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IN THE HIGH COURT OF ALLAHABAD
SADHNA RANI (THAKUR), J.
Prashant Tyagi And 2 Ors. - Applicants
Versus
State Of U.P. And Anr. - Opposite Parties
Application U/S 482 No. 11661 of 2018
Decided On : 03-04-2023
Negotiable Instruments Act - Section 138 – Indian Penal Code,1860 - Section 420 - Criminal Procedure Code,1973 - Sections 200 , 202 and 482 - Company - Application - Praying to quash summoning order - Complaint was filed by opposite party no.2 against the applicants and six other persons with version that opposite party no.2 was a limited Company registered under Companies Act and Vijay Kumar son of late Sri Satpal was authorized to filed complaint on behalf of Company - Opposite party no.2 was indulged in business of purchasing, selling and the construction of properties. Opposite party no.1 (in the complaint) M/S C.S.K. Infrastructure Pvt. Ltd. Was a registered Company - Opposite parties no.2 to 6 were its Directors and officers and opposite parties no.7 to 9 were Company's authorized representatives - Opposite party nos.2 to 9 were responsible for all day to day business and transactions of opposite party no.1, M/S C.S.K. Infrastructure Pvt. Ltd - Whether a prima facie commission of offence has been shown and appropriate material has come justifying summoning of the accused persons against whom complaint has been made - Role assigned to the applicants in clear and specific words is referred in paragraph 4 of the complaint, that all the accused persons are responsible for the day to day business and functioning of the Company. [Para 13]
Finding of Court : It is found that applicant no.1 had resigned from Company much prior to issuance of cheque in question - Admittedly, cheque did not bear signatures of any of the applicants - On date of issuance of cheque applicants were mere the shareholders of Company - There was no active participation of applicants in day to day business and transactions of Company and in complaint itself, it is not mentioned that as to how and in what manner applicants were in-charge or were responsible to the accused Company for the conduct of its business - Thus, in opinion of Court, as on face of record, participation of the applicants is not found in day to day functioning of the Company, hence, on the basis of version that defence would be seen at time of evidence, it would be travesty of justice to drag persons to face prosecution who are no way connected with the issuance of cheque or its being dishonour thereof.
Result : Application under Section 482 Cr.P.C. is, hereby, allowed
JUDGMENT :
(Sadhna Rani (Thakur), J.)
1. Heard learned counsel for the applicants, learned counsel for opposite party no.2 and perused the record.
2. By moving this application under Section 482 Cr.P.C., the prayer is made to quash summoning order dated 25.11.2016 passed by the Upper Nyayalaya Pratham, Ghaziabad in C.C. No.70/2016 under Section 138 Negotiable Instruments Act and also to set aside order dated 22.02.2018 passed by the Additional Session Judge, Court No.15, Ghaziabad in Criminal Revision No.19 of 2017.
3. As per facts of the case, a complaint was filed by opposite party no.2 on 13.10.2016 against the applicants and six other persons with the version that opposite party no.2 was a limited Company registered under Companies Act and Vijay Kumar son of late Sri Satpal was authorized to filed complaint on behalf of the Company. The opposite party no.2 was indulged in the business of purchasing, selling and the construction of properties. Opposite party no.1 (in the complaint) M/S C.S.K. Infrastructure Pvt. Ltd. was a registered Company. Opposite parties no.2 to 6 were its Directors and officers and opposite parties no.7 to 9 were the Company's authorized representatives. Opposite party nos.2 to 9 were responsible for all the day to day business and transactions of opposite party no.1, M/S C.S.K. Infrastructure Pvt. Ltd.
4. The opposite parties (in the complaint) had assured the complainant/opposite party no.2 herein that they would make available a land to the complainant/opposite party no.2 at a reasonable price. Having faith in the opposite parties the complainant/ opposite party no.2 on 16.08.2014 paid Rs. 5,00,00,000/-to the opposite parties, which were received by the opposite parties. When as per their assurance the opposite parties could not arrange the land for the complainant/opposite party no.2 and the complainant gave them a threat of lodging FIR, then opposite parties promised to pay Rs. 7,00,00,000/-in pursuance of the principal amount of Rs. 5,00,00,000/-with interest. Opposite parties issued a cheque of Rs.1,00,00,000/-in favour of the complainant/ opposite party no.2. This Cheque No.000285 valued Rs.1,00,00,000/-dated 30.07.2016 got dishonoured despite of the assurance of opposite parties that it would get encashed. The information of which was received by the complainant/opposite party no.2 on 29.08.2016 and after due procedure, a complaint under Section 420 I.P.C. was filed by the complainant/opposite party no.2 against the nine accused persons including the Company itself.
5. After the statements under Sections 200 Cr.P.C. and 202 Cr.P.C., the trial court vide order dated 25.11.2016 summoned all the nine accused persons to face trial under Section 138 of Negotiable Instruments Act 1881. Against this order dated 25.11.2016, three of the opposite parties/present applicants named Prashant Tyagi, Smt. Neeta Tyagi and Smt. Shweta Tyagi, filed a revision before the Sessions Court, which was rejected vide order dated 22.02.2018.
6. Feeling aggrieved by the summoning order dated 25.11.2016 and revisional court's order dated 22.02.2018, the present application has been moved by the applicants Prashant Tyagi, Smt. Neeta Tyagi and Smt. Shweta Tyagi only with the version that the applicant no.1, who was earlier the Director of M/S C.S.K. Infrastructure Pvt. Ltd. had resigned from his post on 26.09.2014, much prior to the issuance of the cheque no.000285 dated 30.07.2016 to the opposite party no.2. He has filed a certified copy of the form DIR-12 (earlier known as Form 32) to this effect. He had neither signed the cheque nor the amount was received in his bank account, thus, applicant no.1 is the ex-director in the accused Company. Applicant nos.2 and 3 are the mother and sister of the applicant no.1. They had no relation with the functioning of the accused company in any manner. They could not be the in-charge and responsible for the conduct and the business of the Company. Without any specific averment that wha
Point of Law : On face of the record, participation of applicants is not found in the day to day functioning of Company, hence, on basis of the version that defence would be seen at the time of evide....
Vicarious liability of Director of a company it must be pleaded and shown that the Director was responsible for the conduct of the business of the company at the time of commission of offence. Only b....
Directors and company secretary can be held liable under Section 138 and 141 of the NI Act if they are responsible for the day-to-day affairs of the company or if their negligence, connivance, or con....
The company must be summoned as an accused in Section 138 N.I. Act cases for proceedings against its Directors to be valid.
Vicarious liability of company directors under Section 141 of the NI Act is established if directors were in charge of the business, regardless of the signatory's involvement and claims of internal f....
The main legal point established in the judgment is that a person who issues a cheque in his individual capacity to discharge the liability of a company can be made an accused in his individual capac....
The judgment emphasized the principles of vicarious liability under Section 141 of the NI Act and the need for material to substantiate contentions regarding non-involvement in the offense.
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