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2014 Supreme(P&H) 1589
PUNJAB AND HARYANA HIGH COURT
Ritu Bahri, J.
Naveen Kumar Aggarwal & Anr. - Petitioners
Versus
M/s Dove Creation Pvt. Ltd. & Anr. - Respondent
CRM-M-Nos. 36249, 36401, 38057 & 38206 of 2013 (O&M)
Decided on : 13.11.2014
Advocate Appeared:
For the Petitioner: Ashwani Kumar Chopra, Simrith Kaur, Rahul Gautam
For the Respondent: Gaurav Chopra
Directors who have resigned and are not involved in the day-to-day affairs of the company cannot be held liable for offences committed by the company under Section 138/141 of the Negotiable Instruments Act.
Headnote:
Resignation - Company Director - Companies Act, 1956, Section 303 - Negotiable Instruments Act, Sections 138/141
Fact of the Case:
The petitioners, former directors of a company, sought quashing of criminal complaints and summoning orders on the grounds of their resignation before the issuance of the cheques in question.
Finding of the Court:
The court found that the petitioners had resigned from their director positions before the issuance of the cheques, and their resignation had been duly conveyed to the Registrar of Companies. Therefore, the court quashed the complaints and summoning orders.
Issues: The main issue was the liability of the petitioners as former directors for the dishonoured cheques issued by the company after their resignation.
Ratio Decidendi: The court relied on legal principles established in various judgments, emphasizing that directors who had resigned and were not involved in the day-to-day functioning of the company could not be held liable for offences committed by the company under Section 138/141 of the Negotiable Instruments Act.
Final Decision: The court quashed the criminal complaints and summoning orders, allowing the petitions.
Ritu Bahri, J.
This order shall dispose of the above four petitions wherein prayer is for quashing of Criminal Complaint No. 20686 of 2013 dated 09.07.2013 and Criminal Complaint No. 20677 of 2013 dated 09.07.2013 and summoning order dated 09.07.2013 passed by learned Judicial Magistrate 1st Class, Ludhiana.
2. In CRM-M-38057 and 38206 of 2013, brief facts of the petition are that the petitioner along with Rajesh Jain and Naveen Kumar Aggarwal were appointed as Director (s) of Company-M/s Miraaya Apparel and Trading Pvt. Ltd.. However, on 16.02.2013, the petitioner-Smriti Thingbaijam tendred resignation from the Board of Directors of the above said Company. The petitioner was residing at Mumbai, Mahrashtra with her family and children. Thereafter, a resolution was passed on 18.02.2013 (P-3) accepting and acknowledging the resignation made by the petitioner. After accepting the resignation of the petitioner, the relationship of petitioner with respondent No. 2-company stood severed and terminated from that date. Thereafter, the petitioner did not even attend/or participate in any further Board meeting of the company. Petitioner stood absolved from her functions/responsibilities as a Director with immediate effect. The respondent No. 2-company was required to follow up all consequential actions towards intimating all including the Registrar of Companies-about the petitioner's resignation.
3. In CRM-M-36249 and 36401 of 2013, petitioner Naveen Kumar Aggarwal became an additional director of M/s Miraaya Apparel and Trading Pvt. Ltd on 14.05.2012. Thereafter, he resigned from the Board of Directors on 21.02.2013 and is full time employee of Bank of America since 11.12.2006. The said change was communicated to the Registrar of Companies in June, 2013. A photocopy of Form 32 is Annexure P-7 colly.
4. As per complaint No. 20686 of 2013, an amount of Rs.46,31,605/- was due and payable by M/s Miraaya Apparel and Trading Pvt. Ltd in favour of M/s Dove Creations Pvt. Ltd., as a cheque bearing No. 000381 dated 27.05.2013 for Rs.46,31,605/- was tendered by Rajesh Jain (one of the Director) on behalf of M/s Miraaya Apparel in favour of M/s Dove Creations Pvt. Ltd., which on presentation was dishonoured and was returned with remarks "Exceeds arrangement" by Bank memo dated 28.05.2013. In this background, the above said complaint under Section 138 of Negotiable Instruments Act had been registered by M/s Dove Creations Pvt. Ltd. On 09.07.2013 (P-4).
5. In Complaint No. 20676 of 2013, an amount of Rs.19,88,688/- was due and payable by M/s Miraaya Apparel and Trading Pvt. Ltd in favour of M/s Almighty Creations Pvt. Ltd., as a cheque bearing No. 000380 dated 27.05.2013 for Rs.19,88,688/- was tendered by Rajesh Jain (one of the Director) on behalf of M/s Miraaya Apparel in favour of M/s Almighty Creations Pvt. Ltd., which on presentation was dishonoured and was returned with remarks "Exceeds arrangement" by Bank memo dated 28.05.2013. In this background, the above said complaint under Section 138 of Negotiable Instruments Act had been registered by M/s Almighty Creations Pvt. Ltd. On 09.07.2013 (P-4).
6. The petitioners were served with the summons of the above said criminal complaints on 09.07.2013.
7. Learned counsel for the petitioners are seeking quashing of the complaints dated 09.07.2013 as well as summoning orders dated 09.07.2013 on the ground that before cheque was issued on 27.05.2013, the petitioners who were director of M/s Miraaya Apparel and Trading Pvt. Ltd. Have tendered their resignation. Petitioner-Naveen Kumar Aggarwal has tendered his resignation on 21.02.2013, which was duly addressed to Rajesh Jain (one of the Directors) and petitioner-Smriti Thingbaijam has tendered her resignation on 16.02.2013 and the Board of Directors have approved and accepted the resignation of Smriti Thingbaijam on 18.02.2013. Thus, after accep
