TaxTMI 
TaxTMI 
2021 (2) TMI 385
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....[Crl.M.C. 1784/2020] pertains to Complaint No.612305/2016. Since the subject matter of these petitions pertain to four different complaints (henceforth referred to as the "complaints in question") relating to one residential real estate project, namely, "Spire Woods", therefore, with the consent of learned counsel for the parties, these petitions have been heard together and are being disposed of by this common judgment. 3. These petitions have been preferred by the petitioner seeking quashing of orders dated 16.3.2017 and 25.06.2018, passed by the Metropolitan Magistrate vide which petitioner has been summoned to face trial and by order dated 25.06.2020, Metropolitan Magistrate has framed Notices under Section 251 Cr.P.C and dismissed petitioner's plea seeking discharge in the complaints in question. 4. Brief facts of the complaints are that petitioner- Major Surendra Kumar Huda and one other person, namely, Sunil Gandhi, are the Promoters/ Directors of M/S A N Buildwell (P) Ltd. (henceforth referred to as the "accused company"). Respondent/complainant has alleged that petitioner and one Mr.Ashish Gulati, induced him to invest in a residential real estate project, namely, "S....
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....hat the accused Directors had already resigned from the Board of Directors of the accused company, he was left with no option but to send Demand Notices under Section 138 of NI Act against the accused company and its Directors and since no payment was received within the statutory period of 15 days, the complaints in question were instituted under Section 138 of NI Act. 7. The learned trial court, after hearing arguments on the point of summoning held that prima facie offence under Section 138 of NI Act was made out and complaints were filed within limitation period and vide orders dated 16.3.2017 and 25.06.2018, directed issuance of summons against the petitioner and others and vide order dated 25.06.2020 framed Notices under Section 251 Cr.P.C. while rejecting the plea of discharge, and the said orders are under challenge in these petitions. 8. At the hearing, learned counsel for petitioner submitted that petitioner had never met respondent or induced him to invest money in the accused company. It was submitted that petitioner was only a nominee Director of M/s Schleicher Intec Pvt. Ltd. which itself had only 22% share holding in M/S A.N. Buildwell Pvt. Ltd and also that pe....
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....rty to the complaint cases, despite having served them Demand Notice qua the cheques in question. It is also averred that the Metropolitan Magistrate has failed to take notice of the fact that out of four cheques in question, only two cheques were signed by the petitioner and other two cheques were signed by the other Director and that petitioner was not Director of M/S A.N. Buildwell Pvt. Ltd. at the time of presentation of cheques or its dishonour or of issuance and acceptance of Demand Notices. 11. It was also submitted that factum of petitioner's resignation from the Directorship of M/S A.N. Buildwell Pvt. Ltd. on 11.09.2015 and constitution of new Board of Directors on the same day had resulted in replacement of petitioner as the authorized signatory of the bank accounts of M/S A.N. Buildwell Pvt. Ltd. and therefore, the cheques in question were dishonoured with the remarks "Due to signature to operate account not received" and this fact has been completely ignored by the learned Metropolitan Magistrate while proceeding against the petitioner under Section 138 of NI Act. 12. To submit that the Director, who was not Incharge, is not responsible for conduct of business of ....
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....ich was owned, operated and controlled by the petitioner and petitioner is a charge-sheeted accused in several FIRs registered in Delhi and NCR for looting and plundering of money to the tune of Rs. 450 crores. Learned counsel submitted that with an intention to safe guard his hard earned invested money in the project run by the petitioner, respondent/complainant deposited the cheques in bank for payment, which were issued to him by the accused company under the Directorship and signatures of petitioner and after dishonouring of cheques, petitioner was left with no option but to have recourse to law. 16. Learned counsel for respondent/complainant submitted that petitioner's claim of having resigned from the accused company on 11.09.2015 while the cheques in question were dishonoured on 27.04.2016, is blatantly false as petitioner himself is signatory on the two cheques in question and these cheques were issued by the accused company under the Buy Back Option, as spelt out in the Builder Buyer Agreement and Agreement to Sell dated 27.03.2015. It was stated that petitioner first created financial crunch in the accused company by siphoning off the company funds for personal benefit....
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....of NI Act, learned counsel for respondent submitted that the said plea is to be rejected, as the Metropolitan Magistrate, after examining the issue of filing of complaints, has categorically stated in the impugned summoning orders dated 16.3.2017 and 25.06.2018 that the complaints were filed within period of limitation. It is averred on behalf of respondent that the cheques in question were returned from the bank vide Return Memo dated 27.04.2016 and legal Demand Notice was sent on 23.05.2016, which was served upon the company on 30.05.2016 and the complaints were instituted on 14.07.2016 and therefore, there is no delay in filing the complaints in question. 21. Learned counsel for respondent also submitted that the plea of petitioner that in the complaints in question only he, Sunil Gandhi and M/S A.N. Buildwell have been arrayed as accused despite the fact that Demand Notices were sent to other Directors as well, cannot be taken note of as only these persons were responsible for the day to day affairs of the company and they were the majority share holders as well as signatories on the cheques in question. Further, it was stated that petitioner himself has not disclosed the....
