TMI Blog2022 (11) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... k/complainant - Three-judge bench of Hon ble Supreme Court in M/S. KALAMANI TEX ANR VERSUS P. BALASUBRAMANIAN [ 2021 (2) TMI 505 - SUPREME COURT ] held that if the signatures on the cheque are admitted, presumption under Section 139 NI Act, 1881 would be attracted. The primary dispute in the present case pertains to the question as to whether the cheques issued by the petitioners on behalf of the accused company on 23.12.2016 were undated or not, and whether the signatories to the cheques i.e. the petitioners were a part of the accused company at the time of commission of offence or not - this Court is of the opinion that the issue as to whether the petitioners had resigned before the presentation of cheques or not is a disputed question of facts and has to be decided on the basis of relevant documents and evidence to be produced at the stage of trial. This is not a case involving a resignation of a director which can be simply verified by this Court by perusing Form 32 issued by Registrar of Companies. The petitioners herein were admittedly the employees in the holding company of accused no. 1 and were its authorised signatories at the time when the credit facilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which are accused no. 2 and 3. b. RHC Holding Pvt. Ltd. happens to be the holding company emanating from Oscar Investments Ltd./accused no. 1. The petitioner in CRL.M.C. 2359/2022 namely Mr. Vishal Arora i.e., accused no. 4, was employed as the Senior Manager Finance in RHC Holding Pvt. Ltd., and the petitioner in CRL.M.C. 2360/2022 namely Mr. Hemant Dhingra i.e., accused no. 5, was employed as Director (Finance) in RHC Holding Pvt. Ltd. Both the petitioners, however, were not part of the Board of Directors. For the ease of operations, the petitioners were appointed as the Authorized Signatories in the bank account of Oscar Investments Limited/accused no. 1. c. On 23.12.2016, accused no. 1 availed credit facility from the complainant bank for a total sum of Rs.5,65,00,00,000/- (Rupees Five Hundred and Sixty Five Crores). The petitioners, in the capacity of Authorized Signatories of accused no. 1, signed a declaration for submission of cheques towards discharge of the liability of accused no. 1 under the credit facility. In furtherance, the Cheque bearing no. 932400 drawn on Yes Bank Ltd. for an amount of Rs.2,00,00,00,000/- (Rupees Two Hundred Crores) and Cheque bearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat both the accused persons stopped having any association with the accused company post their resignations. It was further stated that in view of the same, petitioners could clearly not have been the person in charge of or responsible for the conduct of day to day business of the accused company in the year 2020. 5. It is stated that accused no. 5 had addressed a letter dated 06.10.2017 to the Board of Directors of RHC Holdings Pvt. Ltd., informing that the cheques signed by him would no longer be valid and a request was made that the said cheques be replaced with ones executed by the Authorised Signatories of the company at the earliest. Accordingly, after the resignation of accused no. 4 also, Mr. Sanjeev Kumar Singhal, Mr. Chandra Shekhar Jha, and Mr. Rajendra Kumar were appointed as the new authorized signatories vide Board Resolution dated 30.08.2018. Thus, at the time of commission of offence, the petitioners were not the authorised signatories of the accused company, and the said fact was in the knowledge of the complainant from the board resolution dated 30.08.2018 as well as from other publicly available documents, the same was also brought to its knowledge by accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruments Act, 1881, for which reliance is also placed on the decision in Mojj Engineering Systems Ltd. Ors. v. A.B. Sugars Ltd. 154 (2008) DLT 579. It is further stated that the petitioners were duly authorized to act on behalf of accused company at the time of issuance of cheques in favour of respondent bank towards discharge of the undisputed liabilities towards credit facility. 10. Mr. Vashishth submits that specific allegations and averments have been made against the petitioners in the complaint, and accused persons have been summoned by the learned Trial Court after due application of mind and considering all the material before it. It is argued that as held in catena of judgments, the contentions raised on behalf of the petitioners are triable issues and thus, no mini trial is contemplated at this stage, more particularly when the complaint discloses a clear commission of an offence. 11. The rival contentions raised by learned senior counsels for the parties have been heard and the material placed on record has been perused. 12. Before adverting to the facts of the present case, it will be relevant to consider the law as laid down in statutes and through preced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation .