Writ Petition for quashing complaint under Section 138 NI Act. Court held that complaint discloses offence against applicant Director due to specific allegations of responsibility for business, dismissing petition.
Writ petition dismissed; quashing of complaint and order of issuing process refused.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION
CRIMINAL WRIT PETITION NO. 390 OF 2013
Mrs.Khalida Abdul Aziz Lokhandwala ...Petitioner vs. The State of Maharashtra & Anr. ...Respondents
...Respondents
Mr.Santosh Patil i/b. Mr.P.M. Pradhan for Petitioner. Mr.D.P. Adsule, APP for State.
Mr.Ramesh K. Tiwari i/b. M/s.Bagla & Associates for Respondent No.2.
CORAM : S.C. DHARMADHIKARI, J
22nd APRIL, 2013
P.C. :-
This application under Section 482 of Cr.P.C. seeks quashing of a complaint being Criminal Case No.2871/M/2007. The offence alleged is punishable under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The order of issuing process dated 2nd November, 2007 and the complaint which is filed in the year 2007 both are sought to be quashed and set aside by filing criminal writ petition on 29th January, 2013.
2 It is undisputed that the trial is underway. However, the argument is that the complaint read as a whole and in entirety does not disclose any commission of offence by the applicant. Though the applicant is a Director in the company viz. Areef Rolling Mills Pvt.Ltd. - original accused no.1, she is not the signatory to the cheque nor is she responsible for the day to day affairs of the Company. No role is ascribed to her insofar as alleged offence is concerned, but it is not possible to accept this contention because in para 2 of the complaint
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it has been stated that accused no.3 / the applicant before me is one of the directors of accused no.1, the cheque is issued and signed by her husband, the Managing Director, which is the respondent no.2. Accused Nos.2 and 3 are both responsible for day to day activities of accused no.1.
3 Thereafter narrating the circumstances in which the cheque came to issued, this is what is alleged :
The Complainant states that on the date of Commission of Offence the Accused Nos.2 and 3 were incharge and responsible for the conduct of the business of the Accused No.1 Company. The offence has been committed by the Accused No.2 and Accused No.3 in connivance with each other. The Accused No. 3 was involved in the transaction through out. The Accused No. 3 used to place order for supply of the goods being subject matter of the Complaint. The Accused Nos. 2 and 3 were aware of the entire transaction including dishonour of the cheques but failed to make payment of the same even after receipt of Notice of Demand, therefore Accused Nos. 2 and 3 are also liable to be tried for the offence committed by Accused No. 1 Company under section 138 read with Section 141 of the Negotiable Instruments Act, 1881 as amended upto date.
Upon perusal of this paragraph and the complaint in its entirety, I am of the opinion that this is not a case which could be said to be covered by the
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judgment of the Hon'ble Supreme Court. The judgments of the Supreme Court right from the decisions in S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla & Ors. {2007 (4) JT 230} emphasise that merely he being a Director and alleging as such in the complaint in not enough. There has to be specific averment that the Directors who have been arraigned as an accused are responsible for conduct of the business of the company. The liability must be determined on the day on which the offence was committed. If there is no direct averment that the accused Director was responsible for the functioning of the company, then he could not have been issued process and the complaint does not disclose any offence. In such circumstances, the director cannot be convicted and sentenced.
4 However in paragraphs 2 and 19, a specific role of the applicant / accused has been set out. The evidence is going on. It will be for the applicant to establish and prove as to how these allegations are false. I have no doubt in my mind that the learned Judge will consider the entire material before passing the final orders in the complaint. At this stage, I do not find that the complaint read as a whole does not disclose commission of offence by the applicant and the order issuing process is, therefore, vitiated by any illegality or perversity requiring interference in my inherent jurisdiction and equally my writ jurisdiction.
5 The writ petition is devoid of any merits and is, therefore, dismissed.
(S.C. DHARMADHIKARI, J.)
2 issues framed by the court
Whether the complaint in quashing proceedings discloses the commission of offence against a Director who is not the signatory of the cheque.
Whether specific averments in the complaint are necessary to hold a Director liable under Section 141 of the Negotiable Instruments Act.
Colour shows how this judgement treated each authority
S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla & Ors.Explained¶19
S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla & Ors. {2007 (4) JT 230} · Who else cites this
2 provisions across 2 enactments
Mrs. Khalida Abdul Aziz Lokhandwala
The State of Maharashtra
Areef Rolling Mills Pvt. Ltd.
S.C. DHARMADHIKARI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
