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2019 (11) TMI 1153 - HC - Indian LawsDishonor of Cheque - Funds Insufficient and exceeds Arrangement - offence punishable under Section 138 of the Negotiable Instruments Act - petitioner have argued that the petitioner has resigned from directorship of the accused-company w.e.f. 21.01.2016 and the cheques were issued subsequently and therefore, the petitioner is not liable to be prosecuted - it is also argued that the petitioner is not authorized signatory of the cheques and therefore, the petitioner cannot be prosecuted. HELD THAT - There is no dispute with regard to judgments of the Hon'ble Supreme Court, relied upon by learned counsels for the petitioner, that a non-executive director or a director, who has resigned prior to issuance of the cheque(s), cannot be prosecuted and there should be a specific averment in the complaint that the director was incharge and responsible for the conduct of business of the accused-company. It is also not disputed that Form No.32 issued by the Registrar of Companies is a proof of resignation of the director. However, it is found that petitioner has, intentionally, not attached Form No.32 to show the date, when his resignation was accepted by Registrar of Companies. As per Rule 16 of the Companies (Appointment and Qualification of Directors) Rules, 2014, a director of the company, upon resignation, will forward his resignation in Form No.DIR-11 along with fees - A perusal of Form No.DIR-12, relied upon by the petitioner, shows that the declaration was signed by Aparna Puri, existing Director on 23.05.2016 and it was also digitally signed by the Company Secretary Anjum Goyal. Therefore, it is a disputed fact, as on which date, resignation of the petitioner was accepted and therefore, there is no illegality in the findings recorded by the trial Court that it could be an ante-dated information given by the petitioner to escape his liability. The petitioner neither in the application(s) for discharge moved before the trial Court nor in the grounds of petitions taken here, has relied upon any certificate from the office of Registrar of Companies, as to when his resignation was accepted and this information is withheld by the petitioner - There is a specific averment in para No.2 of the complaint that the petitioner was travelling abroad on behalf of accused No.1-company for export of the rice and was attending the offices of accused-company for carrying out its business and thus, he was responsible for day to day conduct and affairs of the company. The petitioner neither in the application(s) for discharge nor in the present petitions has denied the fact that as per statements of account of the accused-company pertaining to the relevant period, the liability towards the complainant(s) is not disputed and at that time, the petitioner was a partner, therefore, the argument, that the petitioner was having 0% share, is not acceptable, as even other partners are shown to be having 0% share and for the internal adjustment of directors, no fault can be found with the complaint(s) filed by the respondent(s). Considering the disputed questions of facts, which need to be proved by leading the defence evidence and also in view of the vague pleadings of the petitioner regarding non-denial/explanation of the various facts in the complaint(s) and the discrepancies in Form No.DIR-12, the Court find no ground to quash the criminal complaint(s) and all other proceedings arising therefrom - Petition dismissed.
Issues Involved:
1. Quashing of complaints under Section 138 of the Negotiable Instruments Act, 1881. 2. Petitioner's resignation as Director and its effect on liability. 3. Specific averments regarding the petitioner's involvement in the company's day-to-day affairs. 4. Applicability of precedents regarding non-executive directors and resigned directors. Issue-wise Detailed Analysis: 1. Quashing of complaints under Section 138 of the Negotiable Instruments Act, 1881: The court addressed the petitions to quash 103 complaints filed under Section 138 of the N.I. Act, alleging that the petitioner, as Director of M/s Amira Pure Foods Pvt. Ltd., issued cheques that were dishonored. The complaints included detailed descriptions of the cheques, amounts, and dates of issuance. The trial court had previously found a prima facie case against the petitioner and issued summoning orders. The petitioner’s revision petition was withdrawn to approach the trial court for discharge, which was subsequently dismissed. 2. Petitioner's resignation as Director and its effect on liability: The petitioner argued that he had resigned as Director effective from 21.01.2016, prior to the issuance of the cheques, and thus should not be held liable. He submitted Form No.DIR-11 and Form No.DIR-12 to the Registrar of Companies to support his resignation. The trial court, however, found discrepancies in these forms and questioned the timing of the resignation, suggesting it could be ante-dated to escape liability. The court emphasized that resignation alone does not absolve the petitioner of liability if he was involved in the transaction leading to the issuance of the cheques. 3. Specific averments regarding the petitioner's involvement in the company's day-to-day affairs: The complaints specifically averred that the petitioner was an active director involved in the company's operations, including purchasing raw materials, selling products, and traveling abroad for business. The petitioner did not adequately refute these claims with evidence such as passport records or affidavits. The court noted that the petitioner’s role during the transaction period and his responsibilities were sufficiently detailed in the complaints, establishing his involvement. 4. Applicability of precedents regarding non-executive directors and resigned directors: The petitioner cited several Supreme Court judgments, arguing that non-executive directors or directors who resigned before the issuance of cheques cannot be prosecuted. However, the court found these precedents inapplicable due to the specific facts of the case. The petitioner’s involvement in the company’s transactions during the relevant period was not sufficiently disproven. The court distinguished this case from others by noting the petitioner’s active role and the timing of his resignation relative to the transactions. Conclusion: The court dismissed the petitions, finding no merit in the arguments presented by the petitioner. The discrepancies in resignation documentation, lack of evidence refuting active involvement, and specific averments in the complaints led the court to uphold the trial court’s decision to proceed with the complaints under Section 138 of the N.I. Act.
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