Karnataka HC Refuses To Quash CA’s Prosecution Over Alleged Forged Transfer Of Former Director’s 100 Shares To Her Ex-Husband

Respondent No. 2 alleged that, after her divorce from accused No. 1 and her resignation as a director of Akasandra Consultants Private Limited, her 100 shares in the company were transferred to accused No. 1 without her consent by means of a forged signature.

Petitioner No. 2, the company’s chartered accountant, was alleged to have knowingly facilitated the transfer and later filed the company’s balance sheets.

The police registered a case and filed a charge sheet against both petitioners for offences under Sections 420, 465 and 471 read with Section 34 of the IPC; the Magistrate took cognizance in C.C. No. 59560/2023.

Petitioner No. 1’s petition was dismissed as withdrawn following a memo stating that he had died.

Petitioner No. 2 sought to quash the proceedings against him under Section 482 of the CrPC.

Section 482 of the CrPC permits the High Court to quash criminal proceedings where the complaint does not disclose an offence, or where the proceedings are frivolous, vexatious or oppressive; however, the Court should not conduct a meticulous assessment of the evidence or determine whether the case will ultimately result in conviction before trial.

Applying Sau. Kamal Shivaji Pokarnekar v. State of Maharashtra, (2019) 14 SCC 350, the Court stated that where the complaint and supporting material disclose the ingredients of an offence, quashing is not justified at that stage.

The alleged offences were under Sections 420, 465 and 471 read with Section 34 of the IPC.

The Court considered the allegation that petitioner No. 2, despite knowing that respondent No. 2’s signature had been forged, facilitated the transfer of her shares to accused No. 1.

It also noted that the charge-sheet material included an FSL report finding that the disputed signature did not tally with respondent No. 2’s admitted signature, and that petitioner No. 2 had filed company balance sheets with the Income Tax Department.

At the quashing stage, the Court treated these materials as disclosing a prima facie case and held that their evidentiary weight should be tested at trial, rather than through a detailed assessment under Section 482.

It dismissed petitioner No. 2’s petition as devoid of merit, declining to quash the proceedings in C.C. No. 59560/2023; the allegations against him were left to be tested at trial, without expression of any opinion on the merits.