TaxTMI 
TaxTMI 
2019 (10) TMI 36
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....d Metropolitan Magistrate 44th Court at Andheri, Mumbai (for short "said Court") dated 03rd February 2018 thereby issuing process against the applicants for an offence punishable under Section 138 r/w 141 of the Negotiable Instruments Act, 1881 (for short "the said Act"). 4. The learned counsel appearing for the applicants submit that, if the allegations in the complaint are taken on its face value and read in its entirety an alleged offences are not disclosed. It is submitted that, learned Metropolitan Magistrate has not appreciated the legal position concerning the vicarious liability of a director in a company which is being prosecuted for the offence under Section 138 r/w. 141 of the Said Act. The learned Magistrate has not properly appreciate that, what is required is that the persons who are seeking to be made vicariously liable for a criminal offence under Section 141 of the Said Act should be, at the time the offence was committed, was in charge of and was responsible for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the said provision. Only those persons who are in charge of and responsible for the....
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....the cheque is presented in the bank in that case also the said Director cannot be held responsible for issuance of cheque. The learned counsel invites attention of this Court to the judgment of the Supreme Court in the case of DCM Financial Services Limited Versus J.N. Sareen and Another (2008) 8 SCC 1 and in particular paragraph nos. 21 to 24 thereof. 7. Learned counsel furthers submitted that, unless complaint demonstrates that how and in, what manner accused was responsible, simply because the person is a Director of defaulter company, does not make him liable under the Act. In support of aforesaid contention learned counsel pressed into service exposition by the Supreme Court in the case of Ashoke Mal Bafna Versus Upper India Steel Manufacturing and Engineering Company Limited (2018) 14 SCC 202. Therefore, relying upon the averments in the application, grounds taken therein and annexure thereto, learned counsel appearing for the Applicants prays that applications deserve to be allowed. 8. On the other hand, learned counsel appearing for contesting Respondent No. 2 invites attention of this Court to the affidavit in reply and submits that, though the applicants tendered re....
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....pany, the applicants and the other directors under Section 138 r/w. 141 of the Said Act, and the same are pending, including the cheques, for which the present petition is filed. 11. It is further submitted that, the Company Hamara Doctors Limited has issued cheque bearing no. 786084 dated 01.04.2017 for Rs. 1,20,000/drawn on Yes Bank ltd, Gurgaon branch duly signed by Director Pahal Chawla on behalf of Hamara Doctor Limited, towards part payment of the products supplied by the Respondent No. 2 to it. This cheque was also issued alongwith the order dated 27.09.2016. The cheque was deposited for encashment and it got dishonoured and as per the provisions of Section 138 of the said Act. Demand notice was send to the Drawer of the cheque, Hamara Doctor Limited and all the Directors of the Company responsible for the affairs of the Company, including the present applicants. They all refused to take / accept the demand notice. After expiry of 15 days period, the Respondent No. 2 filed complaint under Section 138 r/w. 141 of the Said Act against drawer of the cheque Hamara Doctor Limited, Director Pahal Chawla signatory of the cheque and the applicants as responsible directors of Hama....
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....que being issued, further they along with the other Directors had placed order of products from the Respondent No. 2. It is also stated that they were aware about the supply of the goods / products and delivery of the same. It also speaks about the issuance of the cheque which was issued towards discharge of legally enforceable debt due from company and Directors and the cheque was deposited as per the instructions of the Directors, as the statutory demand notice was not replied, hence the specific statements made against them were controverted and rebutted at the first possible opportunity. 15. It is further submitted that, the so called resignation letters which were written and sent to the Board of Directors at the address which is also the residence of the applicants were never accepted by the Board of Directors, which is evident from the fact that no documents i.e. Minutes Book or any resolution is produced to show that the Board of Directors has accepted the resignation of the applicants. The documents produced by the applicant only reveal that they have informed the Registrar of Companies (ROC) about their resignation and the same has accordingly recorded in the system, h....
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.... responsible for the day to day trade, supervision, affairs and business management of the accused no. 1 being the Directors of the accused no. 1. That the accused no. 2, 3 and 4 are also signatories for and on behalf of the accused no. 1 and the accused no. 2 had issued the cheque. There are other details also mentioned in the complaint before filing the complaint, and the complainant has taken all necessary procedural steps. I find considerable substance in the contention of the counsel appearing for second Respondent that the applicants are also promoters of the said company. 20. At this juncture it would be apt to reproduce herein below Section 168 of the Companies Act, which reads as under: 168. Resignation of director. (1) A director may resign from his office by giving a notice in writing to the company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar in such manner, within such time and in such form as may be prescribed and shall also place the fact of such resignation in the report of directors laid in the immediately following general meeting by the company: Provided that a [director may ....
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....gistrar of the Companies. There is no denial to the fact that, till date the names of the applicants are being shown as director in the companies record. As rightly submitted by the learned counsel appearing for the Second Respondent that, if there are only three directors and if the two directors are allowed to resign out of three directors and their resignation is accepted, in that case company cannot run by only one director. 22. It will have to be held that, the documents placed on record by the applicants cannot be considered as uncontroverted or of impeachable character. Since said documents are disputed by respondent contending that, said documents do not fulfill the mandate of Section 168 of the Companies Act. As already observed if the averments in the complaint are read in its entirety an alleged offences are disclosed and therefore, as per settled principle of law the order of issuance of process needs no interference by the learned Magistrate. The Supreme Court in the recent judgment in the case of Sau. Kamal Shivaji Pokarnekar Versus State of Maharashtra and others AIR 2019 SC 847 has taken a view that quashing the criminal proceedings is called for only in a case w....