TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 1619
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....petitioner was a Nominee Director of the Company. 3. It is the case of the petitioner that the petitioner is not in-charge of day to day management nor was he signatory to the cheque and he ceased to be the Director of the Company from 01.05.2017, much before the deposit of the cheque as the cheque is dishonoured on 30.08.2017 and the complaint is filed on 03.11.2017. It is further the say of the petitioner that the cheque was merely given towards security and respondent No. 2 was not called upon to deposit the said cheque. 4. The petitioner was appointed as a Nominee Director of the Company by the Punjab National Bank Ltd. On the Board of the Company on 30.01.2016 as per the minutes and resolution of the Board of Directors of the Company. He was nominated under the category of Professional. DIR-12 was submitted by the Company to the Registrar of companies ("ROC" for short). On 01.05.2017 the petitioner came to be transferred from Pune and consequently, could not act as a Nominee Director of the Company. A correspondent to that effect is also on record. Thus, the petitioner was not a Director in-charge of the day to day management of the Company. 5. Facts in a capsulized form le....
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....housand only). The said payment by letter of credit was a negotiated term of contract and was in accordance with Clause 2.5 of the Agreement. Despite the issuance of letter of credit in terms of agreement, respondent No. 2 company stopped the supply of power in favour of the Company from 01.10.2016. Various emails and phone calls were exchanged asking respondent No. 2 to honour the terms and conditions of its agreement. However, respondent No. 2 did not abide by the contractual obligations. Due to non-compliance of respondent No. 2 in obtaining the Captive Power Plant Status, the Maharashtra State Electricity Distribution Company Limited raised a monthly bill to the tune of Rs. 1,79,92,08.05/- which also included cross subsidiary charges which the Company had to pay due to non-compliance of respondent No. 2. The Company terminated its agreement with respondent No. 2 vide its letter dated 20.10.2016. 8. On 26.09.2017, Karur Vyasya Bank intimated the company that it had stopped payment of cheques No. 13286 and 13287. The Company received notice dated 18.09.2017 from the advocate on behalf of respondent No. 2. On 05.10.2017 and 18.10.2017 the Company denied the contents of the notice....
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....averred to be Directors, who are in charge of the day to day management of the Company. 10. Thus, in response to the same, affidavit-in-reply has been filed in all the three matters by original complainant denying all aspects. According to the respondent/complainant, no factual aspects are being admitted and this Court cannot go into that aspect in the proceedings under section 482 of the Code of Criminal Procedure. According to the respondent, there exists legal and enforceable debt payable by the Company and the same has not been denied from the beginning. According to respondent No. 2, it is a Private limited Company registered under the Companies Act having its plant at Mundra Kutch and registered office at Sardar Patel Road, Chennai. It is not being disputed that the power supply agreement had been entered into by and between respondent No. 2 and the company on 24.07.2016 and as per the said agreement, the present respondent No. 2 had raised monthly bill for the power consumption. According to the said agreement, meeting has to be done on the 1st of every calender month for the energy consumed and adjustment would be necessary to be done in the subsequent month. It also provi....
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....iating their respective stands. 14. At the outset, the decision of the Apex Court rendered in the case of DCM Financial Services Limited vs. J.N. Sareen & Anr., (2008) 8 SCC 1 requires to be considered. 14.1. It is the case where the cheque was signed on 03.04.1995 and was presented sometimes in June, 1998. The person concerned had resigned from the Directorship of the Company. In the meantime, a complaint was filed on 20.08.1998 and intimation about the resignation of the Director was given to the complainant in writing by the respondent on several occasions. Despite the knowledge of the complainant, the Director, who had resigned was impleaded as one of the accused in the complaint, as Director in-charge of the affairs of the Company on the date of commission of offence. In such circumstances, the person who had resigned with the knowledge of the complainant in the year 1996, could not be a person in-charge of the company in 1998, when the cheque was dishonoured. The person, who resigned as Director or otherwise could not have been made responsible for payment of the cheque on behalf of the company. 14.2. Likewise, the Apex Court also referred to the decisions in the said matt....
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....la fide despite the fact that on technical grounds it may be lawful to set aside the order of the High Court, it, in our opinion, should not be done. Jurisdiction of this Court in terms of Article 136 of the Constitution of India need not be exercised only because it would be lawful to do so. Various factors including the conduct of the appellant will be relevant therefor. Having regard to the facts and circumstances of this case, it is not a fit case where we should allow the appellants to raise additional contentions which have not been raised before the courts below. 24. For the reasons abovementioned we are of the opinion that no case has been made out for interference with the impugned judgment." 15. This court has taken into consideration the decision of Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Limited, (2016) 10 SCC 458 and has held thus:- "11. The judgment in Indus Airways (supra) is clearly distinguishable. As already noted, it was held therein that liability arising out of claim for breach of contract under Section 138, which arises on account of dishonour of cheque issued was not by itself at par with criminal liability t....
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....egativing the contention, this Court held:- "10. Having heard the learned counsel for the parties, we are of the view that the accused (Respondent 1) challenged the proceedings of criminal complaint cases before the High Court, taking factual defences. Whether the cheques were given as security or not, or whether there was outstanding liability or not is a question of fact which could have been determined only by the trial court after recording evidence of the parties. In our opinion, the High Court should not have expressed its view on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure, to come to a conclusion that the offence is not made out. The High Court has erred in law in going into the factual aspects of the matter which were not admitted between the parties. The High Court further erred in observing that Section 138(b) of the NI Act stood uncomplied with, even though Respondent 1 (accused) had admitted that he replied to the notice issued by the complainant. Also, the fact, as to whether the signatory of demand notice was authorised by the complainant company or not, could not have been examined by the High Court in its....
