THE HONOURABLE SMT. JUSTICE K. SUJANA CRIMINAL PETITION No.4241 of 2014

ORDER:

This criminal petition is filed by the petitioner/A.8 seeking to quash the proceedings in C.C.No.402 of 2013 on the file of IX Special Magistrate, Erramanzil, Hyderabad. The offence alleged against the petitioner is under Section 138 and

141 of Negotiable Instruments Act, 1881.

2. The case of the complainant is that the accused approached the complainant on 10.01.2012 for grant of Rs.50 Crores towards short term loan for the general corporate purpose which is repayable with interest @ 1.50% over and above the base rate of the Bank as applicable from time to time, with floating rate linked to base rate compounding on monthly basis. That the Chairman T.Venkatram Reddy-A.3, T.Vinayak Ravi Reddy, Vice Chairman-A.2 and P.K.Iyer, Vice Chairman-A.4 stood as guarantors to the said loan and A.2 on behalf of A.1 acknowledged the terms and conditions of sanction communication and executed all the necessary loan documents and the other accused are mentioned as Board of Directors.

3. Heard Sri A.Chandra Shaker, learned counsel for the petitioner and learned Additional Public Prosecutor for the 1^st respondent-State. None appeared on behalf of the 2nd respondent, though notice is served.

4. The contention of learned counsel for the petitioner is that petitioner is not the signatory of cheque and he is not the Director who entered into agreement with the complainant, that he is not aware of issuance of any cheque as he was only a nominated Director, his post is only a ceremonial post without any responsibility or powers and he resigned much prior to the alleged issuance of cheque by A.1 and in the complaint there are no averments to show that this petitioner is responsible for the day-to-day affairs of the company. Petitioner has resigned from the post of nominated Director on 27.06.2012. The alleged cheque was issued in the year 2013 and it is also incorporated in the company web. Therefore, he is not the Director of Company on the date of issuance of cheque and there is no cause of action during the term of this petitioner and whatever allegations are made in the complaint are not applicable to the petitioner as he is no way connected with the Company on the date of issuance of cheque.

5. Learned counsel relied on the judgments in Ashoke Mal Bafina Vs Upper India Steel Manufacturing and Engineering Company Limited1, Arrakuntal V. Ganeshan Vs M/s.Sai Rama Cotton Syndicate and another2 and Saroj Kumar Poddar Vs State (NCT of Delhi) and another, (2007) 3 Supreme court Cases 693 He further submitted that in Crl.P.No.5169 of 2014, this Court quashed the proceedings against A.6 and A.9 in the same crime stating that as the petitioners therein were neither Managing Directors nor signatories of the cheque, and they have no role in issuance of cheque. As such, requested the Court to quash the proceedings against the petitioner herein.

6. Though notice is served on the counsel on record for the

2^nd respondent, none appeared on its behalf.

7. Hence, considering the submissions made by the learned counsel for the petitioner and the material available on record, the petitioner herein is only a nominated Director and he has already resigned from the subject company much

1 (2018) 14 Supreme Court Case 202

2 2013 (2) ALT (Crl) 275 (AP)

prior to issuance of cheque and even after resigning from the said company, petitioner herein was arrayed as accused stating that he is Director of company, whereas the documents filed by the petitioner shows that he has resigned from the company on 26.07.2012 and the date of issuance of cheque is in the year 2013, as such he is no way connected to the crime. Hence, the proceedings against the petitioner in C.C.No.402 of 2013 are liable to be quashed.

8. Accordingly, the Criminal Petition is allowed and the proceedings in C.C.No.402 of 2013 on the file of IX Special Magistrate, Erramanzil, Hyderabad are quashed.

Miscellaneous applications, if any pending, sha