Cognizance of time-barred complaint against corporate officer without impleading company or conducting mandatory inquiry is unsustainable.

The petitioner is the MD & CEO of LIC Housing Finance Ltd. (LIC HFL), based in Mumbai

The complainant alleged that in 2017, agents of LIC HFL (accused nos. 2-6) induced her to take a housing loan, misappropriated 14 signed cheques, and diverted loan funds

The petitioner joined the company as Director only on 01.02.2021

A loan was sanctioned in 2016, but the borrowers defaulted, leading LIC HFL to issue a SARFAESI demand notice in 2022

Following this notice, the complainant filed a criminal complaint in 2023. The Judicial Magistrate, 1st Class, took cognizance under Sections 406 and 34 of the IPC via order dated 27.02.2023

1. Whether the criminal proceedings are maintainable given the significant delay in filing and the bar of limitation under Section 468 Cr.PC

2. Whether the MD & CEO can be held vicariously liable for the company's acts without specific allegations or the company being named as an accused

3. Whether the Magistrate complied with the mandatory inquiry requirements under Section 202 Cr.PC for accused residing outside the jurisdiction

Section 406 of the IPC regarding criminal breach of trust

Section 468 of the Cr.PC, which imposes a three-year limitation period for offences punishable with up to three years

Sarah Mathew v. Institute of Cardio Vascular Diseases, establishing that limitation is computed from the date of filing

Pepsi Foods Ltd. v. Judicial Magistrate, summoning an accused requires a speaking order reflecting the application of mind

Vijay Dhanuka v. Najima Mamtaj mandates an inquiry under Section 202 Cr.PC when an accused resides outside the court's territorial jurisdiction

R. Kalyani v. Janak C. Mehta establishes that corporate officers cannot be held vicariously liable unless the company is an accused and specific roles are pleaded

The Court observed that the alleged misappropriation occurred in 2017, but the complaint was filed in 2023, exceeding the three-year limitation period under Section 468 Cr.PC

Factually, the petitioner was not even in office at the time of the alleged incident, having joined in 2021

The Court found the dispute to be a "civil dispute converted into criminal cases" following loan default and SARFAESI proceedings

Legally, the summoning order was "non-speaking" and failed to justify the petitioner's individual liability

Furthermore, as the petitioner resided in Mumbai, the Magistrate's failure to conduct a mandatory inquiry under Section 202 Cr.PC invalidated the process

The Court also highlighted that the corporate entity (LIC HFL) was not made a party, which is a prerequisite for proceeding against its officers for corporate acts

The Court allowed the petition and quashed the cognizance order dated 27.02.2023 against all accused persons. The accused are discharged from the burden of Complaint Case No. 174 of 2023