CRLRC/15/2026 of Narala Vijay Krishna Vs The State of Telangana on 7 January 2026

COMMON ORDER

Since, the parties in all the revision cases are one and the same, these cases are distrlosed of by way of common order.

2. Thest-' Criminal Revision Cases are filed to quash the common order dated 25.11.2025 in Crl.M.p.Nos.529, s30 and s2B of 2oz5 in C.C.Nos.44, 45 arrd 43 of 2023 respecfively on the file of the Special Judge for trial cases unr1er Economic Offences at Nampally, Hyderabad (for short, .the trial Court"), whereby the petitions filed under section 239 Cr.p.C. to discharge the petitioner/accused No.1 and the same were dismissed by the trial Court.

3. ' Hr3€lrd Sri C.Pratap Reddy, learned Senior Counsel representing on behalf of Sri. Praveen Kumar Challa, learned counsel for petitioner, Learned Deptrty Solicitor General of lndia for respondent No.2 and Sri

,: ! i M.Ramachandra Reddy, learned Additional Public Prosecutor for the State- respondent.

4. The brief facts of the case are that the petitioner, who is a practicing Company Secretary, in the course of incgrporation of M/s.Smooth Hours lnformation Service Private Limited certified certain forms/documents under the Companies Act, 2013 which according to the respondent contained qqmisstatements, thereby attracting Section 7(6) or 447 of Companies Act, 2013.

5. Learned Senior Counsel submits that the entire complaint is devoid of any specific averment that the petitioner knowingly or fraudulently made any false declaration. The complaint merely relies upon the fact that the petitioner had certified certairr documents in discharge of his professional duty. Such mechanical and omnibus allegations cannot sustain criminal prosecution merely on suspicion and surmises relying entirely upon an inquiry report under section 206 of the Companies Act, 2013. lt is well settled that an inquiry report is only a preliminary fact finding document and cannot, by itself, constitute substantive evidence to launch a criminal prosecution. lt is further submitted that the sanction for prosecution was accorded mechanically without ication of mind the com clearly vitiated the principles of natural justice. He further submits that the liability of a professional certifying authority cannot by any stretch be equated with that of the promoters or directors of a company, unless it is specifically established that the said professional had actively participated in or connived and \ \.\, ,--l.,:-. ', '. i,. . t,ii-; rt,,.:. :: \

i.! I t with the promoters/directors in the commission of any fraudulent act. The sole circumstance relied upon by the respondent is that certain family members of the petitioner'/vere directors at the time of incorporation of the company.

6. lt is s;ubmitted that under law, tlrere is no prohibition whatsoever against the fa"nily members of a practicing company secretary incorporating a company, nor does such circumstance rpso facto give rise to any presumption of fraud or misconduct. Further the criminal liability being penal in nature *ul['-""".'j':: always be strictly construed in its original sense. Neither the lndian Penal Code nor the Bharatiya Nyaya Sanhita, ?-023 contain any provision for fastening vicarrious liability upon any individual in the absence of a clear statutory'martdatr-', ln the present case, there is no atlegation that the petitioner, a practicing company secretary had uploaded any false document or that the company was non existent at the time of incorporation. The mere reliance by the Enquiry officer on his visit to the premises or on unverified statements of local persons to conclude that the company was not in existence cannot, in law, form the basis of criminal liability. lt is further submitted that in order to fasten criminal Iiability upon the PCS, it is impei"ative that the relevant statute expressly provides for such liability. ln tlie abserrce of such a statutory provision, and in the further absence of specific alleclations establishing the petitioners role, intent or active participation in the alleqed offence, no criminal liability can be attributed to him. Therefore conlinuation of proceedings against the petitioner ;amounts to a ctear abuse of the Oro.".n of law and the penal ri ii : : :i ,] l : consequences contemplated under section 447 of the Companies Act, 2013 also does not attract. Hence, prays to allow the revision cases.

7. Learned Deputy Solicitor General of lndia for the respondent No.2 submits that the petitioner is a practicing company secretary and he incorporated several companies appointing his family members as directors in the said company. The inquiry officer visited the premises and found that A2 company is not operating at the registered office address. The inquiry officer has issued summons and recorded his statements on oath. The petitioner appointed different directors and being a certified professionat, he suppressed the material facts and incorporated the present company. He made his family mempers as directors of A2 company and was running tfg cqrpofate companies with an intention to defraud tlie public investors at large to benefit the Cfiinese nationals. Hence, prays to dismiss the revision cases.

8. On the other hand learned Additional Public Prosecutor submits that the petition filed by the petitioner is neither maintainable according to law nor on facts. The present petitioner filed quash petitions C.C.Nos.43 of 2023, 44 of 2023 and 45 ot 2023 vide Crl.P.No.11186, 11190, 11192of 2025 before this Court and the said quash petitionb were dismissed on 15.09.2025. lt is further submitted that the said quash petitions were fited on 29.08.2025, on the date of listing of the matteis, the cases were reserved for orders by this Court. While pendency of the orders, the petitioners filed present applicaticins before this Court and submitted that it is not a fit case for quashment of \ \

proceedings against the petitioner and the truth or othenruise would come out only after conducting trial by the concerned Court and no interference of this Court is r,equired at this stage. Hence prays to dismiss the criminal revrsron cases

9. On perrusal of the record and in view of the submissions, as there are triable issues and it is a subject matter for trial and that the truth or otherwise would come out only upon eliciting through fulfledged trial. Hence, this Court opires that no interference is required in this matter at this juncture. Therefore, this Court is inclined to direct that the trial Court shall conduct trial and look into the evidence and pass orders on merits uninfluenced by the observations ntadt-' in the order of discharge petitions passed by the trial Court and dispose o{'the matters.

10. With the above direction, these Criminal Revision Cases are disposed of Ar; a sequel, miscellaneous petitions pending, if any, shall stand closed To, SD/- A.V.S. PRASAD DEPUTY REGISTRAR SECTION OFFICER //TRUE COPY//

1. The SPecial Judge for Economic Offences at Hyderabad the Public Prosecutor, High Court for the State of Te

2. Two C3s tc Hydera'bad. [OUT]

3. One Crl to Sri Praveen Kumar Challa, Advocate [OPUC]

4. One Crl to Deputy Solicitor General of lndia IOPUC]

5. Two Clf CoPies Karn/PSL L*- langana at

II I i I i\ HIGH COURT DATED i0710112026 THE S C; C) 2 0 r[8 2026 * COMMOIN ORDER CRLRC.llos.15, 17 and 20 of 2026 DISPOSINIG OF THESE CRIMINI\L REVISION CASES