Case Note & Summary
The petitioner, Pratibha Sadanand Shetty, was arraigned as an accused in Crime No. 2 of 2020 registered at Malad Police Station, Mumbai, for offences punishable under Sections 406, 409, 420 read with 120B of the Indian Penal Code and Section 3 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999. The allegations were that she was a Director of Shri Ramanjaneya Leasing and Finance Pvt. Ltd. (SRLF), which accepted deposits from investors but failed to return them. The petitioner filed an application under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of the FIR. The petitioner's counsel argued that she was merely a director with no active involvement in the company's affairs, no mens rea, and no specific allegations of inducement or acceptance of deposits. The State opposed the application. The High Court, after hearing both sides, observed that the FIR lacked specific allegations against the petitioner regarding her role in the company's management or any dishonest intention. The court noted that the petitioner was not shown to be the 'directing mind' or 'will' of the company, and there was no material to indicate that she induced any depositor. Relying on the principle that criminal liability cannot be imposed vicariously without proof of mens rea, the court held that continuing the proceedings would be an abuse of process. Accordingly, the court allowed the application and quashed the FIR and all proceedings arising therefrom against the petitioner.
Headnote
A) Criminal Law - Quashing of FIR - Vicarious Liability of Director - Sections 406, 409, 420, 120B IPC and Section 3 of Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 - The petitioner, a director of a finance company, was accused of offences relating to failure to return deposits. The court held that mere directorship without specific allegations of active involvement or mens rea is insufficient to sustain criminal proceedings. The court quashed the FIR as there was no material to show that the petitioner was the 'directing mind' or had induced depositors. (Paras 3-8) B) Criminal Law - Mens Rea - Essential for Offences under IPC - Sections 406, 409, 420 IPC - The court emphasized that for offences involving criminal breach of trust, cheating, and criminal conspiracy, mens rea is a necessary ingredient. In the absence of any allegation that the petitioner had dishonest intention or induced depositors, the proceedings were an abuse of process. (Paras 5-8)
Issue of Consideration
Whether criminal proceedings against a director who was not actively involved in the company's management and against whom there are no specific allegations of mens rea or inducement can be quashed.
Final Decision
The court allowed the application and quashed the FIR No. 2 of 2020 registered at Malad Police Station, Mumbai, and all proceedings arising therefrom against the petitioner.
Law Points
- Criminal liability of director
- mens rea
- vicarious liability
- quashing of FIR
- abuse of process of law
