![Summoning Of Company U/s. 319 CrPC Cannot Be Question When There Exits Material Against It: Karnataka HC In Megacity Scam Summoning Of Company U/s. 319 CrPC Cannot Be Question When There Exits Material Against It: Karnataka HC In Megacity Scam](https://www.verdictum.in/h-upload/2022/11/07/1434352-karanataka-hc-justice-m-nagaprasanna.webp)
Summoning Of Company U/s. 319 CrPC Cannot Be Question When There Exits Material Against It: Karnataka HC In Megacity Scam
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A Karnataka High Court Bench of Justice M Nagaprasanna has observed that summoning of the company under Section 319 CrPC cannot be questioned when there exists material against even though it was not a party to the criminal proceedings.
The Court dismissed petitions filed by former minister C P Yogeshwar, which challenged the Trial Court Order impleading Megacity (Bangalore) Developers and Builders Limited as accused in the proceedings related to Megacity scam case.
In that context, it was said that, "without the Company, the proceedings could not have gone on further. Therefore, the concerned Court has rightly allowed the application, bearing in mind the necessity of the Company to be an accused in the proceedings and it is in tune with the law laid down by the Apex Court in the form of guidelines as noticed".
Senior Counsel Kiran S Javali appeared for the petitioner, while Special Central Government Standing Counsel Madhukar Deshpande appeared for the respondent.
In this case, the subject matter revolved around the 'Vajragiri Township Project,' a housing scheme initiated in 1994-95.
Despite receiving around 3,100 applications initially, the project could only provide 1,360 residential plots due to factors like rising land prices and land acquisition for the Bangalore-Mysore Infrastructure corridor project. As a result, approximately Rs 60 crore was collected from applicants, and Rs 3.03 crore was used to construct a Channapatna building leased to Fashion Forum (India) Pvt. Ltd, linked to Yogeshwara as Managing Director.
The prosecution accused the company of mishandling funds collected from the project applicants. Yogeshwar argued in his plea that Megacity (Bangalore) Developers and Builders Limited should not have been implicated, as the project was under the name 'Vajragiri Township Project.' He also contended that the power under section 319 CrPC should not have been applied in these cases.
The Court observed that the complaint narrated several instances of allegations against the Company, which would become ingredients of Sections 403 and 409 of the IPC, and that it is necessary to try the company along with the Directors/Promoters of the Company. In furtherance of the same, the Court noted that, "Without the Company, accused No.1 i.e., Managing Director/Promoter/Directors of the Company cannot be prosecuted".
Holding that the Trial Court had rightly allowed the application, as without the Company, the proceedings could not have gone further, the Court observed that, "In the teeth of the law laid down by the Apex Court in the aforesaid cases, the Company ought to have been made an accused before the concerned Court, as there is enough material against the Company for having allegedly misappropriated the amounts which came into the project, though the project was separate which was under the aegis of the 2nd respondent."
Cause Title: CP Yogeshwara vs Serious Fraud Investigation Office & Ors.
Click here to read/download the Judgment