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TMI Blog2025 (2) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... . The brief facts of the present case are that the respondent bank/complainant extended a loan of Rs. 19,00,00,000/- to M/s. Kwality Limited/accused no. 4 on 01.02.2018. The petitioner is the Managing Director of M/s. Kwality Limited. It is alleged that M/s. Kwality Limited persistently neglected to repay the principal, interest and charges in respect of the loan. It is alleged that thereafter a legal notice dated 25.07.2018 was sent to M/s. Kwality Limited to make the outstanding payment, however no reply to the said legal notice was ever given to the complainant. 4. Subsequently, it is alleged that on 31.08.2018, the employees of the complainant visited the office of M/s. Kwality Limited wherein the petitioner provided them with a cheque bearing no. 064898 dated 30.09.2018 for a sum of Rs. 1,33,50,000/-. The said cheque was issued by Devidayal Radheshyam Traders Private Limited ('DRTPL') /accused no. 1 and signed by one Makardhwaj Kumar/accused no. 2, stated to be director DRTPL. It is alleged that thereafter, in order to confirm the veracity of the cheque, the employees of the complaint visited the registered office of DRTPL where they met one Mr. Chandan who represented himsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se that petitioner is neither the signatory to the dishonoured cheque nor is a director of DRTPL through the account of which the subject cheque was issued. He submitted that the proceedings have rightly been initiated against the accused company - DRTPL, and the authorised signatory being, Makardhwaj Kumar who has been arrayed as accused no. 2. 11. He submitted that the only allegation against the petitioner is that he was the one who handed over the cheque to the officials of the complainant. He submitted that even if the allegations made in the complaint are taken at the highest, yet it was DRTPL who had decided to repay the debt taken by M/s. Kwality Limited thereby making the same a legally enforceable debt against DRTPL. He consequently submitted that no liability can be fastened on the petitioner, who is neither the signatory nor the issuer of the subject cheque. 12. In its reply, the complainant submitted that M/s. Kwality Limited failed to make repayments of the principal amount, interest and charges in respect of the loan from the beginning. It is submitted that M/s. Kwality Limited scheduled a meeting with the complainant on 31.08.2018 wherein the petitioner handed ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the criminal process. Also because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to rebut the presumption. 18. Situated thus, to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial Court. Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited." (emphasis supplied) 15. In line with the dictum of the Hon'ble Apex Court in Rathish Babu Unnikrishnan v. State (NCT of Delhi) (supra), thus, while exercising the power under Section 482 of the CrPC to quash a complaint at the pre-trial stage, it is pertinent for this Court to examine whether the factual defence is of such impeachable nature that the entire allegations made in the complaint is dispr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the NI Act. 18. In S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla : (2005) 8 SCC 89, the Hon'ble Apex Court analysed Section 141 of the NI Act and observed as under: "10. While analysing Section 141 of the Act, it will be seen that it operates in cases where an offence under Section 138 is committed by a company. The key words which occur in the section are "every person". These are general words and take every person connected with a company within their sweep. Therefore, these words have been rightly qualified by use of the words: 'Who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence, etc.' What is required is that the persons who are sought to be made criminally liable under Section 141 should be, at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision. It is only those persons who were in charge of and responsible for the conduct of business of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the accused Company for the conduct of its business. This is in consonance with strict interpretation of penal statutes, especially, where such statutes create vicarious liability. (emphasis supplied) 20. From a perusal of the record, it transpires that the petitioner is being sought to made an accused on account of being the Managing director of M/s. Kwality Limited, the borrower of the subject loan. It is not in doubt that when the principal offender under Section 138 of the NI Act is a company, then every person who is in charge of the affairs of the company, at such time when the subject cheque is dishonoured would be liable. However, it is evident from a perusal of the record that the petitioner is a Managing Director of M/s. Kwality Limited, admittedly, the borrower of the loan. 21. The subject cheque was admittedly issued by DRTPL, and signed by Makardhwaj Kumar, director of DRTPL. The only role attributed to the petitioner in the instant case is that the petitioner had handed over the cheque admittedly issued by DRTPL to the complainant. However, merely because the subject cheque was handed over by the petitioner, the same does not shift the onus from the drawer in ..... 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