IMPORTANT POINT
Where a director was prosecuted for offence under Section 138 r/w 141 NI Act with specific allegations that he was in-charge of and responsible for conduct of business of company proceedings could not be quashed in a petition under Section 482 Cr.P.C. that he was not involved in business activities as it required trial.

V.B. Gupta, J.—By way of present petition, filed under Section 482, Cr.P.C., the petitioner is seeking quashing of complaint case, pending in the Court of Magistrate, filed under Section 138 of the Negotiable Instruments Act.

2. Respondent/complainant filed a complaint under Section 138 of the Negotiable Instruments Act against seven accused persons and the present petitioner is one of the accused in that complaint. It has been alleged in the complaint that accused Nos. 2 to 7 have been Directors of accused No.1 and they have been in-charge and were responsible to the accused No.1 company for the conduct of the business of the company. Towards the part payment of the dues of the respondent/complainant, the accused had issued cheque and when the respondent/complainant presented the cheque for encashment, the same was returned unpaid with the remarks ‘exceeds arrangement’. Thereafter the legal notice was served by the respondent complainant.

3. In the present petition, it has been alleged by the petitioner that this petitioner was sleeping Director at the time of the establishment of the company. He was never involved in the business activity and he tendered his resignation from the office of the Board of Directors of the company with effect from 7th September, 2004 and the Chairman of the Company accepted his resignation and the same was filed before the Registrar of the Companies and accordingly the petitioner’s name was removed from the post of Director from the official record. All the cheques were issued in the year 2005 and at that time the petitioner was not concerned with the office of the company nor he was authorized signatory and was also not involved in the company affairs. Under these circumstances, the present complaint is liable to be quashed.

4. On the other hand, it has been contended by learned counsel for the respondent that Form No. 32, on the own showing of the petitioner was submitted in the office of Registrar of Companies on 9th March, 2005 and the date of resignation in the Form No. 32 has been mentioned as 16th February, 2005. In view of these facts, the petitioner cannot say that he was not a Director on the date of issue of the cheque and as per averments made in the complaint, the petitioner was in-charge of and responsible for the conduct of the business of the company. The learned counsel for the respondent in support of his contention has cited a recent decision of the Supreme Court as N. Rangachari v. Bharat Sanchar Nigam Limited1, contending that the question whether the Director is in-charge of affairs of the company or not at the given time can only be adjudged during the course of trial.

5. Admittedly, the present petitioner was the Director of the company which has issued the cheque though according to the petitioner he was a sleeping Director. The cheque in question is dated 15th February, 2005 whereas as per Form No. 32 of the Registrar of Companies placed on record by the petitioner himself, the date of resignation mentioned in this form is 16th February. 2005. So, prima facie, admittedly on the date of the issue of the cheque, the petitioner was the Director of the company.

Now the question to be seen in the present case is as to whether the present petitioner was in-charge of the affairs of the company or not.

6. In the complaint it has been alleged by the respondent/complainant that the present petitioner has been the Director being the in-charge of and responsible for the affairs of the company. In the case of N. Rangachari (supra), cited by the learned counsel for the respondent, a cheque issued by the company was dishonoured and a complaint under Section 138 of the Negotiable Instruments Act was filed in which allegations were made against the appellant and another who were the Directors and the question was whether they were in-charge of affairs of the company at the relevant time or not. It was held by the Apex Court that it can be adjudged only during the course of tria