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TMI Blog2021 (10) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... ank, the appellants were the Directors of the Company and were responsible for its business and all the appellants were involved in the business of the Company and were responsible for all the affairs of the Company. It may not be proper to split while reading the complaint so as to come to a conclusion that the allegations as a whole are not sufficient to fulfil the requirement of Section 141 of the NI Act. The complaint specifically refers to the point of time when the cheques were issued, their presentment, dishonour and failure to pay in spite of notice of dishonour - there are no hesitation in overruling the argument made by the learned counsel for the appellants. Indisputedly, on the presentation of the cheque of ₹ 10,00,000/ - dated 2nd June 2012, the cheque was dishonoured due to funds insufficient in the account and after making due compliance, complaint was filed and after recording the statement of the complainant, proceedings were initiated by the learned Magistrate and no error has been committed by the High Court in dismissing the petition filed under Section 482 CrPC under the impugned judgment - the High Court has rightly not interfered in exercise of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er impugned. 3. The seminal facts in brief necessary for the present purpose are stated as under. 4. The appellant nos. 1 and 2 in Criminal Appeal @ SLP(Criminal) No. 7573 of 2014 and appellant nos. 2, 3 and 4 in Criminal Appeal @ SLP(Criminal) No. 9520 of 2014 are the Directors of the appellant no. 1(Ameya Paper Mills Pvt. Ltd.) in Criminal Appeal @ SLP(Criminal) No. 9520 of 2014, the Private Limited Company established under the provisions of the Companies Act, 1956. It is the case of respondent no. 1 complainant that it is a Private Limited Company dealing in the business of production and selling spices under the name and style of M/s. Gharkul Industries Private Ltd. and the appellants being well acquainted with respondent no.1complainant and being in need of financial assistance for their business approached respondent no.1 complainant with a request to provide them financial assistance. Respondent no. 1complainant considering the relations and need of the appellants provided financial assistance and on negotiations, Memorandum of Understanding was executed which was signed by appellant no. 2Dilip Shrikrishna Andhare(Appellant no. 2 in Criminal Appeal @ SLP(Criminal) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- 04/04/08 507509 HDFC Bank 3,00,000/- 0/04/08 507500 HDFC Bank 2,70,000/- 28/04/08 507506 HDFC Bank 24,000/- 01/05/08 507507 HDFC Bank 1,27,000/- 06/05/08 507514 HDFC Bank 2,25,000/- 30/05/08 461861 S.B.I. 2,50,000/- 04/06/08 507519 HDFC Bank 4,00,000/- 27/06/08 507426 HDFC Bank 2,50,000/- 12/03/09 333407 S.B.I. 10,00,000/- 12/03/09 333408 S.B.I. 10,00,000/- 12/03/09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contents of the complaint further reveal that respondent no. 1 had demanded balance sheet of appellant no. 1 Company, which was provided and the appellants also confirmed the balance in their accounts by issuing letter dated 21st June, 2012. The cheque involved in the criminal case initiated by respondent no. 1 against the appellants is dated 2nd June, 2012. It is further averred in para 5 7 of the complaint that all Directors of the appellant Company are responsible for its business and all the appellants are involved in the business of the Company and are responsible for all the affairs of the Company. 9. After contending about the fact of issuance of cheque dated 2nd June, 2012 by the appellants to respondent no. 1 and dishonour of cheque for want of sufficient funds, on receipt of intimation regarding dishonour of cheque on 4th June, 2012, respondent no. 1 issued legal notice to the appellants on the address of appellant no. 1 Company as well as on their residential address by registered post acknowledgment due on 26th June, 2012 demanding amount of ₹ 10 lakhs which is alleged to have been refused by the appellants as per endorsement made by the Postal Department. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 141 of NI Act not being complied with, the order passed by the learned trial Judge in summoning the present appellants is nothing but a clear abuse of process of law and the finding which has been recorded by the High Court in the impugned judgment is not legally sustainable in law and in support of his submission has placed reliance on the judgments of this Court in S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another 2005(8) SCC 89 and Pooja Ravinder Devidasani Vs. State of Maharashtra and Another 2014(16) SCC 1. 16. Per contra, Mr. Pallav Shishodia, learned senior counsel for the respondents, while supporting the order passed by the High Court in the impugned proceedings, submits that the appellants in Criminal Appeal @ SLP(Criminal) No. 7573 of 2014 claimed themselves to be a non executive Directors but the record indicates that they are the Directors of the Company and in support thereof, Form No. 32 which has been obtained from the Registrar of Companies placed on record clearly indicates that all are the Directors of the Company as on 1st April 2007 and responsible to the Company for the conduct of business actively involved in the business of the Company and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismiss a complaint under Section 203 without even issuing process observed thus: 5. a complaint must contain material to enable the Magistrate to make up his mind for issuing process. If this were not the requirement, consequences could be far reaching. If a Magistrate had to issue process in every case, the burden of work before the Magistrate as well as the harassment caused to the respondents to whom process is issued would be tremendous. Even Section 204 of the Code starts with the words if in the opinion of the Magistrate taking cognizance of an offence there is sufficient ground for proceeding . The words sufficient ground for proceeding again suggest that ground should be made out in the complaint for proceeding against the respondent. It is settled law that at the time of issuing of the process the Magistrate is required to see only the allegations in the complaint and where allegations in the complaint or the charge sheet do not constitute an offence against a person, the complaint is liable to be dismissed. 21. After so stating, the Court analysed Section 141 of the NI Act and after referring to certain other authorities answered a reference which reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsible to the Company for the conduct of the business of the Company and if statutory compliance of Section 141 of the NI Act has been made, it may not open for the High Court to interfere under Section 482 CrPC unless it comes across some unimpeachable, incontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of cheques and asking him to stand the trial would be abuse of process of Court. Despite the presence of basic averment, it may come to a conclusion that no case is made out against the particular Director for which there could be various reasons. 24. The issue for determination before us is whether the role of the appellants in the capacity of the Director of the defaulter company makes them vicariously liable for the activities of the defaulter Company as defined under Section 141 of the NI Act? In that perception, whether the appellant had committed the offence chargeable under Section 138 of the NI Act? 25. We are concerned in this case with Directors who are not signatories to the cheques. So far as Directors who are not the signator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the High Court in dismissing the petition filed under Section 482 CrPC under the impugned judgment. 29. The submission of learned counsel for the appellants that they are the non executive Directors in the light of the documentary evidence placed on record by Form No. 32 issued by the Registrar of Companies, both the appellants are shown to be the Directors of the Company, still open for the appellants to justify during course of the trial. 30. In our considered view, the High Court has rightly not interfered in exercise of its jurisdiction under Section 482 CrPC for quashing of the complaint. 31. Before concluding, we would like to observe that the proceedings could not be processed further in view of the interim order passed by this Court dated 17th October 2014 and because of the instant appeals, the other cases instituted by the respondent(s)complainant have been held up before the trial Court. Since these are the old cases instituted in the year 2012 and could not be processed further because of the pendency of the appeals in this Court, we may consider it appropriate to observe that let all the three cases of which a reference been made in para 17 of this Judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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