provision relating to the remuneration of
the Chairman of the bank whether the provision is contained in the Company''s Memorandum or Articles of Association shall have effect unless
approved by the Reserve Bank of India in terms of section 35B(2) and 35B(2a) of the said Act. In view of the legal position, no ratification is
needed in the Annual General Meeting. Frivolous and vexatious suits, suits on the same set of facts filed by same person or at the instigation by
some vested interest group and the suits without valid cause of action were filed against the first petitioner, its Chairman, officers, abusing the
process of the Courts. In such circumstances, the first petitioner bank is put to much hardship in its administration and smooth functioning. If the
said situation is allowed to persist it will hamper the activities and the effective functioning of the first petitioner bank. The shareholders at large, the
employees, constituents of the bank and the public interest will be seriously prejudiced; hence the petitioners are constrained to approach this
Court for appropriate direction under Article 227 of the Constitution of India.
Notice to respondents 2 to 9 are given up by the counsel for petitioners. The only contesting respondent, namely, the first respondent, though
duly served with notice, has not chosen to contest the revision by engaging a counsel.
In C.R.P.No.11/2002, it is stated that the respondent filed a criminal complaint in Crl.M.P.No.7388 of 2001 in unnumbered C.C.No. of 2001
before the Judicial Magistrate-No.II, Thoothukkudi for the offence alleged to have been committed punishable under Sections 420, 418 and 406
of I.P.C. read with Section 168 of the Companies Act. The allegation of the respondent in the complaint is that the petitioner herein who is the
Chairman of the Tamilnad Mercantile Bank Limited (hereinafter referred as ""TMB"") did not take any steps to convene the Annual general Meeting
of TMB and is not convening the same which will amount to an offence punishable u/s 168 of the Companies Act and it will cause damage to the
bank and the shareholders. The respondent further alleged that the petitioner herein is drawing salary which is higher and compared with the
previous chairman of the bank and has been making wrongful gains by drawing bata, allowances, etc. during the monthly board and committee
meeting without being approved by the shareholders in the Annual General Meeting of TMB, hence the complaint was filed to harass the petitioner.
The complaint is a clear abuse of process of law. The respondent has no locus standi to file the above complaint and he is not in any way aggrieved
since he is only a minor shareholder holding shares which represents less than 1 per cent of the total shareholding. The complaint itself is exfacie not
maintainable in the absence of the other shareholders who are vested with a right to appoint or remove any Director in the bank; hence the
Revision under Article 227 of the Constitution of India by the petitioner.
The respondent filed a counter affidavit disputing various averments made by the petitioner. Since no impugned order was passed against the
petitioner in Crl.M.P.No. 7388/2001, the petitioner has no locus standi to invoke Article 227 of the Constitution of India. Likewise in the said
Crl.M.P., there is no order or summons to the petitioner till date. Before entering appearance in the lower court the petitioner without any locus
standi has filed this Revision which is quite obvious. Regarding the question to be decided, it is unnecessary to refer the other details furnished in his
counter affidavit.
Mr. A.L. Somayaji, learned senior counsel for the petitioners in both cases, after taking me through various earlier proceedings, orders therein,
would contend that the filing of the present suit in O.S.No. 419/2001 before the Principal District Munsif''s Court, Thoothukudi is a clear case of
abuse of process of Court; accordingly the same is liable to be set aside. Likewise, the present complaint by the respondent in C.R.P.11/2002 is
also not maintainable in view of the order of acquittal of the learned Magistrate u/s 257 Cr.P.C. As stated earlier, the only respondent in
C.R.P.No. 4203/2001 is un-represented. Mr. M. Ravindran, learned senior counsel appearing for the respondent in C.R.P.No. 11/2002, would
contend that in the light of Sections 190, 200, 202, 203, 204 of the Cr.P.C. and considering the fact that the complainant was not examined, and
summons was not issued to the accused, the present revision questioning the same is not maintainable and liable to be dismissed. According to him,
the claim made by the petitioner in C.R.P.11/2002 is premature.
I shall first dispose of C.R.P.No. 4203/2001.
It is the case of the petitioners that in view of dismissal of earlier suits filed at the instance of the shareholders, the present suit namely
O.S.419/2001 on the same cause of action claiming same relief cannot be sustained. In order to substantiate the above claim, learned senior
counsel for the petitioners has brought to my notice the first suit filed by M.P.T. Muthuraj in C.O.S.No.24/98 beofore the District Court, Tuticorin
against Tamilnad Mercantile Bank as first defendant, S. Krishnamurthy as second defendant and Reserve Bank of India as third defendant.
