Paras Vanaspati Pvt. Ltd. and others vs M/s. Manorama Industries Private Limited

T.P. Sharma, J.—I.A. No. 3 for taking affidavits on record is allowed. Affidavits are taken on record. By this petition u/s 482 of the Cr.P.C., the petitioners have prayed for quashment of criminal proceeding pending before the Court of Judicial Magistrate First Class, Raipur in Criminal Case No. 29/2011 for the offence punishable u/s 138 of the Negotiable Instruments Act, 1881 (for short ''the Act'').

I have heard learned Counsel for the parties, perused the petition, copy of the complaint, copies of documents and copies of other material filed on behalf of the petitioners. I have also perused original record of the Court below.

Learned Counsel for the petitioners vehemently argued that complaint was filed on 28-10-2010 without any affidavit in support thereof The complaint has been registered on 18-11-2010 after perusing the documents filed on behalf of the complainant/respondent herein. On that day, the respondent''s authorised person, i.e., Deep Saraf was not present, therefore, it was not possible to examine him or to file evidence on affidavit. Without statement recorded under Sections 200-202 of the Cr.P.C., or evidence on affidavit in terms of Section 145 of the Act, the Court below has registered the complaint and thereby committed illegality. Learned Counsel further argued that petitioner Nos. 2 to 8 are Board of Directors of petitioner No. 1-Company. No specific allegation has been made relating to petitioner Nos. 3 to 8 in terms of Section 141 of the Act. Therefore, in absence of any specific allegation relating to conduct of business of the Company and responsibility of Board of Directors of petitioner No. 1-Company, i.e., petitioner Nos. 3 to 8, by taking cognizance and issuing process against petitioner Nos. 3 to 8, the Court below has committed illegality. Learned Counsel also argued that petitioner No. 2 is signatory of cheque of petitioner No. 1-Company and petitioner No. 1 is Company, therefore, complaint case may be registered against petitioner Nos. 1 and 2 after complying with the procedure prescribed in Chapter XV of the Cr.P.C., also may be in terms of Section 145 of the Act.

Learned Counsel for the petitioners placed reliance in the matter of S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another, in which the Supreme Court has held that it is necessary for the petitioners to aver that at the time the offence was committed the person accused was in charge of, and responsible for the conduct of business of the Company and without this averment, taking cognizance of the offence against members of Board of Directors and order of issuance of process are not sustainable under the law. Learned Counsel further placed reliance in the matter of Central Bank of India Vs. Asian Global Ltd. and Others, , in which the Supreme Court has specifically held that for launching prosecution against Directors under Sections 138 and 141 of the Act, there has to be a specific allegation in complaint in regard to part played by them in transaction in question. Allegations have to be clear and unambiguous showing that Directors were in charge of and responsible for business of Company. In absence of such specific and unambiguous allegations, criminal proceeding against such Directors is liable to be quashed.

On the other hand, learned Senior Advocate appearing on behalf of the respondent opposed the petition and submitted that the complainant has filed his evidence on affidavit on 18-11-2010, copy of which finds place on record. Learned Senior Advocate further submitted that the respondent has made necessary party including Board of Directors of petitioner No. 1-Company.

In Paras 2 and 8 of copy of the complaint, the respondent has made allegations against petitioner Nos. 2 and 8, Directors of petitioner No. 1-Company that they are responsible for the affairs of business of the Company. In Paras 6, 7 and 8 of the complaint, the respondent has further alleged that the cheque was presented and was dishonoured, then notice has been given to the petitioners, which has been replied by the petitioners'' Counsel vide reply dated 24-9-2010. Reply dated 24-9-2010 has been filed by the respondent along with the complaint. Aforesaid reply has been given on behalf of all the petitioners, which clearly reveals that six cheques have been received by all the petitioners, it was for security and not for payment of dues or due legally recoverable. Vide all paras of the reply including Paras 1 to 10, it has been specifically admitted by all the petitioners that they have received Crude Sal Fat (Oil) from the respondent for processing and they have delivered Crude Sal Fat (Oil) after due process. Reply dated 24-9-2010 is unambiguous and very specific relating to the act attributed to all the petitioners that they all are responsible to the Company for the conduct of business of the Company and they are carrying out the business of the Company.

While dealing with the question of order taking cognizance and issuance of process on the basis of evidence on affidavit in terms of Section 145 of the Act, this Court in the matter of Amarjit Singh Vs. Jasjit Singh, , has held that evidence on affidavit is sufficient compliance of statement of the complainant for the purpose of taking cognizance and issuance of process for the offence punishable u/s 138 of the Act.

While dealing with the question of quashment of FIR and criminal proceeding the Supreme Court in the matter of State of Haryana and others Vs. Ch. Bhajan Lal and others, has held that the Court is required to consider FIR or complaint and evidence collected in support of the same and if they do not disclose the commission of any offence and make out a case against the accused then the complaint may be quashed. As held in Ch. Bhajan Lal''s case (supra), the Court is required to consider the complaint and documents collected in support of the complaint. In the present case, alleged reply to notice dated 24-9-2010 of the petitioners admitting the fact that they are conducting the business of petitioner No. 1-Company is required to be considered.

In the matter of S.M.S. Pharmaceuticals Ltd. (supra), the Supreme Court has held that in case of complaint u/s 138 read with Section 141 of the Act, the complainant is required to make specific allegation against the member of Board of Directors that at the time of offence, the member of Board of Directors was in charge of and responsible for the conduct of business of the Company.

In the matter of Central Bank of India (supra), the Supreme Court has held that the complainant is required to make clear and unambiguous allegation showing that the Directors were in charge of and responsible for business of the Company.

In both the above cases, detailed admission relating to conduct of business of the Company, active participation in conduct of business of the Company by members of the Board of Directors and reply to the notice issued to them u/s 138 of the Act was not available for consideration. The cases of S.M.S. Pharmaceuticals Ltd. (supra) and Central Bank of India (supra), are distinguishable on facts to that of the present case.

Paras 2, 5, 6, 7 and 8 of the complaint coupled with reply to notice by all the petitioners dated 24-9-2010 are sufficient compliance and sufficient allegation relating to each of the Directors and their responsibility for conduct of business of the Company. By taking cognizance and issuing process against the petitioners on the basis of clear and unambiguous allegations made in the complaint coupled with reply to notice wherein the petitioners have specifically admitted the fact that they are responsible for conduct of business of petitioner No. 1-Company and they are carrying on the business, the Trial Court has not committed any illegality requiring any interference in exercise of extraordinary inherent jurisdiction in terms of Section 482 of the Cr.P.C., Consequently, the petition is dismissed. I.A. No. 1 stands disposed of.