JUDGMENT

P.K. BALASUBRAMANYAN, J.

1. Leave granted.

2. Heard both sides.

3. On behalf of the Data Access (India) Limited, two cheques were issued to the respondent Bharat Sanchar

Nigam Limited (hereinafter referred to as, "B.S.N.L."). The cheques were dated 31.8.2004. The cheques were duly presented by the B.S.N.L. but were dishonoured for insufficiency of funds. B.S.N.L. thereupon issued requisite notices calling upon the Data Access (India) Limited to pay the amounts due under the cheques. The payments not having been made, B.S.N.L. filed a compliant under Section 138 of the Negotiable Instruments Act.

4. In the complaint, B.S.N.L. alleged that the cheques were issued to it by the Data Access (India) Limited in discharge of a pre-existing liability based on the business transactions between the companies. The appellant herein and respondent No. 2 in the complaint were the Directors of respondent No. 1 Company and they were in charge of and responsible for the conduct of the business of Data Access (India) Limited. The relevant statement in the complaint read:

"That accused No. 1 is a company incorporated under the Companies Act. Accused Nos. 2 and 3 are its Directors. They are incharge of and responsible to accused No.1 for conduct of business of accused No. 1 Company. They are jointly and severally liable for the acts of accused No. 1."

The complaint also stated that in response to the notice issued by B.S.N.L., a reply had been sent claiming that the appellant was no longer the Chairman or Director of Data Access (India) Limited and accused No. 2 was not aware of the issuance of the cheques. These statements were false and by not keeping sufficient funds in their account and failing to pay the cheque amount on the service of the notice, all the accused committed an offence as contemplated in Section 138 of the Negotiable Instruments Act and they were liable to be proceeded against. The complaint also asserted that all the accused were guilty of the offence in terms of Section 138 of the Negotiable Instruments Act and were liable to be punished therefor.

5. The appellant herein moved the High Court under Section 482 of the Code of Criminal Procedure seeking the quashing of the complaint insofar as it related to him. The appellant pleaded that he was nominated as Honorary Chairman without any remuneration, sitting fee etc. by the investors and promoters of the Company of Data Access (India) Limited on 24.7.2004 and he was designated as Chairman of the Company. Being a nominated Chairman and holding an Honorary post in the Company, he was never assigned with any of the Companys financial or other business activities. He was the Chairman for name sake and was never entrusted

with any job or business or constituted a signing authority. He had resigned effectively on 26.8.2004 when problems between the promoters and investors of Data Access (India) Limited started developing. The two cheques that were the subject matter of the complaint, were dated 31.8.2004, after the appellant had effectively resigned. He had not signed those cheques. He was not liable. According to him, the Data Access (India) Limited had two Managing Directors at the relevant time and they were the ones who were invested with substantial powers of management of the Company and as such the Managing directors were involved in the day to day affairs of the Company and not himself, who had only acted for a short period as Honorary Chairman. The complaint did not contain adequate averments to justify initiation of a criminal proceeding against him and hence the complaint was liable to be quashed.

6. On behalf of B.S.N.L., it was contended that the Petition under Section 482 of the Code of Criminal Procedure was not maintainable and that the questions sought to be raised by the appellant were questions that had to be decided at the trial. The complaint disclosed sufficient materials justifying the commencement of the proceedings against Data Access (Ind