2001 (3) TMI 970 - HC - Companies Law

Court decisions on recall of process and sufficiency of allegations in criminal cases; accused permitted exemption in remanded cases.

Pandurang Camotim Sancoalcar Versus Suresh Prabhakar Prabhu

Pandurang Camotim Sancoalcar Versus Suresh Prabhakar Prabhu - [2003] 48 SCL 437 (BOM.) Issues Involved:1. Validity of the process issued under Section 138 of the Negotiable Instruments Act, 1881, and Section 420 of the Indian Penal Code, 1860.2. Allegations against the accused regarding being in charge of the company's management and day-to-day affairs.3. Validity and effect of the accused's resignation.4. Compliance with Section 141 of the Negotiable Instruments Act, 1881.5. The authority of the court to recall the process based on the accused's defense documents.Detailed Analysis:Issue 1: Validity of the process issued under Section 138 of the Negotiable Instruments Act, 1881, and Section 420 of the Indian Penal Code, 1860The case involved 23 criminal revision applications and 23 criminal writ petitions arising out of complaints under Section 138 of the Negotiable Instruments Act, 1881. The Judicial Magistrate First Class had issued process against the company and the accused, which was later quashed by the Sessions Judge. The complainants filed revision applications against this order.Issue 2: Allegations against the accused regarding being in charge of the company's management and day-to-day affairsThe complainants alleged that the accused, as the managing director of the company, was responsible for the conduct of the business. The Sessions Judge quashed the process on the grounds that the complaints did not sufficiently allege that the accused was in charge of the company's management or day-to-day affairs, as required under Section 141 of the Act.Issue 3: Validity and effect of the accused's resignationThe accused contended that he had resigned from the company on May 6, 1996, and thus was not responsible for the cheques issued thereafter. The complainants disputed the resignation date, relying on Form No. 32, which showed the resignation date as March 15, 1997. The court noted that the resignation's validity and date were crucial and required thorough examination.Issue 4: Compliance with Section 141 of the Negotiable Instruments Act, 1881The court examined whether the complaints met the requirements of Section 141, which holds every person in charge of the company's conduct liable for offenses under Section 138. The court found that the complaints by Mr. Nadkarni sufficiently alleged that the accused was in charge of the company's affairs, while the complaints by Mr. Tamba and Mr. Mulgaokar did not.Issue 5: The authority of the court to recall the process based on the accused's defense documentsThe court considered whether it could look into the accused's defense documents, such as the resignation letter and Form No. 32, to decide on recalling the process. The court concluded that it could consider these documents, as established in previous judgments, to determine whether the process should be recalled.Conclusion:(a) Criminal Revision Applications by Mr. Tamba: Dismissed. The court confirmed the Sessions Judge's order recalling the process against the accused, based on the acceptance of the accused's resignation date as May 6, 1996.(b) Criminal Revision Applications by Mr. Nadkarni: Allowed. The court set aside the Sessions Judge's order and remanded the cases to the trial court for decision on merits, as the complaints sufficiently alleged that the accused was in charge of the company's affairs.(c) Criminal Revision Applications by Mr. Mulgaokar: Dismissed. The court upheld the Sessions Judge's order recalling the process, as the complaints did not meet the requirements of Section 141 of the Act.(d) Criminal Revision Applications by Mr. Kholkar: Allowed. The court set aside the Sessions Judge's order and remanded the cases to the trial court for decision on merits, as the complaints sufficiently alleged the accused's responsibility.(e) Criminal Writ Petitions by the accused: Disposed of based on the orders passed in the criminal revision applications, with no order as to costs.The court clarified that the accused could file for exemption in the remanded cases, which would be considered by the trial court.