TMI Blog2016 (5) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... f cheques took place when the Petitioner was very much Director of the Company. Hence, she cannot escape of the liability from this angle also. In this view of the matter, it cannot be said that the Petitioner was not the Director when the offence was committed. Once this is so, she cannot avoid facing prosecution only on the ground of her having ceased to be the Director, when the last few acts of presentation of the cheque to the Bank and its dishonour took place. Therefore, having regard to all the facts, this Court is of the considered opinion that, the Petitioner has failed to make out the case for quashing of process issued against her for the offence punishable under Section 138 read with Section 141 of Negotiable Instruments Act - CRIMINAL WRIT PETITION NO.3188 OF 2014 - - - Dated:- 17-3-2016 - DR. SHALINI PHANSALKAR-JOSHI, J. For The Petitoner : Mr. Yashpal Thakur, i/by M/s. PKA Advocates, For The Respondent : Mr. Kapil Dave, i/by Mr. Santosh Thakur, Mrs. H.J. Dedia, A.P.P., JUDGMENT : 1. Rule. Rule is made returnable forthwith, by consent. 2. Heard learned counsel for both the parties and learned A.P.P. for the Respondent No.2-State. 3. By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f these 7 post dated cheques, 6 cheques of the amount of ₹ 2,70,000/- each were honoured, when presented for payment by Respondent No.1. However, the last cheque bearing No.952611 for the amount of ₹ 1,50,00,000/- came to be dishonoured for the reason Payment Stopped by Drawer , vide Bank Memo dated 6th March 2013. Hence, after issuance of statutory demand notice dated 4th April 2013, Respondent No.1 filed complaint under Section 138 r/w. 141 of Negotiable Instruments Act against Accused No.1 - M/s. Swajay Finance Private Limited and its three Directors, including Managing Director Vinod Kumar Chaturvedi (Accused No.2) the present Petitioner and her husband-Pramod Dave. 6. On this complaint, after recording verification of the representative of Respondent No.1, the Trial Court conducted requisite inquiry under Section 202 of Cr.P.C. and on being satisfied with the material produced on record, the Trial Court was pleased to issue process against all the four Accused vide its order dated 16th September 2013. 7. Being aggrieved by the same, Original Accused No.4 - the present Petitioner has preferred this Writ Petition contending, inter alia, that she has ceased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.1 Company. It is, therefore, urged that, on the basis of these averments in the complaint, the Trial Court has rightly issued process against the Petitioner. Hence, it will not be proper on the part of this Court, in exercise of its powers under Section 482 of Cr.P.C. or Article 227 of Constitution of India, to quash the process issued against the Petitioner, as, prima facie, no illegality, impropriety, much less, perversity is found in the impugned order of the Trial Court. 10. As to the alleged resignation tendered by the Petitioner from the post of 'Director', it is submitted that it was subsequent to the transaction in question and also subsequent to the issuance of post dated cheques. Moreover, the alleged resignation is also a disputed fact as there is every reason to believe that it was ante-dated. The copy of the Resolution passed by Accused No.1 - Company accepting her resignation, is not produced on record. Hence, according to learned counsel for Respondent No.1, in the absence of any uncontrovertable and unimpeachable evidence produced on record to prove that, at the relevant time, when the loan transaction took place, or, when the disputed cheque was issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Registrar of Companies, whether Resolution of the Board of Directors accepting the resignation was passed and the Annual Return filed by the concerned Company. The instant case involves all these factual aspects. 12. Thus, the necessary questions posed before this Court in this Petition for deciding the question whether process issued against the Petitioner by the Trial Court is just, legal and correct, are two, firstly, whether the Director can be prosecuted on the bald assertions made in the complaint that, at the relevant time, when the offence was committed, he or she was in-charge of and responsible for the conduct and day-today business of Accused No.1-Company? , and, secondly, whether Petitioner-Director, who has allegedly resigned before the cheque came to be dishonoured, can be prosecuted after her resignation has been accepted by the Board of Directors of Accused No.1-Company? . 13. In order to answer these two questions, it would be enlightening to reproduce the provisions of Section 141 of Negotiable Instruments Act, which read as follows :- 141. Offences by Companies (1) If the person committing an offence under section 138 is a company, every pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor in the transaction forming the subject matter of the complaint. 