9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (8) TMI 1122 - HC - Companies Law
Issues Involved:
1. Quashing of complaints u/s 138 of the Negotiable Instruments Act. 2. Vicarious liability of non-signatory directors. 3. Validity of reasons for cheque dishonour. Summary: Issue 1: Quashing of complaints u/s 138 of the Negotiable Instruments Act All the petitions are filed by the original accused Nos.1, 2, and 3 seeking quashing of the respective complaints pending before the learned Metropolitan Magistrate, Ahmedabad. The cheques in question were signed by the original accused No.5, not by petitioner Nos.2 and 3. The cheques were returned with endorsements such as 'no image found' or 'drawee's signature incomplete/illegible'. The petitioners argued that these reasons do not constitute grounds u/s 138 of the Negotiable Instruments Act, citing the decision in Vinod Tanna v. Zaher Siddiqui and Mustafa Surka v. Jay Ambe Enterprise. Issue 2: Vicarious liability of non-signatory directorsThe petitioners contended that neither petitioner No.2 nor petitioner No.3 were signatories to the cheques and that respondent No.2 failed to demonstrate their involvement in the day-to-day functioning of the company. Therefore, the question of their vicarious liability does not arise. The respondent argued that the company, managed by petitioner No.2, cannot shift responsibility and that the cheques were issued for repayment of legal dues. Issue 3: Validity of reasons for cheque dishonourThe court noted that a previous bench had quashed complaints against the original accused No.5, the signatory of the cheques, based on similar grounds. The court concluded that endorsements such as "drawers signature differs from the specimen supplied" and "no image found" do not attract the ingredients of Section 138 of the Act. The court referenced the decision in SMS Pharmaceuticals Ltd. v. Neeta Bhalla, which discussed the liability of directors for cheque dishonour. In conclusion, the court found that the complaints did not meet the conditions precedent mentioned in Section 138 of the Act. Therefore, all petitions were allowed, and the respective complaints of cheque bouncing pending before the learned Metropolitan Magistrate, Ahmedabad, were quashed qua the present petitioners.
|
