In Brief
Ganesh Benzoplast Limited obtained an inter-corporate deposit from Morgan Securities & Credits Pvt. Ltd. and pledged 15 lakh equity shares as security under a Letter of Pledge expressly authorizing sale to the lender, its group companies, or outsiders at any price without dispute. The shares were sold for Rs. 24,67,631 in 2001 to a related company. The borrower knew of the sale in 2001, sought information in 2006, yet filed a criminal complaint only in 2011, alleging fraud and breach of trust. The Supreme Court held this was an abuse of process: the complaint sought to criminalize a contractual dispute, contained an unexplained 10-year delay despite knowledge, and did not disclose the essential ingredients of any criminal offence given the express contractual authorization. The appeals were allowed and the complaint dismissed.", "citations">[]
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