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2016 (11) TMI 78 - HC - Indian LawsCheques in question issued by the deceased Managing Director - Negotiable instruments act - summons issues - Held that - Instant is a case where the learned Magistrate has not gone into the depth of From-32, where the petitioner i.e., Ms. Richa Aggarwal, was not even an existing Director of the Company at the time of issuance of the said cheques in question. The learned Magistrate has not gone into the depth of the cause of action arisen qua against the petitioner, i.e., Ms. Mohini Aggarwal, as the cheques in question were issued by the deceased Managing Director, i.e., Mr. Vineet Aggarwal, of the Company on 20.09.2014 and subsequently, there was no occasion of actus reus on the part of Ms. Mohini Aggarwal. It is because of this reason she had replied to the notice dated 12.11.2014 that she does not owe any liability as alleged in the said notice. There is no other factor or circumstance which could show any change of state of mind of Ms. Mohini Aggarwal after issuance of the cheques in question by the deceased, i.e., Mr. Vineet Aggarwal, till the filing of the complaint petition CC. No. 2011/1/14 by the respondent to attract the provisions of Section 138 read with Section 141 of the Negotiable Instruments Act. The aforesaid facts on record only indicates liability if so there is, it could be of civil liability and not criminal liability, which could be put into motion under Section 138 read with Section 141 of the Negotiable Instruments Act
Issues Involved:
1. Validity of the impugned summoning order dated 28.01.2015. 2. Applicability of Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. 3. Liability of the petitioners as Directors of the company. 4. Existence of debt or liability at the time of cheque issuance. 5. Procedural compliance and application of mind by the Magistrate. Issue-wise Detailed Analysis: 1. Validity of the Impugned Summoning Order Dated 28.01.2015: The petitions arose from the summoning order passed by the Metropolitan Magistrate (MM) in CC No. 2011/1/14 on 28.01.2015. The petitioners challenged this order by filing CRL.M.C. 4919/2015 and CRL.M.C. 4028/2015. The court scrutinized the summoning order and found that the Magistrate did not adequately examine the Form-32 and the roles of the petitioners at the time of cheque issuance, leading to the conclusion that the summoning order lacked sufficient application of mind. 2. Applicability of Section 138 read with Section 141 of the Negotiable Instruments Act, 1881: The complaint was filed under Section 138 read with Section 141 for the dishonor of cheques issued by M/s Meenakshi Sarees Pvt. Ltd. The court noted that Section 141 creates vicarious liability and must be strictly construed. It emphasized that only those in charge of and responsible for the conduct of the company's business at the time of the offense can be held liable. The court referenced the Supreme Court's decision in National Small Industries Corporation vs. Harmeet Singh Paintal & Anr., highlighting that mere designation as a Director is insufficient without specific allegations of involvement in the company's day-to-day operations. 3. Liability of the Petitioners as Directors of the Company: The petitioners argued that they were not Directors of the company at the time of cheque issuance. The court examined Form-32, which showed Ms. Richa Aggarwal was appointed as an Additional Director on 22.09.2014, two days after the cheques were issued, and Ms. Mohini Aggarwal was a Director since 09.03.2009. The court found no evidence of their involvement in the issuance of the cheques or in the company's day-to-day operations at the relevant time, thus negating their liability under Section 138. 4. Existence of Debt or Liability at the Time of Cheque Issuance: The petitioners contended that there was no existing liability at the time the cheques were issued. The court noted that the cheques were issued by Mr. Vineet Aggarwal, who acknowledged the debt and issued the cheques on behalf of M/s Meenakshi Sarees Pvt. Ltd. However, Mr. Vineet Aggarwal died on 25.09.2014, shortly after issuing the cheques. The court found that the petitioners were not aware of the cheques and had no role in their issuance, thus no cause of action arose against them under Section 138. 5. Procedural Compliance and Application of Mind by the Magistrate: The court emphasized that summoning an accused in a criminal case is a serious matter and requires careful scrutiny of the evidence. It cited the Supreme Court's judgment in Pepsi Foods Ltd. and Anr. vs. Special Judicial Magistrate and Ors., which mandates that the Magistrate must apply their mind to the facts and law before summoning the accused. The court found that the Magistrate failed to adequately consider the evidence and the petitioners' roles, leading to the improper summoning order. Conclusion: The court concluded that the summoning order dated 28.01.2015 was not justified as the petitioners were not in charge of the company's business at the time of the alleged offense. Consequently, the petitions CRL.M.C. 4919/2015 and CRL.M.C. 4028/2015 were allowed, the impugned order was set aside, and the personal and bail bonds were discharged. No costs were ordered.
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