TaxTMI 
TaxTMI 
2019 (1) TMI 570
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....n the complainant. The accused No.2 is the Managing Director and signatory of the cheque. The accused No.2 had signed all the documents pertaining to membership on behalf of the accused No.1 including the undertaking as required in accordance with rules and Bye laws. The day to day affairs of the accused No.1 are managed by accused Nos. 2, 3 and 4 and as such they are in-charge and are in control of the affairs of accused No.1 and liable for all the acts and deeds done by accused No.1. Accused Nos. 5 to 7 are also aware and responsible for the day to day affairs of the accused No.1. c) The accused No.1 become a trading cum clearing member of the Company and was allocated CM­ID : 13960. Accused No.1 had been conferred rights to trade and clear through the clearing house of complainant and was allowed to make deals for himself as well as on behalf of clients and clear such deals. The accused No.2 is the Managing Director and signatory of the cheque. The accused No.2 had signed all documents pertaining to membership, undertaking in accordance with Rules and Bye laws. The day today affairs of accused No.1 are managed by accused Nos. 2 to 7 and as such they are in-charge and contro....
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....ies by accused No.1 Company and necessary Form­32 was filed on 30.08.2013 giving effect to petitioner's resignation from 01.07.2013. The cheque was issued and dishonoured after filing of Form 32. iv) The impugned cheque is dated 11.09.2013 which was deposited on 14.09.2013 and returned unpaid vide Memo dated 17.09.2013. Thus, at the time when the offence was committed, the petitioner was not in-charge and responsible for the day to day affairs of accused No.1­Company. v) The petitioner has not participated in any meetings and not even received any notice of board meeting from accused No.1 and neither received any pecuniary benefit. He was Independent Non Executive Director only for a period of four months. vi) The petitioner was served with notice dated 17.10.2013. In the said notice the complainant has stated that addressee Nos. 2 to 5 (accused Nos. 2 to 5) were looking after the day to day affairs of accused No.1 Company. Even before receipt of notice dated 17.10.2013, the petitioner had received notice dated 28.08.2013 with respect to dishonour of cheque bearing No.852435 dated 16.08.2013 for sum of Rs. 88,24,000/­. The petitioner vide reply dated 4.09.2013 in....
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.... Kotak Mahindra Bank Limited 2011 (2) Mh.LJ 353 iv) Sampelly Satyanarayana Rao Vs. Indian Renewable Energy Development Agency Limited 2016 (10) SCC 458 v) Suhas Bhand Vs. State of Maharashtra and Anr. delivered by this Court in Cri. Writ Petition No.2330 and 2331 of 2006. vi) Mrs. Jayanti Senthil Nathan Vs. Kotak Mahindra Bank Ltd. And Anr. delivered by this Court in Cri. Application No.164 of 2012. 9. Having heard both the sides, I have also scrutinized the documents on record. The proceedings are initiated under the provisions of Section 138 of Negotiable Instruments Act. The primary contention of the petitioner is that he was independent professional director of accused No.1­Company and he had resigned with effect from 01.07.2013 which is fortified by Form 32. Whereas the contention of the complaint is that the petition is not maintainable and complaint specifies the role of the petitioner and there are sufficient avernments therein indicating that the petitioner along with the other accused was in-charge and in control of day to day affairs of accused No.1 and is liable for acts and deeds of accused No.1. The resignation is disputed. The contention that the petitioner i....
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.... that it was open to the magistrate taking cognizance and issuing process to recall the said process in the event of the summoned accused showing to the Court that the issuance of process was legally impermissible. The magistrate came to the conclusion that the statutory notice issued by the complainant was not inconformity with the requirement of law. Aggrieved by order of discharge passed by the trial Court, the complainant challenged the same by way of revision petition before the Sessions Court on the ground that the learned magistrate had no power to review his earlier order because of the bar under Section 362 of Cr.P.C. The Sessions Court accepted the contention of the complainant and allowed the revision petition without going into the merits of the legality of the statutory notice. The company thereafter challenged the order of Sessions Court by Cri. Writ Petition under Article 227 of the Constitution of India before the High Court. The said petition was rejected by the High Court by order dated 20.12.2000 on the ground that once the magistrate records the plea of the accused and the accused pleads not guilty then the magistrate is bound to take all such evidence as may be....
