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2011 Supreme(Guj) 77
2011 (3) GCD 2556 (Guj)
Hon’ble Mr. Justice M.R. Shah
Jagannath Sarangapani,Managing Director
Versus
Varsana Ispat Ltd. & Ors.
Criminal Misc. Application No. 12631 of 20101—Decided on 15/02/2011
Appearance :
Mr. D. Hanmanth Rao, Learned Sr. Counsel for Ms. Sonal D. Vyas, for the Applicants
Notice Served by DS, for the Respondents No. 1 - 6.
Mr. Anand B. Gogia, for the Respondents No. 1.
Mr. K.P. Raval, Addl. Public Prosecutor, for the Respondent No. 7.
Point in Issue :
Whether in facts and circumstances of the case petitioner accused No. 5 is vicariously liable for the offence of dishonour of cheques.
Headnote:Head Note :
Criminal Procedure Code, 1973 (Central Act 2 of 1974) — Section 482 — Negotiable Instruments Act, 1881 (Central Act 26 of 1881) — Sections 138, 141 and 142 — Dishonour of cheques — Complaints for — Quashing and setting aside — Scope of — Cheques were issued by original Accused No. 1 company and signed by original Accused Nos. 2 and 3 as authorised signatory — The petitioner original Accused No. 5 was not in charge of day to day affairs of the company and was not responsible for the conduct of business of the company merely because he was director in the company he can not be held vicariously liable for the offence under the Act — Complaints against petition quashed and set aside.
Held :
The learned advocate appearing on behalf of the original complainant has heavily relied upon the “Director Profile” of the accused Company in support of his case that as per the “Director Profile” the petitioner is shown to be a Director and not an Additional Director.
From the Profile it cannot be said that the petitioner is in day-to-day working or administration of the original accused No. 1 Company. It is true that in the said Profile it is mentioned that the petitioner is designed as Director, however, against which the petitioner has already produced Form No. 32 issued by the Registrar of Companies, in which it has been specifically mentioned that the petitioner has been appointed as Additional Director. Thus, it appears that the petitioner is an Additional Director in the original accused No. 1 Company. [Para 5.02]
In view of the aforesaid facts and considering relevant averments and allegations made in the complaint against the petitioner – original accused No. 5 and taking the same as it is to continue the criminal proceedings filed by the original complainant against the petitioner – original accused No. 5 would be unnecessary harassment to the petitioner and abuse of process of law and therefore, it appears that on the averments made against the petitioner in the complaint, the learned Chief Judicial Magistrate, Gandhidham-Kutch has materially erred in issuing Summons against the petitioner–original accused No. 5 for the offence punishable under Section 138 read with Section 141 of the N.I. Act. Under the circumstances the same deserve to be quashed and set aside. [Para 5.05]
Law Laid Down :
The persons who are sought to be made vicariously liable for criminal offence under Section 141 of the Act should be at the time the offence was committed was in charge of and were responsible to the company for the conduct of the business of the company.
M.R. Shah, J.—Rule. Mr. Anand B. Gogia, learned advocate waives the service of notice of rule on behalf of the original complainant and Mr. K.P. Raval, learned Additional Public Prosecutor for State, in both these petitions.
1.01. Criminal Misc. Application No. 12631 of 2010 has been preferred by the petitioner - original accused No. 5, under Section 482 of the Code of Criminal Procedure, to quash and set aside the impugned complaint being Criminal Case No. 4120 of 2009 filed by the Respondent No. 1 – original complainant, for the offence punishable under Section 138 of Negotiable Instruments Act, pending in the Court of learned Additional Chief Judicial Magistrate, Gandhidham.
1.02. Criminal Misc. Application No. 12635 of 2010 has been preferred by the petitioner - original accused No. 5, under Section 482 of the Code of Criminal Procedure, to quash and set aside the impugned complaint being Criminal Case No. 5740 of 2009 filed by the Respondent No. 1 – original complainant, for the offence punishable under Section 138 of Negotiable Instruments Act, pending in the Court of learned Additional Chief Judicial Magistrate, Gandhidham.
1.03. Both the aforesaid complaints have been filed by the Respondent No. 1 – original complainant against the accused persons including the petitioner herein under Section 138 of Negotiable Instruments Act, (hereinafter referred to as “the Act” for short) for dishonour of the cheques issued by the original accused No. 1 Company – M/s. R.N. Infra Communications Pvt. Ltd., signed by the original accused Nos. 2 and 3 as the authorised signatory of original accused No. 1 alleging inter-alia that the original complainant is a Company registered under the provisions of the Companies Act, having its office at Gudgav (Haryana) and accused No. 2 is the Chairman; accused No. 3 is the Vice President and accused No. 4 is the Managing Director and accused Nos. 5 and 6 are the Directors of the accused No. 1 Company. That the accused Nos. 2 to 6 are managing the day-to-day affairs of the Company – accused No. 1. That the accused have placed an order for supply of parts of Tower at various locations in India, and as per the purchase orders, they have supplied materials worth Rs. 2,49,21,983 to the original complainant. That the accused issued four cheques in question of State Bank of India, Overseas Branch, New Delhi, in favour of the original complainant and the said cheques were given in discharge of the said debts. That the said cheques have been singed by the accused Nos. 2 and 3 as authorised signatory of the accused No. 1. That the said cheques were issued with the consent / knowledge of the accused Nos. 4 to 6. That the accused Nos. 2 to 6 are aware about the issue of the above said four cheques in favour of complainant. That the aforesaid cheques were presented for realisation of the amount of the said cheques which came to be dishonoured due to “payment stopped by drawer”. That thereafter statutory notices were issued to the accused by RP AD. After the receipt of the said notice by the accused, accused did not make payment within stipulated time and therefore, it is alleged that the accused have committed offence punishable under Section 138 of N.I. Act.
1.04. That the learned Chief Judicial Magistrate issued Summonses against the accused persons inclusive of the petitioner - accused No. 5, in the said complaint filed under Section 138 of N.I. Act and hence Being aggrieved by and dissatisfied with the issuance of the Summonses against the petitioner - original accused No. 5 in the aforesaid criminal complaints, filed under Section 138 of N.I. Act, the petitioners - original accused No. 5 has preferred both these petitions under Section 482 of the Code of Criminal Procedure to quash and set aside the aforesaid impugned two complaints.
2.00. Mr. D. Hanumanth Rao, learned Counsel appearing with Ms. Sonal Vyas, learned advocate appearing on behalf of the petitioner - original accused No. 5, has vehemently
