/■ IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI . V 't2« WEDNESDAY, THE TWELFTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE DR JUSTICE VENKATA JYOTHIRMAI PRATAPA •• y CRIMINAL PETITION NO: 3200 OF 2024 AND 4767 OF 2022 CRLP NO 3200 OF 2024 Between:- - Para Sai Krishna, S/o. Venkata Puma Chandra Rao, Hindu, aged about 29 years. Director cum chief technology officer of cognitive innovations labs Pvt Ltd., R/o. Mulaguntapadu Village, Singarayakonda Mandal Prakasam District, Now residing at London (U.K) ...PETITIONER/ACCUSED NO. 1 AND 1. The State of Andhra Pradesh, Rep. by its Public Prosecutor, High Court of Andhra Pradesh, Amaravathi. 2. Ambati Dinesh,, S/o Mohan Rao, Hindhu, Aged about 31 D.No. 25-2-279, 3rd Cross Road, Military Colony, Nellore Town, S.P.S.R, Nellore District. years, R/o. ...RESPONDENTS Petition under Section 482 of Cr.P.C. praying that in the circumstances stated in the Memorandum of Grounds of Criminal the High Court may be pleased to quash the FIR No. 15/2021 Petition, of P.M. Palem Police Station, Visakhapatnam City or the offences under Sec. 406, 409, 477(A), 420, r/w 120(B) of I.P.C under inherent powers of this Hon'ble court l A. NO: 2 OF 2024 Petition under Section 482 of Cr.P.C., praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to stay the investigation proceedings in FIR No. 15/2021 of P.M. Palem Police Station, Visakhapatnam city including the arrest of the petitioner/accused This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri MADALA NARASINGA RAO, Advocate for the Petitioner and the Public Prosecutor on behalf of the Respondent CRLP NO 4767 OF 2022 Between: Para Venkat Ramesh,, S/o Kondaiah, Aged about 48 years, Occ- Director cum CEO of Cognitive Innovations Labs Pvt Ltd., R/o D.No. 2-174/2, Mulaguntapadu Village, Singarayakonda Mandal, Prakasam District, A.P He is represented by his Special power of attorney Holder R/o Mulaguntapadu Village, Para kondaiah, S/o. Narasimham Singarayakonda Mandal, Prakasam District, A.P ...PETITIONER/ACCUSED NO. 2 AND 1. The State of Andhra Pradesh, Rep. by its Public Prosecutor, High Court of Andhra Pradesh, Amaravathi. 4 2. Ambati Dinesh,, S/o Mohan Rao, Hindhu, Aged about 31 years, R/o. D.No. 25-2-279, 3rd Cfpss Road, Military Colony, Nellore Town, S.P.S.R, Nellore District . -tss- ...RESPONDENTS Petition under Section 482 of Cr.P.C., praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to quash the FIR No. 15/2021 of P.M.Palem Police Station, Visakhapatnam City for the offences under Sec. 406, 409, 477(A), 420, r/w 120(B) of I.P.C under inherent powers of this Hon'ble court I.A. NO: 2 OF 2022 Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to stay investigation proceedings in FIR No. 15/2021 of P.M.Palem Police Station, Visakhapatnam city including the arrest of the petitioner/accused This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri Madala Narasinga Rao, Advocate for the Petitioner and the Public Prosecutor on behalf of the Respondent. The Court made the following COMMON ORDER : APHC010211762024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) / [3396] WEDNESDAY, THE TWELFTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE DR. JUSTICE VENKATA JYOTHIRMAI PRATAPA CRIMINAL PETITION Nos. 3200/2024 & 4767/2022 Criminal Petition No.3200 of 2024: Between: PARA SAJ KRISHNA, S/O.VENKATA PUMA CHANDRA RAO, HINDU, AGED ABOUT 29 YEARS, DIRECTOR CUM CHIEF TECHNOLOGY OFFICER OF R/O.MULAGUNTAPADU VILLAGE, PRAKASAM DISTRICT, NOW RESIDING AT LONDON (U.K). ...PETITIONER/ACCUSED COGNITIVE INNOVATIONS LABS PVT LTD., SINGARAYAKONDA MANDAL AND . 1.THE STATE OF ANDHRA PRADESH, REP. BY ITS PUBLIC HIGH COURT OF ANDHRA PRADESH, PROSECUTOR, AMARAVATHI. 2.AMBATI DINESH, S/0 MOHAN RAO, HINDU, AGED ABOUT 31 YEARS, R/0. D.NO. 25-2-279, CROSS ROAD, MILITARY COLONY, NELLORE TOWN, S.P.S.R, NELLORE DISTRICT. ...RESPONDENT/COMPLAINANT(S): Criminal Petition No.4767 of 2022 Between: PARA VENKAT RAMESH, S/0. KONDAIAH, AGED ABOUT 48 YEARS, OCC-DIRECTOR CUM CEO OF COGNITIVE INNOVATIONS LABS PVT R/O.D.NO.2-174/2, LTD., SINGARAYAKONDA MANDAL, MULAGUNTAPADU VILLAGE, PRAKASAM DISTRICT, A.P HE IS REPRESENTED BY HIS SPECIAL POWER OF ATTORNEY HOLDER R/0 MULAGUNTAPADU VILLAGE, PARA KONDAIAH, S/0. NARASIMHAMSINGARAYAKONDA MANDAL, PRAKASAM ISTRICT, A.P ...PETITIONER/ACCUSED AND 1.THE STATE OF ANDHRA PRADESH, REP. BY ITS PUBLIC PROSECUTOR, HIGH COURT OF ANDHRA PRADESH, AMARAVATHI. 2.AMBATI DINESH, S/0 MOHAN RAO, HINDU, AGED ABOUT 31 2 RD YEARS, R/0. D.NO. 25-2-279, 3 CROSS ROAD, MILITARY COLONY, NELLORE TOWN, S.P.S.R, NELLORE DISTRICT. ...RESPONDENT/COMPLAINANT(S): Counsel for the Petitioner/accused: 1.MADALA NARASINGA RAO Counsel for the Respondent/complainant(S): 1. PUBLIC PROSECUTOR (AP) The Court made the following: COMMON ORDER: The instant petitions under Section 482 of Code of Criminal Procedure, .1973^ have been filed by the Petitioners /Accused Nos.1 and 2 respectively seeking to quash the proceedings against them in Crime No. 15 of 2021 of P.M.Palem Police Station, Viskhapatnam City for the offences under Sections 406, 409, 420 and 477-A read with 120-B of the Indian Penal Code, 1860^. Heard Sri Madala Narasinga Rao, learned counsel for the Petitioners/Accused Nos.1 and 2 and Ms.K.Priyanka Lakshmi, learned Assistant Public Prosecutor for Respondent No. 1/State. None appeared for Respondent No.2. 