2023 (5) TMI 324 - HC - Indian Laws

Petitions to Quash Summoning Orders Denied Under Section 138

Amit Kumar Gupta, Vipul Kant Upadhyay & Ors. Versus M/s. Delhi Safe Deposit Ltd.

The court dismissed the petitions seeking quashing of summoning orders under Section 138 of the Negotiable Instruments Act, 1881, finding sufficient ... Dishonour of Cheque - Funds Insufficient - Signatory of Cheques - vicarious liability of Directors - whether Directors signing the resolution i.e. Vipul Kant Upadhyay and Amit Kumar Gupta shall be fully collectively or individually responsible for repayment of the loan and other dues? - HELD THAT:- As per loan agreement no. 3143 dated 20.09.2016, the accused company through its directors i.e. the aforesaid petitioners had obtained loan to the tune of Rs. 55,00,000/- for a period of 30 months and in lieu thereof, had agreed to issue 29 EMI cheques in favour of complainant. Similarly, as per loan agreement no. 3112 dated 23.04.2016, the accused company through its aforesaid petitioners had obtained loan to the tune of Rs. 35,00,000/- for a period of 24 months and in lieu thereof, had agreed to issue 23 EMI cheques in favour of complainant. The present petitioners i.e. Vipul Kant Upadhyay and Amit Kumar Gupta were the two ‘Borrowers’ in the loan agreements and the said agreements also bear the signatures of both these petitioners. The Demand Promissory Notes and their Receipts have also been executed and signed by these petitioners. The petitioner Vipul Kant Upadhyay was also one of the guarantors in these loan agreements. Moreover, he was the Managing Director of the accused company at the time of entering into the loan agreements and issuing several cheques. Even if the plea of learned counsel for petitioners that blank signed cheques or post-dated cheques were misused by the complainant is concerned, in this context, it will be relevant to take note of the decision of Hon’ble Apex Court in BIR SINGH VERSUS MUKESH KUMAR [2019 (2) TMI 547 - SUPREME COURT] where it was held that If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. The material on record also shows clearly that the petitioner Amit Kumar Gupta was a Whole-time Director of the accused company at the time of entering into the transactions with the accused company and it is not the case of petitioner that he was any non-functional or independent director, not concerned with the affairs of the company. As inferred prima facie from the loan agreement, the cheques in question were issued as post-dated duly signed cheques with the knowledge and consent of the said petitioner and he had also executed all the relevant documents for the purpose of obtaining loan from the complainant. Ground that petitioners Vipual Kant Upadhyay and Amit Kumar Gupta had resigned before the date of issuance of cheque - HELD THAT:- Firstly, the copies of Form DIR-12 placed on record are not the certified copies issued by the Ministry of Corporate Affairs. Secondly, as already observed in preceding discussion, the complainant has carved out the specific role of these petitioners in obtaining loans, executing loan agreements as well as in signing and issuing cheques in question. The veracity of the allegations and the genuineness of the documents pertaining to alleged resignation of these petitioners before the dishonor of cheques cannot be tested at this stage before this Court and the same has to be decided on the basis of relevant documents and evidence to be produced at the stage of trial - If the plea of petitioners is accepted that since they were not a part of the accused company at the time when cheques were dishonoured, proceedings against them be quashed at the outset, it would in fact, amount to throttling the trial by snatching away the right of respondent to examine during before the Court, the signatory of the cheques as well as signatory of the loan agreements, board resolutions and other documents in that regard. Considering the overall facts and circumstances of the case, this Court is of the opinion that there was sufficient material on record before the learned Magistrate to issue summons against the petitioners herein. The role of each petitioner in commission of offence, if any, can become clear only during the course of trial, and cannot be examined in detail by this Court while exercising jurisdiction under Section 482 Cr.P.C. - this Court finds no reasons to interfere with the impugned summoning orders passed by learned Magistrate. Petition dismissed. Issues Involved:1. Quashing of summoning orders in Complaint Cases under Section 138 of the Negotiable Instruments Act, 1881.2. Validity of the petitioners' involvement and role in the alleged offences.3. Application of judicial mind by the Magistrate in issuing summons.Summary:Issue 1: Quashing of Summoning OrdersThe petitions sought quashing of summoning orders dated 21.03.2018, 14.12.2017, and 09.01.2018 passed by the Metropolitan Magistrate in Complaint Cases No. 7944/2018, 6719/2018, and 6719/2018 respectively, under Section 138 of the Negotiable Instruments Act, 1881. The complaints were filed by 'The Delhi Safe Deposit Company' against 'IAP Company Pvt. Ltd.' for dishonor of cheques issued in partial discharge of loan liabilities.Issue 2: Validity of Petitioners' Involvement and RoleThe petitioners contended that they were not involved with the company at the time of the alleged offences. Petitioner Amit Kumar Gupta claimed to have ceased as Director from 17.07.2017, and petitioner Vipul Kant Upadhyay from 18.10.2017, prior to the issuance and dishonor of the cheques. They argued that no specific roles were assigned to them in the complaints. The respondent countered that the petitioners were involved in obtaining loans and issuing cheques, and their resignations were not substantiated by certified documents.Issue 3: Application of Judicial Mind by the MagistrateThe petitioners argued that the Magistrate issued summons without applying judicial mind. The court referred to Sections 138 and 141 of the NI Act and relevant case laws, emphasizing that specific averments against the petitioners were made in the complaints. The court noted that the petitioners were signatories to the loan agreements and cheques, and their roles were clearly outlined.Conclusion:The court found sufficient material on record for the Magistrate to issue summons and held that the veracity of the allegations and documents should be tested during the trial. The petitions were dismissed, allowing the petitioners to raise their contentions at the appropriate stage before the Magistrate. The judgment emphasized that the observations made were solely for deciding the petitions and should not influence the trial's merits.