TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 449
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....the applicant. 3. The complainant's case in brief is as follows:­ The petitioners herein are original accused No. 4, 5, 6, 8 & 9 in Criminal Case No. 3608/SS/2016. They are the directors of the Accused No. 1 i.e. Shri. Saikrupa Sugar & Allied Industries Ltd. (for short "the said company"). The Respondent No. 2 (original complainant) is a company registered under the Indian Companies Act, 1956, engaged in the manufacture, marketing and sale of alcoholic beverages in India. The Respondent No. 2 is the original complainant who has initiated prosecution under Section 138 of Negotiable Instrument Act (for short 'the said Act') against the said company and petitioners alongwith other directors of the company. Shree Saikrupa Sugar & Allied Industries Ltd. is engaged in the business of manufacturing of grain/molasses and rectified spirits. The said company had represented to the Respondent No. 2 that, they had necessary facilities and requisite permissions to manufacture and supply rectified spirits as per the quality, specifications laid down by the Respondent No. 2. On 05.10.2015 agreement to supply rectified spirits was executed between the Respondent No. 2 and the said company. I....
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.... e­mail addressed by Accused No. 2 to Respondent No. 2 was also offered a security in the form of mortgage on 106 acres of land situated at Shirur, Maharashtra. On 16.08.2016, the Respondent No. 2 deposited the aforesaid 4 undated cheques with its bankers i.e. Punjab National Bank, Opera House Branch, Mumbai, which were dishonoured with the remarks "Funds Insufficient" vide memo of dishonor dated 17th August 2017. On 09.09.2016, Respondent No. 2 therefore, sent a legal notice to the company and its director through its advocate under Speed Post A.D. calling upon the said company to pay the amount of aforesaid cheques within the stipulated period of 15 days. 7. It is the case of the petitioners that, the said notice was received by the said company and other accused no. 2, 5 & 8 and the acknowledgment card of the packet sent to accused no. 3 was not yet received by them. The notice addressed to accused no. 4 the envelopes returned with the postal remark "Refused to accept the delivery" and accused no. 6, 7, & 9 the envelope returned with the postal remark "Shifted". Respondent no. 2 filed the complaint under section 138 r/w. 141 of the said Act before the Ld. Metropolitan Magis....
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....itted that, neither in the complaint nor in the verification statement of complainant, petitioners were described or shown as the persons being in charge of and responsible of conducting business of the said company at the time of commission of alleged offence. Nothing has been brought on record to show that the petitioners were actual in charge and responsible for the day to day affairs of the company. It is the primary responsibility of the complainant to make specific averments in the complaint, the provisions of Section 141 of the said Act, were not applicable against the petitioners. In view of vague averments made in the complaint and in absence of necessary evidence in the verification statement, the petitioners are not liable to be summoned, prosecuted and tried for the alleged offence. Respondent No. 2 has miserably failed to make out any case for exercise of jurisdiction of learned Magistrate under Section 204 of Cr.P.C. for issuing process against the petitioners. There are no specific allegations made by Respondent No. 2 in the notice issued to the petitioners. 11. Learned counsel appearing for petitioners in support of aforesaid statements relied upon the ratio laid d....
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....on 138 of the said Act, and accordingly process has been issued against the petitioners. In nutshell averments in the complaint, in brief are as under:­ 22. The complainant respectfully says and submits that:­ (a) that at the time the offence was committed, Accused Nos. 2 to 9 were the Directors and were in charge of and responsible for the day to day affairs and management for Accused No. 1 and, therefore, they are liable for prosecution. The Cheques bearing Nos. 186246,186247, 186248 and 186249 all dated 16th August, 2016, drawn in favour of the complainant were signed by Accused No. 7; (b) that the cheques bearing Nos. 186246,186247, 186248 and 186249 all dated 16th August 2016, in question were issued by the Accused in discharge of their liability to the complainant. (c) that the cheques were dishonoured as there was insufficient funds in the bank account; (d) that the complainant has sent the notice of demand dated 9th September, 2016, to all the Accused within 30 days of the receipt of the intimation of dishonor of the aforesaid cheques from the bank; (e) that the Accused have failed to comply with the notice dated 9th September 2016, by not paying the amou....
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....which is sufficient to make out a case against the Director. 34.3. In the facts of a given case, on an overall reading of the complaint, the High Court may, despite the presence of the basic averment, quash the complaint because of the absence of more particulars about the role of the Director in the complaint. It may do so having come across some unimpeachable, incontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of cheques and asking him to stand the trial would be abuse of process of Court. Despite the presence of basic averment, it may come to a conclusion that no case is made out against the Director. Take for instance a case of a Director suffering from a terminal illness who was bedridden 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 arm­twisting tactics, the High Court may quash the proceedings. It bears repetition to state that no establish such case unimpeachable, incontrovertible evidence which is beyo....