TaxTMI 
TaxTMI 
2026 (8) TMI 786
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....s and grounds raised in all the petitions are substantially identical, the petitions are being decided by this common judgment. BRIEF FACTS 3. The petitioners are Directors of M/s Dev Bhoomi Automobiles Private Limited (hereinafter, "the Company"), which had availed various loan facilities from Axis Bank Ltd. For repayment of the outstanding liabilities, separate cheques were issued on behalf of the Company in favour of the respondent-bank. The three complaint cases which form the subject matter of the present petitions are as under: Complaint Cases No. Cheque No. Date Amount Ct. Case No. 15757/2017 797372 05.06.2017 Rs. 5,50,000/- Ct. Case No. 15760/2017 797363 05.06.2017 Rs. 3,80,000/- Ct. Case No. 15766/2017 797359 05.06.2017 Rs. 4,91,667/- 4. Insofar as Complaint Case No. 15760/2017 is concerned, the complaint records that the Company had availed an Auto Loan facility of Rs. 11,40,000/- under Loan Account No. AUR009300684518 from the respondent-bank. Towards discharge of the said liability, cheque bearing No. 797363 dated 05.06.2017 for an amount of Rs. 3,80,000/- was issued in favour of Axis Bank Ltd. The cheque, upon pr....
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....lied upon by the complainant bank do not bear the signatures of the Petitioner and there is no material to indicate her involvement in the sanction, availing or operation of the loan facilities extended to the Company. 11. It was further contended that the statutory demand notices were never served upon the Petitioner and, therefore, the mandatory requirements under Section 138 of the Negotiable Instruments Act have not been complied with qua her. 12. The learned counsel submits that that mere designation as a Director of a company cannot automatically attract criminal liability under Section 141 of the Negotiable Instruments Act. Learned counsel submitted that in the absence of specific allegations showing active participation in the affairs of the Company, continuation of criminal proceedings against the Petitioner would amount to abuse of the process of law. 13. Placing reliance upon the decisions of the Supreme Court in Himanshu v. B Shivamurthy, AIR 2019 SC 3052 and Sunita Palita v. Panchami Stone Quarry, (AIR 2022 SC 3548), it was argued that vicarious liability under Section 141 of the Negotiable Instruments Act can arise only where the complaint contains clear and ....
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....ated during trial. 18. It was further submitted that the loan documents, the transaction between the parties, the status of the petitioner within the company, and the extent of her involvement in the affairs of the company are disputed questions of fact which cannot be conclusively determined in proceedings under Section 482 Cr.P.C. The petitioner seeks an appreciation of evidence and a determination of factual issues, which is impermissible at the stage of quashing. 19. Learned counsel contended that the summoning orders were passed after consideration of the complaints, affidavits of evidence and supporting documents and upon the learned Magistrate being satisfied that a prima facie case was made out. The orders, therefore, cannot be characterized as mechanical or without application of mind. 20. It was lastly submitted that the pleas raised by the petitioner constitute matters of defence and give rise to triable issues which can only be examined by the Trial Court upon appreciation of evidence. Consequently, no case for exercise of inherent jurisdiction is made out and the present petitions deserve to be dismissed. FINDINGS AND ANLYSIS: 21. Examining the relevant ....
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....signatory to the cheques in question nor was she responsible for the day-to-day affairs of M/s Dev Bhoomi Automobiles Pvt. Ltd. It has been contended that the complaints do not disclose any specific role attributable to the petitioner and merely reproduce the language of Section 141 of the Negotiable Instruments Act, 1881. It has further been urged that the loan documents do not bear the signatures of the petitioner and, therefore, no vicarious liability can be fastened upon her. 23. It is relevant to note that the present petitions arise from three complaints instituted by Respondent No.1-Bank under Sections 138 and 141 of the Negotiable Instruments Act in respect of separate loan facilities extended to Respondent No. 2-Company. The complaints allege that the cheques issued towards discharge of the outstanding liabilities of the Company were dishonoured upon presentation, resulting in initiation of proceedings under the Negotiable Instruments Act. 24. A perusal of the complaints demonstrates that the petitioner has been arrayed as an accused in her capacity as a Director of the borrower Company. The complaints contain averments to the effect that the Directors of the Company....
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.... affairs of the Company and the transaction in question. The Court emphasised that substance must prevail over form and that hyper-technical scrutiny of pleadings at the threshold is impermissible. 28. In the present case, the complaints specifically proceed on the basis that the petitioner was a Director of Respondent No. 2-Company at the relevant time. The petitioner is also reflected as a Director in the records maintained by the Ministry of Corporate Affairs. The complaints, read as a whole, disclose the role attributed to the Directors of the Company in relation to the transactions giving rise to the dishonoured cheques. Whether the petitioner was actually responsible for the conduct of the affairs of the Company is a matter which can only be examined upon evidence being led before the learned Trial Court. At this stage, the complaints cannot be said to be lacking the foundational averments necessary to maintain proceedings under Sections 138 and 141 of the Negotiable Instruments Act. 29. The summoning order dated 10.08.2017 records that the learned Metropolitan Magistrate examined the complaint, affidavit of evidence and documents placed on record and, upon such examina....