2. Learned counsel for the Petitioners would submit that as per Sections 210 and 212 of the Companies Act, the Police have no jurisdiction to register the present case and the complaining authority shall be either Registrar or the Inspector appointed under the Act. Learned counsel would further submit that 3. only Special Courts constituted under Section 415 of Companies Act shall have authority to take cognizance of the offences referred under the Act. Learned counsel would submit that, as per Section 212 of the Companies Act, ' For short ‘Cr.P.C ^ For short ‘I.P.C Serious Fraud Investigation Office^shall only have authority to investigate into Learned counsel would finally submit that in view affairs of Company, guideline No.6 of the case of State of Haryana and others v. Bhajanlal and others^, the proceedings against the Petitioners are liable to be quashed. 4. Learned Assistant Public Prosecutor would submit that there are specific allegations against the Petitioners in the commission of the alleged offences. It is submitted that the proceedings against the Petitioners, at this stage, cannot be quashed. Hence, prayed for dismissal of the petitions. 5. A bare perusal of Section 482 makes it clear that the Code envisages that inherent powers of the High Court are not limited or affected so as to make orders as may be necessary; (i) to give effect to any order under the Code or, (ii) to prevent abuse of the process of any Court or, otherwise (iii) to ends of justice. A court while sitting in Section 482 jurisdiction is not functioning as a court of appeal or a court of revision. It must exercise its to do real and substantial justice, depending on the facts and secure powers circumstances of the case. These powers must be invoked for compelling of abuse of process of law or glaring injustice, which are against reasons sound principles of criminal jurisprudence. 6. As seen from the complaint, it is alleged that. Respondent No.2 has been working as Admin Manager in Cognitive Innovations Labs Private Limited, Visakhapatnam since 2019 and in the said Company, about 50 to 70 Petitioner/Accused No.2 is the Chief employees have been working. 3 AIR 1992 SC eOA Executive Officer of the Company and he has been looking after the operations-of the Company by staying in London. Petitioner/Accused No.l, who is the nephew of Petitioner/Accused No.2 has been appointed as Chief Technology Officer. Petitioners/Accused Nos.1 and 2 were authorized to deal with the affairs of the Company viz., Cheque power, salaries of the employees, and maintenance. The Managing Director of the Company namely Kancherla Prudhvinath used to send amount from his bank account to the H.D.F.C Bank Account of the Company. That being so, some of the employees of the said Company have sent an e-mail to the Managing Director stating that, along with their salaries, excess amounts have been deposited into their accounts and the said excess amounts were re-transferred to the Axis Bank Account of Petitioner/Accused No.1. On conducting an Audit, it came to the light that, an amount of Rs.35.00 lakhs was deposited to the bank accounts of the some of the employees and the same was directed to the Bank account of Petitioner/Accused No.1. It also came to the light that the P.F., E.S.I amounts of the employees have also not been credited to the said organizations. Further, the cars belong to Accused Nos.1 to 3 were kept for hire to the Company and an amount of Rs.47,97,916/- was routed to their personal accounts towards hiring charges of the Petitioners/Accused Nos.1 and 2 being the Directors of the Company, having conspired together, misappropriated an amount of Rs.1.00 crore belongs to the Company by utiliyzing the same for their personal expenses and thereby cheated the Company. said cars. 0 7. A bare perusal of the contents of the complaint, would prima facie disclose that there are specific allegations against the Petitioners in the commission of the alleged offences. The contention of the, learned counsel for the Petitioners that since the matter pertains to the affairs of the Company viz., Cognitive Innovations Labs Private Limited, Visakhapatnam, the Police have no jurisdiction to register the present case and that the Special Courts constituted under Sectiori 415 of Companies Act shall have authority to take .cognizance of the offences referred under the Act, cannot be looked into at this stage while deciding the petition under Section 482 Cr.P.C. Further, the provisions of the Companies Act are not having over-riding effect against the IPC offences. Furthermore, in view of the stay granted in this matter, the investigation has been stalled and if the same is continued, the truth or otherwise of the allegations raised against the Petitioners will be revealed. Since there is a verifiable material and factual aspects to be decided during investigation, at this stage, this Court cannot quash the proceedings against the Petitioners. 