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2008(2) Bankmann 501 (Del.).
DELHI HIGH COURT
V.B. Gupta, J.
Nipam Kotwal and Ors. —Petitioners
versus
M/s. Dominos Printech India
Pvt. Ltd. —Respondent
Criminal M.C. (M) No 3186 of 2007
Decided on 28.11.2007
Counsel for the Parties:
For the Petitioners:Mr. Sunil Bainsla, Advocate.
For the Respondent: Nemo.
IMPORTANT POINT
When the Directors of company were prosecuted with specific averment that they were in-charge of and responsible to company for conduct of its business, complaint under Section 138 NI Act could not be quashed on the plea by Directors that they were sleeping directors.
Headnote:Negotiable Instruments Act, 1881—Sections 138 and 141— Dishonour of cheque issued by company—Prosecution of company and Directors—Quashing petition by accused directors on plea that they were not the authorised signatory and were merely sleeping directors—Specific averment in complaint and demand notice that petitioners were in-charge of and responsible to accused company for conduct of business of company—Contention raised by petitioners could be judged during trial and complaint could not be quashed under Section 482 Criminal Procedure Code.
Held: So, the complainant from the day one has been alleging that the present petitioners were in-charge of and responsible to the accused company for conduct of the business of the company and were looking after the business of the company and the offence under Section 138 of the Act has been committed with the knowledge, consent and connivance of the present petitioners and is attributable to neglect on their part. (Para 9)
So, the question whether a person is a Director, in-charge of the affairs of the company at the relevant time, can only be judged during the course of trial and the complaint cannot be quashed under Section 482, Cr.P.C.
As already stated above, in the present case, specific averments have been made against all the petitioners that the present petitioners are in-charge of and responsible to the company for conduct of the business of the company and have been looking after the business of the company and the offence under Section 138 of the Act has been committed with the knowledge, consent and connivance of the present petitioners besides either and is attributable to neglect on their part.
In view of the decision of the Apex Court in N. Rangachari (supra) when specific averments have been made against each of the petitioners and since it can be adjudged only during the course of trial whether the present petitioners were in charge of or responsible to the affairs of the company or not, the present petition is wholly mis-conceived and is not maintainable and the same is thereby dismissed. (Paras 13 to 15)
Result: Petition dismissed.
V.B. Gupta, J.—The present petition, has been filed under Section 482 Cr.P.C. for quashing of the criminal complaint No.C 1962/01 pending before the Court of Metropolitan Magistrate and the proceedings thereunder qua the petitioners.
2. The brief facts of this case are that the accused company in which the present petitioners are the Directors, placed order for certain Ink Jet Printers and certain cheques have been issued by the accused company in favour of the respondents for part payment, of those Ink Jet Printers. Thereafter, the said cheques have got bounced. Notice under Section 138 of Negotiable Instruments Act (for short ‘the Act’) had been issued by the respondent to all the Directors of the accused company including the petitioners. A criminal complaint under Section 138 of the Act was filed by the respondent company thereby arraying the petitioner along with other persons as accused and vide the impugned order dated 8.12.2005, all the accused persons including the present petitioners, had been summoned by the learned trial Court to face trial before it.
3. It has been contended by the learned counsel for the petitioner that there is no material on record to connect the petitioner with commission of the alleged offence under Section 138 read with Section 141 of the Act in the absence of any averment in the complaint that the petitioners were in charge of and responsible for the day-to-day affairs and conduct of the business of the accused company. It is also contended that the fulfilment of requirements of Section 141 of the Act is the condition precedent and is sine qua non for summoning of the petitioners, which is manifestly lacking in the complaint. Moreover, no prosecution could have been launched against the present petitioners in the absence of any averment that the petitioners have signed the alleged cheque in question. Even otherwise, the petitioners were not the authorized signatory of the company and were merely sleeping Director. No specific role has been assigned to any of the petitioners.
4. In support of his contentions, learned counsel for the petitioner has cited certain judgments of the Apex Court; Sabitha Ramamurthy & Anr. v. R.B.S. Channahasavaradhya3; S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr.2 and N.K. Wahi v. Shekhar Singh & Ors.3
5. In N.K. Wahi’s case (supra), it has been laid down that as per Section 141 of the Act, only such person is held liable if at the time when the offence was committed, he was in-charge and responsible to the company for conduct of the business of the company. It was further held that:
“In certain contingencies referred to under Section 138 of the Act on the cheques being dishonoured a new offence as such had been created. But to take care of the offences purported to have been committed provisions of sub-section (1) to Section 141 of the Act come into play. It reads as under:
“141. Offence by companies—(1) If the person committing an offence under Section 138 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 deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.”
7. This provision clearly shows that so far as the companies are concerned if any offence is committed by it then every person who is a Director or employee of the company is not liable. Only such person would be held liable if at the time when offence is committed he was in-charge and was responsible to the company for the conduct of the business of the company as well as the company. Merely being a Director of the company in the absence of
