Allowed

Mr Kamal Rameshbhai Sheth v. M/S Shivangini Properties Pvt. Ltd.

Karnataka HC7 Dec 2023CRL.P/3089/2018

Case brief

AI extract

What is this about?

High Court of Karnataka quashed proceedings against two non-executive independent directors in a cheque dishonour case, holding they were not in charge of the company's business or signatories to the cheque, thus not liable for prosecution under Section 138 NI Act.

What did the court decide?

Quashing of prosecution against petitioners in C.C. No. 28437/2016 under Section 138 of the Negotiable Instruments Act, 1881.

Mr Kamal Rameshbhai Sheth Vs M/S Shivangini… — Company and Corporate | Karnataka HC (2023)

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NC: 2023:KHC:44441 CRL.P No. 3089 of 2018 C/W CRL.P No. 3090 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 7^TH DAY OF DECEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ CRIMINAL PETITION NO. 3089 OF 2018

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C/W.

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CRIMINAL PETITION NO. 3090 OF 2018

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IN CRIMINAL PETITION NO.3089 OF 2018

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BETWEEN:

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MR. KAMAL RAMESHBHAI SHETH AGED 62 YEARS, HAVING HIS ADDRESS AT 42, AKAASHNEEM BUNGALOWS VASTRAPUR AHMEDABAD - 380 054.

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…PETITIONER

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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(BY SMT. SAHANA DEVANATHAN, ADVOCATE FOR SRI NIKHILESH RAO M., ADVOCATE)

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AND:

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M/S. SHIVANGINI PROPERTIES PVT. LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT HAVING ITS REGISTERED OFFICES AT #209, RAMANASHREE CHAMBERS LADY CURZON ROAD, BANGALORE - 560 001 REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE MR. NAGARAJA BABU

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…RESPONDENT

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(BY SRI M.M. ASHOKA, ADVOCATE)

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NC: 2023:KHC:44441 CRL.P No. 3089 of 2018 C/W CRL.P No. 3090 of 2018

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THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO 1.QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.28437/2016, BEFORE THE HON'BLE COURT OF THE XXV A.C.M.M., AT BANGALORE (ANNEXURE-A HERETO) 2.QUASH THE IMPUGNED ORDER DATED 26.12.2016 PASSED BY THE HON'BLE COURT OF THE XXV A.C.M.M., AT BANGALORE (ANNEXURE-B HERETO).

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IN CRIMINAL PETITION NO.3090 OF 2018

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BETWEEN:

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MR. ANISH KASTURBHAI SHAH AGED : 51 YEARS HAVING HIS ADDRESS AT: OPP. SHIPKI APARTMENTS, NR. SANJIVANI HOSPITAL NEW SHARDA MANDIR ROAD AHMEDABAD-380 007.

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…PETITIONER

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(BY SMT. SAHANA DEVANATHAN, ADVOCATE FOR SRI NIKHILESH RAO M., ADVOCATE)

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AND:

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M/S. SHIVANGINI PROPERTIES PVT. LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT HAVING ITS REGISTERED OFFICES AT #209, RAMANASHREE CHAMBERS LADY CURZON ROAD, BANGALORE - 560 001 REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE MR. NAGARAJA BABU

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…RESPONDENT (BY SRI M.M. ASHOKA, ADVOCATE) THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.28437/2016, BEFORE THE HON'BLE COURT OF THE XXV ADDL. C.M.M., BENGALURU (ANNEXURE-A HERETO) AND QUASH THE IMPUGNED ORDER DATED 26.12.2016 IN C.C.NO.28437/2016 PASSED BY THE XXV ADDL. C.M.M., BANGALORE (ANNEXURE-B HERETO

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NC: 2023:KHC:44441 CRL.P No. 3089 of 2018 C/W CRL.P No. 3090 of 2018

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THESE PETITIONS, COMING ON FOR HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioners in these petition have challenged the prosecution launched against them in C.C No.28437/2016 before the XXV Additional Chief Metropolitan Magistrate at Bangalore for the offence punishable under Section 138 of Negotiable Instruments Act, 1881.

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The respondent herein initiated proceedings to prosecute the petitioner and other accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881. The respondent described that the petitioner herein was a Director of the accused No.1. The Trial Court took cognizance of the offences and issued process. Being aggrieved by the same, the petitioner are before this Court.

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The learned counsel for petitioners contend that

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the petitioners are non executive independent directors in the accused No.1 and are neither incharge of the affairs of the accused No.1 nor responsible for the conduct of its

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4 - NC: 2023:KHC:44441 CRL.P No. 3089 of 2018 C/W CRL.P No. 3090 of 2018

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business. They contend that it is the accused No.2 and accused No.4, who are responsible to and incharge of the business of the accused No.1. This is however not disputed by the learned counsel for the respondent, who contends that the petitioners herein are indeed the non-executive independent Directors and they are not signatories to the

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Cheque.

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If that be so, the proceedings against the petitioner cannot continue. Consequently these petitions are allowed. The prosecution of the petitioners for the offence punishable under Section 138 of Negotiable Instruments Act in C.C.No.28437/2016 before the XXV Additional Chief Metropolitan Magistrate at Bangalore is quashed qua the petitioners. However, the prosecution of the other accused shall continue.

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List No.: 1 Sl No.: 22

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Sd/-

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JUDGE

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RHS

Mr Kamal Rameshbhai Sheth v. M/S Shivangini Properties Pvt. Ltd.

Case brief

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What did the court decide?

Mr Kamal Rameshbhai Sheth v. M/S Shivangini Properties Pvt. Ltd.

Case brief

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