15. The Apex Court has, in its latest decision of Gunmala Sales Private Ltd. (Supra), again taken the review of its all earlier Judgments, including that of SMS Pharmaceuticals Ltd. (Supra); K.K. Ahuja Vs. V.K. Arora Anr., (2009) 10 SCC 48; National Small Industries Corporation Limited Vs. Harmeet Singh Paintal Anr., (2010) 3 SCC 330; N. Rangachari Vs. Bharat Sanchar Nigam Ltd., (2007) 5 SCC 108 , and so many of its earlier decisions and was pleased to summarize its conclusions as follows :- 33. We may summarize our conclusions as follows : (a) Once in a complaint filed under Section 138 read with Section 141 of the N.I. Act the basic averment is made that the Director was in-charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed, the Magistrate can issue process against such Director; (b) If a petition is filed under Section 482 of the Code for quashing of such a complaint by the Director, the High Court may, in the facts of a particular case, on an overall reading of the complaint, refuse to quash the complaint bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that, Accused Nos.3 and 4 viz. Mr. Pramod Dave and Mrs. Lata Pramod Dave are Directors of the Accused No.1 Company. They were, as directed and instructed by Mr. Vinod Kumar Chaturvedi, authorized to sign and execute documents, loan agreement, pledge agreement, demand promissory note and such other documents, which were required for the purpose of taking ICD from Complainant Company and to do all such acts, deeds and things as may be considered necessary in this regard and also the Accused No.3 viz Mr. Pramod Dave is the signatory of the dishonoured cheque. Mr. Vinod Kumar Chaturvedi and Mr. Pramod Dave and Mrs. Lata Pramod Dave are the persons who have actively participated in the negotiation and or execution of documents with the Complainant Company and their officials in respect of loan transaction. Hence the Accused Nos.2 to 4 were in charge of and responsible for the conduct of the business at relevant time when the offence was committed by the Accused. They are responsible for the issuance of the cheque which is subject matter of the present complaint and so also for their dishonour. They failed and neglected to exercise enough care and caution to ensure that the cheque i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has already resigned from the Company. According to Petitioner, she has tendered her resignation on 1st January 2013 and it was received by the Company on the same date. She has also produced on record copy of her resignation letter, Annual Return and Form-32 to substantiate her case that she has tendered her resignation w.e.f. 1st January 2013; it was accepted by the Company and accordingly given effect to by the Registrar of Companies. 20. If the fact of her tendering the resignation was not disputed and there was uncontrovertible and unimpeachable evidence on record to prima facie prove that she has actually tendered the resignation on the date on which it was given i.e. 1st January 2013, then, as held in the above said authority of Gunmala Sales Private Ltd. (Supra), it was easy for this Court to exercise its powers under Section 482 of Cr.P.C. to quash the process issued against her. Unfortunately, however, this fact is seriously disputed by learned counsel for Respondent No.1 and in my considered opinion, rightly so, because, though her resignation letter apparently bears the date 1st January 2013 and it is also alleged to be received by the Company on 1st January 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board of Directors of Accused No.1-Company accepting her resignation letter is not produced on record, to show that it was accepted and acted upon much before the dishonour of the cheque. It is also worth to note that Form No.32 was submitted on 22nd August 2013 along with the penal charges for late submission. 24. Thus, at this prima facie stage, there is no evidence on record, which can be called as unimpeachable or uncontrovertible, or any acceptable circumstances, as laid down by the Apex Court in Gunmala Sales Private Ltd. (Supra), to quash the process issued against the Petitioner. 25. Furthermore, there is much substance in the submission advanced by learned counsel for Respondent No.1 that, the relevant period for deciding the liability of the Director for the act committed by the Company is not only when the cheque was dishonoured, but also when the disputed transaction was entered into, and from time to time thereafter like at the time of issuance of the cheque in question, presentation of said cheque in Bank etc. In the instant case, the averments in the complaint go to reveal that the transaction in question was entered into by Accused No.1 with Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only on the ground of her having ceased to be the Director, when the last few acts of presentation of the cheque to the Bank and its dishonour took place. 27. Thus, when the correctness of the contents of Form No.32 that the Petitioner has tendered her resignation on 1st January 2013 is disputed and when averments in the complaint are, prima facie, sufficient to prove involvement of the Petitioner in the alleged offence, the inherent powers of the High Court under Section 482 of Cr.P.C., which are to be invoked sparingly and in exceptional circumstances, could not be exercised in the instant case to quash the prosecution initiated against the Petitioner. 28. As to the authority relied upon by learned counsel for the Petitioner in Saumil Dilip Mehta Vs. State of Maharashtra Ors., AIR 2002 Bom. 194 , it pertains to Section 303(2) of the Companies Act, wherein the resignation was accepted by the Board of Directors and there was evidence to that effect. Therefore, it was held that, filing of Form No.32 and completing other requirements of Company Law is the duty of the Company Secretary and the retired Director is not liable for liability incurred by the Company after the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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