TaxTMI 
TaxTMI 
2021 (10) TMI 431
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.... JUDGMENT Rastogi, J. 1. Leave granted. 2. The present appeals are directed against the common judgment and order dated 18th July, 2014 filed at the instance of the appellants under Section 482 of Code of Criminal Procedure, 1973(herein after being referred to as "CrPC") against the order dated 10th November, 2012 pursuant to which they were summoned to answer to a charge of Section 138 of Negotiable Instruments Act, 1881(hereinafter being referred to as the "NI Act") that came to be dismissed by the High Court under the order impugned. 3. The seminal facts in brief necessary for the present purpose are stated as under. 4. The appellant nos. 1 and 2 in Criminal Appeal @ SLP(Criminal) No. 7573 of 2014 and appellant nos. 2, 3 and 4 in Criminal Appeal @ SLP(Criminal) No. 9520 of 2014 are the Directors of the appellant no. 1(Ameya Paper Mills Pvt. Ltd.) in Criminal Appeal @ SLP(Criminal) No. 9520 of 2014, the Private Limited Company established under the provisions of the Companies Act, 1956. It is the case of respondent no. 1­complainant that it is a Private Limited Company dealing in the business of production and selling spices under the name and style of M/s. Gha....
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..../09 333408 S.B.I. 10,00,000/- 12/03/09 333409 S.B.I. 10,00,000/- 12/03/09 333410 S.B.I. 10,00,000/- 6. It is the further case of the respondent no. 1 that on 18th August 2010, a letter was issued to the appellants demanding balance­sheet of the Company, which was supplied and accordingly accounts were confirmed by the appellants and on 21st June 2012, the appellants issued a letter admitting the outstanding balance of respondent no. 1­complainant as on 31st March, 2012 to the extent of Rs. 1,49,94,831/­. According to respondent no. 1, the appellants as Directors of their Company are responsible for conduct of their business and for the affairs of the Company. 7. Appellant No. 1­Company in Criminal Appeal @ SLP(Criminal) No. 9520 of 2014 issued a cheque on 2nd June, 2012 in favour of respondent no. 1­complainant towards part payment of the amount valued for Rs. 10,00,000/­ drawn on State Bank of India, Finance Branch at Nagpur, Maharashtra which was deposited by respondent no. 1­complainant in UCO Bank, Amravati, Maharashtra for encashment. However, the same was dishonoured due to "funds insufficient". The intimation....
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....ove averments in the complaint and documents filed on record, and so also the specific averment made in paragraph 5 and 7 of the complaint that all the appellants are equally responsible for the offence committed by them and they have issued the said cheque to discharge their legal liability towards respondent no. 1­complainant. 11. The learned trial Court taking cognizance of the complaint by order dated 10th November, 2012 issued summons to the appellants herein directing them to appear before the Court on 23rd November, 2012 and the appellants were granted bail on furnishing security of Rs. 2,000/­ by an Order dated 23rd November, 2012 by the Court of Chief Judicial Magistrate. 12. The order passed by the learned trial Judge summoning the present appellants came to be challenged in two separate criminal petitions filed under Section 482 CrPC seeking quashing/setting aside of the criminal complaints/Summary criminal case registered against them as well as the summons dated 10th November, 2012. Both the petitions were tagged together and came to be dismissed by the High Court under the order impugned dated 18th July, 2014. 13. Ms. Arundhati Katju, learned counsel ....
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....e affairs of the Company and there is nothing to indicate that they were appointed as non­executive Directors and what is being urged by the learned counsel for the appellants may be their defence which is a matter of trial and is not open to be examined at this stage and once the compliance of the statute has been made as required by law, their petitions have been rightly rejected by the High Court and needs no further indulgence of this Court. 17. During the course of submission, learned counsel for the respondents submits that apart from dishonour of cheque in the instant matters, there are other cheques issued by the appellants which were also dishonoured and separate complaints have been filed by the respondent(s) but because of the pendency of the present appeals before this Court, no action has been taken by the trial Judge. The details of the cases including this case are as under:­ Sl.No. Case No. Court Cheque Amount(In Rupees) 1. S.C.C No. 2500/2012 3^rd JMFC, Amravati 10,00,000/(Ten Lakhs only) vide Cheque No. 493018 dated 02.06.2012 2. S.C.C. No. 4984/2012 3^rd JMFC, Amravati 10,00,000/(Ten Lakhs only) vide Cheque No. 49301....
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....al requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied. (b) The answer to the question posed in sub­para (b) has to be in the negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases. (c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint m....
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....141 of the NI Act that at the relevant time when the offence was committed, the Directors were in charge of and were responsible for the conduct of the business of the company. 26. This averment assumes importance because it is the basic and essential averment which persuades the Magistrate to issue process against the Director. That is why this Court in S.M.S. Pharmaceuticals Ltd.(supra) observed that the question of requirement of averments in a complaint has to be considered on the basis of provisions contained in Sections 138 and 141 of the NI Act read in the light of the powers of a Magistrate referred to in Sections 200 to 204 CrPC which recognise the Magistrate's discretion to take action in accordance with law. Thus, it is imperative that if this basic averment is missing, the Magistrate is legally justified in not issuing process. 27. In the case on hand, reading the complaint as a whole, it is clear that the allegations in the complaint are that at the time at which the cheques were issued by the Company and dishonoured by the Bank, the appellants were the Directors of the Company and were responsible for its business and all the appellants were involved in the busi....