IMPORTANT POINT
Vicarious liability under Section 141(1) of the NI Act must be strictly construed, and the complaint should provide specific averments to establish the accused's responsibility for the company's conduct.

JUDGMENT :

1. By way of preferring present application under Section 482 of the Criminal Procedure Code, 1972 (hereinafter referred to as “CrPC” for short), the applicant, who is original accused no.3, has invoked extra ordinary jurisdiction of this Court for quashing and setting aside the criminal complaint being Criminal Case No.241/2016 pending before the court of the learned Additional Chief Metropolitan Magistrate, Negotiable Instruments Act Court No.31, Ahmedabad for the offences under Section 138 read with Section 141 of the Negotiable Instrument Act, 1881 (hereinafter referred to as “NI Act” for short).

2. The brief facts leading to the filing of the present application are as under,

2.1 There was business transaction between Varun Fertilizer Pvt. Ltd. and Samruddhi Crop Science Pvt. Ltd. and due to business transaction, the Director of Samruddhi Crop Science Pvt. Ltd. had handed over one cheque to the Managing Director of Varun Fertilizer Pvt. Ltd., which was deposited, however on deposit of the same, it was returned unpaid with an endorsement “fund insufficient”, therefore, the Board of Directors of Varun Fertilizer Pvt. Ltd., in a meeting held on 17.08.2015, passed resolution authorizing one Narendra Sitaram Modi to register the complaint and, thereafter, notice as required under Section 138 of the NI Act was issued, which was duly served, however despite service of notice, payment was not made by the accused, which led to filing of the complaint against the accused persons.

2.2 On filing of the aforesaid complaint, verification of the complainant was recorded and, thereafter, process was issued upon the accused.

2.3 As soon as the said fact came to the notice of the present applicant, immediately applicant has filed present application for quashment of the proceeding against him and while issuing notice, interim relief has been granted in favour of the applicant by staying further proceedings qua the applicant.

3. Heard learned advocate, Mr. H.B. Champavat for the applicant and learned APP Mr. Dhawan Jayswal for the respondent – State of Gujarat. Though served, neither the respondent no.2 has remained present personally nor engaged advocate.

4. Learned advocate, Mr. Champavat submitted that impugned criminal complaint is filed against three accused persons, out of which, the applicant has approached this Court for quashment of the said proceeding, wherein while issuing notice, the proceeding qua the applicant were stayed and, hence, the proceedings qua other accused were going on. Learned advocate, however, submitted that the institution of the proceeding against the applicant is nothing but an abuse of the process of law and, hence, it may be quashed and set aside. Learned advocate submitted that resolution to entrust the power to register the complaint against Samruddhi Crop Science Pvt. Ltd. and others was passed on 17.08.2015 but on perusal of the contents of the FIR, it is found out that the cheque was issued by the accused no.1 – Company on 02.02.2016 and thus in short, the resolution was passed before issuance of the cheque. Learned advocate submitted that the present applicant was working as Director in the Samruddhi Crop Science Pvt. Ltd. at earlier point of time, however on 07.11.2015, the applicant has already tendered his resignation, copy of resignation letter was produced at Page No.40 of the compilation, which was accepted by the members of the Board on the very same day, copy of board resolution is produced at Page No.39 of the compilation, which clearly goes on to show that on 11.12.2015, the present applicant has resigned from the said Company and in support of it, learned advocate has referred to the documents produced at Page No.41 of the compilation, more particularly, Form DIR- 12, which was filled in and submitted before the office of the Registrar of Companies, which shows that the resignation letter submitted by the Director, Mr. Girish Golani has been accepted and Resolution to that effect was a