Senior Advocate, Shri Rakesh Dwivedi dealt with the various issues raised by the prosecution and effectively dealt with them through documentary evidence and the legal provisions. Today he dealt with the following issues:
1. Shareholders are not the owners
He emphatically pointed out through various Supreme Court judgments that the liabilities, offenses, frauds attributable to a company cannot be shifted to the shareholders. The company is a juristic person distinct from its shareholders. In the case of Uphaar, since the license was issued in the name of the company and not in the name of any individual, therefore under the law, Company being a juristic person should have been made an accused, which has not been done in this case.
2. Signing of the cheque
Merely because Sushil Ansal had signed a cheque of Rs. 50 lacs, on behalf of the company for purchase of shares, does not mean that he was looking after the day to day affairs of the company. In 9 years from the date of resignation from the company in the year 1988, he had signed only one cheque. There were several other signatories to the account who were issuing several cheques everyday concerning the day to day running of the cinema business. Therefore a person who has signed only one cheque in 9 years cannot be said to be looking after the day to day management of the cinema.
The company apart from running cinema had also expanded into other businesses like purchase of land, owning and running clubs and investment in shares of other companies. Different accounts were opened for different businesses of the company and different signatories were assigned to different accounts. There were several signatories to the accounts nominated by the board of directors to sign cheques upto unlimited amounts. ‘The company’ was run by professionals who were on the board. It is unfair on part of the prosecution to gun at an individual with a pre-determined and biased mind.
3. Special Invitee
Mr. Ansal was invited 4 times in 9 years as a special invitee to some of the board meetings to seek his advice on expansion and growth of new businesses like clubs, property development and other investments. Special invitee does not mean that he was a director of the company. In 1988 Mr. Ansal resigned from the board of directors of the company due to his pre occupation and busy schedule with other businesses and therefore could not devote time to the cinema business and tendered his resignation which was duly accepted by the board of directors.
4. Due to the above reasons the prosecution has tried to project that Sushil and Gopal Ansal were therefore controlling the affairs of the cinema and were the heart and soul behind it. Mr. Dwivedi very emphatically pointed out that in criminal law personal acts of the individuals have to be considered at the time of the offence. Lifting of the corporate veil may be applicable in the civil jurisprudence but under criminal law under section 304 a, direct and proximate act of the accused person is to be determined to establish criminal liability. How can the act of Mr. Sushil Ansal and Mr. Gopal Ansal be deemed to be the direct and proximate cause of incident of fire in Uphaar Cinema?
