It may not open for the High Court to interfere under Section 482 CrPC, if statutory compliance of Section 141 of the NI Act has been made: Supreme Court
If statutory compliance of Section 141 of the NI Act has been made, it may not open for the High Court to interfere under Section 482 CrPC as upheld by the Hon’ble Supreme Court through the learned bench lead by Justice Rastogi in the case of Ashutosh Ashok Parasrampuriya &amp; Anr. V. M/S. Gharrkul Industries Pvt. Ltd. &amp; Ors [CRIMINAL APPEAL NO(S). 1207 OF 2021] (Arising out of SLP(Criminal) No(s). 9520 of 2014). The brief facts of the case are that the appellant nos. 1, 2, 3 and 4 are the Directors of the appellant no. 1(Ameya Paper Mills Pvt. Ltd.). It is the case of respondent no. 1­complainant that it is a Private Limited Company dealing in the business of production and selling spices under the name of M/s. Gharkul Industries Private Ltd. and the appellants being well acquainted with respondent no.1­ and being in need of financial assistance for their business approached respondent no.1 with a request to provide them financial assistance. Respondent no. 1­ complainant provided financial assistance and on negotiations, Memorandum of Understanding was executed which was signed by appellant no. 2­ Dilip Shrikrishna Andhare with consent of all the appellants in the presence of two attesting witnesses. Appellant No. 1 issued a cheque in favour of respondent no. 1 towards part payment of the amount, which was deposited by respondent no. 1 for encashment. However, the same was dishonoured due to “funds insufficient”. After dishonour of cheque, notice was issued to the appellants demanding the said amount of cheque, which was refused to be accepted by the appellants. Respondent no. 1 filed a complaint against the appellants under Section 138 of NI Act in which all the appellants agreed that the amount provided by respondent no. 1 would be refunded within one or two years. In the light of all the averments in the complaint and documents filed on record, and so also the specific averment made in paragraph 5 and 7 of the complaint that all the appellants are equally responsible for the offence committed by them and they have issued the said cheque to discharge their legal liability towards respondent no. 1­complainant. The learned trial Court issued summons to the appellants herein directing them to appear before the Court and the appellants were granted bail on furnishing security of Rs.2,000/­. The order came to be challenged in two separate criminal petitions filed under Section 482 CrPC Both the petitions were tagged together and came to be dismissed by the High Court. Ms. Arundhati Katju, learned counsel for the appellants submitted that there is no specific averment made and merely because the appellants are the Directors of the Company, they are not to be held vicariously liable and cannot be made accused in the proceedings. No notice relating to dishonour of cheque has been received by them. Mr. Sidhartha Dave, learned senior counsel for the appellants relying on the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Another and Pooja Ravinder Devidasani v. State of Maharashtra and Another further submits that they are the non­executive Directors of the Company and were not responsible for the conduct of the business of the Company which is the mandatory requirement for initiation of the proceedings under Section 138 of NI Act and submits that the precondition as referred to under Section 141 of NI Act not being complied with, the order passed by the learned trial Judge in summoning the present appellants is nothing but a clear abuse of process of law and the finding which has been recorded by the High Court in the impugned judgment is not legally sustainable in law. Mr. Pallav Shishodia, learned senior counsel for the respondents, while supporting the order passed by the High Court in the impugned proceedings, submitted that the appellants claimed themselves to be a non­executive Directors but the record indicates that they are the Directors of the Company and responsible to the Company for the conduct of business actively involved in the business of the Company and responsible for the affairs of the Company and there is nothing to indicate that they were appointed as non­executive Directors. Apart from dishonour of cheque in the instant matters, there are other cheques issued by the appellants which were also dishonoured and separate complaints have been filed by the respondent(s) but because of the pendency of the present appeals before this Court, no action has been taken by the trial Judge. After hearing the learned counsel for the respective parties at length, the Hon’ble Court held, “The complaint specifically refers to the point of time when the cheques were issued, their presentment, dishonour and failure to pay in spite of notice of dishonour. In the given circumstances, we have no hesitation in overruling the argument made by the learned counsel for the appellants. The High Court has rightly not interfered in exercise of its jurisdiction under Section 482 CrPC for quashing of the complaint. Consequently, the appeals fail and are accordingly dismissed.”
