Jai Narain Gupta vs State of Gujarat and Another

M.R. Shah, J.—RULE. Shri Gogia, learned advocate waives service of notice of Rule on behalf of Respondent No. 2 - original complainant and Shri L.B. Dabhi, learned Additional Public Prosecutor waives service of notice of Rule on behalf of Respondent No. 1 - State. In the facts and circumstances of the case and with the consent of learned advocates appearing for respective parties, both the applications are taken up for final hearing today.

As common question of law and facts arise in present two Criminal Miscellaneous Applications, they are being disposed of by this common judgment and order.

2.1 Criminal Miscellaneous Application No. 326 of 2011 has been preferred by the applicant - original accused No. 6 u/s 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "CrPC") to quash and set aside the impugned complaint being Criminal Case No. 4120 of 2009 filed by Respondent No. 2 - original complainant, for the offence punishable u/s 138 of Negotiable Instruments Act (hereinafter referred to as "N.I. Act"), pending in the Court of learned Additional Chief Judicial Magistrate, Gandhidham.

2.2 Criminal Miscellaneous Application No. 327 of 2011 has been preferred by the applicant - original accused No. 6 u/s 482 of the CrPC, to quash and set aside the impugned complaint being Criminal Case No. 5740 of 2009 filed by Respondent No. 2 - original complainant for the offence punishable u/s 138 of Negotiable Instruments Act, pending in the Court of learned Additional Chief Judicial Magistrate, Gandhidham.

2.3 Both the aforesaid complaints have been filed by Respondent No. 2 - original complainant against the accused persons including the applicant herein u/s 138 of N.I. Act, for dishonour of the cheques issued by the original accused No. 1 Company - M/s.R.N. Infra Communications Pvt. Ltd., signed by the original accused Nos. 2 and 3 as the authorised signatory of original accused No. 1 alleging inter-alia that the original complainant is a Company registered under the provisions of the Companies Act, having its office at Gudgav (Haryana) and accused No. 2 is the Chairman; accused No. 3 is the Vice President and accused No. 4 is the Managing Director and accused Nos. 5 and 6 are the Directors of accused No. 1 Company. That accused Nos. 2 to 6 are managing the day-to-day affairs of the Company - accused No. 1. That the accused have placed an order for supply of parts of Tower at various locations in India, and as per the purchase orders, they have supplied materials worth Rs. 2,49,21,983 to the original complainant. That the accused issued four cheques in question of State Bank of India, Overseas Branch, New Delhi, in favour of the original complainant and the said cheques were given in discharge of the said debts. That the said cheques have been signed by accused Nos. 2 and 3 as authorised signatory of accused No. 1. That the said cheques were issued with the consent/knowledge of accused Nos. 4 to 6. That accused Nos. 2 to 6 are aware about issuance of the above said four cheques in favour of complainant. That the aforesaid cheques were presented for realization of the amount of the said cheques which came to be dishonoured due to "payment stopped by drawer". That thereafter statutory notices were issued to the accused by RPAD. After the receipt of the said notices by the accused, accused did not make payment within stipulated time and therefore, it is alleged that the accused have committed offence punishable u/s 138 of N.I. Act.

2.4 That the learned Chief Judicial Magistrate issued Summonses against the accused persons inclusive of the applicant - accused No. 6, in the said complaint filed u/s 138 of N.I. Act and hence being aggrieved by and dissatisfied with the issuance of the Summonses against the applicant - original accused No. 6 in the aforesaid criminal complaints, filed u/s 138 of N.I. Act, the applicant - original accused No. 6 has preferred both these applications u/s 482 of the Code of Criminal Procedure to quash and set aside the aforesaid impugned two complaints.

Shri Gupta, learned advocate appearing on behalf of the applicant - original accused No. 6 has vehemently submitted that as such the applicant was never the Director of the original accused No. 1 Company, who has issued the cheque. It is submitted that applicant - original accused No. 6 is neither the signatory to the cheques in question nor in any manner responsible for the day to day functioning of the company and the cheques in question have not been issued by applicant. It is submitted that despite the above, the applicant has been joined as accused in the impugned complaints for dishonour of the cheques in question for offences punishable u/s 138 of N.I. Act.

