SC Quashes Criminal Proceedings Against Share Holders Accused Of 'Stealing' Company Documents To Produce Before Company Law Board [Read Judgment]

While in Rafale, the issue was about admissibility of documents allegedly 'stolen' from the Ministry, here the issue before the bench comprising Justice R. Banumathi and Justice R. Subhash Reddy was whether the act of some shareholders accused of 'stealing' some documents of a company to present it before Company Law Board [CLB] and other judicial forums amounted to 'theft and misappropriation' under Indian Penal Code.

The complaint against the accused (includes shareholders of the company) was that they gained unauthorized access to the documents that were highly confidential and meant for use/consumption only of designated and specified individuals of the Company and they used it in the company petition before the CLB and in the civil suits filed by them. The summons issued against the accused was challenged before the Madras High Court which refused to quash the case in toto.

Allowing the appeal, the Apex Court bench comprising Justice R. Banumathi and Justice R. Subhash Reddy held that information contained in a document, if replicated, can be the subject of theft and can result in wrongful loss, even though the original document was only temporarily removed from its lawful custody for the purpose of extracting the information contained therein, it quashed the complaint and summons issued therein against the accused.

The court opined that merely because the accused have produced the copies of the documents in the CLB proceedings, it cannot be said that they had removed the documents with "dishonest" intention. It said:

"Filing of documents in the CLB proceedings is only to assert their claim of oppression and mismanagement of the Company. According to the respondents, there is a bona fide dispute of oppression and mismanagement and the documents No.1 to 54 are filed only to substantiate their case. When a bona fide dispute exists between the parties as to whether there is oppression and mismanagement, there is no question of "wrongful gain" to the respondents or "wrongful loss" to the appellant. In using the documents, when there is no dishonest intention to cause "wrongful loss" to the complainant and "wrongful gain" to the respondents, it cannot be said that the ingredients of theft are made out."

The court further said that merely because the accused have not called for the documents as per the provisions, it cannot be said that they have committed "theft". The bench observed:

"This may probably be the point to be raised in appropriate proceedings so as to advance arguments as to the evidentiary value to be attached to the documents. But it would be far-fetched to say that the respondents have dishonestly removed the documents and committed the offence of theft and that they are to face criminal prosecution for theft of the documents. It would only be an arm-twisting tactics to deprive the respondents from pursuing their defence with relevant evidence and materials."

While quashing the summons and criminal proceedings against the accused, the bench observed:

"It is one thing to say that the documents have not been secured in accordance with the law and no value could be attached to them. But merely because documents have been produced from one source or other, it cannot be said that documents have been dishonestly removed to obtain "wrongful gain" to the respondents and cause "wrongful loss" to the appellant. Where it appears that the criminal complaint has been filed to bring pressure upon the respondents who are shown as accused in the criminal case, the complaint is to be quashed."

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