Back
IN THE HIGH COURT OF DELHI
Anu Malhotra, J.
Sheela Abhay Lodha - Appellant
Versus
State - Respondent
Crl.M.C. 5213 of 2019 & Crl.M.A. 38050 of 2019 and Crl.M.C. 5219 of 2019 & Crl.M.A. 38072 of 2019
Decided On : 19-11-2022
A former director is not liable for dishonored cheques issued after their resignation, protecting them from criminal liability under the Negotiable Instruments Act.
Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138, 141, and 142 - Companies Act, 1956 - Sections 303(1) and 168(2) - Petitioner, former Managing Director of a company, challenged summoning order in cheque dishonor case - Petitioner claimed resignation before alleged offence - Court ruled that resignation dated 24.11.2010 shielded petitioner from liability for cheques issued post-resignation - Complaints dismissed accordingly. (Paras 1, 5, 11, and 12)
(B) Cheque Dishonor - Liability of Directors - A director's liability for cheques requires that the offence occurred during their tenure - Prior resignation must be established incontrovertibly for liability to attach post-resignation. (Para 5)
Facts of the case:
The petitioner filed CRL.M.C. 5213/2019 and CRL.M.C. 5219/2019 challenging a common summoning order in cheque dishonor cases where she was summoned as a respondent after her resignation from the company on 24.11.2010. The complaints related to dishonored cheques issued in 2011.
Findings of Court:
The court found the petitioner not liable for the cheques issued after 24.11.2010, reinforcing that resignation precluded further liability for subsequent cheque dishonors.
Issues: Whether the petitioner's resignation absolved her from liability for cheques issued post-resignation.
Ratio Decidendi: The court concluded that resignation from a company on 24.11.2010 exempted the petitioner from responsibility for dealings or dishonor of cheques executed after that date.
Result: Petitions allowed, and the complaints dismissed.
| Table of Content |
|---|
| 1. petitioner resigned prior to the alleged offence. (Para 1 , 2) |
| 2. details of loans and dishonoured cheques. (Para 3 , 7 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 3. argument concerning resignation and knowledge. (Para 5 , 6) |
| 4. judicial conclusions on the resignation. (Para 8 , 9) |
| 5. legal implications of resignation. (Para 10 , 11) |
| 6. petition allowed, complaints dismissed. (Para 12) |
JUDGMENT
Anu Malhotra, J. The petitioner of both CRL.M.C. 5213/2019 and CRL.M.C. 5219/2019 is Ms. Sheela Abhay Lodha, the former Managing Director of Akshata Mercantile Pvt. Ltd., who resigned therefrom on 24.11.2010.
2. In as much as, vide the petitions CRL.M.C. 5213/2019 and CRL.M.C. 5219/2019, the petitioner herein has assailed the very same impugned order dated 07.06.2017 of the Court of the learned MM-01, Patiala House Courts, New Delhi in CC No.3453/1/11 renumbered as CC No.1498/1/15 with new No.54000/16 and CC No.3452/1/11 renumbered as CC No.1501/1/15 with new No.54082-16, vide which common order, she was summoned having been arrayed as respondent No.2 to the complaints filed under Section 138 of the Negotiable Instruments Act, 1881 read with Sections 141 and 142 thereof, and having challenged the said common summoning order dated 07.06.2017 of the Court of the learned MM-01, Patiala House Courts, New Delhi vide CR. Revision 597/2018 and CR. Revision 598/2018, the said revision petitions having been dismissed, the two petitions CRL.M.C. 5213/2019 and CRL.M.C. 5219/2019 are hereby being taken up together.
3. The averments in the complaints, which are identical, before the learned Trial Court, (i.e., in Complaint Case No.3453/1/11 renumbered as CC No.1498/1/15 with new No.54000/16 forming part of subject matter of CRL.M.C. 5213/2019 and Complaint Case No.3452/1/11 renumbered as CC No.1501/1/15 with new No.54082- 16 forming part of subject matter of CRL.M.C. 5219/2019) in which the petitioner herein was arrayed as respondent No.2, state to the effect:
"4. That accused/respondents No.2 and 3 on behalf of accused/respondent no.1 approached complainant company and requested to grant financial assistance so that it can purchase and import HR coil/HMS1 and 2 etc. (hereinafter called "raw material") from domestic market as well as from overseas countries.
5. That after various negotiations/deliberations and discussions' complainant company consented to grant financial assistance to accused/respondent no.1 for purchasing and importing the raw material from domestic market as well as overseas countries.
6. That memorandum of agreement (hereinafter called "MOA") and the addendum thereto were executed and signed by and between complainant company and accused respondent no.1 on 26.11.2007 and 23.4.2009, respectively, at complainant company's registered office in New Delhi which elaborately contained all the terms and conditions so agreed between accused respondent no.1 and complainant company.
7. That as per clause 1.0 of MOA it was duty of accused/respondent no.1 to identify and finalize procurement of raw materials with foreign/Indian suppliers and inform to complainant company, indicating details of quantities, specification, price, shipment/delivery schedule etc. on receipt of details complainant company was to sign contract with foreign/Indian suppliers and open foreign/Indian Letter of Credit (hereinafter called "L/C") in favour of supplier. It is pertinent to mention herein that complainant company has to open L/C for each indent/transaction.
As per the MOA, accused/respondent no was under the contractual duty to discharge the amount of L/C on its respective due date. It was also categorically told to accused/respondents by complainant company that overdue payment will attract interest @ 15% per annum.
8. That complainant company from time to time granted financial assistance to accused/respondent No.1 to meet its business requirements by way of opening L/Cs in favour of suppliers
9. That complainant company on the instructions a