3.1 It is further submitted by Shri Gupta, learned advocate appearing on behalf of the applicant that in a case with respect original accused No. 5 who was an Additional Director in accused No. 1 Company, this Court has quashed and set aside the said complaints qua original accused No. 5 vide judgment and order dated 15.02.2011 passed in Criminal Miscellaneous Application Nos. 12631/2010 and 12635/2010. It is submitted that therefore when the applicant - original accused No. 6 was never the Director of the Company nor was signatory to the cheques and has not issued the cheques in question, there is no question of holding the applicant vicariously liable u/s 141 of the N.I. Act. Therefore, it is requested to allow the present criminal miscellaneous applications and to quash and set aside the impugned complaints/criminal cases so far as the applicant - original accused No. 6 is concerned.

Shri Gogia, learned advocate appearing on behalf of Respondent No. 2 - original complainant has submitted that the original complainant has obtained "Director''s Profile" of applicant - accused No. 6 from internet in which the applicant is shown as the Director of original accused No. 1 Company and therefore, he has been arraigned as accused in the impugned complaints. It is submitted that there are necessary averments and allegations in the complaints against the applicant - original accused No. 6 making out a case for the offence punishable u/s 138 read with Section 141 of the N.I. Act and therefore, it is requested not to exercise the powers u/s 482 of the Code of Criminal Procedure and not to quash and set aside the complaints/criminal cases.

Shri Dabhi, learned Additional Public Prosecutor has requested to pass appropriate order.

Heard learned advocates appearing for respective parties at length. At the outset it is required to be noted that applicant - original accused No. 6 is arraigned as an accused in the aforesaid criminal cases for the offence punishable u/s 138 read with Section 141 of the N.I. Act, as Director of the original accused No. 1 Company who has issued the cheques in question. Therefore, the complainant is prima facie required to establish and/or satisfy that in fact applicant was at the relevant time the Director of original accused No. 1 Company. Learned advocate appearing on behalf of Respondent No. 2 - original complainant is not in a position to produce any documentary evidence even to prima facie establish that at the relevant time when the offence was committed, he was the Director of original accused No. 1 Company. Learned advocate appearing on behalf of Respondent No. 2 - original complainant has relied upon the "Director''s Profile" of applicant - original accused No. 6 and from that it is the case on behalf of Respondent No. 2 that applicant was the Director of original accused No. 1 Company. However, from the "Director''s Profile" of applicant, it cannot be said that he was the Director of the Company, if there is no other material to show that he was the Director of the original accused No. 1 Company who issued the cheque. Sometimes it might be that a "Director''s Profile" is misleading and/or incorrect. However, by that only, it cannot be said that he is the Director of the Company, if otherwise he is not. From the documents produced on record by the applicant such as Form No. 32 of the original accused No. 1 Company and the register maintained by the Registrar of Companies of accused No. 1 Company, nothing is on record that applicant - original accused No. 6 was Director of the Company at any point of time, more particularly, at the time of commission of the offence u/s 138 of the N.I. Act. Under the circumstances, when the applicant - original accused No. 6 was not the Director of the original accused No. 1 Company at the time of commission of offence, merely on the basis of the "Director''s Profile" of the applicant - original accused No. 6, he cannot be prosecuted for the offence punishable u/s 138 read with Section 141 of the N.I. Act. Therefore, to conclude the criminal proceedings against the applicant - original accused No. 6 would be abuse of process of law and would not be justified and therefore, this is a fit case to exercise powers u/s 482 of the Code of Criminal Procedure and to quash and set aside the impugned criminal cases/complaints and the process issued by the learned Magistrate against the applicant - original accused No. 6.

In view of the above and for the reasons stated above, both these applications succeed. The impugned order passed by the learned Chief Judicial Magistrate, Gandhidham, Kachchh in the complaints being Criminal Case No. 4120 of 2009 as well as Criminal Case No. 5740 of 2009, dated 03.09.2009 and 01.01.2010 respectively, pending in the Court of learned Chief Judicial Magistrate, Gandhidham Kachchh issuing process against the applicant original accused No. 6 for the offence punishable u/s 138 of the N.I. Act, are hereby quashed and set aside qua applicant herein - original accused No. 6 named Jai Narain Gupta only and consequently proceedings of aforesaid two impugned complaints being Criminal Case No. 4120 of 2009 as well as Criminal Case No. 5740 of 2009 are hereby terminated qua applicant herein - original accused No. 6 named Jai Narain Gupta only. Rule is made absolute accordingly in both the applications.