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TMI Blog2022 (9) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... ss in manufacturing of yarn and A2 to A7 are its Directors. At request of A1 to A6 and one late Radhakrishnan Venkataswamy Naidu, the complainant in the Court below who is R2 herein supplied cotton to A1 company. The A1 company issued cheque bearing No.169748 for an amount of Rs.24,70,642/- towards part payment for the supplied goods. When the said cheque was presented for collection, the same was dishonoured with an endorsement of "funds insufficient". On that the complainant issued legal notice to all the accused and one late Radhakrishnan Venkataswamy Naidu on 13.11.2015. Though the notice was served on A2, A4 and A7, they failed to pay the dishonoured cheque amount. A1, A3, A6 and one late Radhakrishnan Venkataswamy Naidu did not receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il and held as follows; Harshendra Kumar D vs Rebatilata Koley Etc (2011) 3 Supreme Court Cases 351 "As noticed above, the appellant resigned from the post of Director on March 2, 2004. The dishonoured cheques were issued by the Company on April 30, 2004, i.e., much after the appellant had resigned from the post of Director of the Company. The acceptance of appellant's resignation is duly reflected in the resolution dated March 2, 2004. Then in the prescribed form (Form No. 32), the Company informed to the Registrar of Companies on March 4, 2004 about appellant's resignation. It is not even the case of the complainants that the dishonoured cheques were issued by the appellant. These facts leave no manner of doubt that on the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had resigned from the post of Director much prior to the issuance of cheque. The decision in AWADH KISHORE GUPTA [Appeal (crl.) 292 of 1997 dated 18.11.2003] was also referred to, wherein it was held that when the investigation was not completed, it was impermissible for the High Court to look into the materials, the acceptability of which is essentially a matter for trial and while exercising jurisdiction under Section 482 of the Code it is not permissible for the Court to act as if it was a trial Judge. The Supreme Court, however, at paragraph 25 opined that the said observations cannot be read to mean that in a criminal case where trial is yet to take place and the matter is at the stage of issuance of summons or taking cognizance, mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration the uncontroverted documents relating to the appellants resignation from the post of Director of the company and had these documents been considered by the High court, it would have been apparent that the appellant has resigned much before the cheques were issued by the company." 7. This Court, on perusal of catena of decisions, is of the view that the petitioners who were the Directors of Company, but have resigned much prior to the issuance of the cheque, the question of facing criminal trial after lapse of 1½ years would be travesty of justice. It is essential that once cheque was issued for discharge of legally enforceable debt, the company as well as the persons incharge of day to day affairs of the company can be p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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