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TMI Blog2010 (1) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... re thereafter framed by SEBI. vide its letter dated 15-12-1999/29-12-1999 and also by way of a public notice, SEBI directed M/s. Fair Deal Forests Limited, which was operating Collective Investment Schemes and had raised a sum of Rs. 5,20,000 from the general public, to send an information memorandum to all the investors, detailing the state of affairs of the Schemes, the amount repayable to each investor and the manner in which such amount was determined. The information was required to be sent latest by 28-2-2000, which was later extended to 31-3-2000. In terms of Regulation 73(1) of the above-referred Regulations, the Collective Investment Schemes, which failed to apply for registration with SEBI, were required to wind up the existing schemes and repay the amount, collected from the investors. Regulation 74 required the company to formulate a scheme of repayment and make repayment to the investors, in case it was not desirous of obtaining provisional registration from SEBI. M/s. Fair Deal Forests Limited, however, neither applied for registration with SEBI, nor did it take steps for winding up the Scheme and making repayment to the investors and thereby violated the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of such offence. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section, :- (a)'company' means any body corporate and includes a firm or other association of individuals; and (b)'director', in relation to a firm, means a partner in the firm." Section 141 of Negotiable Instruments Act reads as under : "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; Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not a Director, Secretary, Manager or any other person falling under any of the categories (a) to (g), listed in section 5 of Companies Act at the time of commission of offence, he could not have been a person in charge of the business of the company within the meaning of section 141(1) of Negotiable Instruments Act. I noted the judgment of this Court in Dr. (Mrs.) Sarla Kumar v. Srei International Finance Ltd. 2007 (2) NIJ 208 (Delhi), where the petitioner, relying upon certified copy of Form 32, had claimed that she had resigned from the Directorship of the concerned company much prior to issue of cheques in question and this Court, observing that the authenticity of certified copy, issued by Registrar of Companies, could not be disputed and such a document was conclusive of the fact that the petitioner had resigned with effect from the date mentioned in the documents, quashed the complaint holding that the petitioner was not in charge of or responsible for day-to-day affairs of the company. During the course of the judgment, I, inter alia, observed as under : "I am in full agreement with the view taken in the above referred case as regards authenticity and conclusive nature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be made liable under sub-section (1) of section 141. Other officers of a company can be made liable only under sub-section (2) of section 141, be averring in the complaint their position and duties in the company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence." 7. Since the petitioner was not a Director of the company on the date Regulations were framed by SEBI, he cannot be held vicariously liable for violation of those Regulations and the directions, issued to SEBI by M/s. Fair Deal Forests Limited. This is not the case of the respondent that the petitioner was Manager, Secretary or a person in accordance with whose directions or instructions, the Board of Directors of the company was accustomed to act. He is not stated to be one of the persons falling in any of the categories (a) to (g) mentioned in section 5 of Companies Act at the time, offence under SEBI Act was committed by the company. Therefore, he could not have been a person in charge of business of the company on the date the offence was committed. 8. There is no allegation that the regulations, framed by SEBI, were violated or the direction, issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal proceedings should not be quashed but it is another thing to say that a person should undergo a criminal trial despite the fact that no case has been made out at all." In Minakshi Bala v. Sudhir Kumar [1994] 4 SCC 142, the Hon'ble Supreme Court, inter alia, observed as under in the judgment :- "7. If charges are framed in accordance with section 240 Cr. P.C. on a finding that a prima facie case has been made out-as has been done in the instant case-the person arraigned may, if he feels aggrieved, invoke the revisional jurisdiction of the High Court or the Sessions Judge to contend that the charge-sheet submitted under section 173 Cr. P.C. and documents sent with it did not disclose any ground to presume that he had committed any offence for which he is charged and the revisional court if so satisfied can quash the charges framed against him. To put it differently, once charges are famed under section 240 Cr. P.C. the High Court in its revisional jurisdiction would not be justified in relying upon documents other than those referred to in sections 239 and 240 Cr. P.C.; nor would it be justified in invoking its inherent jurisdiction under section 482 Cr. P.C. to quash the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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