Criminal law

SC Quashes Criminal Proceedings Against Share Holders Accused Of ‘Stealing’ Company Documents To Produce Before Company Law Board

“Merely due to the fact the respondents have produced the copies of the documents in the CLB complaints, it can not be said that they have eliminated the documents with “cheating” goal.” The Supreme Court judgment in Birla Corporation Limited vs. Adventz Investments and Holdings Limited attracts a few parallels with its current order in Rafale Review Petitions. While in Rafale, the issue becomes approximately admissibility of documents allegedly ‘stolen’ from the Ministry, here the issue earlier than the bench comprising Justice R. Banumathi and Justice R. Subhash Reddy became whether the act of a few shareholders accused of ‘stealing some documents of an enterprise to provide it earlier than Company Law Board [CLB] and different judicial forums amounted to ‘robbery and misappropriation’ under Indian Penal Code.

The complaint in opposition to the accused (consists of shareholders of the corporation) turned into gaining unauthorized access to the documents that have been pretty private and meant to be used/consumption best of targeted and precise individuals of the Company. They used it in the corporation petition earlier than the CLB and within the civil suits filed by using them. So the summons issued against the accused become challenged before the Madras High Court, which refused to quash the case in toto.

Allowing the attraction, the Apex Court bench comprising Justice R. Banumathi and Justice R. Subhash Reddy held that statistics contained in a file, if replicated, can be the subject of robbery and might bring about wrongful loss, even though the original document turned into best temporarily removed from its lawful custody for the motive of extracting the statistics contained therein, it quashed the criticism and summons issued therein against the accused.


The court docket opined that simply because the accused have produced the copies of the files in the CLB lawsuits, it could not be said that they’d eliminated the files with “dishonest” intention. It stated:
“Filing of documents inside the CLB lawsuits is best to assert they declare of oppression and mismanagement of the Company. According to the respondents, there’s a bona fide dispute of oppression and mismanagement, and documents No.1 to 54 are filed best to confirm their case. When a bona fide dispute exists between oppression and mismanagement, there may be absolute confidence of “wrongful benefit” to the respondents or “wrongful loss” to the appellant. In the use of the files, while there’s no cheating intention to motive “wrongful loss” to the complainant and “wrongful benefit” to the respondents, it can not be stated that the components of robbery are made out.”

The court docket similarly stated that simply because the accused have not known for the files according to the provisions, it could not be said that they have devoted “robbery.” The bench observed:
“This might also probably be the point to be raised in suitable complaints to be able to improve arguments as to the evidentiary cost to be attached to the documents. But it would be a long way-fetched to mention that the respondents have dishonestly removed the documents and devoted the robbery offense. They’re to face criminal prosecution for theft of the files. It would best be arm-twisting strategies to deprive the respondents of pursuing their defense with relevant evidence and substances.”

While quashing the summons and criminal complaints in opposition to the accused, the bench located:
“It is one issue to say that the documents have no longer been secured according to to the regulation and no value may be connected to them. But merely because files have been constituted of one source or different, it can’t be said that files have been dishonestly removed to obtain “wrongful advantage” to the respondents and reason “wrongful loss” to the appellant. Where, therefore, wheres that the crook complaint has been filed with delivering stress upon the respondents who’re proven as accused within the criminal case, the grievance is to be quashed.”

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