TaxTMI 
TaxTMI 
2024 (12) TMI 1291
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.... in the facts and circumstances of the case, in the interest of justice." 2. The brief facts of the case, as per the complaint bearing no. 7369/2022 titled as "Kulbhushan Bharadwaj vs. Siwach Infrastructure Pvt. Ltd.", which led to the filing of the instant petition are as follows: a. The petitioner, respondent no. 4-company and respondent no. 5 are the accused in the aforesaid complaint. b. The respondent no. 3/complainant was approached by the petitioner and respondent no. 5 herein, representing the respondent no. 4-company i.e., "M/s Swiach Infrastructure Private Limited" as being owners of Flat No. 1, Ground Floor, I Wing, Griha Shakti, Ladvali, Karjat, Raigad, Maharashtra - 410206 (hereinafter as the "subject property") and expressed interest in selling the said subject property to the complainant. c. Thereafter, the complainant agreed to pay a sum of Rs. 35,00,000/- as sale consideration and accordingly, made a payment of Rs. 25,00,000/- to the accused herein. d. Later, the petitioner and respondent no. 5 handed over a file to the complainant consisting of documents showing the closing of a house loan in favour of one Ms. Yasmin Hashmat Ullah, a resident of 6, Cresce....
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....Act. l. Aggrieved by the proceedings instituted against her, the petitioner filed the instant petition seeking quashing of the aforesaid complaint and the summoning order. 3. Learned counsel for the petitioner submitted that the petitioner has been falsely implicated in the present case as she was not involved in the issuance of the said cheque to the complainant. 4. It is submitted that the petitioner is not involved in the day-to-day activities and affairs of the respondent no. 4-company and therefore, she cannot be made liable for the offence committed by the respondent no. 4-company. 5. It is further submitted that the petitioner has never dealt with the complainant and has no knowledge about the issuance of the said cheque to the complainant. Moreover, it is submitted that she is not an authorised signatory of the cheque in question and hence, she was erroneously made a party to the instant complaint. 6. It is submitted that due to her non-involvement in the company's affairs and her absence of knowledge regarding the issuance of the said cheque to the complainant, no offence is made out against her under Sections 138 and 141 of the NI Act. 7. It is submitted that it is....
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....d 6th January, 2020. 17. Therefore, it is pertinent to understand the scope of interference of this Court under Section 482 of the Code i.e., Section 528 of the BNSS, wherein, this Court is bestowed with inherent jurisdiction to exercise its powers to either "prevent any abuse of process of law" or "secure the ends of justice". However, the said terminologies are devoid of any specific definition due to its wide ambit and therefore, the determination as to whether the case falls within the scope of the aforesaid terms lies with the Court and must be testified based on the established principles of law. Moreover, under this provision, the Court must exercise its adverse powers sparingly, cautiously and in exigent cases. 18. However, the Court can exercise its inherent powers under Section 482 of the Code to quash complaints and criminal proceedings emanating therefrom, if it does not constitute a prima facie offence against the accused and the same was elaborately dealt with by the Hon'ble Supreme Court in the case of Indian Oil Corporation v. NEPC India Limited and Others, (2006) 6 SCC 736. 19. Keeping the aforesaid law in mind, it is pertinent to understand the contention of th....
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....*** "141. Offences by companies. - (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business 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 ....
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.... If the aforementioned ingredients are satisfied then the person who has drawn the cheque shall be deemed to have committed an offence. In the explanation to the section clarification is made that the phrase "debt or other liability" means a legally enforceable debt or other liability." 22. As per the aforesaid extracts, it is observed that after a cheque is returned for insufficient funds in the account, a notice demanding the repayment of the due amount should be issued by the payee to the drawer within a time period of thirty (30) days from the date on which the cheque was returned. Moreover, the provision also provides the drawer with a statutory period of fifteen (15) days to repay the due amount from the date of receipt of the demand notice. However, if the drawer fails to pay the due amount within the said statutory period, then an offence under Section 138 of the NI Act is deemed to have been committed. 23. In the instant case, the complainant presented the said cheque for the second time on 19th October, 2019, which was dishonored vide memo dated 21st October, 2019 for insufficiency of funds. As required by Section 138 of the NI Act, the complainant issued a demand notic....
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....ioning of the company. As a director he may be attending meetings of the Board of Directors of the company where usually they decide policy matters and guide the course of business of a company. It may be that a Board of Directors may appoint sub-committees consisting of one or two directors out of the Board of the company who may be made responsible for the day-to-day functions of the company. These are matters which form part of resolutions of the Board of Directors of a company. Nothing is oral. 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. There is no universal rule that a director of a company is in charge of its everyday affairs. We have discussed about the position of a director in a company in order to illustrate the point that there is no magic as such in a particular word, be it director, manager or secretary. It all depends upon the respective roles assigned to the officers in a company " 21. It was held that merely because a person is a director of a company, it is not necessary that he is aware about the day-to-day functioning of the company. This Court held that there is no univ....
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.... accused in a complaint merely on the basis of a statement that they are in charge of and responsible for the conduct of the business of the company without anything more is not a sufficient or adequate fulfilment of the requirements under Section 141." (emphasis in original) 18. In Girdhari Lal Gupta v. D.H. Mehta [Girdhari Lal Gupta v. D.H. Mehta, (1971) 3 SCC 189 : 1971 SCC (Cri) 279 : AIR 1971 SC 2162], this Court observed that a person "in charge of a business" means that the person should be in overall control of the day-to-day business of the Company. 19. A Director of a company is liable to be convicted for an offence committed by the company if he/she was in charge of and was responsible to the company for the conduct of its business or if it is proved that the offence was committed with the consent or connivance of, or was attributable to any negligence on the part of the Director concerned (see State of Karnataka v. Pratap Chand [State of Karnataka v. Pratap Chand, (1981) 2 SCC 335 : 1981 SCC (Cri) 453] ). 20. In other words, the law laid down by this Court is that for making a Director of a company liable for the offences committed by the company under Section 1....
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.... subject property and apprised the complainant of the procedure for registration of the subject property. 31. Therefore, the contention of the petitioner that it has no knowledge regarding the issuance of cheque in favour of the complainant cannot be taken into account. Moreover, upon perusal of the complaint, it is observed prima facie that the petitioner had the knowledge of issuance of the cheque in question to the complainant and has been involved in the instant case since the beginning of the transaction between the parties. 32. Furthermore, it is also pertinent to peruse the contents of the Article of Association (AoA) and Memorandum of Association (MoA), which is annexed to the instant petition as Document no. 32 and 34. At Paragraph no. 37 of the AoA, it is specifically stated that the petitioner i.e., Ms. Jyoti Siwach was one of the First Directors of the Company. Further, it is observed that she is one of the Promoters as well as the Subscriber of the respondent no. 4-company. Upon perusal of Company Master Data, which is annexed as Document no. 33, it is observed that the petitioner's Unique Director Identification Number (DIN) is mentioned as 07513150. 33. It is furt....