9911796707
TMI Blog2023 (4) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... date the offence was committed under Section 138 of the N.I Act by the company the appellant was not the director; he had nothing to do with the affairs of the company. Thus, it was held by the Hon ble Supreme Court that in such view of the matter, if the criminal complaints are alleged to proceed against the appellant, it would result in gross injustice to the appellant and tantamount to an abuse of the process of the court. In the instant case similar is the situation. The petitioners were not directors of the company on the date when the cheques were issued. It is not the case of the opposite party No. 2/complainant that they were the signatories of the cheques. The criminal proceedings against the present petitioners quashed - re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank for encashment but all the three cheques were dishonoured on 15th October, 2014 with the remarks Account blocked situation covered . Subsequently, the opposite party No. 2 issued a notice upon M/s Diamond Shipping Company Ltd demanding payment of the cheque amount within the statutory period of time. However, the company failed to pay the said sum and finally the opposite party No. 2 lodged a complaint against the company and the present petitioners. 4. It is contended by the petitioners that the cheques were issued on 21st June, 2014. While the petitioners retired from the post of Directors of the said company with effect from 10th June, 2014. By an order dated 2nd September, 2014 the Commissioner of Customs (Port), Government of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the uncontroverted documents relating to the appellant s resignation from the post of Director of the company. Since the appellant resigned from the post of Directorship before issuance of cheque, and his resignation was accepted, the erstwhile director cannot be prosecuted in a complaint for dishonor of cheques. If the complaint is allowed to proceed against the appellant, it would result in gross injustice to the appellant and tantamount to an abuse of the process of the court. 6. The next limb of argument made on behalf of the petitioners is that the bank account of the company was frozen by the Commissioner of Customs (Port), Government of India with effect from 2nd September, 2014. Therefore, freezing of bank account of the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before issuance of cheques and the account of the accused company was freezed by the order of a statutory authority or on account of the winding-up proceedings as against the accused company, but the accused company having issued the cheques for the subsisting liability is bound to see that the cheques are honoured at any cost. The freezing of the account was not on account of the act of the complainant, but it was on account of the act of the accused. The accused company, therefore cannot escape from the criminal liability on the ground that the cheques were returned dishonoured only on account of the freezing of the accounts of the accused. 9. It is further submitted by learned Advocate for the opposite party that the Negotiable Instru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of evidence in the Trial Court whether default on the part of accused No. 1 company and its Directors in paying the amount of the dishonoured cheque to the holder of the cheque had occurred because of overriding supervening event namely, the Order of the Reserve Bank of India restraining the petitioner company and its Directors from making payment by disbursing funds or disposing of its properties. This point can be decided on the basis of cogent, oral and documentary evidence at the time of trial. Therefore, application filed for winding-up of the company cannot save the company and its directors from penal liability under Section 138 of the N.I Act. 11. Having heard the learned Counsels for the parties and on careful perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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