2008 (8) TMI 877

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....ce punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short the `Act'). In all, 8 petitions were filed which were disposed of by the common judgment. 3. The present appeals relate to Criminal Miscellaneous No.52153 of 2002 and connected cases. The High Court quashed the proceedings primarily on the ground that respondent No.1-Virsa Singh Sidhu in the first case had resigned from the Directorship before the cheques were issued. The other petitions were allowed on the ground that there were some general allegations that all Directors were responsible. 4. Learned counsel for the appellant submitted that the High Court's judgment is clearly unsustainable. So far as respondent No.1 is concerned he claims to have r....

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.... is essentially a matter of trial. Whether respondent No.1 had intimated the company and whether there was any resolution accepting his resolution are matters in respect of which evidence has to be led. Therefore, the High Court was not justified in its view. 7. So far as allegations against the Directors are concerned about their position in the company the complaint specifically contained the averments regarding the position of the accused Directors in the company. 8. At this juncture, it would be relevant to take note of certain observations made by this Court in various cases. 9. In S.V. Muzumdar v. Gujarat State Fertilizer Co. Ltd. and Anr. (2005 (4) SCC 173), it was inter-alia observed as follows: "3. The facts as projected by the....

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....Court. The challenge before the High Court was primarily on the ground that there was no material to show that the accused persons at the time of offence as allegedly committed were in charge and/or responsible to the company for the conduct of the business as required under Section 141(1) of the Act. It was also submitted that the deeming provision under sub-section (2) of Section 141 which covers persons with whose consent or connivance or any attributable negligence for commission of the offence by the company was also not applicable. The High Court did not accept the pleas and held that the controversy was to be adjudicated at the trial. It considered the petition to be unacceptable attempt to stall the criminal proceedings at the thres....

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....ed the offence. (2) Everyone who was in charge of and was responsible for the business of the company. (3) Any other person who is a director or a manager or a secretary or officer of the company with whose connivance or due to whose neglect the company has committed the offence. 11. Whether or not the evidence to be led would establish the accusations is a matter for trial. It needs no reiteration that proviso to sub-section (1) of Section 141 enables the accused to prove his innocence by discharging the burden which lies on him." 10. In N. Rangachari v. Bharat Sanchar Nigam Ltd. (2007 (5) SCC 108), it was observed as follows: "19. Therefore, a person in the commercial world having a transaction with a company is entitled to presume t....