IMPORTANT POINT
The court quashed proceedings against a former director for cheque dishonor, ruling that allegations did not establish an offense post-resignation, emphasizing the need to prevent abuse of legal processes.

ORDER :

Venkata Jyothirmai Pratapa, J.

The instant petition under Section 482 of Code of Criminal Procedure, 1973, [for short ‘Cr.P.C’] is filed by the Petitioner/Accused No.7 respectively, seeking to quash the proceedings against him in C.C.No.553 of 2020 on the file of the Court of Special Mobile Judicial Magistrate of First Class, Guntur, registered for the offences punishable under Sections 138, 141, 142-A and 143 of Negotiable Instruments Act,1881, [for short ‘N.I. Act’].

2. The facts which led to the filing of this petition :

a. The complainant is a partnership firm, represented by its Partner Jamili Tirumaleswara Rao, doing business in Cotton and Cotton products under the name and style “M/s.Lakshmi Cotton Traders” at Guntur. Whereas, Accused No.1 is the Company, Accused No.2 is the Managing Director, Accused Nos.3 to 7 are the Directors of A.1-Company, situated at Mangalagiri, doing business in Cotton and allied products.

b. At the request of all the accused, the complainant had supplied cotton on credit basis under different invoices on different dates, for the business of A.1-Company. All the accused agreed to make payment within three days from the date of invoice failing which they also agreed to pay the interest on unpaid sale consideration @ 24% per annum. The total amount due to the complainant by A.1-Company is Rs.1,22,78,584/-.

c. On repeated demands by the complainant, Accused No.2 with the consent of Accused Nos.3 to 7 issued five cheques bearing Nos.,679478 dated 04.06.2019 for Rs.15,00,000/-, 679479 dated 06.06.2019 for Rs.15,00,000/-, 240284 dated 10.06.2019 for Rs.10,00,000/-, 769352 dated 24.06.2019 for Rs.15,00,000/- and 769342 dated 26.06.2019 for Rs.10,00,000/-, drawn on State Bank of India, Grand Trunk Road, Mangalagiri, Guntur District towards part payment of the amount due under the Khata.

d. Out of the said cheques, when the complainant presented cheque bearing No.769342 dated 26.06.2019 for collection through its banker i.e., State Bank of India, Sreenivasaraopeta, G.T. Road, Guntur, it was returned as “Funds Insufficient”.

e. The complainant sent a registered legal notice to all the accused on 15.07.2019 and the accused having received the same, gave a reply with false allegations. Hence, the complainant filed the complaint against all the accused for the alleged offences, which was numbered as C.C.No.553 of 2020 on the file of the Court of Special Mobile Judicial Magistrate of First Class, Guntur.

f. The said C.C is sought to be quashed by Petitioner/Accused No.7 vide this petition. Hence, the Crl.P.

Arguments Advanced at the Bar

3. Heard Sri N. Ashwani Kumar, learned counsel for the Petitioner and Ms. D. Prasanna Lakshmi, learned Assistant Public Prosecutor representing the State/Respondent No.1. The memo of proof of service dated 25.01.2022 indicates that the notice returned with an endorsement “Respondent No.2, refused to receive the notice”. This Court, vide order dated 17.08.2023, observed the service as sufficient. None entered appearance for Respondent No.2.

4. Learned counsel for the Petitioner/Accused No.7 in elaboration to what was stated in the petition, would submit that the Petitioner has never been into the affairs of the accused company since 2016 respectively as he had given resignation for their post on 29.02.2016. It is also submitted that the Petitioner has no relation with the cheques issued by Accused No.2. It is also urged that the allegations made in the complaint do not disclose any offence against the Petitioner and therefore prayed to quash the proceedings. To buttress his contentions, learned counsel placed reliance on the decisions rendered by the Hon’ble Apex Court in Anita Malhotra v. Apparel Export Promotion Council and another, (2012) 1 SCC 520, and Gunmala Sales Pvt. Ltd. v. Anu Mehta & Others, (2015) 1 SCC 103.

5. Refuting the arguments referred to above, the learned Assistant Public Prosecutor would submit that there are factual aspects, which are to be considered by the