TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 1359
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 3. Heard Mr.H.Siddharth, learned counsel appearing for petitioners and Mr.E.Om Prakash, learned Senior Counsel appearing for respondent. 4. The allegations made against the accused persons in the complaint are extracted hereunder: "3. That the cheque which is the subject matter of this complaint is signed and issued by Accused No.8 and Accused No.9 as the Authorized Signatories of Accused No.1, with the consent and knowledge of the Board of Directors of Accused No.1 of which Accused No.2 to Accused No.7, were a part at all relevant times, and even during the issuance of the cheque which is the subject matter of this complaint, the persons in charge of and responsible for conducting the day-to-day affairs, management, activities and functioning of Accused No.1. Thus, Accused No.2 to Accused No.7 are also responsible for the acts of omission committed by Accused No.1. 4. It is hereby stated that, at all relevant times, Accused No.1 have represented that Accused No.2 to Accused No.7 are the Directors of Accused No.1; Accused No.8 to Accused No.9 are the Authorised Signatories of Accused No.1, having their address mentioned hereinabove. 11. The Accused No.1 being the Borrower....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ported in [2015 1 SCC 103], would submit that it is enough if the basic requirement under Section 141 of the Negotiable Instruments Act, is alleged in the Complaint and nothing more is required. For this purpose, the learned counsel specifically relied upon the following relevant portions of the judgment which is extracted hereunder: "28. We are concerned in this case with Directors who are not signatories to the cheques. So far as Directors who are not signatories to the cheques or who are not Managing Directors or Joint Managing Directors are concerned, it is clear from the conclusions drawn in the above- mentioned cases that it is necessary to aver in the complaint filed under Section 138 read with Section 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. This is a basic requirement. There is no deemed liability of such Directors. 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 SMS Pharma- (1) observed that the question of re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt further observed that what emerges from this is that the role of a Director in a company is a question of fact depending on the peculiar facts in each case and that there is no universal rule that a Director of a company is in charge of its everyday affairs. What follows from this is that it cannot be concluded from SMS Pharma-(1) that the basic requirement stated therein is sufficient in all cases and whenever such an averment is there, the High Court must dismiss the petition filed praying for quashing the process. It must be remembered that the core of a criminal case are its facts and in factual matters there are no fixed formulae required to be followed by a court unless it is dealing with an entirely procedural matter. We do not want to discuss 'the doctrine of Indoor Management' on which submissions have been advanced. Suffice it to say, that just as the complainant is entitled to presume in view of provisions of the Companies Act that the Director was concerned with the issuance of the cheque, the Director is entitled to contend that he was not concerned with the issuance of cheque for a variety of reasons. It is for the High Court to consider these submissions. The Hig....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... It may do so having come across some unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of cheques and asking him to stand the trial would be abuse of the process of the court. Despite the presence of basic averment, it may come to a conclusion that no case is made out against the Director. Take for instance a case of a Director suffering from a terminal illness who was bedridden at the relevant time or a Director who had resigned long before issuance of cheques. In such cases, if the High Court is convinced that prosecuting such a Director is merely an arm-twisting tactics, the High Court may quash the proceedings. It bears repetition to state that to establish such case unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or some totally acceptable circumstances will have to be brought to the notice of the High Court. Such cases may be few and far between but the possibility of such a case being there cannot be ruled out. In the absence of such evidence or circumstances, complaint cannot be quashed; 34....