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....threshold. Unless the parties are given opportunity to lead evidence, it is not possible to come to a definite conclusion as to what was the date when the earlier partnership was dissolved and since what date the respondents ceased to be the partners of the firm." 15. We are in respectful agreement with the above observations. In the present case, reference to the complaint (a copy of which is Annexures P-7) shows that as per the case of the complainant, the cheques which were subject matter of the said complaint were towards the partial repayment of the dues under the loan agreement (para 5 of the complaint). 16. As is clear from the above observations of this Court, it is well settled that while dealing with a quashing petition, the Court has ordinarily to proceed on the basis of averments in the complaint. The defence of the accused cannot be considered at this stage. The court considering the prayer for quashing does not adjudicate upon a disputed question of fact. 17. In Rangappa versus Sri Mohan[9], this Court held that once issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the....
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....d on a complaint, exercise of inherent powers to quash the proceedings is called for only in a case in which the complaint does not disclose any offence or is frivolous, vexatious or oppressive. There is no need to analyse each and every aspect meticulously before the trial to find out whether the case would end in conviction or acquittal. 7. In view of the above position of law, we have no option but to set aside the order passed by the High court as it has entered into highly disputed questions of fact and concluded that the material before it was sufficient to cause reasonable suspicion in the case of the complainant. That is not the ground on which powers under Section 482 of the code can be exercised by the High Court" 17. As mentioned hereinabove, this has been made amply clear in the case of HMT Watches Limited vs. M.A. Abida and another, (2015) 11 SCC 776. 18. In the case of Guru Granth Saheb Sthan Meerghat Vanaras vs. Ved Prakash and others, (2013) 7 SCC 622, matter before the Apex Court, the appellant lodge the First Information Report against respondent No. 4 for commission of offence alleging that they executed false, forged and fabricated Will. The appellant ....
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.... Secondly, in the facts of the present case there is no likelihood of any embarrassment to the defendants (respondent Nos. 1 to 4 herein) as they had already filed the written statement in the civil suit and based on the pleadings of the parties the issues have been framed. In this view of the matter, the outcome and/or findings that may be arrived at by the civil court will not at all prejudice the defence(s) of the respondent Nos. 1 to 4 in the criminal proceedings. 19. For the above reasons, appeal is allowed. The impugned order dated 24.11.2008 passed by the Division Bench of the Madhya Pradesh High Court is set aside. The proceedings in the civil suit shall now proceed further in accordance with law. The parties shall bear their own costs." 19. This Court has taken into consideration the decision of Ram Biraji Devi and another vs. Umesh Kumar Singh and another, (2006) 6 SCC 669, where the complainant' stand was itself contradictory, since at one place he had stated that the oral agreement to sell took place in July, 2002, while at the other he alleged that he started paying consideration amount between July, 2000 and December, 2002. The Court held that it was an e....
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....ve substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whose gamut of the allegations and to reach a conclusion of its own. Preemption of such investigation would be justified only in very extreme cases." 11. There cannot be any disagreement to the well-settled proposition of law that the High Court should exercise its inherent powers in extreme exceptions to quash and FIR or a complaint. The ratio as laid down in Trisuns Chemical Industry case is of no help and assistance of the complainant in the facts and circumstances of the present case. The complaint instituted does not disclose that an offence under Section 429 is made out. Cognizance taken by the Magistrate thereon against the appellants for offences under Sec....
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....n Company Limited, the respondent has resumed power supply to its consumers, but petitioner since at on his own volition, terminated the power supply agreement vide its email dated 21.10.2016, the respondent was not able to supply the power to the petitioner from 01.10.2016. Reliance is also placed on the order dated 01.08.2018 of National Company Law Appellate Tribunal ("Appellate Authority" for short), New Delhi passed in the case of Bhadreshwar Vidyut Pvt. Ltd. vs. R.L. Steels & Energy Ltd., wherein appeal had been preferred against the order passed by NCLT, whereby the application preferred by the appellant under section 9 of the Insolvency and Bankruptcy Code, 2016 in Form 5 had been rejected on the ground of existence of dispute and the same has been confirmed by the Appellate Authority. It is worthwhile to refer to the order of the Appellate Tribunal as under:- "2. Learned counsel appearing on behalf of the Appellant submits that there was no dispute in existence as the claim made by the Respondent do not relate to supply of electricity. It is submitted that about Rs. 6 crore was due from the Corporate Debtor towards supply of electricity made by the Operational Cred....
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....nless the documents are of unimpeachable character, it can be decided as to whether there would be need for the continuance of criminal proceedings and as to whether the complaint was with a ulterior motive. 25. In such circumstances to prevent the abuse of process of law, the Court can step in and indulge. However, where the complaint filed is genuine, the High Court as per this decision is not to travel beyond the prescribed limit and sometimes on the very same set of facts, civil and criminal both proceedings are maintainable. It is clearly held that only the trial Court can determine the disputed questions of facts when the Court chooses to exercise its powers based on disputed questions of facts. Special Criminal Application No. 351 of 2018 26. Resultantly, as discussed hereinabove, Special Criminal Application No. 351 of 2018 is allowed. The petitioner being the Nominee Director and not in-charge of the day to day management of the Company and also considering his having been transferred on 01.05.2019 from Pune and consequently not having acted as a Nominee Director, more particularly, bearing in mind this communication at Annexure-E dated 01.05.2017. Complaint qua him bei....