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TMI Blog2010 (7) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... question of proving a fact which had not been mentioned in the complaint did not, therefore, arise in the facts of this case. This has prompted the High Court to observe that the Bank had relied on the mistaken presumption that as Directors, Rajiv Jain, Sarla Jain and the other Directors were vicariously liable for the acts of the Company. Admittedly, except for the aforesaid statement, no other material has been disclosed in the complaint to make out a case against the respondents that they had been in charge of the affairs of the Company and were responsible for its action. The High Court, therefore, rightly held that in the absence of any specific charge against the Respondents, the complaint was liable to be quashed and the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aying for discharge therefrom and quashing thereof, were allowed by the aforesaid judgment. Consequently, the Bank has also filed SLP(Crl.) Nos. 5094, 5095 and 5096 of 2008, which are also being heard along with SLP(Crl.) No. 5093 of 2008. 2. The facts as disclosed indicate that in 1993 the respondent No. 1 had availed of various credit facilities from the Petitioner Bank, including packing credit facility and overdraft facility. For whatever reason, the account of the Respondent No. 1 is alleged to have become irregular compelling the Bank to call upon the Respondent No. 1 Company to regularize its packing credit account. It appears that corporate guarantee for due repayment of the outstanding dues of the Respondent No. 1 Company was give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45(2), Cr. PC praying for recall of the order issuing summons and consequent discharge from the criminal proceedings initiated on the complaint filed by the Petitioner Bank on the ground that there was no privity of contract between the Petitioner Bank and the Respondent No. 3, Asian Consolidated Industries Ltd. ('ACIL'). On the other hand, the Petitioner Bank took the stand that being a "holder in due course", the Bank was entitled to maintain its complaint. 5. By its order dated 28-7-2003 the Trial Court rejected the application filed by the Respondents for discharge upon holding that under section 118(E) of the 1881 Act, a "holder" of a cheque is presumed to be a "holder in due course" unless and until the contrary is proved by the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould assume so. It was submitted that while correctly holding that to fasten liability on a Director it has to be proved that such Director was responsible to the Company and was in charge of its affairs and that such fact would have to be pleaded and proved, the High Court had erred in holding that the pleadings in paragraphs 12 and 21 of the complaint fell short of sufficient averments required to be made in a complaint under section 138 read with section 141 of the 1881 Act. 9. It was submitted that the decision of this Court in SMS Pharmaceuticals Ltd. v. Neeta Bhalla [2005] 8 SCC 89 1 did not affect the Bank's case, since it had been stated in the complaint in clear and unambiguous terms that the respondents as Directors of the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No. 3 on its own Bank which had dishonoured the cheques. Except for presenting the cheques to the Bank for collection, the Respondent No. 1 had no other role to play in the dishonour thereof. 13. We have carefully considered the submissions made on behalf of the respective parties and we are unable to persuade ourselves to differ with the judgment and order of the High Court. The judgment in SMS Pharmaceuticals Ltd.'s case (supra), which was relied upon by the High Court, while interpreting the provisions of sub-section (1) of section 141 of the 1881 Act, made it very clear that unless a specific averment was made in the complaint that at the time when the offence was committed, the person accused was in charge of and responsible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbarking on a fishing expedition to try and unearth material against the Director concerned. 15. In this case, save and except for the statement that the Respondents, Mr. Rajiv Jain and Sarla Jain and some of the other accused, were Directors of the accused Companies and were responsible and liable for the acts of the said Companies, no specific allegation has been made against any of them. The question of proving a fact which had not been mentioned in the complaint did not, therefore, arise in the facts of this case. This has prompted the High Court to observe that the Bank had relied on the mistaken presumption that as Directors, Rajiv Jain, Sarla Jain and the other Directors were vicariously liable for the acts of the Company. Admittedl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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