The present appeals are directed against the common judgment and order dated 18th July 2014 filed at the instance of the appellants under Section 482 of Code of Criminal Procedure 1973(herein after being referred to as “CrPC”) against the order no. 1(Ameya Paper Mills Pvt. Ltd.) in Criminal Appeal SLP(Criminal) No. 9520 of 2014 the Private Limited Company and the appellants being well acquainted with respondent no.1­ complainant and being in need of financial assistance for their to provide them financial assistance. Respondent no. 1­ complainant considering the relations and need of the appellants Dilip Shrikrishna Andhare(Appellant no. 2 in Criminal Appeal Memorandum of Understanding and accordingly payments were various cheques details which were furnished in the complaint Accordingly a total amount of Rs. 1 50 19 831 ­ was received by the appellants through cheque during the period 23rd November 2007 to 12th March 2009 the details of which are as under:­ Bank HDFC 20 00 000 16 00 000 6 00 000 5 00 000 10 00 000 5 39 831 7 00 000 3 00 000 5 00 000 3 00 000 4 00 000 3 50 000 80 000 3 04 000 3 00 000 2 70 000 24 000 1 27 000 2 25 000 2 50 000 4 00 000 2 50 000 10 00 000 10 00 000 10 00 000 10 00 000 It is the further case of the respondent no. 1 that on 18th August 2010 a letter was issued to the appellants demanding of Rs.1 49 94 831 ­. According to respondent no. 1 the appellants No. 95214 issued a cheque on 2nd June 2012 in favour of valued for Rs. 10 00 000 ­ drawn on State Bank of India Finance Branch at Nagpur Maharashtra which was deposited by respondent no. 1­complainant in UCO Bank Amravati was received by respondent no. 1­complainant on 4th June 2012 After dishonour of cheque notice was issued to the appellants demanding the said amount of cheque which was refused to be Authorities and thus the notice was returned with remark “not complaint against the appellants under Section 138 of NI Act in which a specific averment was made that respondent no. 1 by Appellant no. 2­Dilip Shrikrishna Andhare. It is specifically contended that appellant no. 2 signed the said document with consent of all the remaining appellants in the presence of two Company which was provided and the appellants also confirmed the balance in their accounts by issuing letter dated 21st June 2012. The cheque involved in the criminal case initiated by cheque for want of sufficient funds on receipt of intimation regarding dishonour of cheque on 4th June 2012 respondent no. 1 1­Company as well as on their residential address by registered post acknowledgment due on 26th June 2012 demanding amount of Rs.10 lakhs which is alleged to have been refused by the In the light of the above averments in the complaint and equally responsible for the offence committed by them and they Rs.2 000 ­ by an Order dated 23rd November 2012 by the Court of petitions filed under Section 482 CrPC seeking quashing setting against them as well as the summons dated 10th November 2012 13. Ms. Arundhati Katju learned counsel for the appellants submits that there is no specific averment made that they have the Company which is one of the essential ingredient requirement and in the absence of such averment they are not to be held vicariously liable and cannot be made Directors or were responsible for day­to­day business of the 15. Mr. Sidhartha Dave learned senior counsel for the appellants in Criminal Appeal @ SLP(Criminal) No. 7573 of 2014 further and were not responsible for the conduct of the business of the condition as referred to under Section 141 of NI Act not being complied with the order passed by the learned trial Judge in and in support of his submission has placed reliance on the judgments of this Court in S.M.S. Pharmaceuticals Ltd. Vs 16. Per contra Mr. Pallav Shishodia learned senior counsel for the respondents while supporting the order passed by the High Criminal Appeal @ SLP(Criminal) No. 7573 of 2014 claimed Form No. 32 which has been obtained from the Registrar of Companies placed on record clearly indicates that all are the business of the Company and responsible for the affairs of the trial and is not open to be examined at this stage and once the 17. During the course of submission learned counsel for the respondents submits that apart from dishonour of cheque in the which were also dishonoured and separate complaints have been filed by the respondent(s) but because of the pendency of the trial Judge. The details of the cases including this case are as S.C.C No. 7th 10 00 000 ­(Ten only) vide Cheque No 10 00 000 ­(Ten only) vide Cheque No 1 15 39 200 ­(One Crore Fifteen Lakhs Thirty Nine Thousand and Two Hundred only) vide Cheque Cheque No. 493020 and of this Court in S.M.S. Pharmaceuticals Ltd.(supra) would be Act the Court explaining the duty of a Magistrate while issuing to make up his mind for issuing process. If this were not the taking cognizance of an offence there is sufficient ground for proceeding’. The words ‘sufficient ground for proceeding’ again suggest that ground should be made out in the complaint for 21. After so stating the Court analysed Section 141 of the NI Act under Section 141 that at the time the offence was committed the person accused was in charge of and responsible for the conduct of business of the Section 141 and has to be made in a complaint requirements of Section 141 cannot be said to be company is not sufficient to make the person liable to the company for the conduct of its business. The to be made liable should be in charge of and responsible for the conduct of the business of the c) The answer to Question has to be in the affirmative. The question notes that the managing director or joint managing director would be that is so holders of such positions in a company of the office they hold as managing director or joint responsible for the conduct of business of the company. Therefore they get covered under Section 141. So far as the signatory of a cheque which is 22. The same principle has been reiterated Electricity Distribution Co. Ltd. & Another Vs. Datar In the light of the ratio in S.M.S. Pharmaceuticals Ltd they are incharge of and responsible to the Company for the conduct of the business of the Company and if statutory it comes across some unimpeachable incontrovertible evidence which is beyond suspicion or doubt or totally acceptable case is made out against the particular Director for which there makes them vicariously liable for the activities of the defaulter Company as defined under Section 141 of the NI Act In that perception whether the appellant had committed the offence 25. We are concerned in this case with Directors who are not signatories to the cheques. So far as Directors who are not the signatories to the cheques or who are not Managing Directors or Joint Managing Directors are concerned it is clear from the against the Director. That is why this Court in S.M.S Pharmaceuticals Ltd.(supra) observed that the question of Act read in the light of the powers of a Magistrate referred to in Sections 200 to 204 CrPC which recognise the Magistrate’s discretion to take action in accordance with law. Thus it is imperative that if this basic averment is missing the Magistrate is In the case on hand reading the complaint as a whole it is were responsible for its business and all the appellants were reading the complaint so as to come to a conclusion that the point of time when the cheques were issued their presentment given circumstances we have no hesitation in overruling the Indisputedly on the presentation of the cheque of Rs.10 00 000 ­(Rupees Ten Lakhs only) dated 2nd June 2012 the and after making due compliance complaint was filed and after recording the statement of the complainant proceedings were initiated by the learned Magistrate and no error has been are the non­executive Directors in the light of the documentary In our considered view the High Court has rightly not 31. Before concluding we would like to observe that the are the old cases instituted in the year 2012 and could not be Court we may consider it appropriate to observe that let all the three cases of which a reference been made in para 17 of this possible on its own merits in accordance with law without being judgment not later than six months from the date parties record 32. Consequently the appeals fail and are accordingly dismissed 33. Pending application(s) if any stand disposed of