Specific averments against directors and pre-summoning inquiry under Section 202 CrPC sustained the cheque dishonour summons.

Specific averments that directors were in charge of and responsible for the company's day-to-day business and financial decisions were held sufficient at the summoning stage under Sections 138 and 141 of the Negotiable Instruments Act, so the challenge by non-executive directors failed. The Court also held that Section 202 CrPC was complied with where cognizance was taken on the complaint and documents, pre-summoning evidence was led by affidavit, and arguments were heard before summons issued; the objection on that ground was rejected. The summoning order was left undisturbed, with only limited exemption from personal appearance granted to one petitioner.

---

---

Issues: (i) Whether the summoning order in a complaint under Sections 138 and 141 of the Negotiable Instruments Act, 1881 could be quashed on the ground that the petitioners, being non-executive directors, were not responsible for the day-to-day affairs of the company; (ii) Whether the requirement of inquiry under Section 202 of the Code of Criminal Procedure, 1973 was not complied with before issuance of summons.

Issue (i): Whether the summoning order in a complaint under Sections 138 and 141 of the Negotiable Instruments Act, 1881 could be quashed on the ground that the petitioners, being non-executive directors, were not responsible for the day-to-day affairs of the company.

Analysis: The complaint contained specific averments that the petitioners were directors in charge of and responsible for the conduct of the company's day-to-day business and financial decision-making. The pleaded allegations were sufficient at the stage of summoning. The Court also noted that the petitioners would remain free to lead evidence before the trial court to establish that they were neither whole-time directors nor involved in day-to-day management. Applying the settled principle that such averments can justify issuance of process, the Court found no ground to interfere with the summoning order on this basis.

Conclusion: The challenge to the summoning order on the ground of absence of liability of the petitioners as directors was rejected.

Issue (ii): Whether the requirement of inquiry under Section 202 of the Code of Criminal Procedure, 1973 was not complied with before issuance of summons.

Analysis: The impugned summoning order showed that cognizance was taken on the basis of the complaint and original documents, pre-summoning evidence was led by affidavit, and arguments were heard before summons were issued. On that basis, the Court held that an inquiry contemplated by Section 202 had in fact been conducted. The Court distinguished the relied-upon precedent on the footing that, there, the Magistrate had expressly stated that he was not considering the sworn statements at the pre-cognizance stage.

Conclusion: The objection based on non-compliance with Section 202 was rejected.

Final Conclusion: The petitions failed on merits and the summoning order was left undisturbed, with only limited exemption from personal appearance granted to one petitioner.

Ratio Decidendi: Specific averments in a complaint that a director was in charge of and responsible for the conduct of the company's business are sufficient at the summoning stage, and a pre-summoning examination of the complaint, documents, and evidence can satisfy the inquiry contemplated by Section 202 of the Code of Criminal Procedure, 1973.

---