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TMI Blog2024 (3) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... NI Act'), are that the complainant i.e. Sh. Ankit Sood is proprietor of 'M/s Ankit Sood and Company' which is engaged in supply of food and vegetables, and the accused company i.e. 'Yumm Bites Foods and Hospitality Pvt. Ltd.' is also engaged in the similar business. It is alleged that the accused company had entered into business relations with the complainant in the year 2015 for supply of fruits and vegetables on a daily basis. It is stated that the bills of the goods supplied were sent to the accused on weekly basis. As per the complaint, initially, the accused was regular in making payments but eventually, the accused had started defaulting in making the payments and from February, 2016 till August, 2017, the complainant had supplied goods worth Rs. 26,81,253/-, however, the accused had paid only Rs. 17,23,793/- out of the same. It is alleged that in the month of September, 2018, in order to discharge the remaining liability, the accused had issued a cheque bearing no. 241976 dated 05.09.2018 for Rs. 9,57,460/- drawn on IDBI Bank, and had assured the complainant that the cheque would be honoured upon its presentation. However, when the complainant had presented the same for enc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y w.e.f. 10.08.2017 and thereafter, he had no concern with the day-to-day affairs and decisions of the company qua its business transactions. In this regard, this Court's attention has been drawn towards the resignation letter and Board Resolution dated dated 10.08.2017, as well as Form No. DIR-12 wherein the petitioner is shown to have ceased as Director of Company w.e.f. 10.08.2017. It is stated that the petitioner is not aware of the circumstances and the purpose for which the cheque in question had been issued. It is also stated that the cheque has neither been signed by the petitioner nor is the petitioner aware of the amount if any or at all was payable to the complainant, since the cheque was allegedly issued in September, 2018, whereas the petitioner had already resigned in August, 2017. It is also argued that the complainant has not attributed or assigned any role to the petitioner in the entire complaint, and the learned Magistrate had issued summoning order on the basis of un-updated Master Data of accused company which was reflecting petitioner as its Director. In these circumstances, it is prayed that the summoning order and the complaint case be quashed against the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner Saurabh Sethi had tendered his resignation from the directorship of accused company vide resignation letter dated 10.08.2017; e. Board Resolution dated 10.08.2017 was passed wherein it was proposed that Ms. Sheetal Pahwa will be appointed as an Additional Director and Sh. Saurabh Sethi, Director and Sh. Bhagwan Singh, Additional Director, would cease to be a part of the company; f. Thereafter, Form No. DIR-12 was filed wherein Ms. Sheetal Pahwa was appointed as Additional Director/Executive Director and information regarding cessation of directorship of Saurabh Sethi as well as Bhagwan Singh, with effect from 10.08.2017, was informed to the Registrar of Companies. This Form was digitally signed by Nikhil Mehta, the Director of the accused company; g. The aforesaid sequence of events is also corroborated by the Master Data available on the website of Ministry of Corporate Affairs wherein Nikhil Mehta appears to be the Director of the accused company since 04.12.2015 and Ms. Sheetal Pahwa is shown as the Director of the accused company since 10.08.2017. The records of the MCA also corroborate the date of appointment and resignation of the petitioners Dheeraj Pahw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ought to be then entitled to be discharged from prosecution." 12. Similarly, in case of Ashoke Mal Bafna v. Upper India Steel Manufacturing and Engineering Co. Ltd. (2018) 14 SCC 202, the Hon'ble Apex Court had quashed proceedings under Section 138/141 of NI Act against a Director who had resigned a few months prior to the dishonour of cheque. 13. Therefore, this Court has no hesitation to hold that the petitioners herein had resigned more than a year prior to the issuance of cheque in question, and thus, they cannot be roped in as accused to face trial for dishonour of a cheque which had been issued subsequent to their cessation from the accused company. 14. While observing so, it is also significant to mention that the cheque in question had not been signed by the present petitioners, but by accused no. 3 i.e. Nikhil Mehta, who has admitted his signatures before the learned Trial Court. 15. Furthermore, this Court has also taken note of the fact that in the criminal complaint filed in the present case, only one line has been added at the end of the complaint, as para no. 13, wherein it has been written that "accused no. 2 to 4 are responsible of day to day affairs of accus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ald cursory statement in a complaint that the Director (arrayed as an accused) is in charge of and responsible to the company for the conduct of the business of the company without anything more as to the role of the Director. But the complaint should spell out as to how and in what manner Respondent 1 was in charge of or was responsible to the accused Company for the conduct of its business. This is in consonance with strict interpretation of penal statutes, especially, where such statutes create vicarious liability. 14. A company may have a number of Directors and to make any or all the Directors as accused in a complaint merely on the basis of a statement that they are in charge of and responsible for the conduct of the business of the company without anything more is not a sufficient or adequate fulfilment of the requirements under Section 141." (emphasis in original) 18. In Girdhari Lal Gupta v. D.H. Mehta [Girdhari Lal Gupta v. D.H. Mehta, (1971) 3 SCC 189 : 1971 SCC (Cri) 279 : AIR 1971 SC 2162], this Court observed that a person "in charge of a business" means that the person should be in overall control of the day-to-day business of the Company. 19. A Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the NI Act is something different and higher. Every person who is sought to be roped in by virtue of sub-section 1 of Section 141 NI Act must be a person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company. Merely because somebody is managing the affairs of the company, per se, he does not become in charge of the conduct of the business of the company or the person responsible for the company for the conduct of the business of the company. For example, in a given case, a manager of a company may be managing the business of the company. Only on the ground that he is managing the business of the company, he cannot be roped in based on sub-section 1 of Section 141 of the NI Act. 23. The second allegation in the complaint is that the appellants are busy with the day-to-day affairs of the company. This is hardly relevant in the context of sub-section 1 of Section 141 of the NI Act. The allegation that they are in charge of the company is neither here nor there and by no stretch of the imagination, on the basis of such averment, one cannot conclude that the allegation of the second respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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