2023 (9) TMI 706 - HC - Indian Laws

Dishonour of Cheque - legally enforceable debt or not - validity of cheque - cheques in question signed by only one Director of M/s Shalini Securities Private Limited - under what circumstances Amandeep Singh had issued the cheques in question in favour of Lokesh Thakkar particularly when he had resigned as Director from the M/s Shalini Securities Private Limited in the year 2012? - HELD THAT - M/s Shalini Securities Private Limited and Amandeep Singh at this stage cannot be allowed to take advantage of their acts committed by issuance of the cheques in question in favour of Lokesh Thakkar. Lokesh Thakkar is appearing to be the holder of cheques in question and is entitled for presumption under section 139 of NI Act. It is for M/s Shalini Securities Private Limited to establish on record by leading probable defence that the cheques in question were not issued towards discharge of legally enforceable debt and are not valid instruments in the eyes of law as Amandeep Singh was not having any authority to sign and issue the cheques in question. The issues raised in the present complaint require evidence and cannot be decided in the present petitions. The counsel for M/s Shalini Securities Private Limited referred the judgment passed by the Supreme Court in MRS. ANITA MALHOTRA VERSUS APPAREL EXPORT PROMOTION COUNCIL (APPAREL EXPORT PROMOTION COUNCIL) 2011 (11) TMI 532 - SUPREME COURT wherein it was observed that the criminal proceedings for the dishonour of the cheques in question against the non-executive ex-Director who has resigned from the company six years back are liable to be quashed. However in the present case the cheques in question were issued by Amandeep Singh from the account of M/s Shalini Securities Private Limited. The issue whether there is any liability against M/s Shalini Securities Private Limited and Amandeep Singh qua the cheques in question can only be decided by evidence during the trial. The present petitions are dismissed with the cost of Rs. 25, 000/- (Rupees Twenty Five Thousand only) each on M/s Shalini Securities Private Limited and Amandeep Singh which is to be paid to Lokesh Thakkar before the trial court on the next date of hearing.

Summary

Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act (NI Act).
2. Validity of cheques issued by an ex-director.
3. Joint trial of multiple cheques under Section 219 of the Code of Criminal Procedure, 1973.
4. Presumption under Section 139 of the NI Act.

Summary:

Issue 1: Legally enforceable debt under Section 138 of the NI Act

Lokesh Thakkar filed a complaint under Sections 138/141 of the NI Act against M/s Shalini Securities Private Limited and Amandeep Singh. Thakkar alleged that he invested Rs. 10 crores 40 lakhs in Amandeep Singh's project, of which Rs. 9 crores 12 lakhs remained unpaid. Amandeep Singh issued 11 post-dated cheques, which were dishonored due to "Funds Insufficient." The trial court took cognizance under Section 138 of the NI Act and summoned the accused.

Issue 2: Validity of cheques issued by an ex-director

M/s Shalini Securities Private Limited and Amandeep Singh filed petitions to quash the trial court's order, arguing that Amandeep Singh was neither a Director nor an Authorized Representative of the company when the cheques were issued. Amandeep Singh had resigned in 2012, and the cheques were issued in 2018. They contended that the cheques were issued without any authority and were invalid instruments.

Issue 3: Joint trial of multiple cheques under Section 219 of the Code of Criminal Procedure, 1973

M/s Shalini Securities Private Limited argued that the joint trial for 11 cheques violated Section 219 of the Code. They also claimed that no debt was due against the company as the transactions were between Thakkar and Singh in a personal capacity.

Issue 4: Presumption under Section 139 of the NI Act

The court noted that Thakkar had made necessary allegations against the accused, and it was for them to prove during the trial how the cheques came into Singh's possession and under what circumstances they were issued. The court held that the issues require evidence and cannot be decided at this stage.

Conclusion:

The petitions were dismissed with costs of Rs. 25,000 each on M/s Shalini Securities Private Limited and Amandeep Singh, to be paid to Lokesh Thakkar before the trial court on the next hearing date. The court emphasized that the issues raised require evidence and cannot be resolved in the present petitions.