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PUNJAB AND HARYANA HIGH COURT
Mehinder Singh Sullar, J.
Pankaj Badlani and Ors. —Petitioners
versus
M/s Nectar Lifesciences Ltd.
and Ors. —Respondents
Cri Misc. No. 24079 of 2011, M. 24172 of 2011, M. 24230 of 2011, M. 24231 of 2011, M. 24232 of 2011 M 24233 of 2011, M 24353 of 2011 M 24394 of 2011 M 5465 of 2012 M 5595 of 2012, M 5596 of 2012 , M 5597 of 2012
Decided on 3.10.2012
For the Petitioners:Avnish Mittal and P.K. Kukreja, Advocates.
For the Respondent No.1:Atul V. Sood, Advocate.
IMPORTANT POINT
Criminal law cannot be set into motion as a matter of course.
Headnote:(A) Negotiable Instruments Act, 1881—Sections 138 and 141—Criminal Procedure Code, 1973—Section 482—Dishonour of cheque—Summoning—Offence by company—Petitioners cannot possibly be termed to be accused solely on ground that they were Directors of defaulter company at relevant time, unless their complicity is duly pleaded and prima facie proved in terms of Section 141—Impugned summoning orders are not only non-speaking, lack application of mind and illegal, but against pointed statutory provisions as well—Same cannot be sustained in eyes of law and deserve to be quashed in obtaining circumstances of connected cases—Impugned summoning orders quashed—Cases remitted back to trial Magistrate to decide the matter afresh and to pass appropriate orders. (Paras 14 to 17)
(B) Negotiable Instruments Act, 1881—Sections 138 and 141—Criminal Procedure Code, 1973—Section 482—Dishonour of cheque—Summoning—Offence by company—Criminal prosecution is a serious matter—It affects liberty of a person—No greater damage can be done to reputation of a person than dragging him in a criminal case—Criminal law cannot be set into motion as a matter of course—Order of Magistrate summoning accused must reflect that he has applied his mind to facts of case and law applicable thereto—He has to examine nature of complaint and evidence both oral and documentary in support thereof, relatable to relevant provisions of offences and that would be sufficient for complainant to succeed in bringing charge home to accused—It is not that Magistrate is a silent spectator at the time of preliminary evidence—Accused cannot be summoned in a routine manner. (Para 15)
Certainly. Based on the provided legal document, the key points are as follows:
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Criminal law cannot be initiated lightly; the process must involve careful application of law and facts, especially in criminal proceedings involving dishonour of cheques under the Negotiable Instruments Act (!) (!) .
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The order to summon accused persons must be based on a thorough examination of the facts, evidence, and applicable law, and must clearly demonstrate that the magistrate has applied his mind to the case. Routine or non-speaking orders are considered illegal and arbitrary (!) (!) .
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In cases involving companies and their directors, criminal liability under the relevant sections requires specific pleadings and proof that the accused was in charge of and responsible for the conduct of the company's business at the relevant time. Vicarious liability cannot be presumed and must be established with clear and specific averments (!) (!) .
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Accusations against individual directors or officers of a company require that their specific role and responsibility be adequately pleaded and proved, rather than assuming liability solely based on their position (!) (!) .
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The law emphasizes fairness and the importance of a reasoned, well-founded order before summoning an accused, to prevent unwarranted damage to reputation and liberty. Summoning orders must be backed by relevant, rational, and legally sufficient material (!) (!) .
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The court has the authority to quash improper summoning orders that lack application of mind, are non-speaking, or are against statutory provisions. Such orders should be remitted back to the trial court for a fresh decision, ensuring compliance with legal standards (!) (!) .
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Criminal proceedings are serious and should not be initiated as a matter of routine; the decision to proceed must be based on a careful assessment of evidence and legal requirements (!) (!) .
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The court's primary concern is to safeguard the rights and reputation of individuals, ensuring that criminal law is invoked only when there is a prima facie case supported by proper pleadings and evidence (!) (!) .
Please let me know if you need further elaboration or specific legal advice regarding this document.
Mehinder Singh Sullar, J.— As identical points of law and facts are involved, therefore, I propose to dispose of above indicated petitions to quash the impugned complaints & summoning orders, by virtue of this common judgment, in order to avoid the repetition. However, the crux of the facts, which needs a necessary mention for the limited purpose of deciding the core controversy, involved in the instant petitions, has been extracted from titled as Pankaj Badlani & Ors. v. M/s Nectar Lifesciences Ltd. & Ors., for ready reference in this context.
2. Tersely, the facts & material, culminating in the commencement, relevant for deciding the present petitions and emanating from the record, are that initially, M/s Nectar Lifesciences Limited complainant/respondent No.1 (for brevity “the complainant”) filed the criminal complaints under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter to be referred as “the NI Act”), inter alia, pleading that the impugned cheques issued by the petitioners/accused in order to discharge their legal liability were dishonoured. They did not make the payment, despite legal notices within a statutory period. Thus, they have committed the pointed offence.
3. Taking cognizance of the complaints, the trial Court summoned the petitioners/accused to face the trial under Section 138 of the NI Act, by way of impugned summoning order dated 5.3.2011. The similar impugned summoning orders were passed as well in the other connected cases instituted on similar private complaints.
4. Aggrieved thereby, the petitioners-accused preferred the instant petitions to challenge the impugned complaints and summoning orders, invoking the provisions of Section 482 Cr.PC.
5. The case, inter alia set up by the petitioners/accused, in brief in so far as relevant, was that the complainant has filed the false complaints against them. They have been arrayed as accused only in the capacity of Directors of Cecil Pharmaceuticals Private Limited (respondent No.11), without pleading therein that they are in any way responsible for the commission of indicated offence as required under Section 141 of the NI Act. The trial Court was stated to have mechanically summoned them without the application of mind, by way of non-speaking impugned summoning orders. On the strength of aforesaid grounds, the petitioners/accused sought to quash the impugned complaints & summoning orders in the manner depicted here-in-above.
6. Faced with the grave situation, although initially, the complainant has vaguely refuted the prayer in question and filed the reply, but during the course of hearing, its learned counsel has very fairly conceded that petitioners/accused have been arrayed as accused only on account of Directors of company/respondent No.11 and no other overt act as contemplated in Section 141 of the NI Act is attributed to them.
7. Having heard the learned counsel for the parties, having gone through the record & legal provisions with their valuable help and after bestowal of thoughts over the entire matter, to my mind, the present petitions deserve to be partly accepted in this respect.
8. At the very outset, the learned counsel for the petitioners- accused did not press the prayer, for quashing the impugned complaints at this stage, without prejudice to their rights in any manner. However, the argument of learned counsel that vague, non-speaking impugned summoning orders are not only arbitrary & illegal, but against the statutory provisions of Section 141 of the NI Act, has considerable force.
9. As is evident from the record, that the complainant has filed the complaints under Section 138 of the NI Act against the petitioners/accused only in the capacity of Directors of company respondent No.11. Section 141 postulates that if the person committed 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
