Threshold quashing in cheque dishonour cases is limited where the complaint alleges company responsibility and director status supports process.

In prosecutions under Sections 138 and 141 of the Negotiable Instruments Act, 1881, the High Court will not quash summoning orders under Section 482 CrPC at the threshold where the complaint contains the basic averment that the accused was responsible for the company's business. A plea of resignation, non-remuneration, or absence from business premises is insufficient unless supported by unimpeachable material showing the accused could not have been concerned with the transaction. An Executive Director and Promoter may ordinarily be treated as having control over the company's affairs for the purpose of process, and disputed questions about actual role or internal functioning must be left to trial.

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Issues: (i) Whether the summoning orders passed in complaints under Section 138 of the Negotiable Instruments Act, 1881, could be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the plea that the petitioner was only a resident Indian director and had resigned from the company; (ii) Whether an Executive Director and Promoter can be presumed to be in charge of and responsible for the conduct of the company's business for the purpose of Section 141 of the Negotiable Instruments Act, 1881.

Issue (i): Whether the summoning orders passed in complaints under Section 138 of the Negotiable Instruments Act, 1881, could be quashed under Section 482 of the Code of Criminal Procedure, 1973 on the plea that the petitioner was only a resident Indian director and had resigned from the company.

Analysis: The power under Section 482 of the Code of Criminal Procedure, 1973 is to be exercised sparingly, and the Court at the summoning stage is confined to a prima facie assessment of the complaint and supporting material. If the complaint contains the basic averment required by Section 141 of the Negotiable Instruments Act, 1881, the High Court does not conduct a mini-trial or a roving inquiry. A plea of subsequent resignation, lack of remuneration, or absence from the place of business cannot by itself justify quashing unless supported by unimpeachable and incontrovertible material showing that the accused could not have been concerned with the transaction.

Conclusion: The quashing challenge on this ground failed and the summoning orders were upheld.

Issue (ii): Whether an Executive Director and Promoter can be presumed to be in charge of and responsible for the conduct of the company's business for the purpose of Section 141 of the Negotiable Instruments Act, 1881.

Analysis: Rule 2(k) of the Companies (Specification of Definitions Details) Rules, 2014 treats an Executive Director as a whole-time director, and the Companies Act, 2013 provisions dealing with whole-time directors, key managerial personnel, officers in default, and promoters support the inference that such a person ordinarily has control over the affairs of the company. In prosecutions under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, persons holding such positions can be proceeded against where the complaint makes the requisite averments, and the Court cannot, at the threshold, decide disputed questions about their actual role in the transaction or the company's internal functioning.

Conclusion: The petitioner's status as Executive Director and Promoter supported issuance of process and no ground for interference was made out.

Final Conclusion: The petitions challenging the summoning orders under the cheque dishonour law were rejected, and the connected applications were treated as infructuous.

Ratio Decidendi: In proceedings challenging summoning in a complaint under Sections 138 and 141 of the Negotiable Instruments Act, 1881, the High Court will not quash process at the threshold where the complaint contains the basic averment of responsibility and no unimpeachable evidence shows that the director could not have been concerned with the company's business or the transaction; disputed questions of role and control must be left to trial.

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