High Courts may rely on unimpeachable ROC records to quash proceedings against former directors.

The applicant, named as Accused No. 5, sought quashing under Section 482 Cr.P.C. of two FIRs registered at Mansa Police Station under Sections 406, 420 and 114 IPC.

The complainants alleged that their firms supplied maize to Anil Limited on credit in 2016, received post-dated cheques, and were induced not to present them; the cheques later expired without valid revalidation

The applicant contended that he had resigned as a director on 6 November 2015, before the transactions, and that the FIRs alleged no specific act by him

The complainants disputed the resignation date and relied on other pending proceedings against him

The applications were heard together

1. Whether the High Court could rely under Section 482 Cr.P.C. on Form DIR-12, a statutory public document recording the applicant’s resignation, despite the complainants’ contrary assertion

2. Whether the allegations disclosed the ingredients of Sections 406 and 420 IPC, including the relevance of the asserted mutual exclusivity of those offences

3. Whether the applicant’s alleged criminal antecedents and pending proceedings precluded quashing of these FIRs

4. Whether the FIRs disclosed criminal offences or amounted to use of the criminal process to pursue recovery of a commercial debt

Section 482 Cr.P.C. empowers the High Court to quash proceedings to prevent abuse of process and secure the ends of justice; under State of Haryana v. Bhajan Lal, quashing may be warranted, among other circumstances, where allegations do not disclose an offence, are inherently improbable, or proceedings are manifestly mala fide

Under Harshendra Kumar D. v. Rebatilata Koley and Anita Malhotra v. Apparel Export Promotion Council, the Court may consider unimpeachable statutory records, including Registrar of Companies filings, when exercising that jurisdiction

Section 406 IPC requires entrustment and dishonest misappropriation; Section 420 requires dishonest or fraudulent intention at the time of inducement, and subsequent non-performance alone does not establish that intention (Hridaya Ranjan Prasad Verma v. State of Bihar)

The Court relied on Delhi Race Club (1940) Ltd. v. State of Uttar Pradesh for the rule that an ordinary sale of goods transfers ownership and creates a debtor-creditor relationship, not entrustment, and that non-payment alone does not constitute criminal breach of trust

Although civil and criminal remedies may coexist, criminal process should not be used merely to recover a civil debt (Indian Oil Corpn. v. NEPC India Ltd.)

The Court also held that IPC offences of cheating and criminal breach of trust do not impose vicarious liability on a director merely by virtue of office

The Court treated the certified Form DIR-12 as an unimpeachable statutory record establishing that the applicant ceased to be a director on 6 November 2015, before the 2016 transactions; it found the complainants’ unsupported contrary assertion insufficient to create a triable factual dispute

The FIRs described sales of maize on credit, which did not involve entrustment, and did not allege facts showing that the applicant personally induced the complainants or possessed dishonest intent at the inception of the transactions

The applicant’s other pending cases could not supply missing allegations or establish liability in these FIRs

Given the absence of a specific act attributed to him and the commercial nature of the claims, the Court found the proceedings against him to fall within the Bhajan Lal categories warranting quashing

It quashed FIR Nos. C.R. I-54 of 2018 and C.R. I-57 of 2018, and all consequential proceedings, qua the applicant, Shashin Ajitkumar Desai