Defendants 1 and 2 are the petitioners in this revision. In that suit the plaintiff M.P.T. Muthuraj prayed for a relief of declaration declaring the
withdrawal of the monthly salary and enjoyment of perks by the second defendant in the absence of ratification by the Annual General Meeting of
the first defendant bank is illegal and consequently to restrain the first defendant by an order of permanent injunction from disbursing the salary and
perks to the second defendant. Pending the suit, the plaintiff filed an application in I.A.No.87 of 98 for recording of a Memo stating that the suit in
C.O.S.No.24/98 and the interim applications may be dismissed as ''not pressed'' without costs. Based on the said Memo, C.S.O.No.24/98 was
dismissed ""as not pressed"". Thereafter, the very same plaintiff, namely, M.P.T. Muthuraj as Secretary of Tamilnad Mercantile Bank Shareholders
welfare Association, has filed C.O.S.No.2/2000 against TMB, its Chairman and Officers of the Reserve Bank of India before the District Court,
Thoothukudi. In that suit, the plaintiff has prayed for a decree and judgment against the defendants declaring the withdrawal of the monthly salary
and enjoyment of perks by the second defendant in the absence of ratification by the Annual General Meeting of the first defendant bank is illegal
and consequently to restrain the first defendant by an order of permanent injunction from disbursing the salary and perks to the second defendant
and for other reliefs. Here again, after some time, the plaintiff filed a Memo dated 21-6-2000 stating that since the plaintiff is not willing to proceed
with the case as the case is based on mistake of fact, the suit may be dismissed as not pressed without costs. By recording the Memo, the learned
Principal District Judge dismissed their suit ""as not pressed"" on 28-6-2000. Before going further, as requested by the learned senior counsel for the
petitioners, I have verified and compared the plaint averments and the reliefs prayed for in both the suits. I am satisfied that the
allegations/averments and the reliefs prayed for are identical in both the suits. I have already referred to the fact that at the instance of the plaintiff,
both the suits were dismissed.
Now I shall consider the third suit viz., O.S.No. 419/2001 on the file of the Prl.District Munsif, Thoothukudi, which is under challenge in this
Civil Revision Petition. This suit was also filed by the very same M.P.T. Muthuraj, Secretary, Tamilnad Mercantile Bank Shareholders Welfare
Association. The defendants were TMB, its Chairman and various officers of Reserve Bank of India. In that suit, the plaintiff prayed for declaration
declaring the withdrawal of the monthly salary and enjoyment of perks by the 2nd defendant in the absence of ratification by the Annual General
Meeting of the first defendant bank is illegal and consequently to restrain the first defendant by an order of permanent injunction from imposing the
salary and perks to the 2nd defendant, and for mandatory injunction not to grant extension of time for convening the Annual general Meeting. Here
also, I have carefully gone through the various plaint averments and the relief prayed for. As rightly argued by Mr. A.L. Somayaji, the very same
plaintiff has filed the third suit claiming the same relief which were already rejected and dismissed by the competent court. I have already referred
to the fact that the averments and allegations in the plaint as well as the relief sought for are identical in all the 3 suits. The same relief has been
prayed for against the very same defendant. Though it is elaborately argued that the plaintiff has no locus standi to seek the relief as he is not in any
way aggrieved since he is only a minor shareholder which represents less than 1 per cent of the total shareholding, I am of the view that in view of
the dismissal of the suits on two occasions without specific relief to file a fresh suit on the same cause of action, the plaintiff should not be permitted
to pursue the present suit, namely, O.S.No.419/2001. Likewise, the learned Senior counsel, by drawing my attention to the various provisions of
the Companies Act and the Reserve Bank of India Guidelines, has highlighted the reason for non-convening of Annual General Meeting, and also
stated that for the very same reasons, the plaintiff should not be permitted to raise the same issue again and again just to harass the defendants and
that in such a circumstance, the plaintiffs are entitled to invoke the jurisdiction of this Court under Article 227 of the Constitution of India. In this
regard it is relevant to refer a decision of S.S. Subramani, J., in Henry, A. and another v. St. Georges Church and others, reported in 1999 3 L.W.
49, wherein the learned Jude has held that when the plaintiff concedes that he has no claim and wanted to put an end to the litigation by endorsing
as ''not pressed'' and did not want any leave of Court for instituting another litigation, he should not be again permitted to file another suit under the
same cause of action. In Kanagaraj, P.S.K. and 3 others v. Kamaraj and another, reported in 1997 3 L.W. 909, the same view was expressed by
the very same learned Judge.
In the light of what is stated above, I accept the contention of the learned senior counsel for the petitioners that plaintiff should not be permitted
to institute such a suit, and if he is permitted, it will only encourage him (plaintiff) to abuse the process of Court. When plaintiff concedes that he has
no claim and wanted to put an end to the litigation and did not want any leave of Court for instituting another litigation, he should not be again
permitted to file another suit under the same cause of action. Accordingly, I hold that the suit, viz., O.S.419/2001 on the file of the Principal District
Munsif, Tuticorin stands struck off the file.
Now I shall consider C.R.P.No. 11/2002. The petitioner, who is Chairman of the Tamilnad Mercantile Bank, has filed this revision questioning
the filing of a complaint by the respondent before the Judicial Magistrate-No.II, Thoothukudi. By pointing out the earlier complaint in C.C.No.
