2021 (12) TMI 275 - HC - Indian Laws

Dishonor of Cheque - signatories of the defaulted cheque - Liability of Chairman / Managing Director - burden to establish the applicability of the exemption created by the second proviso to Section 141 of the Act - case of applicants is that no proceedings may continue against any of the accused persons/applicants by virtue of the bar created by the second proviso to Section 141 of the Act - HELD THAT - In the context of the present facts, none of the applicants namely Krishan Mohan Pandey, Manoj Kumar Pathak, Bhikari Singh and Yogesh Shukla are shown to be either officers of the Central Government or the State Government or a Financial Corporation owned or controlled either by the State Government or Central Government. It is also not shown that they had been nominated as Directors of the Corporation by virtue of that office held. On the contrary, it does appear that all the applicants were appointed as officers of the Corporation itself. The burden to establish the applicability of the exemption created by the second proviso to Section 141 of the Act was on the applicants. That burden not discharged, at present, no good ground is made out to offer any interference on such count. It is however made clear that the Court has not adjudicated the rights of the applicants on this issue. It may therefore remain open to the applicants to raise proper objection before the learned Magistrate, if such facts exist. Prima facie case is made out against applicant nos. 1 and 2 at this stage. Therefore, the application filed on behalf of applicant nos. 1 and 2 is dismissed. At the same time, it may be noted that the present application was filed in the year 2009 and there is an interim order operating in favour of the applicants since 03.06.2009. More than 12 years have passed - in absence of any specific allegation made against applicant no. 3-Bhikari Singh, the complaint may not be prosecuted further against him. Having done that there was no liberty available to the complainant and there was no requirement in law to implead the Managing Director. The Corporation is a juridical person, which was required to be impleaded (in the complaint lodged) to fulfill the requirement of law. That requirement however does not create any offence by its Managing Director. The entire proceedings of Complaint Case No. 283 of 2007 (Dinesh Tyagi Vs. Manoj Pathak), under Section-138 Negotiable Instruments Act, 1881, pending in the court of Special Chief Judicial Magistrate, Meerut against applicant no. 3 and Yogesh Shukla are quashed - Application allowed in part.

Summary

Issues involved:
Application to quash proceedings of Complaint Case under Section-138 Negotiable Instruments Act, 1881 based on the second proviso to Section 141 of the Act and lack of specific allegations against certain accused persons.

Analysis:
The judgment pertains to a 482 Cr.P.C. application seeking to quash proceedings of a Complaint Case under Section-138 Negotiable Instruments Act, 1881. The complaint arose from a dishonored cheque issued by the Corporation, naming specific individuals as accused persons. The applicants argued for quashing the proceedings citing the second proviso to Section 141 of the Act and lack of specific allegations against certain accused persons. The court examined the roles of the accused individuals in relation to the defaulted cheque. It found that applicant nos. 1 and 2, as signatories of the cheque, could not evade liability. However, applicant no. 3, being the Chairman, lacked specific allegations against him, leading to the quashing of proceedings against him. Similarly, Yogesh Shukla, the Managing Director, was unnecessarily impleaded, and since no specific allegations were made against him, the proceedings against him were also quashed.

The court delved into the second proviso to Section 141 of the Act, emphasizing the conditions for its application. It highlighted that the exemption under this proviso applies to individuals nominated as Directors by virtue of holding specific government or financial corporation offices, which was not the case for the accused in question. The burden to establish the exemption's applicability rested on the applicants, which they failed to discharge. Consequently, the court found no grounds to interfere based on this aspect. However, it clarified that the issue remains open for the applicants to raise before the trial court.

In conclusion, the court dismissed the application concerning applicant nos. 1 and 2, allowed the application for quashing proceedings against applicant no. 3 and Yogesh Shukla, and highlighted the necessity to implead the Corporation alone for legal purposes without attributing liability to its Managing Director. The judgment provided a nuanced analysis of the accused individuals' roles, the application of legal provisions, and the considerations for quashing proceedings based on specific allegations and statutory requirements.