TMI Blog2024 (2) TMI 1295X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner was a Non-Executive Director is stated to have been filed with the concerned office on the date of withdrawal of earlier CRL.M.Cs. (i.e. 07.08.2018). The scope of proceedings under Section 141 of NI Act has been considered by the Hon ble Apex Court in SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [ 2005 (9) TMI 304 - SUPREME COURT ], wherein, it was observed that persons, who are sought to be made criminally liable under Section 141 of NI Act, should at the time of commission of offence be incharge of and responsible to the Company for the conduct of the business of the Company. Consequently, a Director, merely by holding a designation or office in a Company, would not be liable unless he was in-charge of and responsible for the conduct of the business of the Company. Thus, the liability depends upon role in the conduct of the affairs of the Company and not merely by the designation or status except in the case of Managing Director and Joint Managing Director. The existence of special circumstances or change of circumstances which is specific to the knowledge of accused needs to be established during the course of trial, if the same is not apparent from the record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 4 are the directors of the accused No. 1 and accused No. 2 is authorised signatory of accused No. 1 and has been participating in day to day functioning and activities of the accused No. 1 and also responsible for day to day affairs and business of accused No. 1. The accused No. 3 and 4 are the Directors of the accused No. 1 and also responsible for day to day affairs and business of accused No. 1. As such, they have been dealing in day to day activities of the accused No. 1. 3. As per the case of the petitioner (accused No. 3 in the complaint under Section 138 NI Act), she was summoned in aforesaid proceedings by the learned MM vide order dated 05.07.2014 without considering the fact that the petitioner had already resigned on 15.03.2014 as Director of the Company and was neither signatory of the cheques, nor Managing Director of the Company. Further, she was pursuing her studies at relevant time and had completed her Law only in the year 2014 having joined Jindal Global Law School in the year 2009. It is further her case that the transactions as per the complaint pertain to January, 2014 to March, 2014 and during the aforesaid period, she was residing in the hostel withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions relate back to December, 2013 and 13 PDCs were issued, which were dishonoured during the period January, 2014 to March, 2014. The petitioner is stated to be Executive Director and Promoter at the relevant time. It is pointed out that part payment of Rs.51,000/- was also made through NEFT in December, 2013 prior to alleged resignation of the petitioner on 15.03.2014. 7. It may be noticed that CRL. M.C. 2382/2017-2386/2017 were earlier preferred on behalf of the petitioner for quashing of summoning orders in the aforesaid complaint cases under Section 138 NI Act but the same were withdrawn with liberty to urge all the pleas before the learned Trial Court at appropriate stage. At the stage of issuing of notice in the present petitions, aforesaid aspect was noticed in order dated 10.09.2021 and submission of learned counsel for the petitioner was recorded whereby reliance was placed upon Anil Khadkiwala v. State (Govt. of NCT of Delhi) Anr. (supra). It is pertinent to observe that nothing had been commented upon by this Court regarding maintainability of the petitions but only contentions of the learned counsel for the petitioner were noticed for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anaging 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 business of the company or make any specific allegation about consent, connivance or negligence. The very fact that the dishonoured cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141. (iii) In the case of a Director, secretary or manager [as defined in Section 2(24) of the Companies Act] or a person referred to in clauses (e) and (f) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in regard to the vicarious liability of the partners and upon receipt of such notice, if the partner keeps quiet and does not say anything in reply to the same, then the complainant has all the reasons to believe that what he has stated in the notice has been accepted by the noticee. In such circumstances what more is expected of the complainant to say in the complaint. 57. When in view of the basic averment process is issued the complaint must proceed against the Directors or partners as the case may be. But, if any Director or Partner 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 the issuance of the cheque, he must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his contention. He must make out a case that making him stand the trial would be an abuse of process of Court. He cannot get the complaint quashed merely on the ground that apart from the basic averment no particulars are given in the complaint about his role, because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny or the firm. 58.3. Needless to say, the final judgment and order would depend on the evidence adduced. Criminal liability is attracted only on those, who at the time of commission of the offence, were in charge of and were responsible for the conduct of the business of the firm. But vicarious criminal liability can be inferred against the partners of a firm when it is specifically averred in the complaint about the status of the partners qua the firm. This would make them liable to face the prosecution but it does not lead to automatic conviction. Hence, they are not adversely prejudiced if they are eventually found to be not guilty, as a necessary consequence thereof would be acquittal. 58.4. 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/she is really not concerned with the issuance of the cheque, he/she must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his/her contention. He/she must make out a case that making him/her stand the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complaint initiated under Section 138 of NI Act, respondent No. 1 (complainant) duly pleaded that accused Nos. 2 to 4 (including petitioner) are the Directors of accused No. 1 (Company) and accused Nos. 3 (petitioner) and 4 are also responsible for day-to-day affairs and conduct of business of accused No. 1 Company. The accused, in discharge of legal liabilities are also stated to have partly paid a sum of Rs. 51,000/- through NEFT. During the relevant period, the petitioner was shown as an Executive Director and Promoter in the Company and the cheques were issued towards the outstanding amount of Rs. 95 lacs prior to resignation of petitioner as Director on 15.03.2014. It has also not been brought to the notice of this Court if any such stand clarifying the status of the petitioner in the Company was taken in the reply to notice issued after dishonour of cheques. In the facts and circumstances, it cannot be inferred at this stage that the petitioner was not responsible for day-to-day affairs of the Company in the position of Executive Director and Promoter . This Court is of the considered opinion that the issue can be only resolved in the light of evidence led on record by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
