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TMI Blog2025 (1) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... ning Order dated 18.05.2018 passed in Complaint Case bearing No. 12892/2017 instituted by the Respondent Complainant under Section 138 read with Sections 141 and 142 of the Negotiable Instruments Act (hereinafter 'N.I. Act') in respect of dishonour of cheque dated 31.07.2017 in the sum of Rs. 4,26,72,257/- drawn in favour of the Complainant by M/s. Selco International Ltd, Respondent No. 2. 2. The fundamental grounds for challenge by the Petitioner are that a pre-condition for an offence to be made out under Section 141of the N.I. Act is that the person accused should be in charge and responsible for the conduct of the business of the Company at the time when the offence is committed under Section 138 of N.I. Act. However, the words of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question. 5. It is further argued that it is the defence of the Petitioner that he had resigned from the Company in 2003, though there is no document of resignation or Company Resolution placed on record. Even otherwise, the liability of the Petitioner is not confined to his being a Director in the Company, but is also on account of him being a Guarantor for the liability of the Company. 6. It is, therefore, submitted that there is no infirmity in the impugned Order, Summoning the Petitioner and the present Petition is liable to be dismissed. 7. Learned counsel for the Respondent has relied upon the judgment in Kirshna Texport & Capital Markets Ltd. vs. Ila A. Agrawal & Ors, Criminal Appeal No. 1220/2009, to argue that for filing a Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orised Signatory of the Company at the time of entering into the Agreement and had made repeated assurances that the money shall be repaid by them as well as by the Company jointly and severally and they even pledged their shares and gave personal as well as corporate guarantee to secure the loan amount". 12. Further averments made are that the Complainant had sanctioned a total sum of Rs. 455 lakhs for utilisation by the accused/Company, for the Project. In the Loan Agreement dated 23.11.1998, it was envisaged that the repayment of the loan amount shall be made by the accused persons along with the interest, as and when such conditions arose. 13. The second Loan Agreement dated 21.03.2002 was executed between the Borrower Company (Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eque was dishonoured for insufficient funds and consequently, after serving a Legal Notice dated on 06.09.2017; the present Complaint under Section 138 of the N.I. Act was filed. 19. From the entire averments made in the Petition, what emerges is that the Petitioner herein was admittedly the Director in the year 1998 at the time when the parties started negotiating initially. 20. There is not an iota of averment made against the Petitioner that he continued to be the Director or was responsible for day-to-day conduct of business at the time in 2017, when the impugned Cheque was issued. 21. Section 141 of the N.I. Act mandates that those Directors/Officials who are responsible for the day-to-day affairs of the Company are responsible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat only those Directors who are vicariously responsible for the acts of the Company, need not be served with an individual Notice. 26. In the present case, there is not a single averment to show that the Petitioner was in any way responsible for the day-to-day affairs of the Company on the date of issuance of Cheque and cannot be summoned in a Complaint under Section 138 of N.I. Act, on the basis of his personal liability. Moreover, the Legal Notice dated 06.09.2017 is addressed only to the Respondent No. 2/Company/M/s Selco International Ltd. and Respondent No. 3/Dr. Venkata Rama Krishna Govindraju a.k.a. Dr. G.V. Rama Krishna; it is not addressed to the Petitioner. 27. He is neither a signatory to the Cheque nor is a Director in the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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