8. At this stage, it is relevant to refer to judgment in Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and Others'*, wherein, a three Judge Bench of the Hon’ble Apex Court laid down the following principles of law:- “57. From the aforesaid decisions ■ of this Court, right from the decision of the Privy Councii in the case of Khawaja Nazir Ahmad (supra), the following principles of law emerge: \202l see OnLine Se 315 i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into cognizable offences; ii) Courts would not thwart any investigation into the cognizable offences; • Hi) However, in cases where no cognizable offence or offence of any kind is disclosed in the first information report the Court will not permit an investigation to go on; iv) The power of quashing should be exercised sparingly with circumspection, in the ‘rarest of rare cases’. (The rarest of rare cases standard in its application for quashing under Section 482 Cr.P.C. is not to be confused with the norm which has been formulated in the context of the death penalty, as explained previously by this Court); v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability genuineness or otherwise of the allegations made in the FIR/complaint; - - - vi) Criminal proceedings ought not to be scuttled at the initial stage; vii) Quashing of a complaint/FIR should be an exception and a rarity than an ordinary rule; viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of activities. The inherent power of the court is, however, recognized to secure the ends of justice or prevent the above of the . process by Section 482 Cr.P.C. ix) The functions of the judiciary and the police are complementary, not overlapping; x) Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences; xi) Extraordinary and inherent powers of the Court do not confer arbitrary jurisdiction on the Court to act according to its whims caprice; xii) The first information report is not an encyclopedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. During or after investigation, if the Investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file appropriate report/summary before the learned Magistrate which ' may be considered by the learned Magistrate in accordance with the known procedure; xiii) The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the court to be cautious. It casts an onerous and more diligent duty on the court; or an or an 7 xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lai (supra), has the jurisdiction to quash the FIR/complaint; and xv) When a prayer for quashing the FIR Is made by the alleged accused, the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether or not the allegations in the FIR disclose the commission of a cognizable offence and Is not required to consider on merits whether the allegations make out a cognizable offence or not and the court has to permit the investigating agency/police to investigate the allegations in the FIR.” (emphasis supplied) In view of the above discussion and the judgment referred to supra, this Court is of the view that the contentions raised by the learned counsel for the Petitioners are the aspects to be decided after completion of investigation. As there are specific allegations leveled against the Petitioners, this is not a proper stage to consider them. A petition filed under Section 482 Cr.P.C., cannot be decided based on presumptions and assumptions. As rightly put by the learned Assistant Public Prosecutor, because of the stay granted at the threshold, there is no progress in the investigation at least to prima facie understand the strength in the allegations attributed against the Petitioners. This Court cannot rely on the merits of the case at this stage, and hence, the petitions deserve dismissal. Accordingly, without prejudice to the rights and contentions of the Petitioners, the Criminal Petitions are dismissed. Pending miscellaneous petitions, if any, shall stand closed. Sd/- N.NAGAMMA ASSISTANT REGISTRAR 9. 10. //TRUE COPY// SECTION OFFICER To, 1. The Station House Officer P.M. Palem Police Station, Visakhapatnam 2. One CC to Sri Madala Narasinga Rao, Advocate [OPUC] 3. Two CCs to Public Prosecutor, High Court of Andhra Pradesh. [OUT] 4. Three CD Copies HIGH COURT DATED:12/02/2025 COMMON ORDER CRLP.No.3200 of 2024 AND 4767 OF 2022 DISMISSING THE BOTH CRIMINAL PETITIONS