A director cannot be held vicariously liable under the Negotiable Instruments Act without specific allegations demonstrating their active responsibility in the company's operations.

ORDER :

J. C. DOSHI, J

1. By way of this application under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as ”the Code”), the petitioner has prayed to quash and set aside Criminal Case No.5606 of 2016 qua the petitioner, pending before the Ld. Chief Judicial Magistrate, Rajkot.

3. Brief facts of the case are as under:-

3.1 Axis Bank through power of attorney filed private complaint before learned CJM, Rajkot under section 138 of Negotiable Instrument Act read with section 141 of NI Act, which came to be registered as Criminal Case No.5606 of 2016 against Champion Agro. Ltd. and its Directors. The petitioner is arraigned as accused no.4 in the private complaint. Learned CJM, after recording verification issued process against Champion Agro. Ltd. and its Directors. Case of Axis Bank before the learned Trial Court was that accused nos.2,3 and 4 are Directors of accused no.1 Company, which is carrying its business under the name and style of Champion Agro. Ltd. Financial assistance was availed by company from Axis Bank. Pursuant to which, agreement was executed between the parties. The loan amount was repayable at Rajkot to complainant Bank with interest. Accused company did not discharge its duty by paying back credit facility sanctioned and disbursed by Axis Bank. Resultantly, account of accused company has been classified as NPA as per Rules and Regulations of RBI. Proceedings under Securitization Act also started and possession of open land of village - Gundasara was taken under Securitization Act. Aggrieved by said action, Company wrote request letter dated 22.03.2016 to pay sum of Rs.50 Crores by way of Cheque No.000647 dated 28.03.2016 drawn in favour of HDFC Bank as part of outstanding dues. Cheque in question having signed by accused no.2 - Mr.Dhirajlal Hirpara returned unpaid on being deposited for the reason fund insufficient. After completing formalities, Axis Bank and after issuing statory notice, Criminal Case was filed against company and its Directors under section 138 read with section 141 of NI Act. Learned CJM, was pleased to issue process. Hence, present petition.

4. Heard learned advocate Mr.V.K.Shah for petitioner, learned advocate Mr.Anip Gandhi for respondent Bank and learned APP for respondent - State. Others accused are served but did not remain present.

5. Plank of argument of learned advocate Mr.Shah for the petitioner is that Criminal Case filed under section 138 of NI Act through power of attorney of Axis Bank is not maintainable on the ground that power of attorney is not witness of transaction and thus Criminal Case filed against the petitioner requires to be dismissed. To buttress this proposition, learned advocate Mr.Shah relied on judgment of Hon'ble Apex Court in the case of A.C.Narayanan v/s. State of Maharashtra [(2014) 11 SCC 790] . Further, it is argued that cheque in question which has returned upaid is issued on behalf of Champion Agro. Ltd. - accused no.1 signed by accused no.2. The petitioner did not play any active role in issuance of cheque, authorized signatory is accused no.2. In this circumstances, since the petitioner has not played any active role and is not responsible for day to day affairs of accused company, no prosecution against him can be continued under section 138 read with section 141 of NI Act. Learned advocate Mr.Shah also referred to recent judgment of Hon'ble Apex Court in the case of Susela Padmavathy Amma v/s. M/s. Bharti Airtel Ltd. [Special Leave Petition (Criminal) No.12390- 12391 of 2022] and submitted that private complaint against petitioner should