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TMI Blog2019 (10) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord to show the further steps taken by the said board of directors as contemplated under Section 168 of the Companies Act - The documents produced by the applicant only reveal that they have informed the Registrar of Companies (ROC) about their resignation and the same has accordingly recorded in the system, however the applicants have not produced form no. 32, which will reveal, whether the resignation of the applicants was accepted by the board of directors on behalf of the company and the company has accordingly informed and updated the Registrar of Companies about it. Therefore, it appears that, without having the approval and recommendation of the board of directors the Form No. DIR 11 has been accepted by the Registrar of the Companies. There is no denial to the fact that, till date the names of the applicants are being shown as director in the companies record. The documents placed on record by the applicants cannot be considered as uncontroverted or of impeachable character. Since said documents are disputed by respondent contending that, said documents do not fulfill the mandate of Section 168 of the Companies Act - As already observed if the averments in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly those persons who are 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. If a Director of a Company 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 a criminal offence under the provisions. The liability arises from being in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Section 141 of the said Act is a penal provision creating vicarious liability, and which, as per settled law, must be strictly construed. It is, therefore, not sufficient to make a bald cursory statement in a complaint that a Director (arrayed as an accused) is in charge of and responsible to the company for the conduct of the business of the company. This is in consonance with a strict interpretation of penal statutes, especially, where such statutes create vicarious liability. 5. The learned Metropolitan Magistrate made grave error in not taking into considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention of this Court to the affidavit in reply and submits that, though the applicants tendered resignation to the board of directors of the company, as per the requirement of law the said board of directors has to approve such resignation and forward it in Form No. DIR 32 to the Registrar of the Company for approval and acceptance. In support of the aforesaid contention, learned counsel appearing for second Respondent invites attention of the Court to Section 168 of the Companies Act. The present applicants are not simply the Directors of the Company but they are also the promoters of the company. The material placed on record would clearly indicate, their active role in the company. Learned counsel invites attention of this Court to the averments in the complaint and submits that, there are averments in the complaint that the applicants are responsible for day to day affairs of the company. The main accused was authorized by the present applicants to sign the cheques and therefore, the applicants cannot escape from their responsibility since the said cheque on presentation has been dishonoured. 9. It is submitted that, the Respondent No. 2 Transasia BioMedicals Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cheque Hamara Doctor Limited, Director Pahal Chawla signatory of the cheque and the applicants as responsible directors of Hamara Doctors Limited. Cognizance of the complainant was taken and process came to be issued against them. 12. It is further submitted that, the applicants in connivance with the other Director namely Pahal Chawla who is signatory of the cheque, have induced and represented Respondent No. 2 on behalf of Company Hamara Doctor Limited and based on it Respondent No. 2 had supplied products worth ₹ 8,00,000/(Eight Lacs) as ordered by the company vide order dated 27.09.2016. The applicants were the only directors apart from Pahal Chawla and were actively involved and were incharge of the day to day affairs of the company. It is pertinent to note that the disputed cheque was handed over to the Respondent No. 2 alongwith order dated 27.09.2016 duly signed and executed by Pahal Chawla on behalf of the Company Hamara Doctor Limited, at that time, the applicants were very much involved with the day to day affairs of the company Hamara Doctor Limited, as they were in Board of Directors and every decision making was done with their confirmation and knowle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant only reveal that they have informed the Registrar of Companies (ROC) about their resignation and the same has accordingly recorded in the system, however the applicants have not produced form no. 32, which will reveal, whether the resignation of the applicants was accepted by the board of directors on behalf of the company and the company has accordingly informed and updated the Registrar of Companies about it. 16. It is submitted that, the applicants were incharge and responsible for day to day affairs of the company as and when the order dated 27.09.2016 was placed before the Respondent No. 2. Upon they realising that post dated cheques issued by the company have got dishonoured and there was a single cheque remaining to be deposited, they with malafide intentions have resigned from the company as directors before the cheque could be deposited and had written resignation letters and submitted to the Board of Directors compromising of them and the other director Pahal Chawla, however as stated above the resignation was accepted or not needs to be proved by various documents which the applicants have failed to prove. 17. It is submitted that, at this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as may be prescribed and shall also place the fact of such resignation in the report of directors laid in the immediately following general meeting by the company: Provided that a [director may also forward] a copy of his resignation along with detailed reasons for the resignation to the Registrar within thirty days of resignation in such manner as may be prescribed. (2) The resignation of a director shall take effect from the date on which the notice is received by the company or the date, if any, specified by the director in the notice, whichever is later: Provided that the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure. (3) Where all the directors of a company resign from their offices, or vacate their offices under Section 167, the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in general meeting. 21. The aforesaid provision would make it abundantly clear that, the Director who wish to resign from his office, he / she has to give notice in wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate. The Supreme Court in the recent judgment in the case of Sau. Kamal Shivaji Pokarnekar Versus State of Maharashtra and others AIR 2019 SC 847 has taken a view that quashing the criminal proceedings is called for only in a case where the complaint does not disclose an offence, or is frivolous, vexatious, or oppressive. Paragraph nos. 4, 5, 6 and 9 of the said judgment are relevant and the same are reproduced herein under for the sake of ready reference: 4. The only point that arises for our consideration in this case is whether the High Court was right in setting aside the order by which process was issued. It is settled law that the Magistrate, at the stage of taking cognizance and summoning, is required to apply his judicial mind only with a view to taking cognizance of the offence, or in other words, to find out whether a prima facie case has been made out for summoning the accused persons. The learned Magistrate is not required to evaluate the merits of the material or evidence in support of the complaint, because the Magistrate must not undertake the exercise to find out whether the materials would lead to a conviction or not. 5. Quashing the crimi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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