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IN THE HIGH COURT OF MADHYA PRADESH
P.K. JAISWAL, J.
Naveen Kumar Kedia - Appellant
Versus
M.P. High Tech Engineering Pvt. Ltd., Bhopal - Respondent
M.Cr.C. No. 2208 of 2009
Decided on : 16-02-2010
N.I. Act - Quashing of complaint under section 138 - 138 - 141
Fact of the Case:
The applicant, a former director of a company, sought quashment of complaint and proceedings of criminal cases pending against him for an offence under section 138 of the Negotiable Instruments Act, 1881 (N.I. Act). The complaint alleged dishonour of a post-dated cheque issued by the company after the applicant's resignation.
Finding of the Court:
The court found that the applicant, having resigned from the company in 2002, could not be held responsible for the dishonoured cheque issued in 2005. The complaint failed to establish a nexus between the accused companies and the applicant, and no criminal liability could be legally fastened in the absence of any agreement.
Issues: The issues revolved around the applicant's liability as a former director for the dishonoured cheque and the legal requirements for establishing an offence under section 138 of the N.I. Act.
Ratio Decidendi: The court emphasized that for vicarious liability under section 141 of the Act, necessary averments must appear in the complaint, and a person can only be made liable if the conditions precedent are satisfied. It held that the applicant, having resigned from the company, could not be considered in-charge of the company at the time of the cheque dishonour.
Final Decision: The court allowed the petition under section 482 of the Criminal Procedure Code and quashed the complaint against the applicant, ruling that no case under section 138 of the N.I. Act was made out against him.
ORDER :
Shri Satish Chand Bagadiya, Senior Advocate with Shri Kapil Jain, Advocate for the applicant.
None for the non-applicant, though served.
Heard.
This order shall also govern the disposal of M.Cr.C. No. 2201/2009 (Naveen Kumar Kedia vs. Smt. Pammi Sobthi) and M.Cr.C. No. 2202/2009 (Naveen Kumar Kedia vs. Manvendra Singh).
2. In this petition under section 482, Code of Criminal Procedure, the applicant who was appointed as Director of accused No. 1 (Kedia Castle Dalleon Industries Ltd.) on 1st April, 2000 and resigned from the post of Director on 5th November, 2002 is praying for quashment of complaint and proceedings of proceedings of criminal cases pending against him in the Court of Judicial Magistrate First Class, Bhopal for an offence under section 138, Negotiable Instruments Act, 1881 (in short 'N.I. Act') on the ground that he had resigned in 2002 could not be a person in-charge of the company in 2005 when the cheque was dishonored. He had no say in the matter nor he could ask the company to pay the amount and could not have been made responsible for payment of the cheque on behalf of the company or otherwise and no offence can be registered against him nor he cannot be made accused for the offence when he was not a Director of the Company at the relevant time.
3. The basic facts of the matter is not in dispute.
4. The appellant herein was appointed as Additional Director of a company known as Kedia Castle Dalleon Industries Ltd. on 1st April, 2000 as is evident from Form No. 32, in which particulars of appointment of Directors and Managers and changes among them in pursuance to section 303(2) of the Indian Companies Act, 1956(Annexure-A-2) has been mentioned. The applicant thereafter resigned from the post of Director on 5-11-2002 as is evident from Form No. 32 dated 20th November, 2002 in which it is mentioned that the applicant ceased to be Director due to resignation.
5. The case of the complainant is that on 5th September, 1995 M/s Kedia Castle Dalleon Industries Ltd. took a loan of Rs. 4,00,000/- for investment from the complainant. The cheque of the complainant was received by the accused No.5-Dr. Shivendra Shrivastava, Director of the said company and issued a receipt on 5th September, 1995 itself. It is averred in the complaint that in discharge of this loan/debt which was received by accused No. 5-Dr. Shivendra Shrivastava who is alleged to be Director of Accused No. 4 (Kedia Distillery Ltd.), a post cheque bearing No. 559957 and 25th July, 2005 drawn on State Bank of India Industrial Estate Branch, Bhilai was given by the accused persons. On 25-7-2005 when the said post dated cheque was presented for encashment, the same was returned after being dishonoured with a remark "Funds Insufficient" on 3-8-2005. The complainant has sent a notice through his counsel to the accused persons on 23-8-2005 under registered post and UPC which was returned with an endorsement refused to take/does not reside on 30-8-2005 and thereafter the complaint under section 138 of the N. I. Act was filed before the Judicial Magistrate First Class, Bhopal.
6. The non-applicants has filed a complaint against five alleged accused persons namely; (i) M/s Kedia Castle Delleon Industries Ltd., (ii) Naveen Kedia (Managing Director of M/s Kedia Castle Delleon Industries Ltd.), (iii) Mr. Rajeev Newatia (Authorised Signatory of Kedia Great Galleon Ltd.), (iv) Kedia Distillery Ltd., (v) Dr. Shivendra Shrivastava (Director of Kedia Distillery Ltd.). For committing an offence under section 138 read with section 141 of the N. I. Act.
7. Accused No. 1-M/s Kedia Castle Delleon Industries Ltd., which is a company duly registered under the Indian Companies Act, 1956 and having its registered office at Calcutta. Accused No. 4-Kedia Distillery Ltd. is also a separate company duly registered under the Companies Act having its registered office at Indore.
8. As per averments made in the complaint, it is not in dispute that a post cheque bearing No. 559957 dated 25
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