2021 (3) TMI 1433 - HC - Indian Laws

Dishonour of Cheque - vicarious liability of petitioner - Petitioner seeks quashing of the present proceedings inter-alia on grounds that neither she is a Director nor she has signed the cheques in question nor she ever participated in any of meetings or negotiations with the complainant with regard to the transactions in question nor she ever executed any document with regard thereto, hence she has no role in the offence. HELD THAT - The prosecution under section 138 of the Act can be launched for vicarious liability against any person, who at the time of commission of offence was in charge and responsible for the conduct of the business of the accused company. Merely because the petitioner did not sign the cheques in question, is not decisive for launching prosecution against him. The plea of the petitioner that the offences were committed without his knowledge cannot be considered at this stage considering the fact that the Complainant has specifically averred that negotiations had taken place with him along with other co-accused persons and they were prima facie aware about the whole series of transaction. After all, it was not small amount that was being invested and it was because of the parties being acquainted with each other that the whole transaction materialized. Now, coming to the jurisdiction, suffice it to say that the Court, in exercise of its jurisdiction under Section 482 Cr.P.C. cannot go into the truth or otherwise of the allegations made in the complaint or delve into the disputed question of facts. The issues involving facts raised by the petitioner by way of defence can be canvassed only by way of evidence before the Trial Court and the same will have to be adjudicated on merits of the case and not by way of invoking jurisdiction under Section 482 Cr.P.C. at this stage - Upon analyzing the provisions of the N.I. Act, it is clear that Section 138 of the Act spells out the ingredients of the offence as well as the conditions required to be fulfilled before initiating the prosecution. The parameters of the jurisdiction of the High Court in exercising jurisdiction under Section 482 Cr.P.C, are now almost well-settled. Although it has wide amplitude, but a great deal of caution is also required in its exercise. The requirement is the application of well-known legal principles involved in each and every matter Adverting back the facts of the present case, this Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.P.C. at this stage - Though invariably the initial phase of a litigation under Section 138 of the N.I. Act depends on how well the pleadings or the allegations are laid down or articulated, by the complaint, in the ultimate analysis it is the trial that alone can bring out the truth so as to arrive at a just and fair decision for the parties concerned. There are no flaw or infirmity in the proceedings pending before the Trial Court. However, the Trial Court shall certainly consider and deal with the contentions and the defense of the petitioner in accordance with law - petition dismissed.

Summary

Issues Involved:
1. Quashing of the complaint under Section 138 of the Negotiable Instruments Act (N.I. Act).
2. Petitioner's role and responsibility in the alleged offence.
3. Jurisdiction of the High Court under Section 482 Cr.P.C.

Detailed Analysis:

1. Quashing of the Complaint under Section 138 of the N.I. Act:
The petitioner sought to quash the complaint filed by Respondent No. 2 under Section 138 of the N.I. Act, arguing that she was neither a director nor involved in the issuance of the cheques in question. The court noted that the complaint detailed specific averments against the petitioner, including her role in handling the company's finances and accounts. It was emphasized that the prosecution under Section 138 can be initiated against any person responsible for the conduct of the company's business at the time of the offence. The court held that the petitioner's arguments about her non-involvement could not be considered at this preliminary stage and should be addressed during the trial.

2. Petitioner's Role and Responsibility:
The petitioner argued that she had no role in the issuance of the cheques and was not responsible for the company's day-to-day affairs. However, the court found that the complaint contained specific allegations against her, including her involvement in the company's financial operations and her awareness of the transactions. The court referred to previous judgments, highlighting that the determination of a director's or officer's role is a question of fact to be established during the trial. The petitioner's defense that she did not sign the cheques or participate in negotiations was deemed insufficient to quash the complaint at this stage.

3. Jurisdiction of the High Court under Section 482 Cr.P.C.:
The court emphasized that its jurisdiction under Section 482 Cr.P.C. is limited and should be exercised with caution. It cannot delve into the truth of the allegations or disputed facts at this stage. The court reiterated that the issues raised by the petitioner require evidence and can only be adjudicated during the trial. The court cited the Supreme Court's decision in "State of Madhya Pradesh Vs. Yogendra Singh Jadon & Anr.", which held that the power under Section 482 Cr.P.C. cannot be exercised where allegations need to be proved in a court of law.

Conclusion:
The court concluded that the petitioner's arguments and defenses involve disputed questions of fact that must be resolved through trial. The trial court is responsible for considering and addressing these defenses in accordance with the law. Consequently, the petition to quash the complaint was dismissed, and the proceedings before the trial court were upheld.