TaxTMI 
TaxTMI 
2026 (3) TMI 4
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....n this petition was issued vide order dated 15.07.2024 and proceedings in case bearing CC No. 12918/2018 were stayed qua the petitioner. Written Submissions dated 05.05.2025 and 06.05.2025 have been filed respectively on behalf of the petitioner and respondent No. 2. 3. The court has heard Mr. Chandra Shekhar Yadav and Mr. Astitva Srivastava, learned counsel appearing for the petitioner; and Mr. Shashwat Awasthi, learned counsel appearing for respondent No. 2, who is the contesting respondent in the matter. Considering the nature of the case, the State has no role in the matter. SUBMISSIONS ON BEHALF OF THE PETITIONER 4. Mr. Chandra Shekhar Yadav has submitted, that vide order dated 03.01.2020 passed by the learned National Company Law Tribunal ('NCLT'), Indore Bench at Ahmedabad, Corporate Insolvency Resolution Process ('CIRP') was initiated against the petitioner company; and thereafter vide order dated 26.02.2021, liquidation of the company was ordered; and accordingly, in view of section 33(5) of the Insolvency & Bankruptcy Code, 2016 ('IBC'), the institution of any suit or other legal proceedings against the company was barred. 5. Furthermore, it has been submitted....
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.... prima facie case for the commission of offence punishable u/s 138 of NI Act is made out against the accused. I therefore, take cognizance of the offence punishable u/s 138 NI Act, 1881. "Issue summons to the accused on filing of PF/EC/AD/Speed Post returnable on 21.03.2019. "Steps be taken within three weeks." (emphasis supplied) 8. Most importantly, learned counsel has submitted that vide order dated 06.05.2024 passed by a Co-ordinate Bench in CRL.M.C. 3618/2024, proceedings qua co-accused Mrs. Gulab Chand Agarwal, who is one of the Directors of the petitioner-company, have been stayed. 9. Therefore, the petitioner has argued, that the petitioner-company could not have been summonsed under section 138 of the NI Act, since it was not the "drawer" of the cheque under section 7 of the NI Act. It has accordingly been urged, that the impugned summoning order dated 23.08.2018 is vague and has been passed mechanically, without referring to the essential statutory ingredients for making-out an offence against the petitioner company under section 138 of the NI Act. SUBMISSIONS ON BEHALF OF RESPONDENT NO. 2 10. At the outset, Mr. Shashwat Awasth....
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....iod of limitation, after the statutory notice was duly issued by the complainant and received by the accused persons. Furthermore, the complaint discloses the common and composite liability of the petitioner-company as well as of accused Nos. 2 and 3, who are the directors of the petitioner-company; and the learned Magistrate has rightly summonsed all the said persons as accused, keeping in mind the vicarious liability arising under section 141 of the NI Act. 15. Most importantly, Mr. Awasthi has submitted, that order dated 07.06.2023, whereby the learned Magistrate has rejected the petitioner's plea seeking stay of proceedings, is a speaking and reasoned order in-line with the judgment of the Supreme Court in P. Mohanraj vs. Shah Brothers Ispat (P) Ltd. (2021) 6 SCC 258. 16. Reference has also been made by learned counsel for the respondent to Sudeep Jain vs. M/s. ECE Industries Ltd. 2013 SCC OnLine Del 1804, to submit that though the court has advocated greater scrutiny by Magistrates at the pre-summoning stage, to ensure prima-facie satisfaction under section 141 NI Act without mechanically arraying parties in criminal complaint, in the present case the learned Magistrate ....
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....Cri) 872]." (emphasis supplied) 18. In its judgment in Mehmood Ul Rehman vs. Khazir Mohammad Tunda & Ors. (2015) 12 SCC 420, while relying on the celebrated judgment of the Supreme Court in Pepsi Foods Ltd., and emphasizing the seriousness of setting in motion the process of criminal law against a person, the Supreme Court has reiterated the following: "20. The extensive reference to the case law would clearly show that cognizance of an offence on complaint is taken for the purpose of issuing process to the accused. Since it is a process of taking judicial notice of certain facts which constitute an offence, there has to be application of mind as to whether the allegations in the complaint, when considered along with the statements recorded or the inquiry conducted thereon, would constitute violation of law so as to call a person to appear before the criminal court. It is not a mechanical process or matter of course. As held by this Court in Pepsi Foods Ltd. [Pepsi Foods Ltd. v. Judicial Magistrate, (1998) 5 SCC 749 : 1998 SCC (Cri) 1400] to set in motion the process of criminal law against a person is a serious matter. * * * * * "22. The steps take....
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.... the process will not be issued cannot also be appreciated. Though no formal or speaking or reasoned orders are required at the stage of Sections 190/204 CrPC, there must be sufficient indication on the application of mind by the Magistrate to the facts constituting commission of an offence and the statements recorded under Section 200 CrPC so as to proceed against the offender. No doubt, the High Court is right in holding that the veracity of the allegations is a question of evidence. The question is not about veracity of the allegations, but whether the respondents are answerable at all before the criminal court. There is no indication in that regard in the order passed by the learned Magistrate." (emphasis supplied) 19. Furthermore, in its recent judgment in JM Laboratories & Ors/ vs. State of A.P. & Anr. 2025 SCC OnLine SC 208, the Supreme Court has re-enunciated that a summoning order passed by a Magistrate should reflect his application of mind in the following words: "8. In the judgment and order of even date in criminal appeal arising out of SLP (Crl.) No. 2345 of 2024 titled "INOX Air Products Limited Now Known as INOX Air Products Private Limited v. The Sta....
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.... thus: * * * * * "53. However, the words "sufficient ground for proceeding" appearing in Section 204 are of immense importance. It is these words which amply suggest that an opinion is to be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no reason is given therein while coming to the conclusion that there is prima facie case against the accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect." * * * * * "9. In the present case also, no reasons even for the namesake have been assigned by the learned Magistrate. The summoning order is totally a non-speaking one. We therefore find that in light of the view taken by us in criminal appeal arising out of SLP (Crl.) No. 2345 of 2024 titled "INOX Air Products Limited Now Known as INOX Air Products Private Limited v. The State of Andhra Pradesh", and the legal position as has been laid down by this Court in a catena of judgments incl....