2020 (12) TMI 137 - HC - Indian Laws

Dishonor of Cheque - whether as per the averments made in the legal notice, complaint and the presummoning evidence, the petitioner at the time of commission of offence was in charge of and responsible for the conduct of the business of the company and its day-to-day affairs? HELD THAT - In the present case, it is seen that in the legal notice issued by complainant company, a bald assertion was made that the co-accused i.e., Krishan Gopal Goyal (petitioner s husband) along with the petitioner had approached the complainant company for being appointed as their authorized distributor and subsequently, at the time when products were provided, they were received/acknowledged by M/s Beyond Tele Private Limited through both of its directors and other representatives. It was also stated that M/s Beyond Tele Private Limited, under instructions from both the directors, had issued the impugned cheque. The complainant company acknowledged the receipt of the reply however, despite coming to know of the aforesaid stand of the petitioner, no specific or further details regarding the date, time and place of the meetings with the petitioner were mentioned either in the complaint filed under Section 138 read with Section 142 of the N.I. Act or in the pre-summoning evidence. Even in the present proceedings, only written submissions have been filed but no reply has been filed by the complainant company either specifically denying the petitioner s stand or giving any further details qua the petitioner. A combined reading of the legal notice, the complaint as well as the pre-summoning evidence would show that in spite of the aforementioned specific stand taken on behalf of the petitioner, no additional averment has come detailing the role of the petitioner either in the complaint or in the pre-summoning evidence. Admittedly, the present petitioner neither signed the cheque in question nor signed nor witnessed the Distributorship Agreement. In fact, it has not even been averred that the petitioner was even present at the time of signing the agreement. The person who has signed the cheque in question and the Distributorship Agreement i.e., Krishan Gopal Goyal (husband of the petitioner) as well as the company i.e., M/s Beyond Tele Private Limited have also been summoned as accused in the complaint case along with the present petitioner. The present petition has been filed only on behalf of the petitioner. Thus, necessary ingredients required to constitute the offence under Section 141 of the N.I. Act qua the present petitioner are not satisfied - petition allowed.

Summary

Issues Involved:
1. Validity of the summoning order under Section 138 of the Negotiable Instruments Act, 1881.
2. Whether the cheque was issued towards security or discharge of legal liability.
3. The role and liability of the petitioner as a director under Section 141 of the N.I. Act.

Detailed Analysis:

1. Validity of the Summoning Order:
The petitioner challenged the summoning order dated 05.12.2019 issued by the trial court, summoning her for the offence under Section 138 of the Negotiable Instruments Act, 1881. The petitioner argued that the order was passed without due application of mind, asserting that the cheque in question was issued as security and not towards discharge of any legal liability. Moreover, it was contended that the petitioner, though a director, was not in charge of the day-to-day affairs of the company and thus not liable under Section 141 of the N.I. Act.

2. Cheque Issued Towards Security or Legal Liability:
The court examined whether the cheque was issued towards security or discharge of legal liability. Referring to the case of M/s Chesons Enterprises v. M/s Cadiz Pharmaceuticals Pvt. Ltd., it was emphasized that this is a matter of defense to be determined during the trial. The Supreme Court in HMT Watches Limited v. M.A. Abida & Another reiterated that such factual disputes should be resolved by the trial court after recording evidence, and not in a petition under Section 482 Cr.P.C.

3. Role and Liability of the Petitioner as a Director:
The court scrutinized whether the petitioner was in charge of and responsible for the conduct of the business of the company at the time of the offence. The Supreme Court in Gunmala Sales Private Limited v. Anu Mehta and Others summarized that a complaint must contain basic averments that a director was responsible for the company’s conduct when the offence was committed. The High Court may quash the complaint if there is unimpeachable evidence proving the director’s non-involvement.

In this case, the petitioner contended that she was not involved in the company’s daily affairs, a claim supported by the reply to the legal notice. The complainant failed to provide specific details or evidence contradicting this claim. The court found that the complaint and pre-summoning evidence lacked specific allegations detailing the petitioner’s role, thus failing the averment test.

Conclusion:
The court held that the necessary ingredients to constitute the offence under Section 141 of the N.I. Act against the petitioner were not satisfied. It emphasized that summoning an accused should not be a matter of course and must show due application of mind, as held in Pepsi Foods Ltd. and Another v. Special Judicial Magistrate and Others. Consequently, the summoning order against the petitioner was quashed, and the petition was allowed.

Communication:
A copy of the judgment was directed to be communicated electronically to the concerned trial court.