Allowed

Sri Narayan Mahadevrao Biradar v. M/S Aarbee International

Karnataka HC20 Sept 2023CRL.P/1703/2021

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed a criminal petition under Section 482 Cr.P.C. seeking to quash proceedings for cheque dishonour against an accused who had ceased to be a Director of the company before the relevant cheques were issued. The court held he could not be deemed guilty under Section 141 of the NI Act and quashed the proceedings against him, but not against the company.

What did the court decide?

Impugned proceedings in C.C.No.51460/2020 against accused No.6/petitioner insofar as it relates to him are hereby quashed.

Sri Narayan Mahadevrao Biradar Vs M/S Aarbee… — Company and Corporate | Karnataka HC (2023)

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NC: 2023:KHC:33984 CRL.P No. 1703 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 20^TH DAY OF SEPTEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 1703 OF 2021

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BETWEEN:

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SRI NARAYAN MAHADEVRAO BIRADAR S/O MAHADEV, AGED ABOUT 65 YEARS, 2, 2ND MAIN, KAREKALLU, KAMAKSHIPALYA, BASVESHWARANAGAR, BENGALURU-560079

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BUT PRESENTLY RESIDING AT NO.1 NORTH WOOD LAYOUT, KAVERI NAGAR (VADDARAPALYA), HORAMAVU AGRA ROAD, BENGALURU-560043 …PETITIONER

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Digitally signed by B K MAHENDRAKUMAR Location: HIGH COURT OF KARNATAKA

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(BY SRI. VINOD PRASAD.,ADVOCATE)

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AND:

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M/S AARBEE INTERNATIONAL 29/1, IST FLOOR CHUNCHAGATTA MAIN ROAD YELACHANAHALLI BANGALORE-560068 A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER MR TARUN REDDY GUNNA S/O ASHOK REDDY GUNNA AGE 40 YEARS, PH.NO.9845004274.

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M/S KANVA FASHIONS LIMITED REGISTERED OFFICE - REPRESENTED BY M.D NANJUNDAIAH

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NC: 2023:KHC:33984 CRL.P No. 1703 of 2021

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NARAYANAPPA SURVEY NO.7/1 KONGENAHALLI KASABA HOBLI KORATAGERE TALUK TUMKUR DIST. TUMKUR-572129.

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a. M/S KANVA FASHIONS LIMITED NO.861, KANVA SRI SAI COMPLEX W O C ROAD, OPP. MODI HOSPITAL RAJAJINAGAR BANGALORE-560086

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b. M/S KANVA FASHIONS LIMITED 162, PYATE CHANNAPPA INDUSTRIAL ESTATE 3 MAGADI MAIN ROAD KAMAKSHIPALYA BANGALORE-560079

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…RESPONDENTS

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(BY SRI. G.A.PREMA KUMAR ADVOCATE FOR R1; R2 SERVED)

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THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE PROCEEDINGS INITIATED AGAINST THE PETITIONER HEREIN IN C.C.NO.51460/2020 WITH PCR.NO.56444/2019 ON THE FILE OF THE XXXIV ACMM, MAYO HALL, BANGALORE.

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THIS PETITION IS COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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This petition is filed challenging the proceedings for the offence punishable under Section 138 of Negotiable Instrument Act, 1881.

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3 - NC: 2023:KHC:33984 CRL.P No. 1703 of 2021

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Respondent No.1 herein has filed a private complaint under Section 200 Cr.P.C. alleging that the subject cheques issued by the company of which the petitioner herein/accused No.6 is the Director towards legally enforceable debt when presented for realization were returned for want of funds. The cognizance taken for the aforesaid offence is impugned in the present petition.

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Learned counsel for the petitioner/accused No.6 submits that as on the date when the subject cheques were issued, he had ceased to be the Director of the Company, which is evident from Form No.DIR-11-25122020 issued by the Registrar of Company. Therefore, he submits that the petitioner was not involved or responsible for the day-to-day affairs of the company as on the date when the subject cheques were issued so as to hold him vicariously guilty along with the company as specified under Section 141 of Negotiable Instrument Act.

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Learned counsel for respondent No.1/ complainant, on instructions, submits that the complainant does not dispute the fact that the petitioner ceased to be the

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NC: 2023:KHC:33984 CRL.P No. 1703 of 2021

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Director of the Company in question as on the date when the subject cheques were issued.

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Considered the submission made by the learned

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counsel for the parties.

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Section 141 of the N.I. Act deals with offences by companies, and it specifies that, if an offence is committed under Section 138 is a company, every person who, at the time of the offence was committed, was incharge of, and was responsible of 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.

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In the instant case, the petitioner had ceased to be

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the Director of the Company, and was not in charge of the affairs and was responsible for the conduct of the business of the company as on the date when the subject cheques were issued in favour of the complainant to hold him vicariously guilty along with the company.

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5 - NC: 2023:KHC:33984 CRL.P No. 1703 of 2021

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Therefore, the continuation of the criminal

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proceedings would be an abuse of process of law. Accordingly, I pass the following:

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ORDER

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i. The petition is allowed .

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ii. The impugned proceedings in C.C.No.51460/2020,

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pending on the file of the XXXIV Additional Metropolitan Magistrate, Mayohall Unit, Bengaluru, insofar as it relates to accused No.6/petitioner herein, is hereby quashed.

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In view of disposal of the petition, pending interlocutory applications, if any, do not survive for consideration.

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Sd/JUDGE

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List No.: 1 Sl No.: 46

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Sri Narayan Mahadevrao Biradar v. M/S Aarbee International

Case brief

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What did the court decide?

Sri Narayan Mahadevrao Biradar v. M/S Aarbee International

Case brief

What is this about?

What did the court decide?

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