TMI Blog2022 (8) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... PPLICATION NO.74 OF 2021 - - - Dated:- 1-7-2022 - PRAKASH D. NAIK J. Mr. Abhijeet Desai a/w. Ms. Karan Gajra i/b. M/s. Desai Legal, Advcoate for the Applicants. Mr. A.R. Patil, APP for the Respondent No.1 State. Mr. Deepak Rane, Advocate for Respondent No.2. P.C. : The applicants are aggrieved by order issuing process in CC.No.3461 of 2013, passed by the Metropolitan Magistrate 7th Court at Dadar, Mumbai. 2. The complaint was fled for offence under Section 138 of Negotiable Instruments Act ( NI Act , for short) alleging that, the complainant company is engaged in business of various types of material handling equipments. The accused no.1 is a company. Accused no.10 is its secretary. Accused Nos.11 and 12 are authorised signatory of accused no.1. Accused nos.2 to 9 are Directors of accused no.1 company. Accused nos.2 to 12 are responsible for day to day affairs of accused no.1 company and they are responsible for transactions of this case. Accused no.1 is the customer of complainant company. Directors of accused no.1 had placed orders with the complainant for Electromagnetic Oil Cooled Overband Magnetics Separator on behalf of accused no.1. As per requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The corporate Governance Report for the year 2013 14 refers to composition of Board of Directors. It is mentioned that applicants are independent non executive Directors, Form 32 of applicant no.1 describes him, as independent director. (i) Being independent Directors and lack of averments in complaint, the applicants cannot be prosecuted for the offence under Section 138 of NI Act. (j) Reliance is placed on following decisions: (a) Pooja Ravinder Devidasani Vs. State of Maharashtra AIR 2015 SC 675. (b) Sunita Palta Ors. Vs. M/s. Kit Marketing Pvt. Ltd., decided by Delhi High Court vide Criminal M.C.1410 of 2018. 4. Learned counsel for respondent has submitted that there are sufficient averments in the complaint to indicate the role of the applicants. The grounds urged by the applicants that they are independent non executive Directors or that there are no averments to satisfy the requirements of Section 141 of NI Act is required to be appreciated during the trial. On the basis of the facts stated in the complaint that Court took cognizance of the complaint. It is submitted that the applicants have not brought any unimpeachable evidence which leads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the current financial year; (d) none of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or other promoters, or directors, amounting to two percent or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year; (e) who, neither himself nor any of his relatives- (i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed; (ii) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of- (A) a firm of auditors or company secretaries in practice or cost 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 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on a person, at the material time, that person shall have been at the helm of affairs of the company, one who actively looks after the day to day activities of the company and particularly responsible for the conduct of its business. Every person connected with the company will not fall within ambit of the provision. Simply because a person is director of company does not make him liable under the NI Act. Only those persons who are incharge and responsible for the conduct of business of the company at the time of commission of the offence will be liable for criminal action. A director, who was not in charge of and was not responsible for the conduct of the business of the company, at the relevant time, will not be liable for offence by invoking Section 141 of NI Act. 9. In the case of Ashutosh Ashok Parasrampuriya and Anr. Vs. M/s.Gharrkul Industries Pvt. Ltd. And Ors. (Supra) , relied upon by learned advocate for respondent/complainant the factual matrix was that, according to complainant, the accused appellants therein had agreed that the amount received from complainant would be returned within a specified time as agreed in memorandum of undertaking and accordingly pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Kit Marketing Pvt. Ltd. , the submission of the petitioners in the said case was that they are independent non executive Directors and were not involved in the day to day affairs of the company at any point of time. They were not Managing Directors nor signatories to the cheque. Form No.32 showed that they were independent non executive additional director and independent non executive director. The objection of the complainant was that the said issue can be decided during the trial. The Delhi High Court relied upon the decision of Supreme Court in the case of S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla (2005) 8 SCC 89 and Pooja Ravinder Devidasani Vs. State of Maharashtra (Supra), and K.K. Ahuja Vs. V.K. Vora (2009)10 SCC 48 and Chintalapati Srinivasa Raju Vs. Securities and Exchange Board of India (2018) 7 SCC 443. It was observed that the petitioner therein were neither Managing Directors nor authorised signatories of the accused company. Except the general allegations, no specific role was attributed to them. 11. In the case of Chitalapati Srinivasa Raju Vs. Securities and Exchange Board of India (Supra) it is held as follows: 23 Non executive direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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