RADHEY SHYAM KHEMKA vs STATE OF BIHAR

The Supreme Court dismissed the appeals challenging the High Court's rejection of an application under Section 482 Cr.P.C. The Court held that the provisions of the Companies Act do not shield promoters and directors from prosecution under the Penal Code if the company was formed with the intent to defraud the public. It emphasized that the trial court must determine if there is prima facie evidence of dishonest intent in the collection and misappropriation of funds from investors, and that the High Court cannot quash prosecutions merely because alternative remedies exist under the Companies Act.