2017 (3) TMI 1852 - HC - Indian Laws

Dishonor of Cheque - legally enforceable debt or not - vicarious liability fastened upon the shoulder of the petitioner or not - resignation from the Directorship of the Company - HELD THAT - The resignation of the petitioner and resolution passed by the Company, accepting resignation of the petitioner, is disputed by the respondent No. 2, which is a factual aspect. Forwarding of Form No. 32 by the petitioner to the Registrar of Companies would also be a matter of trial, and therefore, this Court cannot enter into the facts of the case, or the dispute, while deciding application for discharge under section 482 of the Code, and therefore, liability, if any, of the petitioner with the Company shall be decided by the trial court, on leading of evidence by either sides and not by this Court, at this juncture. The present petition fails and is hereby dismissed.

Summary

Issues Involved:
1. Quashing of the complaint under Section 482 of Cr.P.C.
2. Vicarious liability under Section 138 of the Negotiable Instruments Act.
3. Validity and acceptance of resignation from directorship.
4. Discrepancies in the date of appointment and resignation.
5. Procedural compliance with Form No. 32 under the Companies Act.

Issue-wise Detailed Analysis:

1. Quashing of the complaint under Section 482 of Cr.P.C.:
The petitioner sought to quash Criminal Case No. 926/2011 pending in the court of the Chief Metropolitan Magistrate, Ahmedabad, under Section 482 of the Code of Criminal Procedure. The petitioner argued that he was not involved in the alleged offence under Section 138 of the Negotiable Instruments Act and was unnecessarily dragged into the proceedings. The court, after considering the arguments and evidence, dismissed the petition, stating that the factual disputes regarding the petitioner’s resignation and involvement in the company’s affairs need to be adjudicated by the trial court.

2. Vicarious liability under Section 138 of the Negotiable Instruments Act:
The petitioner contended that he was not responsible for the company’s conduct when the alleged offence occurred as he had resigned from his position before the issuance and dishonor of the cheque. The court noted that the petitioner’s resignation and his role in the company were disputed facts, and thus, the question of vicarious liability could not be decided in the proceedings under Section 482 of Cr.P.C. The trial court is the appropriate forum to determine these issues based on evidence.

3. Validity and acceptance of resignation from directorship:
The petitioner claimed to have resigned from the company on 4th March 2010, which was accepted by the Board of Directors, and he ceased to be a Director from 5th March 2010. However, the respondent disputed this, arguing that the resignation was not communicated to him, and the petitioner continued as a Director. The court held that the validity and acceptance of the resignation are factual matters that need to be examined by the trial court through evidence.

4. Discrepancies in the date of appointment and resignation:
There were discrepancies in the petitioner’s date of appointment as Executive Director (Sales), with conflicting dates of 16th April 2009 and 1st August 2009. The court observed that these discrepancies, along with the disputed resignation, are factual issues that cannot be resolved in a petition under Section 482 of Cr.P.C. and must be addressed by the trial court.

5. Procedural compliance with Form No. 32 under the Companies Act:
The petitioner argued that he had filed Form No. 32 with the Registrar of Companies, indicating his resignation. However, the respondent contended that this was done with a delay and that the resignation was not communicated to him. The court referred to the Supreme Court’s decision in Malwa Cotton and Spinning Mills Limited Vs. Virsa Singh Sidhu, which held that the effect of delayed presentation of Form No. 32 is a matter for trial. The court concluded that the compliance with Form No. 32 and its implications are factual issues to be determined by the trial court.

Conclusion:
The petition to quash the complaint was dismissed, with the court emphasizing that the factual disputes regarding the petitioner’s resignation, role in the company, and compliance with procedural requirements must be resolved by the trial court through evidence. The interim relief granted earlier was vacated, and the notice was discharged with no order as to costs.