- For the purposes of this section,- (a) company means any body corporate and includes a firm or other association of individuals; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141... (emphasis supplied) 15. In K.K. Ahuja v. V.K. Vohra (2009) 10 SCC 48 , the Hon ble Supreme Court had summarised the position under Section 141 as under: 20. The position under section 141 of the Act can be summarized thus : (i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix `Managing' to the word `Director' makes it clear that they were in charge of and are responsible to the company, for the conduct of the business of the company. (ii) In the case of a director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r offence committed by the company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with. (iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred. (v) If the accused is a Managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. (vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in the complaint. (vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases... (emphasis supplied) 17. Thus, the settled position of law is that the signatory of a cheque which is dishonoured, is responsible for the act and will be covered under sub-section (2) of Section 141. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh its authorised signatories i.e. the present petitioners, had submitted a declaration along with signed cheques of Rs.200,00,00,000/- and Rs.25,00,00,000/- to the respondent bank on 23.12.2016. Thereafter, the loan agreement was entered into between the accused company and complainant on 17.01.2017. The cheques in question were presented for encashment on 09.01.2020 and the same were dishonoured. 19. The petitioners, however, contend that a blank declaration and undated cheques, signed by them, were forwarded to the complainant bank on 23.12.2016. Thereafter, both the petitioners had subsequently resigned from their positions in the holding company of accused no. 1 in the years 2017 and 2018. It was argued on behalf of petitioners that the details in the declaration, as well as the date on the cheques, were filled by the respondent on 09.01.2020 before presenting the same for encashment, however, the petitioners had already resigned, much prior to the said date. The petitioners have annexed both the filled as well as unfilled declaration/cheques along with the petitions to prove their stand. It is further the case of the petitioners that when they had resigned prior to the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant accused .. 22. The Hon ble Apex Court in Rajeshbhai Muljibhai Patel v. State Of Gujarat (2020) 3 SCC 794 had observed as under: 22. The High Court, in our view, erred in quashing the criminal case in C.C.No.367/2016 filed by appellant No.3Hasmukhbhai under Section 138 of N.I. Act. As pointed out earlier, Yogeshbhai has admitted the issuance of cheques. When once the issuance of cheque is admitted/established, the presumption would arise under Section 139 of the N.I. Act in favour of the holder of cheque that is the complainant-appellant No.3. The nature of presumptions under Section139 of the N.I. Act and Section 118(a) of the Indian Evidence Act are rebuttable. Yogeshbhai has of course, raised the defence that there is no illegally enforceable debt and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ukesh Kumar, (2019) 4 SCC 197 , has observed as under: 33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. 34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. 35. It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court. The Court had observed as under: 20. The cheque in question was admittedly a post dated one. It was signed on 3rd April, 1995. It was presented only sometimes in June, 1998. In the meantime he had resigned from the directorship of the Company. The complaint petition was filed on or about 20th August, 1998.Intimation about his resignation was given to the complainant in writing by the 1st respondent on several occasions. Appellant was, therefore, aware thereof. Despite having the knowledge, the 1st respondent was impleaded one of the accused in the complaint as a Director Incharge of the affairs of the Company on the date of commission of the offence, which he was not. If he was proceeded against as a signatory to the cheques, it should have been disclosed before the learned Judge as also the High Court so as to enable him to apply his mind in that behalf. It was not done. Although, therefore, it may be that as an authorized signatory he will be deemed to be person incharge, in the facts and circumstances of the case, we are of the opinion that the said contention should not be permitted to be raised for the first time before us... 27. Reliance placed upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments and evidence to be produced at the stage of trial. This is not a case involving a resignation of a director which can be simply verified by this Court by perusing Form 32 issued by Registrar of Companies. 30. The petitioners herein were admittedly the employees in the holding company of accused no. 1 and were its authorised signatories at the time when the credit facility was obtained from the respondent bank. It is also not the case of petitioners that they had informed the respondent about their resignations, rather, they had merely asked the accused company to do the same. Nothing is placed on record to show that the respondent bank was informed by the accused company about the resignations of the authorised signatories to cheques issued to it, before the same were presented for encashment. Further, respondent bank was informed about the factum of resignations of the petitioners only through a reply to legal notice under Section 138 NI Act, 1888, dated 03.02.2020 by petitioner Hemant Dhingra. Therefore, the facts that emerge from the preceding discussion are that (i) the amount in dispute is Rupees Two Hundred and Twenty Five Crores of public money, (ii) the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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