TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 932
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....ted by the respondent No.1 against the petitioner before the learned Metropolitan Magistrate (MM for short) Saket Courts, under Section 138 of the Negotiable Instruments Act, 1881 (NI Act hereinafter) purportedly on the ground that the petitioner was a Director of the respondent No.2. According to him, the cheques in question, all dated December 31, 2018 were issued by the respondent No.2 for a total amount of Rs. 45 Lakhs and the same were dishonoured due to insufficient funds vide memo dated January 11, 2019. He stated that as per the complaints, the respondent No.1 had disbursed Venture Capital Funding of Rs. 45 Lakhs to the respondent No.2 in terms of an agreement dated March 03, 2011. The cheques in question were purportedly issued by the respondent No.2 to discharge its liability towards the respondent No.1. 3. He submitted that the petitioner ceased to be a Director of the respondent No.2 w.e.f. October 27, 2010, at least eight years prior to the issuance of the cheques in question. The petitioner was a Non-Executive Director of the respondent No.2 for a brief period between October 07, 2009 to October 27, 2010. The resignation of the petitioner was also notified to the Reg....
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...., decided on February 04, 2010; and (vii) Sudeep Jain v. ECE Industries, CRL. M.C. 1821/2013 decided on May 06, 2013. 6. In support of his submissions, he has drawn my attention to various documents like the Form 32, Company Master data, cheque dated December 31, 2018, cheque return memo, the complaint and pre-summoning evidence filed before the learned MM. He states that it is a fit case where the proceedings initiated against the petitioner by the respondent No.1 needs to be set aside. 7. On the other hand, Mr. Punit Gaur, learned counsel appearing for the respondent No.1 contended that the respondent No.1 is a society registered under the Societies Registration Act, 1860 established by the Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, with the objective to facilitate agribusiness ventures in collaboration with private investment in close association with financial institutions. That as the respondent No.2 and its Directors needed Venture Capital Assistance (VCA for short) for setting up a mango pulp processing unit, they requested the respondent No.1 for VCA and accordingly, the accused respondent No. 2 provided the bio data of all th....
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.... the lending Bank and for VCA to respondent No.1, which was duly considered. In fact, according to him, the petitioner had participated in the deliberations that had taken place between the Officers of the respondent No.1 with the Directors of the respondent No.2. 13. That apart, the respondent No.2 had furnished the detailed project report which included bio data of the petitioner and a sale deed in favour of the respondent No.2 which was executed by the petitioner. In substance, it is his submission that the petitioner played a very important role on behalf of the respondent No.2 resulting in the sanction of the VCA. Moreover, neither the petitioner nor the respondent No.2 ever informed the respondent No.1 about the resignation of the petitioner. He stated that it is not a case where this Court in exercise of its power under Section 482 of the Code of Criminal Procedure, 1973 (CrPC hereinafter) should quash the proceedings initiated by the respondent No.1 under Section 138 of the NI Act and dismiss the present petition. 14. Having heard the learned counsel for the parties and perused the record, it is evident that this petition has been filed seeking quashing of five complaint ....
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....by him does not depict the name of the petitioner. 18. The case of the respondent No.1 is primarily that the petitioner was involved in the discussion before an agreement was executed between the respondent No.1 and the respondent No.2. In support of his submission, he had relied upon the photographs (annexed at Annexure-F&G of the counter affidavit). On a specific query to the learned counsel for respondent No.1, whether he disputes the Form 32 as annexed by the petitioner at page 20 (of the petition), the answer was in the negative. In other words, he does not dispute the Form 32 annexed by the petitioner which depicts that the petitioner ceased to be the Director of respondent No.2. This factum surely suggests that the petitioner having resigned on October 27, 2010 from the respondent No.2 was not the Director when the agreement dated March 03, 2011 was executed. Even the cheque dated December 31, 2018 was also issued much after petitioner's resignation as the Director of the respondent No.2. 19. If that be so, the respondent No.1 ought not to have arrayed the petitioner as an accused in the proceedings. In cases where the accused has resigned from the Company and Form 32 has ....
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....he present petition would fall within the aforesaid parameters. 23. I must state that the learned counsel for the petitioner is justified in relying upon the judgment of a Coordinate bench of this Court in the case of J.N. Bhatia & Ors. (supra), wherein it was held as under: "16. However, difficulty arises when the complainant states that the concerned accused was Director and also makes averment that he was in charge of and responsible for the conduct of its day-to-day business, but does not make any further elaboration as to how he was in charge of and responsible for the day-today conduct of the business. The question would be as to whether making this averment, namely, reproducing the language of Subsection (1) of Section 141 would be sufficient or something more is required to be done, i.e. is it necessary to make averment in the complaint elaborating the role of such a Director in respect of his working in the company from which one could come to a prima facie conclusion that he was responsible for the conduct of the business of the company. xxx xxx xxx 24. Thus, what follows is that more bald alleg....
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....ni, who is accused No. 4, has filed these petitions raising similar plea that he had tendered his resignation on 1.3.2002, which was accepted on 10.3.2002 and thereafter. Form 32 was filed with the Registrar of Companies. Cheques were allegedly issued on 20.3.2002, namely, after his resignation and were dishonoured much thereafter when he was not the director. It is further contended that apart from bald allegation that he was in charge of the affairs of the company, nothing is stated as to how he was in charge of and/or responsible for the conduct of the day-to-day business of the accused No. 1 company. The averments qua the petitioner herein contained in all these complaints are as under: "The accused Nos. 2 to 4 are the Directors and accused No. 5 is the General Manager Finance, who are responsible for the day-to-day affairs of accused No. 1 company and are jointly and severally liable for the acts and liabilities of the accused No. 1 company." 77. On the basis of these bald averments, I am afraid, proceedings could not have been maintained against the petitioner herein, as it is not specifically stated as to how the petitioner was in charge of and responsible for the affair....
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....cribed form (Form 32) about the resignation of the appellant from the post of Director of the Company and, thus, the change among Directors. 21. The above documents placed on record by the appellant have not been disputed nor controverted by the complainants. As a matter of fact, it was not even the case of the complainants before the High Court that the change among Directors of the Company, on resignation of the appellant with effect from 2-3-2004, has not taken place. The argument on behalf of the complainants before the High Court was that it was not permissible 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. xxx xxx xxx 25. In our judgment, the above observations cannot be read to mean that in a criminal case where trial is yet to take place and the matter ....
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....on the date the offence was committed by the Company, the appellant was not the Director; he had nothing to do with the affairs of the Company. In this view of the matter, if the criminal complaints are allowed to proceed against the appellant, it would result in gross injustice to the appellant and tantamount to an abuse of process of the court." 26. Similarly, in Pooja Ravinder Devidasani (supra) the Hon'ble Supreme Court in para 22 has held as under: "22. As held by this Court in Pepsi Foods Ltd. v. Judicial Magistrate, summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully....