2010 (1) TMI 1281 - HC - Indian Laws

Summary

Issues Involved:
1. Summoning of petitioners u/s 138 of the Negotiable Instruments Act.
2. Petitioners' resignation from directorship prior to cheque presentation.
3. Vicarious liability of petitioners under Section 141 of the Negotiable Instruments Act.
4. Consideration of Form 32 as evidence.
5. Continuation of trial against other accused persons.

Summary:

1. Summoning of petitioners u/s 138 of the Negotiable Instruments Act:
Criminal complaints u/s 138 of the Negotiable Instruments Act were filed against M/s. Sakura Seimitsu India Limited and others, including the petitioners, who were summoned by the Metropolitan Magistrate u/s 138 r/w Section 141 of the Act. The petitioners sought quashing of the complaint, claiming they had resigned from their directorship before the cheques were presented for encashment.

2. Petitioners' resignation from directorship prior to cheque presentation:
The petitioners presented certified copies of Form 32 from the Registrar of Companies, showing their resignation dates: M.L. Gupta on 4th September 1997, Rajiv Gupta on 5th June 1998, and Sanjeev Gupta claimed resignation on 25th September 1995, supported by previous court judgments.

3. Vicarious liability of petitioners under Section 141 of the Negotiable Instruments Act:
The court noted that the essential ingredients of the offence u/s 138 include drawing the cheque, presentation, return unpaid, notice of demand, and failure to pay within 15 days. The respondent conceded that the cheques were presented after the petitioners had resigned, thus they could not ensure encashment or compliance with the demand notice. The court cited the Supreme Court's decision in "DCM Financial Services Limited v. J.N. Sareen and Anr." emphasizing that mere past involvement does not attract liability u/s 141.

4. Consideration of Form 32 as evidence:
The court held that certified copies of Form 32, being public documents, could be considered in proceedings u/s 482 of the Code of Criminal Procedure, especially when their authenticity is not disputed. The court referenced previous decisions, including "All Cargo Movers (I) Pvt. Ltd. v. Dhanesh Badarmal Jain and Anr." and "Minakshi Bala v. Sudhir Kumar," supporting the consideration of such documents at the initial stage.

5. Continuation of trial against other accused persons:
The court concluded that since the petitioners had resigned before the cheques were presented, they could not be held vicariously liable. The criminal complaints against the petitioners were quashed, subject to Sanjeev Gupta filing a certified copy of Form 32 within six weeks. The trial would continue against the other accused persons.