TaxTMI 
TaxTMI 
2014 (2) TMI 1368
X X X X Extracts X X X X
X X X X Extracts X X X X
....inal Procedure, 1973 (Cr.P.C.) for quashing of the summoning order dated 15.11.2011 passed by the learned Metropolitan Magistrate ('MM'). 2. The common ground of challenge raised by the Petitioners in the instant Petitions is that the Petitioners were prosecuted as Directors and persons in charge and responsible for the conduct of business of M/s. Pragati Hitech Products Pvt. Ltd. (Pragati) as certain cheques issued by Pragati were dishonoured on presentation and the Petitioners were made vicariously liable being Directors of the Company. It is urged that the Petitioners had tendered their resignation by letter dated 19.07.2011. The resignations were accepted by the Company by the Resolution dated 20.07.2011. Form 32 in respect of Petitioner Ved Prakash Gupta was submitted with the Registrar of Company (ROC) immediately thereafter. Since the cheques in question were dated 10.08.2011, 20.08.2011, 30.08.2011, 10.09.2011, 10.10.2011 & 30.10.2011, the Petitioners cannot be fastened with the vicarious liability as it was not within their power and competence to honour the cheques as they had already resigned from the Directorship. Learned counsel for the Petitioners places re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the inquiry into the alleged offence, to be completed, this Court highlighted the necessity of a proper investigation observing thus: (Paras 65-66) "65. An investigation is carried on for the purpose of gathering necessary materials for establishing and proving an offence which is disclosed. When an offence is disclosed, a proper investigation in the interests of justice becomes necessary to collect materials for establishing the offence, and for bringing the offender to book. In the absence of a proper investigation in a case where an offence is disclosed, the offender may succeed in escaping from the consequences and the offender may go unpunished to the detriment of the cause of justice and the society at large. Justice requires that a person who commits an offence has to be brought to book and must be punished for the same. If the court interferes with the proper investigation in a case where an offence has been disclosed, the offence will go unpunished to the serious detriment of the welfare of the society and the cause of the justice suffers. It is on the basis of this principle that the court normally does not interfere with the investigation of a case where an offence has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge." 6. At this juncture, I will turn to the copy of the complaints which have been placed in the paper book. In para 3 of the complaint it was stated that accused No.2 is the Director and authorized signatory of accused No.1 (Pragati) whereas accused No.3 to 5 were also the Directors and were responsible for the day to day affairs and conduct of the business of the accused No.1. It was stated that accused Nos. 2 to 5 (Petitioners herein) on behalf of accused No.1 negotiated with the Complainant for supply of goods as mentioned in the complaint. 7. In para 5 of the complaint, it was stated that the Complainant (Respondent No.1 herein) supplied goods worth Rs. 1,6851,152/- since April, 2010 till November, 2010. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r 10.10.2011 10,00,000/- 6 955534, Oriental Bank of Commerce Jagadhri Road, Yamuna Nagar 30.10.2011 10,00,000/- 8. I have already observed above that for the purpose of quashing of a complaint the averments made in the complaint have to be accepted on its face value. In Harshendra Kumar D., the Supreme Court quoted with approval the observations of its earlier decision in National Small Industries Corporation Limited v. Harmeet Singh Paintal & Anr., (2010) 3 SCC 330; and Saroj Kumar Jhunjhunwala v. State of Weswt Bengal & Anr. (2007) 1 C.Cr.LR (Cal.) 793 and held that if the Director is made liable on the ground of being in-charge and responsible for the company, there have to be specific averments with regard to the same. It was further held that if before issuance of the cheque, the accused resigned from the Directorship, then he cannot be held liable for the offence. Paras 15 and 21-23 of the report in Harshendra Kumar D. are extracted hereunder:- "15. In a recent decision in National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal (2010) 3 SCC 330 after survey of earlier decisions wherein legal position concerning Section 138 and Section 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ible for the High Court to look into the papers and documents relating to the appellant's resignation since these are the matters of defence of the accused person and defence is a matter for consideration at the trial on the basis of evidence which cannot be decided by the High Court. The complainants in this regard relied upon a decision of the Single Judge of that Court in Fateh Chand Bhansali (2005) 4 ICC 117 (Cal). 22. The counsel for the present appellant (the revision petitioner therein) on the other hand referred to a later decision of a Single Judge of the Calcutta High Court in Saroj Kumar Jhunjhunwala v. State of W.B. (2007) 1 C Cri LR 793 (Cal) wherein it was held that if before the issuance of cheques, the accused had resigned from the directorship, then he cannot be held liable for the offence. 23. Confronted with two Single Bench decisions of that Court in Fateh Chand Bhansali (2005) 4 ICC 117 (Cal) and Saroj Kumar Jhunjhunwala (2007) 1 C Cri LR 793 (Cal) the Single Judge held that the judicial discipline demanded that he should go by the earlier decision, namely, Fateh Chand Bhansali and, accordingly, refused to take into consideration the docum....