Non Issuance Of Duplicate Share Certificates Does Not Indicate Malice Of Company At The Inception Of Transaction: Calcutta High Court Quashes Cheating Case

The Calcutta High Court has quashed a criminal case of Cheating instituted against a company and its Directors over non-issuance of duplicate share certificates to the complainant, claiming to be a shareholder in the company. A Single Bench of Justice Suvra Ghosh held that mere non-issuance of duplicate share certificates on misplacement by an alleged shareholder does not indicate malice on part of the company from the inception of the transaction. It observed that the when the shares were issued against a consideration, loss or misplacement of such shares by the Opposite Party is a “subsequent event” which could not have been contemplated by the company at the time of issuance of the shares. It thus held, “No prima facie case of initial deception has been made out and under no stretch of imagination can it be held that the petitioners acted with criminal intent at the inception on an anticipation that the shares would be misplaced at a subsequent stage.”