TaxTMI 
TaxTMI 
TaxTMI 
2026 (2) TMI 661
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....een filed on behalf of the Petitioners for setting aside the Summoning Order dated 03.04.2018 passed Ld. MM in CC No. 9804/2017 and quashing of CC No. 9804/2017 under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act'). 2. Brief facts are that Respondent/Complainant, M/s Vyagrah Infrastructures Pvt. Ltd. had filed CC No. 9804/2017 under Section 138 NI Act against the Petitioners in respect of alleged dishonour of Cheque No.315005 dated 25.04.2017 for Rs. 21,90,905/- drawn on Yes Bank, South Extension, New Delhi, due to 'insufficiency of funds'. 3. Ld. MM, vide Order dated 03.04.2018, took cognizance of the said Complaint and summoned the Petitioners, among other accused and directed them to appear....
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..... Bhagwan Singh Duggal are Non-Executive and Independent Directors of the Accused Company. Petitioner No. 2/Mr. Darshan Singh Negi has been erroneously described, in the Memo of Parties, as a Director, while he is the Chief Financial Officer (CFO) of the Company. Therefore, their roles, as statutorily defined under Companies Act, 2013, do not sustain summoning. 9. An Independent, Non-Executive Director, as defined in Sections 149 and 150 of the Indian Companies Act, 2013 as well as SEBI (Securities and Exchange Board of India) Listing Agreement and RBI Master Circular {RBI/2012-13/43 dated 02.07.2012), describes that they have connection with management of the Company and only serve a statutory function in view of the mandatory requireme....
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....be set aside and CC No. 9804/2017 under Section 138 NI Act be quashed. 14. Reply has been filed on behalf of the Respondent/M/s Vyagrah Infrastructures Pvt. Ltd. wherein the contentions made by the Petitioners are opposed. 15. It is submitted that that the Petitioners have wilfully concealed about the Revision Petition preferred by the Petitioners before Ld. District and Sessions Judge, South East District, Saket Court bearing No. 159/2020 titled 'Darshan Singh Negi vs. M/s Vyagrah Infrastructure Pvt. Ltd.' seeking the same relief. The said Petition was dismissed as withdrawn. 16. The accused Company and its Chief Managing Director have also filed a Petition under Section 482 Cr.P.C titled 'MBL Instrastructure vs. M/s Vyagrah Infra....
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..../2017 against them, on the grounds that they are Non-Executive and Independent Directors of the Company. 23. Thus, first and foremost what needs to be ascertained is who is an Independent Director and under what circumstances can a Director be liable for the acts of an Accused Company? 24. Herein, reference can be made to Section 2(47) Companies Act, 2013 which states that an "independent Director" means an independent Director referred to in sub-section (6) of Section 149. 25. Section 149(6) Companies Act, 2013 thus, defines that an independent Director is a director who is not a Managing Director, Whole-Time Director, or Nominee Director, and who meets specific criteria related to integrity, expertise, who has / had no pecuniary ....
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....n be made accused only if there is sufficient material to prove their active role coupled with criminal intent. The criminal proceedings were quashed against the accused, who was a Managing/Non-Independent Executive Director. 30. Similar observations have been made by the Apex Court in the case of K.S. Mehta vs. M/s Morgan Securities and Credits Pvt. Ltd., 2025 INSC 315 wherein the Complaint lacked specific averments that would have established a direct nexus between the Appellants and the financial transactions in question or demonstrate their involvement in the Company's financial affairs and the documents on record confirmed the non-executive status of the Appellants/Directors, underscoring their limited role in governance without any....
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....Managerial Personnel and is actively involved in the day-to-day financial affairs of the Company. 33. Herein, it is pertinent to refer to Section 2(51) of the Companies Act, 2013, which is reproduced as under: "Section 2 (51) "key managerial personnel", in relation to a company, means- (i) the Chief Executive Officer or the managing director or the manager; (ii) the company secretary; (iii) the whole-time director; (iv) the Chief Financial Officer; (v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and (vi) such other officer as may be prescribed" 34. Whether Petitioner N....