TaxTMI 
TaxTMI 
2024 (12) TMI 1292
X X X X Extracts X X X X
X X X X Extracts X X X X
.... filing of the present petition are as follows: a) The respondent no. 2 is a manufacturer and distributor of various brands of beer. The respondent no. 3 is a private limited company engaged in retail liquor business. The petitioner was an Additional Director of the respondent no. 3 company. It is stated in the instant complaint that as per the books of account of the respondent no. 2, a sum of Rs. 4,79,327.44 was due and outstanding against the respondent no. 3. b) In order to clear the outstanding amount, the respondent no. 3 issued two cheques bearing No. 287719 dated 28th September, 2014 (hereinafter "cheque 1") for a sum of Rs. 1,23,000/- and No. 287720 dated 30th September, 2014 (hereinafter "cheque 2") for a sum of Rs. 1,21,800/- in favour of respondent no. 2 and the said cheques were drawn on the Nainital Bank Ltd., Rohit Kunj Pitampura, New Delhi. However, the said cheques were returned unpaid vide memo dated 18th December, 2014 due to insufficiency of funds. c) A demand notice dated 15th January, 2015 was issued to the respondent no. 3 and it is alleged that despite the receipt of such notice, the respondent no. 3 did not make the payment within the timeline of 15 d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2 opposed the present petition and submitted that the respondent no. 3 company had issued two cheques in favour of respondent no. 2 to clear its outstanding dues, which were returned due to insufficiency of funds. 10. It is submitted that it is specifically averred in the complaint that the respondent no. 4 is the signatory of the cheques in question and respondents no. 4 to 6 along with the petitioner are the Directors of the company by virtue of which, they are in full control of the affairs of the company and therefore, the ingredients of the offence under Section 141 of the NI Act are met in the present case. 11. It is submitted that in light of the aforementioned submissions, the instant petition, being devoid of any merit, is liable to be dismissed. 12. Heard learned Counsel for the parties and perused the material placed on record. 13. Before adverting to the merits of the case, it is important to discuss the settled law on the scope of the Court's inherent powers under Section 482 of the CrPC. 14. In the case of State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, the Hon'ble Supreme Court had set out the broad categories of cases in which the inherent powers under S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re is a specific provision in the Code or the Act concerned, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge." 15. The inherent powers of the Courts under Section 482 of the CrPC must be exercised sparingly and with great caution. From the abovesaid judgment, it is clear that the Court may quash a complaint under Section 482 of the CrPC if it is satisfied that the allegations made against the accused in the complaint, even when they are taken at face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused. Further, the Court may also invoke its extraordinary powers to quash a complaint if the allegations made in the complaint are so absurd and improbable that no prudent person may reach a conclusion that there is sufficient ground for proceeding against the accused. 16. In the present petition, the petitioner's case is that the instant complaint l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 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 been subjected to action." * * * "18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A li....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed after all the ingredients of the offence under the said provision are satisfied, i.e., when the drawer fails to make the payment within 15 days of the receipt of the notice demanding payment of cheque amount following the return of the said cheque unpaid by the payee bank. By extension, the said parameters as provided for under Section 138 of the NI Act would be applicable to establish the commission of offence under Section 141 of the NI Act as well. 23. In the present case, it is undisputed that the respondent no. 3 company issued cheque 1 on 28th September, 2014 and cheque 2 on 30th September, 2014 in favour of respondent no. 2. Both the cheques were returned unpaid on 18th December, 2014 by the payee bank due to insufficiency of funds, and subsequently, a notice was issued was issued on 15th January, 2015 demanding the payment of the cheque amount, which was not paid even after the expiry of the timeline of 15 days after the receipt of the notice of demand. 24. It is stated in the complaint that the petitioner was a director of the respondent no. 3 company and was in full control of the affairs of the company at the time of the commission of the offence. Upon perusal of th....