TaxTMI 
TaxTMI 
2026 (3) TMI 585
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....e cheques which when presented for encashment, were dishonoured, as detailed under : Cheque No. Date Amount 616102 25.09.2014 Rs. 20 lakhs 616104 26.12.2014 Rs. 35 lakhs 616105 20.04.2015 Rs. 40 lakhs 3. The Petitioner was summoned, vide Order dated 09.12.2015. The Petitioner filed an Application under Section 245 Cr.P.C for discharge, which has been dismissed, vide Order dated 05.05.2017. 4. The Petitioner has stated that he is a Non Resident Indian, having obtained his Engineering Degree from BITS, Pilani and Masters in Engineering from Illinois Institute of Technology, Chicago, USA. He is settled in USA, for the last 40 years. 5. Respondent No. 2, Sh. Anil Sethi, his nephew, is a school dropout and an uneducated person who had lost his father at an early age. Being the maternal uncle of the Respondent/Complaint, with a view to help him establish in life, Petitioner formed a Company in India, under the name and style of Compuaction Financial Services India Private Limited; obtained the Membership of the National Stock Exchange in the name of the Company and nominated the Respondent as the full time Director of the Company. He, as the D....
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....hus filled in the aforesaid three cheques with the dates, 25.09.2014, 26.12.2014 and 20.04.2015 in the sum of Rs. 20 lakhs Rs.35 lakhs and Rs. 40 lakhs respectively. 12. The Petitioner has further explained that in the year 2013, RBI had ordered the cancellation of old MICR Cheque Books, to be replaced with new Cheque Books. These old cheques have been utilized by the Complainant, to draw the aforesaid three cheques from his old MICR Cheque Book of year 2004-05, which had been left by the Petitioner with the Complainant, trusting him as he was the nephew. The cheques on presentation, were dishonoured. 13. The Petitioner further asserted that the HDFC Account was being handled by the Respondent/Complainant and was fully aware that there was hardly any balance in the said Account. The three cheques with a malicious intent, have been forged in order to implicate the Petitioner, in these false cases. 14. The Respondent had alleged in his Complaint that he was entitled to 10% of gross brokerage as commission, besides the monthly remuneration. The Complainant alleged that these Cheques were issued by the Petitioner for the payment of the Director's remuneration, in the form of c....
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....aited for 19 years, for signing the cheque towards his alleged commission. The Complainant had completely forgotten to record his remuneration by way of alleged commission from the Company, in the Book of Accounts. He also did not remember to instruct the Accountants of the Company or the Auditors, to record his due commission in the Books of Accounts of the Company. The Company's records available for the last 7 years do not borne out that the Complainant was entitled to any commission on the brokerage and commission from the Company. 19. Strangely, it was only on the termination of his relationship with the Company, that he remembered of his commission. Further, he had to turn to the Petitioner to sign the personal cheques for himself, towards his commission allegedly due from the Company. As it is the admitted case of the Complainant, that the debt was due from the Company and not from the Petitioner. 20. The falsity of the Complaint is also evident as the impugned cheques have been issued from the personal account of the Petitioner, for the payment of Director's Remuneration in the form of Commission to the Complainant, even though the Petitioner had no personal liability....
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....is liable to be quashed. 28. The main grounds agitated are that the averments made in the Complaint and the material placed on record, do not disclose the do not satisfy the ingredients under Section 138-142 NI Act and commission of offence. Therefore, the Summoning Order dated 09.12.2015 is liable to be set aside. 29. Furthermore, it is nowhere asserted in the Complaint that the cheques had been issued in discharge of lawful debt due to the Complainant. The claim of the Director of the Company is only against the Company and not against the Directors as they are not personally liable for the debts of the Company. Moreover, the presumption under Section 139 NI Act, does not arise against the Petitioner as he did not owe any debt to the Complainant. 30. Furthermore, the Petitioner is a Non Resident Indian, while the Complainant was a whole Director of the Company. If the amount as alleged was actually due to him, he would have withdrawn the same from the Company at any time and not after he was terminated from the Directorship of the Company. These facts throw much light on the lack of bona fide of the Complainant. 31. Reliance is placed on Adalat Prasad vs. Roop Lal Jin....
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....ainant had successfully proved prima facie case, for which the Petitioner has been summoned and the Revision Petition filed against the Order of Summoning, had been disposed of. 39. The Application filed by the Petitioner for recall of Order of Summoning has also been dismissed by the Trial Court. Three Writ Petitions were filed for challenging the Summoning Order. However, the Writ Petition pertaining to cheque dated 25.09.2014 for the sum of Rs.20 lacs, was withdrawn on 13.02.2018 while the aforesaid two Writ Petitions are in respect of cheque bearing No. 616104 dated 26.12.2014 for the sum of Rs.35 lacs and the cheque bearing No.616105 dated 20.04.2025 for the sum of Rs. 40 lacs. 40. There is no legal or fundamental right of the Petitioner involved in the present proceedings, nor is there any irregularity or illegality in the Orders of the Court. 41. A similar Petition filed by the Petitioner was dismissed as withdrawn as it was not maintainable. The present Petition is similar in nature and contains similar points of facts and law, which has already been disposed of by this Court. 42. On merits, it is asserted that the Petitioner was a frequent visitor to India and ....
