2022 (8) TMI 533 - HC - Indian Laws

Dishonor of Cheque - whether petitioner no. 3 has got any responsibility for the conduct of business of the company in connection with the issuance of impugned cheque by the company in respect of which proceeding under Section 138 of the Negotiable Instruments Act has been initiated by the complainant/opposite party? - HELD THAT - At the time when the offence under section 138 of N.I. Act was committed, all the three petitioners are in charge of and was responsible to the company for the conduct of the business of the company as alleged in paragraph 4 of the complaint. When the specific allegation in complaint supported by documents like DIR-12 and notice of resignation, it is made clear that petitioners were responsible for the day to day affairs of the company and it s decisions, the defence that petitioner no. 3 was no longer the directors of the company at the time when the cheque was presented and dishonoured, had to be substantiated by the accused/petitioner and this could be done only at the stage of trial. Since this is a proceeding, under Section 138/141 of the Negotiable Instruments Act, 1881 and pending for last six years, learned Metropolitan Magistrate, 20th Court at Calcutta is hereby requested to make expeditious disposal of the case and to dispose of the entire proceeding preferably within a period of six months from the date of the order, without granting any unnecessary adjournment to either of the parties. Application disposed off.

Summary

Issues:
1. Interpretation of resignation date of a director from a company.
2. Responsibility of a director for the conduct of business leading to the issuance of a dishonored cheque.
3. Scope of the High Court's power under section 482 of the Code of Criminal Procedure.

Analysis:
1. The case involves a dispute regarding the resignation date of a director, petitioner no. 3, from a company. The opposite party alleges that the resignation occurred on a later date than claimed by the petitioner, leading to conflicting assertions supported by documents like Form DIR-11 and DIR-12.

2. The key issue revolves around the responsibility of petitioner no. 3 for the company's actions, specifically in connection with the issuance of dishonored cheques. The complainant argues that the petitioner was still a director when the cheques were issued, contradicting the petitioner's defense of having resigned earlier. The court emphasizes the need for a trial to substantiate this defense.

3. The High Court, while dismissing the application under section 482 of the Code, highlights the limited scope of its jurisdiction in quashing complaints. It clarifies that at this stage, the court cannot delve into the merits of the accusations or conduct a detailed inquiry. The court's role is to ensure that the complaint, supported by relevant documents, prima facie discloses the accused's involvement, leaving detailed evaluation for the trial stage.

4. Referring to precedents, the court underscores that during preliminary stages, such as when charges are framed, the court's assessment is limited to determining if sufficient grounds exist to proceed against the accused. The court cannot delve into the evidence's appreciation, reserving detailed evaluation for the trial proceedings.

5. As a directive to expedite the case's disposal, the court instructs the Metropolitan Magistrate to conclude the proceedings within six months, urging against unnecessary adjournments. This emphasizes the importance of timely resolution in criminal cases to uphold justice and prevent undue delays in legal proceedings.