2018 (6) TMI 1370

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....politan Magistrate, Saidapet, Chennai for an alleged offence punishable under Section 138 of Negotiable Instruments Act. Subsequently, the case was transferred to III Fast Track Metropolitan Magistrate Court, Saidapet, Chennai. The case of the respondent/complainant in C.C.No.1530 of 2013 is that he is engaged in the business of distribution of computers and computer peripherals and related products of various multinational companies and the first accused having its office at No.2/10, Ajay Plaza, 3rd Floor, 1st Main Road, N.S.Palya, Banerghatta Road, Bangalore 560 076, through its Managing Director Mr.Prabhakar Kini and Additional Director Mr.Ravi Kumar Dorai Swamy, who are 2nd and 3rd petitioners respectively, placed orders for purchase of....

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.... Director and Additional Director respectively of the first accused company on 30.06.2012. According to the complainant, the 2nd and 3rd accused as directors of the first accused company, are responsible for the day today affairs of the company and also they had active involvement in all the transactions between the complainant and the accused. 3. Mr.Lakshmi Narasimhan, learned counsel appearing for the petitioners contended that the entire proceedings in C.C.No.1530 of 2013 on the file of III Fast Track Metropolitan Magistrate, Saidapet, Chennai is liable to be quashed under Section 482 of Code of Criminal Procedure on the following grounds. [i] The 2nd petitioner resigned his post as Managing Director of the first petitioner c....

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.... it may be observed that the 2nd petitioner issued the cheques on 27.01.2018 i.e. 2 months prior to the date of his resignation from the post of Managing Director. The learned counsel appearing for the petitioners would contend that since the cheques were presented only after his resignation, the 2nd petitioner cannot be held liable for an offence punishable under Section 138 of the Negotiable Instruments Act. His specific contention is that the " offence " under Section 138 of Negotiable Instruments Act is committed only when the cheques are presented and dishonoured. He relied on the decisions in [i] S.M.S.Pharmaceuticals Limited v. Neeta Bhalla and another in (2007) 4 Supreme Court Cases 70 [ii] N.K.Wahi v. Shekhar Sing....

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....ders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141. (Neeta Bhalla case, SCC p.103 para 19) Therefore, the first ground fails. 5. Another contention of the learned counsel appearing for the petitioner is that since the petitioners/accused are residing in Bangalore, the Magistrate, before issuing summons, should ha....

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....the offences committed under the Indian Penal Code. No doubt, it is true that the procedure for trial of a private complaint for the offences under the Indian Penal Code cannot be different from a trial under Section 138 of the Negotiable Instruments Act. The amendment of Section 202 of Criminal Procedure Code was made by the Central Act 25 of 2005, in order to curb the practice of private complaints being filed by unscrupulous person against persons residing in far off places. In a case under Section 138 of Negotiable Instruments Act, petitioners/accused and the complainant would be knowing each other and there should have been some transactions between them. In the instant case, the petitioners/accused had purchased computers and other ac....

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....nd therefore, this ground also fails. 8. Yet another contention of the learned counsel appearing for the petitioners/2nd & 3rd accused is that though the account of the company/first accused was frozen on 01.06.2013 by the Department of Commercial Tax, Government of Karnataka for non payment of commercial tax, the cheque return memo states the reason for return as "account closed" . It is true that the account of the company/first accused was frozen by the Government of Karnataka on 01.06.2012 for non payment of commercial tax. The respondent/complainant had presented the cheques within 6 months from the date of issuance of the cheques and the petitioners have not intimated the respondent / complainant about the factum of freezing of the....