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....High Court of Bombay in Tayal Cotton Pvt. Ltd. Vs. State of Maharashtra and others (W.P.(Crl.) 1437/2017) in support of respondent's case. 25. Lastly, it was submitted on behalf of respondent/complainant that none of the grounds raised by the petitioner merit any consideration and these petitions deserve to be dismissed. 26. Arguments advanced by learned counsel representing both the sides were heard in detail and I have also perused the impugned orders, material placed on record as well as decisions relied upon by the parties. 27. It is not in dispute that petitioner was Director of M/S A N Buildwell (P) Ltd. when respondent/complainant invested in the residential project by the name of "Spire Woods" located in Gurugram, Haryana and Builder Buyer Agreement and Agreement to Sell was entered between the accused company and respondent/complainant on 27.03.2015. It is further not in dispute that out of the four post dated cheques issued in the name of respondent/complainant, two cheques of higher value were signed by petitioner in the capacity of Director as well as one another authorized representative of the accused company, whose name petitioner has not disclosed. It is al....
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....heir creditability by not being honoured on presentment. It was found that an action in the civil court for collection of the proceeds of a negotiable instrument like a cheque tarried, thus defeating the very purpose of recognising a negotiable instrument as a speedy vehicle of commerce. It was in that context that Chapter VII was inserted in the Negotiable Instruments Act by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (Act 66 of 1988) with effect from 1-4-1989. The said Act inserted Sections 138 and 142 in the Negotiable Instruments Act. The objects and reasons for inserting the chapter were: "to enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for penalties in case of bouncing of cheques due to insufficiency of funds in the accounts or for the reason that it exceeds the arrangements made by the drawer, with adequate safeguards to prevent harassment of honest drawers." 16. While Section 138 made a person criminally liable on dishonour of a cheque for insufficiency of funds or the circumstances referred to in the section and on the conditions mentioned therein, Sectio....
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....e of petitioner that the two cheques in question did not bear his signatures or that at the time of issuance of cheque, he was not the Director of the accused company. The stand taken by petitioner is that at the time of presentation of cheques in bank, he was not on the role of Board of Directors and has placed on record copy of Form DIR 12 in support of his claim, which shows that he had resigned on 11.09.2015. However, this Court cannot lose sight of the fact that he was the Director/Promoter of the accused company at the time of issuance of cheques and was also signatory on two cheques. The Hon'ble Supreme Court in S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla AIR 2005 SC 3512, while affixing the liability of the signatory on the cheque, has held as under:- "19. In view of the above discussion, our answers to the questions posed in the reference are as under: (a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. ....
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....heir responsibility to honour the cheques. 35. The petitioner has approached this Court against his summoning and framing of Notices under Section 251 Cr.P.C in the complaints in question. It is settled law that a Magistrate at the stage of taking cognizance and summoning is required to only consider whether a prima facie case has been made out for summoning the accused persons or not and is not required to go into the merits of the case or material placed on record. However, since petitioner has also sought dismissal of the complaints on merits, this Court while exercising its extra ordinary inherent jurisdiction under Section 482 Cr.P.C. heard the parties at length on the merits of the case as well. 36. What has shocked the conscience of this Court is that for purchase of one residential unit, respondent/complainant had paid a sum of Rs. 45,25,331/- to the accused company through RTGS, whereas the total sum value of four post dated cheques in question is Rs. 11,4,74,703/- which were given to respondent by the petitioner's company. It appears that the accused company guaranteed significant returns to the customers/ investors who paid the entire amount in one instalment for t....
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....cted only to be aware generally of who are in charge of the affairs of the company. It is not reasonable to expect him to know whether the person who signed the cheque was instructed to do so or whether he has been deprived of his authority to do so when he actually signed the cheque. Those are matters peculiarly within the knowledge of the company and those in charge of it. So, all that a payee of a cheque that is dishonoured can be expected to allege is that the persons named in the complaint are in charge of its affairs. The Directors are prima facie in that position. XXXXX XXXXX 27. We think that, in the circumstances, the High Court has rightly come to the conclusion that it is not a fit case for exercise of jurisdiction under Section 482 of the Code of Criminal Procedure for quashing the complaint. In fact, an advertence to Sections 138 and 141 of the Negotiable Instruments Act shows that on the other elements of an offence under Section 138 being satisfied, the burden is on the Board of Directors or the officers in charge of the affairs of the company to show that they are not liable to be convicted. Any restriction on their power or existence of a....