Pawan Kumar Ajmera vs Parenteral Drugs (India) Ltd. and Others

Prakash Shrivastava, J.—Heard. This order will also govern disposal of M.Cri.C. No. 6174/2012, which has been filed against the similar order on the identical grounds on the same fact situation.

The petitioner has filed the present M.Cr.C. u/s 482, Cr.P.C. challenging the order dated 7-8-2012 in Criminal Case No. 25920/2009, whereby the petitioner''s application for discharge has been rejected.

In brief, the facts of the present case are that respondent No. 1 had filed a complaint u/s 200 of Cr.P.C. alleging commission of offence u/s 138 of Negotiable Instruments Act on the plea that two cheques bearing No. 057026, dated 24-2-2008 for Rs. 50,00,000/- and No. 0570207, dated 25-2-2008 for Rs. 50,00,000/- were issued in the name of respondent No. 1 by respondent No. 2 company under the signature of respondent No. 3. Those cheques were presented by respondent No. 1 before the bank and were dishonoured on 22-8-2008. A notice was given by respondent No. 1 to the accused persons on 12-9-2008, which was received on 15-9-2008, but within 15 days the payment was not made, hence, the complaint was filed. The Trial Court had taken cognizance in the matter and rejected the petitioner''s application for discharge. Hence, the present petition has been filed.

Learned Counsel appearing for the petitioner has submitted that during the relevant time when the cheques were issued or dishonoured, the petitioner was not the Director of the company. He was also not given the statutory notice and in the complaint, no role of the petitioner has been disclosed, therefore, the complaint is liable to be quashed.

Learned Counsel for respondent No. 1 has supported the impugned order and has submitted that no error has been committed by the Trial Court in rejecting the petitioner''s application for discharge.

I have heard learned Counsel for the parties and perused the record.

The petitioner has placed on record copy of Form 32 of respondent No. 2 M/s. Phoenix Devcons Pvt. Ltd. submitted to Registrar of Companies. The said document reveals that the petitioner was appointed as Director of respondent No. 2 on 30-9-2008 and he had resigned w.e.f. 12-2-2011. Counsel for respondent No. 1 has neither disputed Form 32 filed by the petitioner before this Court nor he has disputed his these dates of becoming Director and resigning from the Directorship of respondent No. 2 company. In terms of the judgment of the Supreme Court in the matter of Anita Malhotra Vs. Apparel Export Promotion Council and Another, copy of Form 32 can be taken into account by this Court at this stage.

The complaint reveals that the cheques in question were issued on behalf of respondent No. 2 company signed by respondent No. 3 on 24-2-2008 and 25-2-2008 but at that time the petitioner was not a Director. The statutory notice was given on 12-9-2008 which as per the complaint was received by respondent Nos. 2 to 5 on 15-9-2008, on that date also the petitioner was not one of the Director of the company.

It is also worth noting that respondent No. 1 had given the statutory notice dated 12-9-2008 to respondent Nos. 2 to 5, but no such statutory notice was given to the petitioner, apparently so, because at that point of time the petitioner was not Director of the company. In reply to the petitioner''s application for discharge, the respondent No. 1 had admitted that no notice was given to the petitioner since it was not within the knowledge of respondent No. 1 that the petitioner was one of the Director. The Trial Court while rejecting the petitioner plea has relied upon the judgment of the Supreme Court in the matter of Ramraj Singh Vs. State of M.P. and others, reported in AIR 2009 SCW 3836, for the proposition that individual notice to Director is not necessary ignoring that in the present case, apart from the respondent No. 2 company, statutory notice individually was also sent by respondent No. 1 to respondent Nos. 3 to 5 and in the said notice there was no allegation against the present petitioner. That apart, the complaint also does not disclose any specific role played by the petitioner in the commission of alleged offence. The Trial Court has proceeded on the basis that the petitioner had given the receipt of cheques relating to the loan transaction but that was in respect of creation of liability and not discharge of liability.

The Supreme Court in the matter of Anita Malhotra (supra), has held that in the case of a Director, the complaint should specifically spell out how and in what manner the Director was in-charge of or was responsible to the accused company for conduct of its business and mere bald statement that he or she was in-charge of and was responsible to the company for conduct of its business is not sufficient.

The Supreme Court in the matter of Harshendra Kumar D. Vs. Rebatilata Koley Etc., , has held that the Director whose resignation is accepted by the company and that is duly notified to Registrar of the Companies cannot be made accountable and fastened with liability for anything done by company after acceptance of his resignation. The criminal liability of Director must be determined on the date of offence is alleged to have been committed. It has also been settled in this case that uncontroverted documents relating to accused Director''s resignation from post of Director of Company can be looked into at this stage.

In the matter of National Small Industries Corp. Ltd. Vs. Harmeet Singh Paintal and Another, , the Supreme Court has reiterated that the liability u/s 138 arises from being in-charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in the company. For making a person liable u/s 141(2), the mechanical repetition of the requirements u/s 141(1) is of no assistance but there should be necessary averments in the complaint as to how and in what manner the accused was guilty of consent and connivance or negligence and therefore, responsible u/s 141(2) of the Act.

In the matter of S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another, while answering the reference made by the two-Judges Bench in respect of necessary pleadings and liability of a Director, the 3-Judges Bench of the Supreme Court has held:-- 19. In view of the above discussion, our answers to the questions posed in the reference are as under:--

(a) It is necessary to specifically aver in a complaint u/s 141 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. This averment is an essential, requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.

(b) The answer to the question posed in sub-para (b) has to be in the negative. Merely, being a Director of a company is not sufficient to make the person liable u/s 141 of the Act. A Director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases.

(c) The answer to Question (c) has to be in the affirmative. The question notes that the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable u/s 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered u/s 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141.

In the present matter, since the petitioner was not the Director on the date of commission of offence, the statutory notice, as given to other accused persons was not given to the petitioner and there is no specific allegation against the petitioner in the complaint, therefore, continuation of the proceedings u/s 138 of Negotiable Instruments Act on the basis of complaint in question would be an abuse of process of the Court, therefore, it is found to be a fit case for exercising of the inherent jurisdiction u/s 482 of Cr.P.C. Accordingly, the complaint filed against the petitioner u/s 138 of Negotiable Instruments Act is quashed. The M.Cr.C. is accordingly allowed to the extent indicated herein above.

C.C. as per rules.