TMI Blog2019 (1) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... produced, there is nothing on record to doubt the genuineness of Form 32 produced by the petitioneraccused. The Form 32 was filed on 30.08.2013 giving effect to resignation of petitioner from 01.07.2013. Thus, before date of issuance of cheque and its dishonour the petitioner had resigned and Form 32 was filed with ROC Karnataka. The verification clause of Form 32 mentions that accused No.1 Company has verified information and that the person tendering it has been authorised by Board of Directors resolution dated 17.07.2013 to sign and submit the Form. There is no material to doubt the genuineness of Form 32 produced by the petitioner. Merely an account entry in Form 32 as Additional Director/independent director Form 32 with regards to resignation cannot be discarded. It is not necessary to refer to the other issues raised by the petitioner as the proceedings are required to be quashed on this ground alone. It is also pertinent to note that the process was issued in the present case on 01.04.2015. The petitioner thereafter preferred revision application challenging the order of process before the Sessions Court which was rejected by order dated 20.01.2017. The plea was record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... today affairs of accused No.1 are managed by accused Nos. 2 to 7 and as such they are in-charge and control of day to day affairs of accused No.1 and liable for all the acts and deeds done by accused No.1 There were certain defaults in pay ins on the Exchange by its members including accused. There was an outstanding amount of ₹ 26,47,25,122.75, as per the settlement schedule of the contracts. The accused No.1 paid an amount of ₹ 3.02 crores and balance amount was to be paid. Accused No.2 on behalf of accused No.1 issued post dated cheque 11.09.2013 for an amount of ₹ 1,66,00,000/ bearing No.852436, drawn on YES Bank Ltd., Nariman Point, Mumbai towards due discharge of part of its liability to the complainant. d) The cheque was deposited on 14.09.2013. It was returned unpaid by the banker of the accused for the reasons payments stopped by drawer vide Bank Memo dated 17.09.2013. e) The complainant issued legal notice to the accused under Section 138 of Negotiable Instruments Act on 17.10.2013 and called upon them to make the payment due and payable under the said cheque within 15 days from the date of receipt of the said notice. The said notice was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onour of cheque bearing No.852435 dated 16.08.2013 for sum of ₹ 88,24,000/ . The petitioner vide reply dated 4.09.2013 intimated the entire facts in respect to his role and resignation from directorship by petitioner with effect from 01.07.2013. vii) Sessions Court has rejected the revision application without application of mind to facts and the law. 6. Learned Advocate for the petitioner relied upon following decisions : i) Harshendra Kumar D. Vs. Rebatilata Koley and Ors. (2011) 3 SCC 351 ii) Aparna A. Shah Vs. Sheth Developers Private Limited and Another. (2013) 8 SCC 71 7. Learned Advocate for respondent No.2 submitted that the petitioner was in-charge and responsible for day to day affairs of the accused No.1 Company. In the complaint, it is specifically mentioned that the petitioner was in-charge and in control of the day to day affairs of the accused No.1. It is submitted that in paragraph 4 (b), it is categorically stated that the day to day affairs of the accused No.1 are managed by accused Nos. 2 to 7 and as such they are in-charge and control of day to day affairs of accused No.1 and are liable for all the acts and deeds done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her accused was in-charge and in control of day to day affairs of accused No.1 and is liable for acts and deeds of accused No.1. The resignation is disputed. The contention that the petitioner is Independent Director is also debatable and the issues are triable before trial Court. 10. Since, the learned Advocate for the respondent complainant has raised an issue with regards to maintainability of this petition, it would be apt to deal with the said submission before adjudicating on the other issues. The contention of the complainant is that plea of the accused has been recorded in accordance with Section 251 of Criminal Procedure Code and in view of that this Court may not quash the proceedings in exercise of powers under Article 227 of Constitution of India or inherent powers under Section 482 of Cr.P.C. It is contended that having recorded plea the trial has to be taken to the logical end. Thus, the petition is not maintainable in law. Learned Counsel has placed strong reliance on the decision of the Hon'ble Supreme Court in the case of Subramanium Sethuraman (Supra). It is submitted that in the said decision the Apex Court has held that the High Court was justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court by order dated 20.12.2000 on the ground that once the magistrate records the plea of the accused and the accused pleads not guilty then the magistrate is bound to take all such evidence as may be produced in support of the prosecution and there is no provision under Cr.P.C. enabling the magistrate to recall the process and discharge the accused after recording the plea of the accused. It was undisputed that the plea of all the accused was recorded by the magistrate on 01.11.1999. The said order of the High Court was challenged before the Supreme Court by preferring Special Leave Petition which was rejected summarily on 05.02.2001. While disposing of the said petition, the Hon ble Supreme Court had observed that the Counsel for the petitioner after noticing the observations of the Court requested for permission to withdraw the Special Leave Petition without prejudice to his contentions to be raised at the appropriate stage and the SLP was dismissed as withdrawn. After withdrawing the SLP, the second round of litigation had commenced challenging the issuance of process by the appellant Subramanium Sethuraman who was the director of the said company which had earlier fought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The appellant s Counsel