Legal Question in Criminal Law in India

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a company has booked certain percentage of expenses on business promotion without supporting vouchers. These expenes are duly approved by the sanctioning authority. They amount to less than 2% of the total expenses. The annual accounts have been approved and adopted by shareholders in AGM during the years. A criminal case has been filed in the matter by the promoter shareholder which is pending the court. The company is a listed company. The promoter shareholder had 30% shareholding during the time of filing the complaint. The promoter shareholder is a government body. They are party to approving the accounts during those years. later on, they have filed the said complaint. The questions are:

Can a shareholder file a complaint bypassing the BOD against ED and other officers?

Can an expenese which is not material if not supported by bills but put up by HOD and approved by ED sanctioning authority is illegal and it amounts to criminality?

It seems that corporate sector will collapse if such things happen and the powers of whole time directors are interferred by shareholders and BOD is bypassed?


Asked on 9/08/08, 11:58 am

4 Answers from Attorneys
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

Re: legal help

You have tried to answer your question in your way and as per your own thinking.

In this case, public money is involved; You have admitted that the promoter share holder is a government body holding 30% shares in the company.

they can surely file a criminal complaint about an expense which is not supported by vouchers/bills. Sanction is not a substitute of voucher, that is just an authority to spend but was the money spent properly or not will need to be examined.

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Answered on 9/12/08, 6:04 am
Vijay Chandavale Advocate Vijay Chandavale & Associates

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yes share holder can file a complaint by byepassing the BOD against ED and other officers it depends upon the facts of the case and head of account . The every action can be challenged but it is very difficult to prove the claimed facts and ingredints of offence are very much difficult to prove before court

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Answered on 9/14/08, 1:56 pm
Aniruddha Pawse Aniruddha.P.Pawse Advocates

Re: legal help

A corporate lawyer can answer it better. Contact a Corporate lawyer

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Answered on 9/09/08, 1:47 am
Shrichand Nahar S.V.Nahar, Advocate

Re: legal help

1) Barring few prosecutions under IPC and other special laws, anybody can file complaint in respect of offences committed. For filing a complaint, approval of Board of Directors or AGM not necessary.

2)Expenses not supported by bills is not an offence. However, even if such expenses were supported by bill but were not genuine expenses etc. then criminal offence is made out.

3)No comments can be offered on your views.

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Answered on 9/09/08, 1:53 am


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