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TMI Blog2018 (9) TMI 2065X X X X Extracts X X X X X X X X Extracts X X X X ..... way of respective criminal petitions, seeking for quash of proceedings in CC.No.4 of 2013 on the file of the IX Special Metropolitan Magistrate at Hyderabad, CC.Nos.116, 117 and 119 of 2013 on the file of the XIII Special Metropolitan Magistrate, Hyderabad and CC.No.447 of 2013 on the file of the XX Additional Chief Metropolitan Magistrate, Hyderabad respectively. 3. Heard the counsel for the petitioners, the counsel for the second respondent and the learned Public Prosecutor, appearing for the first respondent. 4. The facts, in CRLP.No.3703 of 2013, would suffice for the purpose of disposal of these cases, which are as under: The complainant is a banking company, A1 is a company incorporated under the provisions of the Companies Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eque by such date. As such, the presentation of cheque was deferred. On 04.06.2012, the accused credited an amount of Rs. 6,20,00,000/- to the complainant's account through RTGS, with further promise of making balance payment on the committed date, i.e. 08.06.2012. The balance payment was not made. Hence, the complainant presented the cheque, which was dishonoured on the ground of insufficient funds. A notice was issued to the accused. A3 replied to the said notice admitting the liability and informing the complainant that they could not honour the said cheque due to mismatch of cash flows and liquidity crunch at their end and indicated its intent to pay the amount due to the complainant and requested for additional time, till end of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay affairs would suffice to launch prosecution on the directors. The Supreme Court was dealing with a reference made by a two Judge Bench on three questions, one of which is as under: "(a) Whether for purposes of Section 141 of the Negotiable Instruments Act, 1881, it is sufficient if the substance of the allegation read as a whole fulfil the requirements of the said section and it is not necessary to specifically state in the complaint that the persons accused was in charge of, or responsible for, the conduct of the business of the company." The question was answered holding that it is necessary to specifically aver in a complaint under Section 141 of the Act that at the time the offence was committed the person accused was in charge o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may quash the complaint despite the basic averment. It may come across some unimpeachable evidence or acceptable circumstances which may in its opinion lead to a conclusion that the Director could never have been in charge of and responsible for the conduct of the business of the company at the relevant time and therefore making him stand the trial would be abuse of the process of court as no offence is made out against him. 31. When in view of the basic averment process is issued the complaint must proceed against the Directors. But, if any Director wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he is really not concerned with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the day to day affairs of the company, the annual reports pertaining to the years 2009-2010. 2010-2011 and 2011-2012 were filed, which show that the petitioners are directors and the category is non-executive independent. 9. The definition of Independent Director under section 149 of The Companies Act, runs as follows: "149. Company to have Board of Directors. - ... (6) An independent director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director,- (a) who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience; (b) (i) who is or was not a promoter of the company or its holding, subsidiary or associate company; (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auditors of the company or its holding, subsidiary or associate company; or (B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent. or more of the gross turnover of such firm; (iii) holds together with his relatives two per cent. or more of the total voting power of the company; or (iv) is a Chief Executive or director, by whatever name called, of any non-profit organisation that receives twenty-five per cent. or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent. or more of the total voting power of the company; or (f) who possesses such oth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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