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2022 (3) TMI 314 - HC - Indian LawsDishonor of cheque - fund insufficient - vicarious liability of Managing Director - Sections 138/141 read with Section 142 of Negotiable Instruments Act, 1881 - HELD THAT - It appears that the complaint case was filed on 14.05.2018 under Sections 138/141 read with Section 142 of the NI Act by the complainant firm, M/s. M. M. Enterprise, against the accused No. 1 M/s. Sanwaria Infra Space Pvt. Ltd., accused No. 2- Shri Mukharjee Bijit, accused No. 3 Sabari Bijit Mukharjee, both are Directors of M/s. Sanwaria Infra Space Pvt. Ltd., and the present petitioners Shri Girish Mulshankar Chaudhary and Smti. Kusum Choudhary, arraying them as accused No. 4 and accused No. 5, who were also the Directors of M/s. Sanwaria Infra Space Pvt. Ltd., for dishonour of the two cheques issued by the company, accused No. 1, on 27.03.2018, in discharge of their liability to the complainant firm. It also appears that while the cheques were issued on 27.03.2018, the present petitioners, Nos. 1 2, who were the Directors of the accused company No. 1, tendered their resignation on 01.02.2018 and 03.01.2018 respectively, much before issuance of cheques on 27.03.2018. Admittedly, they were not the signatories of both the cheques, which returned dishonoured from the bank. The petitioner nos. 1 2 had sent their resignation letters to the Registrar of the companies in the Form No. DIR-12 and DIR-11 and the same are uploaded in the website of Registrar of the Companies. It also appears that no specific role is assigned to the petitioners in the complaint except one omnibus statement to the effect that all the accused Directors are liable for issuing the cheques in question despite knowing well that the said cheques would be dishonoured due to insufficient fund and that none of the Directors had exercised any due diligence to prevent the commission of offence. Now the question before this Court is whether the aforesaid averment made in the complaint against the petitioner Nos. 1 2 are sufficient to fasten vicarious liability upon them - In the case in hand admittedly, the petitioners have not issued the cheques and they have tendered their resignation much before issuance of the said cheques, moreover, they were not the Managing Director of the Company. Time and again, it has been asserted by this Court that only those person who were in charge of and responsible for the conduct of the business of the Company at the time of commission of an offence will be liable for criminal action. A Director, who was not in charge of and was not responsible for the conduct of the business of the Company at the relevant time, will not be liable for an offence under Section 141 of the NI Act. In the case in hand, having considered the statements made in the complaint and also having considered the submissions advanced by the learned counsels of both the sides, this Court is left unimpressed that the aforementioned requirement is fulfilled here in this case. And as such further proceeding against the petitioners, in the learned court below, to the considered opinion of this court, is nothing but an abuse of the process of the court - In SABITHA RAMAMURTHY ANR. VERSUS RBS. CHANNABASAVARADHYA 2006 (9) TMI 490 - SUPREME COURT , it has been held by the Hon'ble Supreme Court that by verbatim reproducing the wording of the section without a clear statement of fact supported by proper evidence, so as to make the accused vicariously liable is a good ground for quashing proceedings initiated against such person under section 141 of the N.I. Act. Here in this case, the petitioners have not issued the cheques and they have tendered their resignation much before issuance of the said cheques. These are un-controvertible facts. Only a bald averment is made in the complaint against them that they were responsible for day to day affairs of the company. There is no specific averment against them to show, as to how and in what manner the petitioners are responsible for the conduct of the business of the Company. Moreover, they were not the Managing Director of the Company. There are no merit in the petition - petition dismissed.
Issues Involved:
1. Whether the petitioners were liable under Sections 138/141 of the Negotiable Instruments Act, 1881. 2. Whether the petitioners' resignations were effective before the issuance of the cheques. 3. Whether the complaint contained sufficient averments regarding the petitioners' roles in the alleged offence. 4. Whether the inherent power under Section 482 Cr.P.C. can be exercised to quash the proceedings. Detailed Analysis: 1. Liability under Sections 138/141 of the Negotiable Instruments Act, 1881: The petitioners sought to quash the complaint case under Sections 138/141 read with Section 142 of the Negotiable Instruments Act, 1881, on the grounds that they were not the Directors at the time of the issuance of the cheques. The complaint was filed against the company and its Directors for dishonour of cheques amounting to ?19,82,000 due to insufficient funds. The court noted that the petitioners were not signatories of the dishonoured cheques and had resigned before the cheques were issued. 2. Effectiveness of Resignations: The petitioners argued that they had tendered their resignations on 01.02.2018 and 03.01.2018, respectively, before the cheques were issued on 27.03.2018. The court found that the petitioners had submitted their resignation letters to the Registrar of Companies, which were reflected on the company's website. The respondent's argument that the resignations were not accepted by the company was not sufficient to hold the petitioners liable, as the resignations were tendered before the issuance of the cheques. 3. Sufficiency of Averments in the Complaint: The court examined whether the complaint contained specific averments regarding the petitioners' roles in the alleged offence. It was observed that the complaint only contained an omnibus statement that all accused Directors were liable without specifying how the petitioners were responsible for the issuance of the cheques. The court referred to the Supreme Court's ruling in Pooja Ravinder Devidasani vs. State of Maharashtra, which held that there must be specific averments showing how and in what manner the Directors were responsible for the conduct of the company's business. The court found that the complaint did not meet this requirement. 4. Exercise of Inherent Power under Section 482 Cr.P.C.: The court considered whether it was appropriate to exercise its inherent power under Section 482 Cr.P.C. to quash the proceedings. It was concluded that the continuation of the proceedings against the petitioners would be an abuse of the process of the court, as the complaint did not contain sufficient averments to fasten vicarious liability on the petitioners. The court also referred to the Supreme Court's decision in National Small Industries Corporation vs. Harmeet Singh Paintal, which emphasized the need for specific allegations to make a Director liable under Section 141 of the NI Act. Conclusion: The court allowed the petition and quashed Complaint Case No. 2845c/2018 pending before the learned SDJM-II, Kamrup (Metro) against the petitioners. The interim order was vacated, and the parties were directed to bear their own costs.
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