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BOMBAY HIGH COURT
J.N. Patel, J.
Orient Syntex Ltd. and others - Petitioners
versus
Besant Capital Tech Limited, Akola - Respondent
Cri. W.P. No. 233 of 1998
Decided on 7-6-1999
Counsel for the parties:
For the Petitioners: Mr. Sunil V. Manohar, Advocate.
For the Respondents: Mr. S.P. Dharmadhikari with Mr. Anilkumar Thakkar and Mr. R.B. Agrawal, Advocates.

Headnote:Negotiable Instruments Act, 1881 - Sections 138 and 141 – Dishonour of cheque - Offence by Company Liability of Directors - Two categories of persons who could be deemed to be guilty where offence' was committed by Company - 'Every person who at the time offence was committed was In charge of and was responsible to Company for conduct of its business Persons against whom it was proved that offence was committed with consent or connivance of or attributable to any neglect on part of any Director. Manager. Secretary or other Officer of Company - Petitioner No.4 who claimed to be the Nominee Director nominated by _Industrial Development Bank of India did not file any application for recalling the process - Cheque was issued to discharge amount which petitioner had borrowed from respondent Company - Accused before trial Court were prima facie liable to be proceeded against. (Paras 22 and 27 and 30)

       Result: Petition dismissed.

       

JUDGMENT

J.N. Patel, J. - On dishonour of Cheque No. 434881 dated 26-1-1995, drawn by the petitioner Company Orient Syntex Limited in the sum of Rs. 12, 56, 212/- in favour of Besant Capital Tech Limited, the complainant Besant Capital Tech Limited issued notice to the petitioner Company and its Directors, demanding payment within 15 days from the receipt of the notice failing which the petitioner Company and its Directors would be prosecuted for having committed offence punishable under Section 138 of the Negotiable Instruments Act, 1881. As the petitioner Company and its Directors refused to comply with the notice, a complaint under Section 138 of the Negotiable Instruments Act, 1881 came to be filed in the Court of the Judicial Magistrate, Akola, against the petitioner Company and its Directors, which came to be registered as Complaint Case No. 1120 of 1996.

2. The learned Chief Judicial Magistrate, after verification of the complaint, passed an order issuing process against the accused under Section 138 of the Negotiable Instruments Act, 1881, by his order dated 16-7-1996. Thereafter, it appears that the accused failed to appear in response to the summons. On 11-9-1996, non - bailable warrants came to be issued against the accused Nos. 3 to 9 who were Directors of the petitioner Company. This issuance of process came to be challenged before this Court vide Criminal Application No. 1227 of 1996. By the order dated 14-1-1997, this Court recorded that the petitioners/accused having already moved an application before the learned Magistrate to recall the process. it ordered that the learned Magistrate would consider the said application and decide the same with reasonable expediency after hearing both the sides and also made certain observations and, therefore: the petitioners did not press for relief’s based on various contentions raised before this Court, which came to be disposed of accordingly.

3. The learned 9th Joint Judicial Magistrate, First Class, Akola. heard the counsel appearing for the petitioner Company, accused Nos. 3, 7, 9 and 10, and, rejected their application Exhs. 11 and 67 which were filed for recall of the process. It is this order of the learned Magistrate which is challenged before this Court by this petition.

4. This petition is filed by the accused Company/Orient Syntex Limited, Shri S.K. Kejriwal, its Vice Chairman-cum-Director; Shri G.L. Lath. Managing Director; Shri K.R. Vishwanathan, Nominee Director nominated by the Industrial Development Bank of India; and one Shri R.M. Mehta, Director. It is the contention of the petitioners that apart from the Vice Chairman-Cum-Director and the Managing Director, i.e., the petitioner Nos. 2 and 3, there are other non-working Directors of the Company who are wholly unconcerned with day-today work of the Company and have no concern whatsoever and these Directors are neither incharge nor are the working Directors and the petitioners have explained the position of the Directors vis-a-vis the Company and their functions. Out of the petitioners, the petitioner No.4 K.R. Vishwanathan has been nominated on the Board of Directors by the Industrial Development Bank of India, since the Industrial Development Bank of India has financed the petitioner Company and he is merely nominee Director, and in respect of petitioner No. 5, it is merely stated that he is a leading industrialist and Director of the petitioner Company. As regards the contentions in respect of the other Directors are concerned for the purpose of deciding this petition, this Court need not refer to it as none of the other Directors have come before this Court taking such a plea that the issuance of process against them, deserves to be quashed and set aside.

5. It is the case of the petitioners that the petitioner Company has made payment to the respondent - Company for the exact amount of Rs. 12,56.212/- against which the debit note dated 21-31996 issued by the respondent Company in favour of the petitioner




























































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