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2017 (11) TMI 1865 - HC - Indian LawsMaintainability of petition - Dishonor of Cheque - Sections 138, 141 and 132 of Negotiable Instruments Act, 1881 - Liability of a Director - Vicarious Liability - respondent contended that the summoning order has been passed by learned Magistrate and the remedy by way of revision before the Court is Sessions is available to the present petitioner and as such, the present petition under Section 482 Cr.P.C. is not maintainable. HELD THAT - This Court is of the considered view that most of the facts are not disputed that the petitioner is not signatory to the cheques in question. He was not Director of the Company on the relevant date i.e., 20-08-2014/26-08-2014 when the cheques were issued, rather he had resigned from his position long-back on 7.10.2013 and his resignation was accepted vide Annexure P/5. Notice was also issued in the news paper on 24.10.2013 i.e., prior to the issuance of cheques in question. As per provisions of Sections 138 and 141 of the Act, a Director can be held liable on the principle of 'vicarious liability', but there must be specific averments against the said Director showing as to how and in what manner, he was responsible for the conduct of the business of the Company, but in the case in hand, the facts are totally otherwise because the petitioner was not the Director of the Company on the date of issuance of cheques in question, rather he had resigned long back, which was duly accepted. More so, the petitioner is not signatory to the cheques. Petition allowed.
Issues:
Petition under Section 482 of CrPC for quashing of Criminal Complaint under Sections 138, 141, and 142 of the Negotiable Instruments Act, 1881 based on summoning order dated 28.10.2014. The main issue is the liability of the petitioner as a Director of the company for the bounced cheques despite resigning before the issuance of the cheques. Analysis: Issue 1: Liability of the Petitioner The petitioner argued that he was neither a signatory to the cheques nor a Director of the company at the relevant time. He had resigned from the company before the issuance of the cheques, supported by documentary evidence. The petitioner contended that the summoning order against him was not maintainable due to his resignation and publication of the same in a newspaper. The petitioner also cited relevant case laws to support his argument. Issue 2: Vicarious Liability of Directors The petitioner emphasized that as per Sections 138 and 141 of the Act, a Director can be held liable under the principle of vicarious liability. However, specific averments must exist to show the Director's responsibility for the company's conduct. In this case, the petitioner had resigned before the cheques were issued, and he was not a signatory to the cheques. The court noted that continuing proceedings against the petitioner would result in a miscarriage of justice, citing previous judgments supporting this stance. Issue 3: Maintainability of the Petition The respondent argued that the petitioner could seek remedy through revision before the Sessions Court and thus the petition under Section 482 CrPC was not maintainable. The respondent relied on a relevant Supreme Court judgment to support this argument. Judgment: After considering the submissions and evidence, the court found that the petitioner was not liable as he was not a signatory to the cheques and had resigned from the company before the issuance of the cheques. The court emphasized that the petitioner's resignation had been accepted and notified, clearing him of any liability. Citing relevant case laws, the court quashed the criminal complaint and summoning order against the petitioner, setting aside all subsequent proceedings specifically against the petitioner.
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