TaxTMI 
TaxTMI 
2022 (12) TMI 559
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....t no. 1") has filed two complaints under section 138 of the Negotiable Instrument Act, 1881 (hereinafter referred to as the "NI Act") titled as Planetcast Media Services Ltd V Beret Media Services & Others bearing CC no. 5229/2017 subject matter of CRL.M.C 1745/2019 and CC No. 3047/2017 subject matter of CRL. M.C 1155/2019 respectively on the allegations that the respondent no. 1 is engaged in the business of providing Playout, Satellite bandwidth & Teleport (Up linking) services under the license of the Ministry of Information & Broadcasting (MIB), Government of India. The respondent no. 2, namely, Beret Media Pvt. Ltd./accused no. 1 (hereinafter referred to as the "respondent no. 2") is stated to be a company registered under the Companies Act, 1956. The petitioner/accused no. 2, respondent no. 3/accused no. 3 and respondent no. 4/accused no. 4 are stated to be directors of the respondents no. 2, and are in charge and responsible for the conduct, management and day-to-day affairs of the respondents no. 2. The respondents no.2 and 3 are jointly, severely liable for acts of the respondent no. 2. The accused no. 5 i.e. Bhola Baba Developers Ltd is stated to be company registered und....
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.....2017 and they are also liable to pay interest amounting to Rs.9,75,946/- in terms of the agreement. The respondent no. 2 in terms of the letter/written communication dated 30.10.2015, admitted its liability and accordingly, in discharge of its liability, the respondent no. 2 through petitioner, respondents no. 3 and 4, issued cheque bearing no. 190325 dated 03.02.2017 amounting to Rs.39,58,988/- subject matter of complaint bearing CC no. 5229/2017 and Crl.M.C.1745/2019 and cheques bearing no. 214270 dated 30.09.2016, 214281 dated 20.10.2016 and 214280 dated 30.10.2016 each amounting to Rs.6,00,000/-, drawn on Axis Bank, Meerut, Uttar Pradesh-250001 subject matter of complaint bearing CC No. 3047/2017 and CRL. M.C 1155/2019, respectively. However, when the said cheques were presented for encashment, returned back from the Bankers of the respondents no. 1 with remarks 'fund insufficient' vide return memo dated 06.02.2017 and 27.12.2016 respectively issued by the Canara Bank, Branch-Janpath i.e. the Banker of the respondent no. 1. The respondent no. 2 through the petitioner and the respondents no. 3 and 4, did not make the payment of the cheque amount despite the notice dated 15.02.2....
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....02.2017 and 01.04.2017 on the ground that the impugned orders are abuse of process of law. There is no proximate of direct or indirect involvement of the petitioner in the affairs of the respondent no. 2 as he was only a Non-Executive Director as such, he never involved in its day-to-day activities. The impugned orders would cause unnecessary hassles, prejudice, embarrassment and loss of reputation to the petitioner. The petitioner did not have any role to play in the entire transaction. The Trial Court has failed to appreciate that the entire transaction took place between the respondent no. 1 and the accused no. 5 i.e. M/s Bhola Baba Real Estate Developers Pvt. Ltd. The petitioner has not given any undertaking or confirmation to admit the alleged liability. The alleged undertaking/confirmation was given prior to the petitioner being inducted as the director in the respondent no. 2 and as such, the petitioner was not having any knowledge regarding the said undertaking and confirmation. There is no specific averment made against the petitioner in the complaints. The petitioner is not the signatory of the cheques in question. The petitioner was only the Non-Executive Director of the....
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....7. The section 138 and section 141 of the NI Act read as under:- 138 Dishonour of cheque for insufficiency, etc., of funds in the account. -Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 19 [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder ....
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....o a firm, means a partner in the firm.] 8. A company is stated to be a juristic person and all the acts done on behalf of a company are done by the others. The officers of a company who are responsible for acts done on behalf of the company are personally liable for those acts including the criminal action. Every person who at the time of commission of offence is in charge and responsible for the conduct of the business of the company is liable for the offence stated to be committed by the company. However, the criminal liability arises when the offence was committed and not on the basis of merely holding a designation or office in a company. As per section 141 of the NI Act, a person is stated to be criminally liable when at the time of commission of offence was in charge and responsible for the conduct of the business of the company. Every person connected with the company may not fall within the ambit of section 141 of the NI Act. 8.1 The Supreme Court on various occasions, considered the liability of directors of a company in complaints filed under section 138 of NI Act. The Supreme Court in SMS Pharmaceuticals Ltd. V Neeta Bhalla & Anr., 2005 (8) SCC 89 held as under:- ....
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.... was not responsible for the conduct of the business of the company at the relevant time, will not be liable under the provision. The liability arises from being in charge of and responsible for the conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a company may be liable if he satisfies the main requirement of being in charge of and responsible for the conduct of business of a company at the relevant time. Liability depends on the role one plays in the affairs of a company and not on designation or status. If being a director or manager or secretary was enough to cast criminal liability, the section would have said so. Instead of "every person" the section would have said "every director, manager or secretary in a company is liable"..., etc. The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have ....
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....efines an independent director and provides that an independent director in relation to a company means a director other than a managing director or a whole time director or a nominee director who is or was not a promoter of the company or its holding, subsidiary or associate company and who is not related to the promoters and directors in the company, its holding, subsidiary or associate. 12. As mentioned hereinabove and reflecting from the Form DIR-12 that the petitioner was inducted as a director in the category of Promoter which means that the petitioner was having control over the affairs of the company directly or indirectly and is not falling in the definition of an independent director. The Form DIR-12 clearly reflects that the petitioner was not away from the affairs of the respondent no. 2 and was directly or indirectly involved in the affairs of the respondent no. 2. The petitioner is not an independent director of the respondent no. 2 although the petitioner is named as Non-Executive Director in Form DIR-12. Mere nomenclature in Form DIR-12 as Non-Executive Directed necessarily does not mean that the petitioner was not directly or indirectly related with the affairs ....