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....f gross brokerage and 50% of other financial income. According to the averments made in the Complaint, when the Petitioner came to India in May, 2014, he found that the brokerage/commission amount due to the Complainant/Anil Sethi, was very heavy. In August, 2014, the Petitioner had no reason or occasion to review the business of the Company or to pose tough questions to the Complainant. It is only when the Respondent asked him to pay the said amount, the Petitioner turned dishonest and called a meeting of Directors on 22.09.2014, vide Notice dated 01.09.2014. 50. The Complainant claimed that the Accused adopted adamant and callous attitude, towards the Complainant. When he reached for the Meeting on 22.09.2014, he had to call the Police because of the misbehaviour of the Petitioner/Accused. He denied that he ever extended any threats. It was claimed that it was the Petitioner who on his visit to the office of the Company and manhandled the Complainant. 51. The Complainant was given an assurance that they would talk later and settled the account of commission and other income. Before leaving India, The parties met in the evening and the account was settled in respect of amoun....
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....the Company. 61. The Revision Petition that was filed by the Petitioner to challenge the Complaint and the Summoning Order, was decided on 19.09.2025. There were various documents filed along with the Revision Petition. The Covering letter dated 22.09.2014 given by the Petitioner to the Complainant, reflects admission of the outstanding liability of the Petitioner. 62. The cheques have been issued towards the legally enforceable debt and liability i.e. the amounts due to the Complainant as his remuneration to be a Director in the Company. Moreover, the Petitioner had stood as a Guarantor and, therefore, is liable for the payments for the cheque amounts. The Petition is, therefore, liable to be dismissed. Submissions heard and record perused. 63. It is not disputed that the Petitioner/Accused/maternal uncle of Complainant/Respondent No. 2 Anil Sethi, is a resident of USA, for the last 14 years. The Petitioner had set up a Company in the name and style of CompuAction Financial Services India Private Limited and had obtained the membership of National Stock Exchange. 64. The Petitioner explained that though he was the Director, he was represented through his proxy. The ....
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....e Companies Act reads as under:- "(4) Subject to the provisions of Section 197 and Schedule V, a managing director, whole-time director or manager shall be appointed and the terms and conditions of such appointment and remuneration payable be approved by the Board of Directors at a meeting which shall be subject to approval by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions [specified in Part I of that Schedule]: Provided that a notice convening Board or general meeting for considering such appointment shall include the terms and conditions of such appointment, remuneration payable and such other matters including interest, of a director or directors in such appointments, if any: Provided further that a return in the prescribed form shall be filed within sixty days of such appointment with the Registrar." 71. In a Company, the regulation and the payments to be made to the Directors, are subject to a valid Board Resolution. The Complainant had not placed on record any Board Resolution, which is mandatory requirement under Section 196, to show that he was entitled to 1....
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....76. Another significant fact is that this Letter did not find mention anywhere at earlier point of time, till it got filed along with the Application for placing on record Additional Documents on 15.12.2025, in these Writs. 77. Even otherwise, such Letter is not tenable, in view of Section 196 Companies Act; the petitioner could not have agreed to bind the Company to pay any Commission/Brokerage as an individual; a Board Resolution was mandatorily required, which admittedly does not exist. 78. In this context, it is also pertinent to mention that according to the Complainant after the disputes which arose on 22.09.2014, the petitioner met the Complainant in the evening, and handed over the three cheques vide Letter dated 22.09.2014, copy of which has also been filed on 15.12.2025. Pertinently, the Letter dated 22.09.2014 is also interestingly worded, which states as under:- Sep 22,2014 Dear, Anil Sethi I can understand your insecurity on the account of the events which happened today in the office. Due to personal reasons which I cannot convey to you, our business association for future is not. possible. I appreciate all what you h....
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....unts due on account of commission/brokerage, it is highly unlikely that the Petitioner would acknowledge the great heights to which the Company has been taken due to the efforts of the Complainant is unlikely. Also, what the Letter states is that "I understand that amount payable to you shall not be less than Rs. 1 crore." 85. Herein also, there is no reference to any Statement of Accounts. This Letter on the face of it, is against the prudence of a reasonable man. If differences got settled and sorted out and Parties had a Settlement on 22.09.2014, there would not have been any subsequent Board Meeting and removal of the Complainant from the Company, vide Resolution dated 15.01.2015. In this background of there being a persistent dispute, it is absolutely incomprehensible that the Petitioner would have given the three Cheques. 86. The Complaint is conspicuously silent about there being any entries ever made in the Balance Sheets in regard to the commission/remuneration paid to him. The Balance sheets and the statement of accounts are required to be audited, but there is nothing placed on record by the Complainant to corroborate his entitlement to the commission and the broke....