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IN THE HIGH COURT OF DELHI AT NEW DELHI
Swarana Kanta Sharma, J.
Amit Kumar Gupta – Appellant
Versus
M/s Delhi Safe Deposit Ltd. – Respondent
Cr.M.C. 2456 of 2019, Cr.M.C. 4378 of 2019 & Cr.M.A. 34857 of 2019 and Cr.M.C. 4379 of 2019 & Cr.M.A. 34859 of 2019
Decided On : 01-05-2023
NI Act - Summoning Orders - Section 138, 141 of NI Act - Summary
Fact of the Case:
The case involved petitions seeking quashing of summoning orders and proceedings pursuant to complaints filed under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused company had issued cheques that were returned unpaid, leading to the filing of complaints and issuance of summoning orders by the Magistrate.
Finding of the Court:
The court found that there was sufficient material on record before the learned Magistrate to issue summons against the petitioners. The role of each petitioner in the commission of the offence, if any, could only be determined during the trial and could not be examined in detail by the court while exercising jurisdiction under Section 482 Cr.P.C.
Issues: The issues revolved around the alleged misuse of blank signed cheques, the resignation of the petitioners before the dishonor of the cheques, and the specific roles of the petitioners in obtaining loans and issuing the cheques.
Ratio Decidendi: The court emphasized that the legal principles of preventing bouncing of cheques and sustaining the credibility of commercial transactions should be kept in mind, and the power of quashing should be exercised sparingly. It also highlighted the need for the petitioners to furnish incontrovertible material or acceptable circumstances to substantiate their contentions for quashing the process.
Final Decision: The court dismissed the petitions and stated that the petitioners could raise all contentions before the learned Magistrate by placing relevant material at the appropriate stage for adjudication as per law.
JUDGMENT
Swarana Kanta Sharma, J.
1. This judgment shall govern the disposal of CRL.M.C. 2456/2019, CRL.M.C. 4378/2019 and CRL.M.C. 4379/2019, along with pending applications, arising out of similar set of facts, contentions and prayers.
2. By way of above-captioned petitions filed under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter 'Cr.P.C.'), the following reliefs have been sought:
i. In CRL.M.C. 2456/2019, the petitioner seeks quashing of summoning order dated 21.03.2018 passed by learned Metropolitan Magistrate-1, Patiala House Court, New Delhi and proceedings pursuant thereto in Complaint Case No. 7944/2018 titled as 'The Delhi Safe Deposit Company v. IAP Company Pvt. Ltd.';
ii. In CRL.M.C. 4378/2019, the petitioners seek quashing of summoning order dated 14.12.2017 passed by learned Metropolitan Magistrate-1, Patiala House Court, New Delhi and proceedings pursuant thereto in Complaint Case No. 6719/2018 titled as 'The Delhi Safe Deposit Company v. IAP Company Pvt. Ltd.'
iii. In CRL.M.C. 4379/2019, the petitioners seek quashing of summoning order dated 09.01.2018 passed by learned Metropolitan Magistrate-1, Patiala House Court, New Delhi and proceedings pursuant thereto in Complaint Case No. 6719/2018 titled as 'The Delhi Safe Deposit Company v. IAP Company Pvt. Ltd.'
3. A perusal of the complaints filed under Section 138 of Negotiable Instruments Act, 1881 (hereinafter 'NI Act') reveals that the complainant/respondent i.e. 'M/s. The Delhi Safe Deposit Company' was engaged in the business of financial activities such as giving loans. It was alleged that the accused company had approached the complainant for grant of loan and documents in this regard were executed by petitioners Vipul Kant Upadhyay and Amit Kumar Gupta. The accused company had taken loans from the complainant vide loan agreement no. 3112 dated 23.04.2016 and loan agreement no. 3143 dated 20.09.2016, and had agreed to re-pay the same in installments, as per schedule.
4. In Complaint Case No. 16649/2017 (subject matter of CRL.M.C. 4378/2019) the complainant had alleged that in partial discharge of liability in respect of loan agreement no. 3112 dated 23.04.2016, the accused company had issued cheque bearing No. 891479 dated 07.11.2017 of Rs.1,77,917/- drawn on HDFC Bank at C-5/32, Safdarjung Development Area, New Delhi-110016 in favour of the complainant. Upon presentation of said cheque by the complainant for encashment with its bank within the validity period, the cheque was returned unpaid vide return memo dated 08.11.2017 with the remarks 'Funds Insufficient.. Thereafter, in consonance with the provisions of Section l38 read with Section 141/142 of the NI Act, the complainant had sent a legal notice dated 10.11.2017 through Speed Post to the accused persons demanding payment of the cheque amount of Rs.1,77,917/- vide postal receipt dated 16.11.2017 and the notice was served upon the accused, as per Internet Acknowledgment. Having not received any payment from the accused persons, the present complaint was filed by the complainant. Learned Magistrate vide order dated 14.12.2017 had issued summons against all the accused persons.
5. In Complaint Case No. 6719/2018 (subject matter of CRL.M.C. 4379/2019) and Complaint Case No. 7944/2018 (subject matter of CRL.M.C. 2456/2019), it was alleged by the complainant that in partial discharge of liability in respect of loan agreement no. 3143 dated 20.09.2016, the accused company had issued cheque bearing no. 891566 dated 26.11.2017 and cheque bearing no. 891568 dated 26.01.2018, of Rs.2,33,750/- each, both drawn on HDFC Bank at C- 5/32, Safdarjung Development Area, New Delhi-110016 in favour of the complainant. Upon presentation for encashment, the cheque bearing no. 891566 dated 26.11.2017 was returned unpaid vide return memo dated 30.11.2017 with the remarks 'Funds Insufficient'. The statutory legal notice dated 04.12.2017 was sent by the complainant through Speed Post to the accused persons
The main legal point established in the judgment is that the role of each accused in the commission of the offence can only be determined during the trial and cannot be examined in detail by the cour....
The court emphasized that the complainant's specific averments in the complaint fulfilled the requirements of Section 141, and the petitioners failed to provide unimpeachable material to show their n....
The judgment emphasized the principles of vicarious liability under Section 141 of the NI Act and the need for material to substantiate contentions regarding non-involvement in the offense.
The main legal point established in the judgment is that the timing of a director's resignation from a company and their involvement in the company's affairs, especially in the context of dishonored ....
Directors and company secretary can be held liable under Section 138 and 141 of the NI Act if they are responsible for the day-to-day affairs of the company or if their negligence, connivance, or con....
Vicarious liability under the Negotiable Instruments Act requires proof of a director's active involvement and responsibility in the company's operations, not merely their title.
Vicarious liability of company directors under Section 141 of the NI Act is established if directors were in charge of the business, regardless of the signatory's involvement and claims of internal f....
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