TaxTMI 
TaxTMI 
2010 (7) TMI 286
X X X X Extracts X X X X
X X X X Extracts X X X X
....8-2007 passed by the Delhi High Court in Crl. M.C. No. 5167 of 2003 allowing the said petition under section 482, Code of Criminal Procedure, 1973 ('Cr. PC') filed by the respondents and discharging them and quashing the complaint filed by the petitioner-bank and the process issued thereupon. By the said judgment, three other petitions, being Crl. MC No. 5161 of 2003, Crl. MC No. 5162 of 2003 and Crl. MC No. 2166 of 2003, were also disposed of in favour of the respondent Nos. 1 and 2, Asian Global Ltd. and its Director, Mr. Rajiv Jain. Several other petitions filed by Sarla Jain, a Director of the Respondent No. 1-company, also challenging the complaint filed by the petitioner-bank and praying for discharge therefrom and quashing thereof, w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was again presented for payment on 31-7-1996, but was again returned by the New Delhi Gulmohar Park Branch of the Petitioner Bank with the remark "since account closed". It is only thereafter that the Petitioner Bank filed a complaint against the Respondents under sections 138 and 139 of the Negotiable Instruments Act, 1881 ('the 1881 Act'), read with sections 120B and 420 IPC, upon which cognizance was taken by the Additional Chief Metropolitan Magistrate, Patiala House, New Delhi, on 27-1-2001. 4. Aggrieved by the order issuing summons, the Respondent Nos.1 to 3 and other accused persons, being the Directors of the Respondent Nos. 1 to 3 Companies, moved an application under section 245(2), Cr. PC praying for recall of the order issuing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 141 of the 1881 Act, which merely provide that if a person committing an offence under section 138 is a Company, every person, who at the time when the offence was committed, was in charge of, and was responsible to the Company for the conduct of the business of the Company, as well as the Company, shall be deemed guilty of the offence. It was urged that the High Court had wrongly interpreted the provisions of sub-section (1) of section 141 of the 1881 Act in their application to the statements made in paragraphs 12 and 21 of the complaint in arriving at a finding that the complaint had merely presumed that the Directors would be guilty because of holding a particular office since law would assume so. It was submitted that while correctly....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... submissions made on behalf of the Petitioner Bank were strongly opposed on behalf of the respondents and it was submitted that having regard to the decision of this Court in SMS Pharmaceuticals Ltd.'s case (supra) which was later followed in N.K. Wahi v. Shekhar Singh [2007] 9 SCC 481/AIR 2007 SC 1454/AIR 2007 SCW 1880, there was no scope to urge that the ingredients of a complaint against the respondents had been satisfied by the averments made in paragraphs 12 and 21 of the complaint. 12. As far as the second limb of the submissions made on behalf of the Bank was concerned, it was submitted that the same was an argument of desperation as the cheques in question had been drawn by the Respondent No. 3 on its own Bank which had dishonoured....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iments expressed in SMS Pharmaceuticals Ltd.'s case (supra) that merely being a Director would not make a person liable for an offence that may have been committed by the Company. For launching a prosecution against the Directors of a Company under section 138 read with section 141 of the 1881 Act, there had to be a specific allegation in the complaint in regard to the part played by them in the transaction in question. It was also laid down that the allegations had to be clear and unambiguous showing that the Directors were in charge of and responsible for the business of the Company. This was done to discourage frivolous litigation and to prevent abuse of the process of Court and from embarking on a fishing expedition to try and unearth m....