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SUPREME COURT OF INDIA
Dipak Misra, Shiva Kirti Singh, JJ.
Standard Chartered Bank – Appellant
versus
State of Maharashtra and Others
Etc. – Respondents
Criminal Appeal Nos. 271-273 of 2016 (Arising out of S.L.P.(Crl.) Nos.484-486 of 2016) - Decided on : 06-04-2016
(2012) 5 SCC 661 – Relied upon
(b) Negotiable Instruments Act, 1881 – Section 138 and 141 r/w sections 203 and 204, Code of Criminal Procedure, 1973 – Complaint must contain material to enable the Magistrate to make up mind for issuing process – Only direct involvement of an officer of a Company would make such officer liable under section 141(2) – Liability arises on account of conduct, act or omission by an officer and not merely on account of his holding office or position in a company – The accused being in charge of, and responsible for the conduct of business of the company must be specifically averred in the complaint u/s 141 – The specific averment may be direct or indirect. (Para 15, 17, 18)
[1998] 2 Crimes(SC) 295 / [1998] 5 SCC 343 / [1998] 3 JT 584 / [1998] 4 Supreme 364; [2001] 2 Supreme 311; (2002) 7 SCC 655; (2015) 1 SCC 103; (2010) 3 SCC 330; [2013] 7 Supreme 465; (2007) 4 SCC 70; [2006] 4 Crimes(SC) 67 / [2006] 7 Supreme 168; [2007] 1 Supreme 239 [2007] 1 Crimes(Sc) 274; [2007] 2 Crimes(Sc) 247 / [2007] 3 Supreme 699 – Relied upon
(1999) 96 Comp Cas 106 (AP); (2000) 107 Comp Cas 107 (AP); (2003) 115 Comp Cas 321 (Mad); (2003) 115 Comp Cas 957 (Del); (2002) 108 Comp Cas 687 (AP) – Cited with approval
(2015) 8 SCALE 733 – Referred
(c) Code of Criminal Procedure, 1973 – Section 482 r/w section 141, Negotiable Instruments Act, 1881 – Complaint prosecuting the Company – Specifically attributing liability of Chairman, Managing Director and whole time Directors asserting that they were responsible for day to day business of the Company – Complaint making out case against respondent Nos. 2 and 3, whole-time Director and Executive Director – Meeting the test laid down in (2015) 1 SCC 103. (Para 33, 34)
[2014] 7 Supreme 580 – Relied upon
(2015) 8 SCALE 733 – Referred
Facts of the case:
M/s ABG Shipyard Ltd. obtained a short term loan facility for a sum of Rs. 200 crores from the appellant-bank.
The company executed an indemnity in favour of the appellant-bank and agreed to repay the amount in three instalments; one on 15.12.2012, the second on 15.01.2013 and the last on 15.02.2013.
The company issued three cheques, one dated 15.12.2012 for Rs.66,67,00,000/-, and the two others dated 15.01.2013 and 15.02.2013 for Rs.66,67,00,000/- and Rs.66,66,00,000/- respectively towards the repayment of the liability.
The cheques, when presented were dishonoured due to “insufficient funds” and “account blocked”. The appellant-bank filed three complaints under Section 138 of the NI Act before the Metropolitan Magistrate, 23rd Court at Esplanade, Mumbai who took cognizance and issued summons against all the accused persons.
The single Judge of the High Court has quashed the orders of issuance of summons against the respondent Nos. 2 and 3 herein (original accused Nos. 5 and 4) by the Metropolitan Magistrate. The High Court has declined to quash the order of the Magistrate issuing summons against the respondent No. 4 (original accused No. 2).
Finding of the Court:
High Court has fallen into grave error by coming to the conclusion that there are no specific averments in the complaint for issuance of summons against respondent Nos. 2 and 3.
Result: Appeal allowed.
JUDGMENT
Dipak Misra, J.—Leave granted.
2. The present appeals, by special leave, are directed against the order dated 13th October, 2015, passed by the High Court of Judicature at Bombay in Criminal Writ Petition Nos. 1482-1484 of 2015 whereby the learned single Judge by the common impugned order has quashed the orders of issuance of summons against the respondent Nos. 2 and 3 herein (original accused Nos. 5 and 4) by the Metropolitan Magistrate, 23rd Court at Esplanade, Mumbai, under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘the Act’). Be it noted that the High Court has declined to quash the order of the Magistrate issuing summons against the respondent No. 4 (original accused No. 2), but the said accused has not approached this Court.
3. The facts, briefly stated, are that M/s ABG Shipyard Ltd. is a company registered under the Companies Act, 1956. On being approached by the authorities of the company, a short term loan facility for a sum of Rs. 200 crores was granted by the appellant-bank to the company on 28.04.2012. As averred in the complaint, the company executed an indemnity in favour of the appellant-bank and agreed to repay the amount in three instalments; one on 15.12.2012, the second on 15.01.2013 and the last on 15.02.2013. The company issued three cheques, one dated 15.12.2012 for Rs.66,67,00,000/-, and the two others dated 15.01.2013 and 15.02.2013 for Rs.66,67,00,000/- and Rs.66,66,00,000/- respectively towards the repayment of the liability. As per the dates mentioned in the cheques, they were presented before the bank but due to “insufficient funds” and “account blocked” the cheques were dishonoured. The appellant-bank issued requisite statutory notice for each cheque. As no response was given by the respondents, the appellant filed three complaints, being C.C. No. 451/SS of 2013, C.C. No. 843/SS of 2013 and C.C. No. 1145/SS of 2013 under Section 138 of the Act before the Metropolitan Magistrate, 23rd Court at Esplanade, Mumbai who took cognizance and issued summons against all the accused persons.
4. The respondent nos. 2 to 4 herein, being grieved by the orders issuing summons, preferred three revision petitions, that is, Revision Application Nos. 1123 to 1125 of 2014 before the City Civil & Sessions Court, Mumbai, and the revisional court after due deliberation did not perceive any merit in the said challenge and dismissed the revision petitions.
5. The dismissal order constrained the respondents to prefer criminal writ petitions, bearing Criminal Writ Petition Nos. 1482 to 1484 of 2015, before the High Court of Judicature at Bombay and the learned single Judge by the order impugned allowed the writ petitions preferred by accused nos. 4 and 5 holding that the complainant had averred the said respondent to be responsible without making any specific assertion in the complaint about their role. As mentioned earlier, the High Court dismissed the writ petition preferred by the respondent no.4.
6. On a perusal of the impugned order, it transpires that the learned Single Judge of the High Court has quashed the summons singularly on the ground that there are no allegations against the successful writ petitioners connecting them with the affairs of the Company.
7. Criticizing the aforesaid order passed by the High Court, it is submitted by Mr. Divan, learned senior counsel appearing for the appellant-bank that the High Court has failed to properly scrutinize the assertions made in the complaint, for the complaint has clearly stated about the role of the accused persons in the complaint. Learned counsel would submit that it is a case where the respondents had availed loan of Rs.200 crores and the cheques that had been issued were dishonoured on due presentation, the High Court should not have exercised the inherent jurisdiction under Section 482 CrPC to set aside the order issuing summons against the Executive Director and the whole-time Director who are really the persons responsible and in
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