had challenged the decision of the High Court wherein it was observed that once plea is recorded in a summons case, it is not open to the accused to seek discharge. The Hon ble Supreme Court in paragraph 16 of the aforesaid decision rejected the said contention. It was observed that the case involving a summons case is covered by Chapter XX of the Code which does not contemplate a stage of discharge like Section 239 which provides for a discharge in a warrant case. Therefore, the High Court was correct in coming to the conclusion that once the plea of the accused is recorded under Section 252 of the Code, the procedure contemplated under Chapter XX has to be followed which should take a trial to its logical conclusion. It was further observed that in accordance with observation of the Supreme Court in Adalat Prasad's case, the only remedy available to an aggrieved accused to challenge an order at an interlocutory stage is the extra ordinary remedy under Section 482 of the Code and not by way of application to recall the summons or to seek discharge which is not contemplated in the trial of a summons case. From the observations of the Apex Court in par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 and 202, the order of the magistrate may vitiated but then the relief and aggrieved accused can obtain at that stage is not by invoking Section 203 of the Code because Criminal Procedure Code does not contemplate a review of an order. Hence, in the absence of any review power or inherent power with the subordinate Criminal Courts the remedy lies in invoking Section 482 of the Code. The factual matrix in the case of Subramanium Sethuraman (Supra) before the Hon ble Supreme Court is that the accused had preferred an application before the trial Court for recall of process. Relying on the decision of the Apex Court in the case of K.M. Mathew (Supra) the said application was allowed. In the light of the facts, it was observed that having recorded plea trial has to be taken to logical conclusion. Paragraph 19 of the said decision categorically mentions that the accused cannot be precluded from exercising the power under Section 482 of Cr.P.C. 13. In the case of Aparna Shah (Supra), it was observed that only after issuance of process a person can approach the High Court seeking quashing of the same on various grounds available to him. It was observed that, the High Court was clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 casts vicarious liability on the director of the company and how to deal with the said liability has always been a vexed question and engaged the attention of the higher Courts since its enactment. By analyzing the facts of the said case, the petition was dismissed on the ground that the petitioner has failed to make out the case for quashing the process issued against her for the offence punishable under Section 138 (141) of Negotiable Instruments Act. One of the submission was that the petitioner therein had tendered resignation letter and expressed her desire to discontinue with accused No.1 company and the letter of resignation was accepted and reflected in Form 32. The Counsel for the complainant had contended that the complaint contains sufficient avernments as required under Section 141 of Negotiable Instruments Act and on the basis of that the process has been issued. It was also contended that the resignation was subsequent to the transaction in question and issuance of post dated cheques and the resignation is disputed fact as there is every reason to believe that it is anti dated. The resolution was not produced and there was no uncontrovertable and unimpeachable evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, in the case of Harshendra Kumar (Supra), the Hon ble Supreme Court after analyzing several decisions on the issue of Section 138 and 141 of the Negotiable Instruments Act has observed that criminal prosecution is a serious matter, it affects the liberty of a person. No greater damage can be done to the reputation of the person then dragging him in a criminal case. The High Court fell into grave error in not taking into consideration the uncontroverted document relating to resignation from the post of the director of the company. Had these documents been considered by the High Court, it would have been apparent that the appellant had resigned much before the cheques were issued by the Company. It was further observed that the accused had resigned before the cheques were issued and dishonoured. The acceptance of appellant s resignation is reflected in the resolution as well as Form 32 of the company. It is not the case of the complainant that the dishonoured cheques were issued by the appellant. These facts leave no manner of doubt that on the date of the offence was committed by the company, the appellant was not the director and he had nothing to do with the affairs of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of cheques. In such cases, if the High Court is convinced that prosecuting such a director is merely an arm twisting tactic, the High Court may quash the proceedings. To establish such case unimpeachable incontroverting evidence which is beyond suspicion or doubt or some totally acceptable circumstances will have brought to the notice of the Court. Such cases may be few and far between but the possibility of such a case being cannot be ruled out. Thus, from the factual aspects of the present case, it is seen that the petitioner had resigned from accused No.1 company. He was director from 14.03.2013 till 01.07.2013. There is no material to doubt the genuineness of Form 32 produced by the petitioner. Merely an account entry in Form 32 as Additional Director/independent director Form 32 with regards to resignation cannot be discarded. It is not necessary to refer to the other issues raised by the petitioner as the proceedings are required to be quashed on this ground alone. It is also pertinent to note that the process was issued in the present case on 01.04.2015. The petitioner thereafter preferred revision application challenging the order of process before the Sessions Court wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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