2002 (11) TMI 660 - HC - Companies Law

Summary

Issues:
1. Quashing of criminal proceedings invoking inherent powers.
2. Validity of complaint filed by a G.P.A. holder on behalf of multiple complainants.
3. Examination of complainant under section 200 of Cr. P.C.
4. Responsibility of a Director under section 141 of N.I. Act.
5. Guidelines for cases where complaints are presented by G.P.A. holders.

Issue 1: The petitioners sought quashing of criminal proceedings in C.C. No. 1012 of 2000 by invoking inherent powers. The case involved depositing amounts with the petitioner company, issuance of a dishonored cheque, and subsequent legal notices. The accused argued that the second petitioner, a Director, was not responsible for the cheques issued. The respondents contended that the complaint was maintainable, citing Supreme Court stays and non-cooperation by the company. The Public Prosecutor argued against quashing the proceedings, suggesting the matter proceed to trial.

Issue 2: The judgment analyzed the validity of a complaint filed by a G.P.A. holder on behalf of multiple complainants under section 142 of the Negotiable Instruments Act. The court emphasized the requirement for the complainant's signature on the complaint and the mandatory examination of the complainant and witnesses present. It concluded that a G.P.A. holder cannot invoke section 142, and only the payee can file a complaint in writing under the Act.

Issue 3: The court discussed the examination of the complainant under section 200 of Cr. P.C., highlighting the mandatory nature of this procedure. It noted that the original complainants must be examined at the time of filing the complaint, and failure to do so renders the proceedings liable to be quashed.

Issue 4: Regarding the responsibility of a Director under section 141 of the N.I. Act, the judgment clarified that the Director appointed after the cheque issuance cannot be held vicariously liable under this section. The court also dismissed the notion of prosecuting present Directors based on non-disclosure of prior Directors' information by the complainant.

Issue 5: The judgment provided comprehensive guidelines for cases where complaints are presented by G.P.A. holders to prevent injustice. These guidelines included insisting on the payee's signature, examining all relevant parties, and thorough documentation before the Magistrate. The court emphasized the need for adherence to procedural requirements under Cr. P.C. sections 200 to 203.

In conclusion, the court quashed the proceedings in C.C. 1012 of 2000 due to the second petitioner's lack of responsibility for the cheques and the failure to record sworn statements as per section 200 of Cr. P.C. The judgment highlighted the importance of following proper procedures and provided detailed guidelines for handling cases involving complaints by G.P.A. holders to ensure fairness and adherence to legal standards.