IMPORTANT POINT
Vicarious liability u/s 141, N.I. Act discussed.

JUDGMENT

R.M. Lodha, J. —

Leave granted.

2. These 18 appeals, by special leave, are directed against the common judgment and order dated September 6, 2007 passed by Calcutta High Court whereby 18 criminal revision applications filed by the appellant for quashing the proceedings initiated by the complainants in 18 complaint cases under Section 138 read with Section 141 of Negotiable Instruments Act, 1881 ( for short, ‘NI Act’) against him have been dismissed.

3. The brief facts are these. The complainants were interested in business relationship with Rifa Healthcare (India) Pvt. Ltd. (for short, ‘the Company’) for the sale of bio-ceramic products. The complainants, for the orders they had placed, issued demand drafts in favour of the Company. It appears that the Company had not delivered the products ordered by the complainants and accordingly they asked the Company for return of their money. On April 30, 2004, the Company issued 18 cheques bearing Nos. (i) 000843 for Rs. 30,000/-; (ii) 00870 for Rs. 40,000/-; (iii) 000845 for Rs. 30,000/-; (iv) 000852 for Rs. 3,00,000/-; (v) 00842 for Rs. 60,000/-; (vi) 000862 for Rs. 40,000/-; (vii) 000834 for Rs. 60,000/-; (viii) 000572 for Rs. 40,000/-; (ix) 000827 for Rs. 30,350/-; (x) 000854 for Rs. 3,00,000/-; (xi) 000826 for Rs. 60,000/-; (xii) 000855 for Rs. 3,00,000/-; (xiii) 000857 for Rs. 3,00,000/-; (xiv) 000858 for Rs. 3,00,000/-; (xv) 000841 for Rs. 60,000/-; (xvi) 000871 for Rs. 40,000/-; (xvii) 000568 for Rs. 40,000/- and (xviii) for Rs. 60,130/- drawn on UTI Bank Ltd., Jayanagar, Bangalore in favour of the complainants. These 18 cheques were dishonoured by the Bank/s on presentation.

4. In the month of December, 2004, the complainants filed 18 complaints under Section 138 read with Section 141 of the NI Act. For the sake of brevity and convenience, we shall refer to the complaint no. 14512 of 2004. In the complaint, besides the Company, the appellant was arraigned as accused No. 3. It was alleged in the complaint that the Managing Director and the two Directors (including the appellant) were responsible for day-to-day affairs of the Company and that it was on their assurance that the complainant issued demand draft in favour of the Company and when the products of the Company were not received by the complainant, she contacted the accused persons and told them that she could not continue business with them and asked for return of her money. Accordingly, for and on behalf of the Company, in discharge of the existing liability, an account payee cheque was issued but the cheque was returned by the complainant’s banker on presentation with the endorsement ‘insufficient fund’. The complainant then sent legal notice asking the accused persons to pay the amount of cheque within 15 days from the date of the receipt of the notice but despite service of notice, no payment has been made.

5. The concerned Metropolitan Magistrate issued summons to all the accused persons including the appellant.

6. The appellant challenged the proceedings initiated by the complainants against him by filing 18 revision applications under Section 397 read with Section 401 of the Criminal Procedure Code, 1973 (for short, ‘Code’) before the Calcutta High Court. In these revision applications, notices were issued to the complainants. On behalf of the appellant, the principal contention canvassed was that the appellant was appointed as Director of the Company on August 27, 2003. He resigned from the directorship on March 2, 2004 which was accepted by the Board of Directors on that day itself with immediate effect. The factum of his resignation is also recorded in Form No. 32 filed by the Company with the Registrar of Companies on March 4, 2004. The 18 cheques which were issued on behalf of the Company to the complainants were issued after his resignation. The dishonour of these cheques through the complainants’ bankers’ was also subsequent to his resignation. In other words, it was submitted by the counsel for