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2002 DIGILAW 1611 (DEL)

V. K. VORA v. K. K. AHUJA

2002-10-10

O.P.DWIVEDI

body2002
O. P. Dwivedi, J. ( 1 ) THROUGH these petitions under Section 482, Cr. P. C. the petitioner seeks quashing of proceedings arising out of complaint cases No. 58 and 59 of 2001 filed by the complainant/respondent No. 1 under Section 138 of Negotiable Instrument act (hereinafter referred to the Act) pending in the court of Shri Rajinder Kumar, M. M. Delhi. ( 2 ) BRIEFLY stated the facts leading to these petitions are that on 14th May, 2001 respondent No. 1. K. K. Ahuja filed two complaints against the company M/s. Motorol Speciality Oils Limited and its office bearers. Complaint No. 58/2001 was regarding dishonouring of five cheques of Rs. 5 lacs each all dated 28th February 2001 whereas the other complaint No. 59/2001 was regarding dishonouring of three cheques for an amount of Rs. 3 lacs dated 31st October, 2000 Rs. 3 lacs dated 30th November and Rs. 10 lacs dated 20th December, 2000 respectively. As per allegations made in the aforesaid complaints, complainant K. K. Ahuja is carrying the business of supplying oils and lubricants and is the sole proprietor of M/s. Delhi Paints and Oil Traders. Against the said goods supplied by the complainant to the company M/s. Motorol Speciality Oils Limited, company had issued cheques. On presentation, these cheques were dishonoured. Petitioner was working as deputy General Manager in the said company. In both the complaints, said company was cited as accused No. 1 whereas petitioner was cited as accused No. 9. Regarding the role played by the petitioner in the company s dealings with the complainant, the only averment contained in the para No. 2 of the complaints was as follows:- para No. 2 : "the accused No. 1 is a limited company having its office at the address mentioned in the cause title. The accused Nos. 2 to 6 are the Director of the Accused No. 1, accused Nos. 7, 8 and 9 are the Vice President (Finance), General Manager and Deputy Manager of the accused No. 1 who are directly and actively involved in the financial dealings of the accused company with accused Nos. 2 to 9. Hence all the accused are liable for action under Section 138 read with Section 141 of the negotiable Instrument Act. " ( 3 ) IN preliminary evidence, complainant K. K. Ahuja examined himself as CW- 1. 2 to 9. Hence all the accused are liable for action under Section 138 read with Section 141 of the negotiable Instrument Act. " ( 3 ) IN preliminary evidence, complainant K. K. Ahuja examined himself as CW- 1. He made an identical statement in both the complaint cases to the effect that accused Nos. 2 to 6 are the Directors of the company and accused Nos. 7 to 9 are the Vice President (Finance), General Manager and Deputy General Manager respectively and they were responsible for the conduct of day to day business of the company at the time of commission of offence. On this basis, learned MM passed identical orders dated 3rd October, 2001 summoning the accused persons including the petitioner to face the trial under Section 138 of the Act. ( 4 ) FEELING aggrieved, petitioner has preferred these petitions under Section 482, Cr. P. C. for quashing the proceedings under Section 138 of the Act. ( 5 ) I have heard learned counsel for the parties and perused the record. ( 6 ) CONTENTION of learned counsel for the petitioner is that there is no averment in the complaint or in the statement of respondent No. 1/complainant specifying the role played by the petitioner in the company s dealings with the complainant. Simply saying that petitioner is directly and actively involved in the financial dealings of the accused company or they were responsible for the conduct of day to day business of the company is not enough. Section 141 of the Act which deals with offences by the company, reads as under :- section 141 Offences by companies (1) If, the person committing an offence under Section 138 is a company, every person (who, at the time the offence was committed, was in charge of, and was responsible to, the company to the conduct of the business of the company, as well as of the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against the punished accordingly: PROVIDED that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his Knowledge, or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1) where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any Director, Manager, secretary or Other officer of the company, such Director, Manager, secretary or Other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. ( 7 ) IN the case of Cdr. Shekhar Singh v. N. K. Wahi, 2002 (VI) AD (Delhi) 1021 V. S. Aggarwal, J. While dealing with a similar situation observed that there must be a specific allegation in the complaint as to the part played by the accused in the transaction. There should be clear and unambiguous allegation as to how the Directors are incharge and responsible for the conduct of the business of the company. In that case there were general allegations to the effect that the accused no. 1 is a limited company whereas accused Nos. 2 to 12 were the Directors/vice Presidents etc. and, were responsible for conducting the business of the company. In the preliminary evidence also, it was not clarified as to how every director was responsible for the conduct of the business of the company or incharge of the company. Summoning orders were quashed in that case. ( 8 ) RECENTLY in the case of Smt. Katte Sujatha v. Fertilizers and Chem, Travan- core Limited and Anr. , 2002 (3) JCC 1559 while dealing with the case under Section 138 of the Negotiable Instruments Act, Supreme Court found that there was nothing in the complaint or in the evidence to show that the petitioner was incharge of the business of the company or was responsible for the conduct of the business of the firm nor was there any allegation that she had connived with any other partner in the matter of issue of cheque. After referring to some earlier decisions of the Apex Court in the case of State of Karnataka v. Pratap Chand and ors. After referring to some earlier decisions of the Apex Court in the case of State of Karnataka v. Pratap Chand and ors. , 1981 SCR (3) 2000, KPG Nayar v. Jindal Menthol Limited, 2000 (6) scale 576 and Anil Hada v. Indian Acrylic Limited, JT 1999 (9) SC 223, it was held that "a person incharge" must mean that the person should be in over all control of the day to day business of the company or firm. Such person should be a party to the policy to be followed by the company. Company has various departments. Therefore, being company s employee or office bearers by itself does not mean that he is over all incharge of the affairs of the company or that he has some role to play in every dealings of company with its customers. ( 9 ) FROM the averments made in both the complaints and statement of the complainant, it does not appear that the petitioner was signatory on the cheques in question or was a party to the decision to allow get the cheques to be dishonoured. At the time of conceded, learned counsel for the respondent No. 1 considered the position that requisite details are not given either in the complaint or in the subsequent statement on oath. Learned counsel for the respondent No. 1 however, submitted that these details have been given in the counter-affidavit. Counter affidavit is no substitute for complaint on preliminary evidence. Summoning order has been passed on the basis of averments made in the complaint or stated in the preliminary evidence. ( 10 ) FOR these reasons, both the petitions are allowed. Order dated 3rd October, 2001 whereby the petitioner was summoned under Section 138 of the Act is hereby set aside. Proceedings arising out of complaint cases Nos. 58 and 59/2001, against the petitioner under Section 138 of the Act pending in the Court of learned metropolitan Magistrate are hereby quashed. ( 11 ) BOTH petitions stand disposed of.