Directors of a company cannot be summoned under Section 138 of the NI Act without specific allegations of their individual responsibility for the company's conduct.

ORDER :

(V.R.K. Krupa Sagar, J.)

1. Summoning order of a learned Magistrate is under challenge in this criminal revision case.

2. M/s. Andhra Pradesh State Financial Corporation (APSFC) filed a complaint under section 200 CrPC alleging offence under section 138 read with section 142 of the Negotiable Instruments Act, 1881 (for short “the NI Act, 1881). A1 to A6 are arraigned in the complaint. On 21.06.2023, after verifying the complaint and sworn statements of the complainant, the learned Magistrate passed the following order:

“Heard, the counsel for complainant. This complaint was filed to take the cognizance of the offence punishable U/sec. 138 of N.I. Act. Sworn statement of the complainant recorded. Perused the material of the record in support of the complaint. On perusal of the documents it is found that there is prima facie material to proceed further into the case. Hence, Cognizance of the offence is taken against the accused for the offence punishable U/sec. 138 and 142 NI Act Vide CC.No.3150/2023. Issue summons to the accused on payment of process. Call On 14.09.2023”

3. Learned Magistrate registered the case as C.C.No.375 of 2023. The said case is pending before learned IV Additional Chief Metropolitan Magistrate, Vijayawada. A2, A3 and A5 therein filed the present criminal revision case impugning the above referred order dated 21.06.2023.

4. Sri D.S.Siva Darshan, the learned counsel for revision petitioners and Sri G.R.Sudhakar, the learned standing counsel for respondent No.2/ Andhra Pradesh State Financial Corporation submitted arguments. Learned counsel for revision petitioner cited legal authorities.

5. M/s. Karvy Realty (India) Limited is an incorporated company. M/s. Karvy Data Management Services Limited is a part of the said group of companies. M/s. Andhra Pradesh State Financial Corporation owns a building. A part of the building was leased out to M/s. Karvy Reality (India) Limited. Over a period, the lease holder fell in arrears in paying the rents and various other charges for power and common maintenance charges etc. It is in that regard, the tenant company issued three cheques towards repayment of the overdues. On their presentation for collection, they were returned unpaid by bankers with an endorsement that “payment stopped by drawer”. After serving notices on A1 to A6 and since there was no repayment of cheque amounts, M/s. Andhra Pradesh Financial Corporation had filed the complaint. The learned Magistrate took cognizance of the offence and ordered summons to A1 to A6.

6. To appreciate the submissions of the learned counsels, the cause title in the said criminal case is required to be seen and the same is extracted below:

1. M/s.Karvy Data Management Services Ltd. Rep. by its Managing Director, Registered Office: Karvy Gateway, Plot No.38 & 39, Nanakramguda, Financial District, Gachibowli, Rangareddy, Hyderabad - 500032.

2. M/s.Karvy Data Management Services Ltd, Director, Divakar Atluri, Karvy House, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad-500034.

3. M/s.Karvy Data Management Services Ltd, Director: Vijay Kumar Tarimela, Karvy House, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad-500034.

4. Sri Mahesh Vijaya Gopal, Managing Director M/s.Karvy Data Management Services Ltd, Karvy House, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad-500034.

5. M/s.Karvy Data Management Services Ltd, Director: Comandur Parthasarathy, Karvy House, 46, Avenue 4, Street No.1. Banjara Hills, Hyderabad-500034.

6. G.Sridhar, Vice President, M/s.Karvy Data Management Services Ltd, Karvy House, 46, Avenue 4, Street No. 1. Banjara Hills, Hyderabad-500034.”

7. Dishonour of cheque for insufficiency of funds etc., is an offence under section 138 NI Act, 1881. If a person committing an offence under section 138 NI Act is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be de