In the above captioned six petitions, quashing of criminal complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as ‘NI Act’) and the common order of 2nd June, 2010 (vide which petitioners have been summoned as accused), is sought on merits by M/s Rachana Global Excavation Limited and its Chairman, Managing Director and a Director.

In the above captioned four petitions, petitioner – Nalin, Chairman of M/s Rachana Global Excavation Limited (hereinafter referred to as M/s Rachana Global) and petitioner – Ashesh, Director of M/s Rachana Global seek to challenge summoning order of 2nd June, 2010 on the ground that there are no averments to make them vicariously liable. Whereas, in the above captioned remaining two petitions i.e. Crl. M.C. No. 4395/2010 and Crl. M.C. 4396/2010, petitioner – M/s Rachana Global and its Managing Director are seeking quashing of two criminal complaints under Section 138 of NI Act wherein the total cheque amount is Rs. 27,84,52,604/- and Rs. 5,00,00,000/- respectively and quashing of these two complaints is sought on the ground that the aforesaid two post dated cheques were not issued in discharge of any debt or existing liability and receipt of these two cheques is hit by Section 3(2) of Foreign Exchange Management Act, 1999 (hereinafter referred to as ‘FEMA’).

With the consent of learned counsel for the parties, the above captioned six petitions were heard together and are being disposed of by this common judgment.

The undisputed facts emerging from the two complaints in question are that a 100% foreign subsidiary of M/s Rachana Global in Mozambique, Africa entered into a commercial relationship with a 100% foreign subsidiary of M/s Jindal Steel and Power Limited (hereinafter referred to as M/s JSPL) in Mauritius. The transaction between the parties stands explained in paragraphs No. 1 to 16 of the complaints in question and it needs no reproduction. It would be suffice to note that since M/s JSPL had to pay US $ 10 Million to M/s Rachana Global under 1218 L and M/s Rachana Global had to return US $ 17,140,274 on account of cancellation of 929 L, 1242 L. The parties agreed to set off these amounts vide 1220L Amendment No. 3 Agreement dated 31.12.2009. Finally, M/s Rachana Global became liable to pay to M/s JSPL US $ 7,140,274 by 31st January, 2010 along with interest @ 12 % pa w.e.f. 1st October, 2009 till 31st January 2010 which was calculated and agreed to be US $ 2,85,611/- thereby totaling US $ 7,425,885. M/s Rachana Global gave a letter of 18th January, 2010 to M/s JSPL in which M/s Rachana Global acknowledged the liability of M/s Rachana to pay US $ 7,425,885 to M/s JSPL and enclosed three post dated cheques of Rs. 20,00,00,000/-,Rs. 7,84,52,604/- and Rs. 5,00,00,000/- respectively, totaling to Rs. 32,84,52,604/- (equivalent to aforesaid US $ 7,425,885) which were payable at Delhi and were dishonoured. Hence, two complaints in question were lodged.

To seek quashing of these two complaints in question and the common summoning order, it was vehemently contended by learned counsel for petitioners that these two complaints are bereft of necessary averments to impute vicarious liability on petitioners – Nalin and Ashesh. It was pointed out by learned counsel for petitioners that in these two complaints, there are no averments to indicate that petitioners – Nalin and Ashesh were Incharge and were responsible for the dishonor of cheques in question and so bald assertions made in these two complaints are not sufficient to hold petitioners – Nalin and Ashesh vicariously liable for the offence in question. It was pointed out that role of petitioners – Nalin and Ashesh is required to be highlighted as there is no deemed liability of a Director or Chairman of the company. To contend so, reliance is placed upon decisions in Central Bank of India v. Asian Global Limited and Others (2010) 11 SCC 203 ; Anita Malhotra v. Apparel Export Promotion Council and Another (201