9911796707
TMI Blog2024 (3) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... sed No. 1. Petitioner Nos. 1 and 2 (accused Nos. 2 and 4) in WP No. 3065 of 2021, claim to be independent directors of Isinox Ltd. - accused No. 1. 4. Nirmal Manoharlal Daga (complainant in 5696/SS/2019 and 5695/SS/2019) the proprietor of M/s. Ishita Metals, had sold and delivered SS Metals under various bills to Isinox Ltd. - accused No. 1, of which Petitioners in WP No. 3067 of 2021 and 3066 of 2021 (accused Nos. 2 and 5 in complainants in 5696/SS/2019 and 5695/SS/2019) claim to be independent directors. 5. The complainant in CC No. 811/SS/2020 alleged, in discharge of the liability allegedly incurred by Isinox Ltd., the accused No. 1 had drawn 13 cheques on Indian Bank, Nariman Point Branch in favour of Kaybee Foundry Services Pvt. Ltd., for varying amounts. All the 13 cheques were returned unencashed on presentment. Despite service of the statutory demand notice, Isinox Ltd. and its directors, including the Petitioners, committed default in payment of the amounts covered by the dishonoured cheques. Kaybee Foundry Services Pvt. Ltd., thus, lodged a complaint for an offence punishable under Section 138 read with Section 141 of the Act, against Isinox Ltd., its directors and aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and non-executive directors of Isinox Ltd., with effect from 30 September 2016. It was urged that it is well neigh settled by a long line of decisions that an independent director cannot be roped in by invoking provisions contained in Section 141 of the Act, 1881. 13. Mr. Nigam Kumar, learned Counsel for Respondent No. 1 - complainant resisted the submissions on behalf of the Petitioners. It was urged that there are adequate averments in the complaints which bring the acts of the Petitioners within the ambit of the provisions contained in Section 141 of the Act. Moreover, according to Mr. Kumar, the claim of the Petitioners that they are independent and non-executive directors of Isinox Ltd., is a matter which warrants determination at the trial. At this stage, according to Mr. Kumar, the Court cannot proceed on the basis of the information furnished in Form DIR 12 alone. 14. Inviting attention of the Court to the information disclosed in the audit report of Isinox Ltd. (R-7 colly), annexed to the affidavit in reply, Mr Kumar strenuously submitted that the Petitioner Nos. 1 and 2 were principal officers and also looking after the day to day business affairs of Isinox Ltd. Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t time when the offence was committed and not on the basis of merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a Company may be liable if he satisfies the main requirement of being in charge of and responsible for conduct of business of a Company at the relevant time. Liability depends on the role one plays in the affairs of a Company and not on designation or status. If being a Director or Manager or Secretary was enough to cast criminal liability, the Section would have said so. Instead of "every person" the section would have said "every Director, Manager or Secretary in a Company is liable"....etc. The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action. .......... 18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a persons can be subjected to criminal process. A liability under Section 141 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his has to be averred, as there is no deemed liability upon a director." 18. In the case of Pooja Ravinder Devidasani V/s. State of Maharashtra and Anr. (2014) 16 SCC 1, the Supreme Court enunciated that the law laid down by the Supreme Court is that for making a director of a company liable for the offence committed by the company under Section 141 of the Act, there must be specific averments against the director showing as to how and in what manner, such director was responsible for the conduct of the business of the company. 19. In a recent pronouncement in the case of Sunita Palita and Ors. V/s. Panchami Stone Quarry (2022) 10 SCC 152 the Supreme Court followed the judgments in the cases of S.M.S. Pharmaceuticals Ltd. V/s. Neeta Bhalla (2005) 8 SCC 89 and Pooja Ravinder Devidasani (supra), and enunciated the legal position as under : "42. Liability depends on the role one plays in the affairs of a company and not on designation or status alone as held by this Court in S.M.S. Pharmaceuticals (supra). The materials on record clearly show that these appellants were independent, non-executive Directors of the company. As held by this Court in Pooja Ravinder Devidasani (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1) of Section 141 of the Act, can still be made liable under Section 141(2) of the Act by making averments in the complaint about their position and duties in the company and their role in regard to the issuance of the dishonoured cheques, disclosing the consent, connivance or negligence. 21. To this end, recourse to the averments in the complaint is indispensable. I have perused the averments in the complaint carefully. There are but omnibus allegations that accused Nos. 2 to 6 are the directors of the accused No. 1 company. They are principal officers and looking after the day to day affairs and management of the company as of the date of the offence, prior and subsequent thereto. The complaints singularly lack any averment that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, the Petitioners. In the absence of such averments, the prosecution of the Petitioners by invoking the provisions contained in Section 141(2) of the Act also, would be legally impermissible. 22. The conspectus of aforesaid discussion is that the prosecution of the Petitioners who are the independent non-executive directors of Isinox Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