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....hich is the subject matter of the aforesaid decision. While dealing with the challenge, the Supreme Court has observed that when the matter had come up for preliminary hearing the Court had observed that the decision rendered in K.M. Mathew's case may require reconsideration and the appeal was referred to a bench of three Judges. However, the correctness of the judgment in K.M. Mathew's case came up for consideration before a three Judge Bench of the Supreme Court. In the case of Adalat Prasad Vs. Rooplal Jindal and Ors. 2004 (2) BCR (Cri) 857 and the three Judge bench did not agree with the law laid down by the Court in K.M. Mathews' case. The contention of the complainant before the Apex Court, in the case of Subramanium Sethuraman (Supra) was that the case in hand was triable as a summons case and the Code has not contemplated a stage of discharge once the plea of not guilty is recorded. The appellant has to face a trial as contemplated in Chapter XX of the Code. The appellant's Counsel had challenged the decision of the High Court wherein it was observed that once plea is recorded in a summons case, it is not open to the accused to seek discharge. The Hon'ble Supreme Co....
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....le a petition under Section 482, the Court cannot deny him the statutory right available to him in law and taking into consideration the history of the case, the concerned Court entertaining the application will take into consideration the objections raised by the complainant in this case as to delay that is being caused by the entertainment of applications and petitions filed by the accused. Thus, the powers under Section 482 of Cr.P.C. are available to the accused to challenge the proceedings. From the observations of the Apex Court in the aforesaid decision it cannot be said that the application under Section 487 of Cr.P.C. is not maintainable after recording plea of the accused. 12. In the case of Adalat Prasad Vs. Rooplal Jindal (Supra), it was observed that if a magistrate takes cognizance of an offence and issues process without their being any allegation against the accused or any material implicating the accused or in contravention of provisions of Section 200 and 202, the order of the magistrate may vitiated but then the relief and aggrieved accused can obtain at that stage is not by invoking Section 203 of the Code because Criminal Procedure Code does not contemplate a ....
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....e facts of the said case and it was observed that ordinarily the High Court shall not interfere under Section 482 of Cr.P.C in view of recording plea. It is pertinent to note that in the said decision the Court has also analysed the merits of the case and dismissed the said petition. 15. In the case of Sampelly Satyanarayana Rao (Supra), relied upon by the Counsel for respondent­complainant, it was observed by relying upon the decision in the case of HMT Watches Ltd. Vs. M.A. Abida (2015) 11 SCC 776 and Rallis India Ltd. Vs. Poduru Vidya Bhushan (2011) 13 SCC 88 that the High Court should not have expressed its view on the disputed questions of fact in a petition under Section 482 of Code of Criminal Procedure to come to a conclusion that the offence is not made out. In the case of Lata Pramod Dave (Supra), this Court had observed that Section 138 of Negotiable Instruments Act has converted civil liability for dishonour of cheque into penal liability and Section 141 casts vicarious liability on the director of the company and how to deal with the said liability has always been a vexed question and engaged the attention of the higher Courts since its enactment. By analyzing the....
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....onclusions. On the basis of the facts, the petition was dismissed. 16. In the present case, it is the contention of the petitioner that he was an additional director only for a period of four months. The documents indicate that he was appointed on 14.03.2013 and he has resigned on 30.08.2013. The contention of the petitioner is that there is nothing to doubt the genuineness of Form 32 with regards to the resignation of the petitioner. Except stating that the complainant is disputing the same is not sufficient. Learned Counsel for the respondent had submitted that in the case of Suhas Bhand (Supra), it was observed by this Court that if the resignation is not accepted or admitted by the complainant upon production of the certified copy of the Form No.32, the accused would have to prove the truth of the contents of the said certified copy that is the factum of his resignation and the such accused cannot be discharged upon production of certified copy of Form No.32. However, in the case of Harshendra Kumar (Supra), the Hon'ble Supreme Court after analyzing several decisions on the issue of Section 138 and 141 of the Negotiable Instruments Act has observed that criminal prosecution is....
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....o.1. Reference is also made to circular dated 12.07.2013 directing companies to furnish undertaking that all existing contracts will be settled on due dates. The said letter is subsequent to resignation of petitioner. The notice also mentions that accused Nos. 2 to 5 were in-charge and responsible for conduct, liability and daily affairs of business of accused No.1. Petitioner is arraigned as accused No.6. The notice does not give any role to the petitioner. In the case of Gunmala Sales (P) Ltd. Vs. Anu Mehta 2015 (1) SCC 103 it was observed that in the facts of a given case on an oral reading of the complaint, the High Court may despite the presence of the basic avernments, quash the complaint. Despite the presence of basic avernment, it may come to a conclusion that no case is made out against the director. Take for instance, the case of a director suffering from a terminal illness was Director at the relevant time or a director who had resigned long before issuance of cheques. In such cases, if the High Court is convinced that prosecuting such a director is merely an arm twisting tactic, the High Court may quash the proceedings. To establish such case unimpeachable incontrovert....