543/98 by M.P.T. Muthuraj and the subsequent filing of a compromise memo, seeking permission of the Court to compound the same u/s 320(2)
Cr.P.C., the learned senior counsel would contend that the present complaint on the same nature at the instigation of the earlier complaint cannot
be sustained. Regarding the fact of acquittal of the accused viz., Krishnamurthy, petitioner herein, u/s 257, Cr.P.C., based on the memo filed by
the complainant, Mr. Somayaji has referred to various decisions of the Supreme Court and prays interference by this Court under Article 227 of
the Constitution of India. At this juncture, Mr. Ravindran, learned senior counsel for the respondent, by drawing my attention to various provisions
of the Code of Criminal Procedure, namely, Sections 190, 200, 202, 203 and 204 of Cr.P.C., would contend that inasmuch as the complainant
was not examined and the Court has not issued summons for appearance of the accused/petitioner herein, the present claim and the revision is
premature. There is no dispute that the complainant is yet to be examined and admittedly, the criminal court has not issued summons to the accused
therein/petitioner herein. In this regard, it is relevant to refer the following conclusion of the constitution Bench of the Supreme Court in Chandra
Deo Singh Vs. Prokash Chandra Bose and Another, : ""7. Taking the first ground, it seems to us clear from the entire scheme of Ch. XVI of the
Code of Criminal Procedure that an accused person does not come into the picture at all till process is issued. This does not mean that he is
precluded from being present when an enquiry is held by a Magistrate. He may remain present either in person or through a counsel or agent with a
view to be informed of what is going on. But since the very question for consideration being whether he should be called upon to face an
accusation, he has no right to take part in the proceedings nor has the Magistrate any jurisdiction to permit him to do so. It would follow from this,
therefore, that it would not be open to the Magistrate to put any question to witnesses at the instance of the person named as accused but against
whom process has not been issued; nor can he examine any witnesses at the instance of such a person. Of course, the Magistrate himself is free to
put such questions to the witnesses produced before him by the complainant as he may think proper in the interests of justice. But beyond that, he
cannot go. It was, however, contended by Mr. Sethi for respondent No.1 that the very object of the provisions of Ch.XVI of the Code of
Criminal Procedure is to prevent an accused person from being harassed by a frivolous complaint and, therefore, power is given to a Magistrate
before whom complaint is made to postpone the issue of summons to the accused person pending the result of an enquiry made either by himself
or by a Magistrate subordinate to him. A privilege conferred by these provisions can, according to Mr. Sethi, be waived by the accused person
and he can take part in the proceedings. No doubt, one of the objects behind the provisions of Section 202, Cr.P.C. is to enable the Magistrate to
scrutinise carefully the allegations made in the complaint with a view to prevent a person named therein as accused from being called upon to face
an obviously frivolous complaint. But there is also another object behind this provision and it is to find out what material there is to support the
allegations made in the complaint. It is the bounden duty of the Magistrate while making an enquiry to elicit all facts not merely with a view to
protect the interests of an absent accused person, but also with a view to bring to book a person or persons against whom grave allegations are
made. Whether the complaint is frivolous or not has, at that stage, necessarily to be determined on the basis of the material placed before him by
the complainant. Whatever defence the accused may have can only be enquired into at the trial. An enquiry u/s 202 can in no sense be
characterised as a trial for the simple reason that in law there can be but one trial for an offence. Permitting an accused person to intervene during
the enquiry would frustrate its very object and that is why the legislature has made no specific provision permitting an accused person to take part
in an enquiry..."".
In Thanikachala Mudali v. Ponappa Mudali 1947 M.W.N. 98, it was held that when a Magistrate dismisses a complaint without issuing
process to the accused, the accused person cannot be said to have been discharged within the meaning of the proviso to Sec. 436, Cr.P.C., and
therefore a notice is necessary to him when the Sessions Judge directs further inquiry into the complaint. It is clear from the above decisions that
the object behind the provisions of section 202, Cr.P.C. is to enable the Magistrate to scrutinise carefully the allegations made in the complaint with
a view to prevent a person named therein as accused from being called upon to face an obviously frivolous complaint. The another object behind
this provision and it is to find out what material there is to support the allegations made in the complaint. It is the bounden duty of the Magistrate
while making an enquiry to elicit all facts not merely with a view to protect the interests of an absent accused person, but also with a view to bring
to book a person or persons against whom grave allegations are made. It is further clear that whether the complaint is frivolous or not has, at that
stage, necessarily to be determined on the basis of the material placed before him by the complainant. Whatever defence the accused may have
can only be enquired into at the trial. It is further clear that an enquiry u/s 202 can in no sense be characterised as a trial for the simple reason that
in law there can be but one trial for an offence. Permitting an accused person to intervene during the enquiry would frustrate its very object and that
is why the legislature has made no specific provision permitting an accused person to take part in an enquiry. Accordingly, in the absence of
examination of the complainant, and non- issuance of summons to the accused by the Magistrate after satisfying himself, I hold that the petitioner
has no role to play or challenge the same before any Forum. On this ground, C.R.P.No. 11/2002 is liable to be dismissed as premature.
In the light of what is stated above, C.R.P.No. 4203/2001 is allowed; C.R.P.No. 11/2002 is dismissed. No costs. The interim stay granted in
C.M.P.Nos. 22794/2001 and 116/2002 is vacated. V.C.M.P.No. 1771/2002 is closed.