The main legal point established is that for prosecution under Section 138 of the Negotiable Instruments Act, 1881, the accused directors must be in charge of or responsible for the conduct of the company's business at the time of the offence.

1. On 19.03.2014, eleven criminal complaints were filed in the court of the Metropolitan Magistrate, each seeking prosecution of the parties shown in the array of respondents for offences punishable under Section 138 of the Negotiable Instruments Act, 1881, two of such complaints i.e. the complaint nos.800/1/14 and 802/1/14 having been presented by Jwala Devi Enterprises Pvt. Ltd. through its authorized representative Sat Parkash Bansal and the rest – complaint nos.799/1/14, 812/1/14, 813/1/14, 814/1/14, 815/1/14, 839/1/14, 840/1/14, 841/1/14 and 842/1/14 – having been presented by Anand Prakash Bansal, Proprietor of M/s. Pooja Enterprises. Each of the said criminal complaints were directed against several persons including a company described as M/s. Bush Foods Overseas Pvt. Ltd. It may be mentioned that Mr. Virkaran Awasty was reflected in the array of the accused as the Managing Director of the said company accused. The respondents in these petitions were amongst the other persons shown as accused in the said complaints, each of them having been described as “Director” of the said company accused.

2. On the basis of the preliminary inquiry in each case, the Metropolitan Magistrate issued process including against the respondents herein. The respondents, feeling aggrieved, approached the court of Sessions invoking its revisional jurisdiction by separate petitions (CR nos.34-62/2015), their prime contention being that there was no case made out for they to be summoned as accused on the basis of allegations that they were directors of the company accused, denying that they had any concern with the responsibility for the conduct of the day-to-day business of the company.

3. Placing reliance primarily on decision of a bench of three Hon’ble Judges of the Supreme Court in SMS Pharmaceuticals Pvt. Ltd. Vs. Neeta Bhalla, (2005) 8 SCC 89, the court of Sessions found substance and merit in the aforesaid contentions and allowed all the above-said revision petitions by a common order dated 18.04.2015 holding that the summoning order had been passed by the Magistrate mechanically without going through the material(s) on record, there being no averment to the effect that the said persons were in charge of, or responsible for the conduct of the business of, the company accused and consequently dropping the criminal proceedings against each of them.

4. The petitions at hand have been filed by the complainants invoking the inherent jurisdiction of this court under Section 482 of the Code of Criminal Procedure, 1973 (Cr. PC) and Article 227 of the Constitution of India, 1950 to pray for the aforesaid orders of the Sessions court in each of the said eleven complaint cases to be set aside and the proceedings against the respondents herein to be revived on the file of the Metropolitan Magistrate. Reliance is placed in this context by the petitioners on the decisions of benches of two Hon’ble Judges of the Supreme Court reported as Gunmala Sales (P) Ltd. Vs. Anu Mehta and Ors, (2015) 1 SCC 103 and Standard Chartered Bank Vs. State of Maharashtra and Ors., (2016) 6 SCC 62. There can be no quarrel with the proposition, as advanced by the counsel for the respondents, that the ruling of the bench of three Hon’ble Judges in SMS Pharmaceuticals (supra), continues to hold the field, the decisions in Gunmala Sales (P) Ltd. (supra) and Standard Chartered Bank (supra) having accepted this position and the said subsequent rulings being in a slightly different context.

5. These matters pertain to the penal clause contained in Section 138 of the Negotiable Instruments Act, 1881, which reads thus :-

138. Dishonour of cheque for insufficiency, etc., of funds in the account — Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amo