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2002 DIGILAW 995 (MAD)

Vijay Kumar Syal v. Arihant Steels

2002-09-06

M.CHOCKALINGAM

body2002
Judgment :- What is sought for here is to quash the complaint in respect of the petitioner herein, who is shown as A-4 in C.C.No.6762 of 2000 on the file of the VII Metropolitan Magistrate, George Town, Madras. 2. As could be seen from the copy of the complaint filed, the respondent has filed the said complaint, which was taken cognizance by that court, alleging that in the business transaction, the first accused M/s.Rita bottling Machines Limited, represented by its Director Vinay Kumar Syal was liable to pay Rs.95,372/- along with interest; that towards that liability, the cheques, the subject matter of the complaint, were issued and signed by the second and third accused, as Authorised Signatories and Directors respectively, and the fourth accused, the petitioner herein was also added, since he was a Director of the Company, who was also responsible to answer. 3. Arguing for the petitioner, the learned Counsel would submit that it is true that the petitioner who is shown as the 4th accused, was originally a Director in the first accused Company; that he subsequently resigned therefrom; that a notice was issued by the complainant Company to the petitioner also along with the other accused, which was suitably replied stating that he has nothing to do with the transaction either, and he ceased to be the Director of the Company, and hence, he was not liable to answer; that despite the same, a complaint has been made with the averments that he was a Director of the first accused Company and was also responsible to answer, and under such circumstances, without any material whatsoever, the VII Metropolitan Magistrate has taken cognizance of the complaint including the petitioner also, and hence, it has got to be quashed. In support of his contentions, the learned Counsel relied on a decision of this Court rendered by M.KARPAGAVINAYAGAM, J., and reported in 2002 (3) CTC 342 (S.N.BANGUR AND THREE OTHERS VS. M/S.KLEN & MARSHALLS MFRS. & EXPORTERS PVT. LTD). 4. In support of his contentions, the learned Counsel relied on a decision of this Court rendered by M.KARPAGAVINAYAGAM, J., and reported in 2002 (3) CTC 342 (S.N.BANGUR AND THREE OTHERS VS. M/S.KLEN & MARSHALLS MFRS. & EXPORTERS PVT. LTD). 4. Countering to the above contentions, the learned Counsel appearing for the respondent would urge that the petitioner was a Director of the first accused Company during the relevant period; that it is true that cheques have been signed by the 2nd and 3rd accused on behalf of the 1st accused Company; that it has been clearly averred in paragraph 9 of the complaint that the 4th accused was in charge and responsible to the 1st accused Company for the conduct of the business of the 1st accused Company, and hence, he was also jointly and severally liable along with the other accused; that the letter what has been filed by the petitioner is a self-serving one; that apart from that, he continues to be the Director, and so long as, the petitioner continues to be the Director of the 1st accused Company, the contentions now put forth by him could not be accepted, and hence, this petition has got to be dismissed. 5. After careful consideration of the rival submissions, the Court is of the view that it is a fit case where the complaint in respect of the 4th accused, the petitioner herein, has got to be quashed. 6. At the outset, it has to be necessarily stated that except the bald allegations made in paragraph 9 of the complaint that the 4th accused was a Director, who was in charge and responsible to the 1st accused Company for the conduct of the business of the 1st accused Company, and hence, he was also jointly and severally liable, no material was placed in the hands of the lower court either at the time of taking the complaint on file or subsequently. According to the petitioner, he has ceased to be a Director of the 1st accused Company. According to the petitioner, he has ceased to be a Director of the 1st accused Company. Even assuming that the 4th accused continues to be the Director of the 1st accused Company, as contended by the respondent's side, the Court is of the view that the bald allegations, without any material whatsoever as to the participation of himself in the conduct of the business and the affairs of the 1st accused Company, which alone would make him responsible, would not be suffice to proceed against him. 7. The Court is unable to see anything to deviate from the decision of M.KARPAGAVINAYAGAM, J., reported in 2002 (3) CTC 342 , wherein it has been held that the allegation that the Directors are responsible for failure to make payment of cheque amount without any further material would not be sufficient to attract Section 141(2) of the Negotiable Instruments Act, 1881; and that the mere allegation that the Directors are responsible for failure to make payment of cheque amount is not sufficient for proving the offence under Section 141(2). Therefore, in the absence of any other material, the lower court cannot proceed with the complaint against the petitioner only based on the averments in the complaint. Hence, the proceedings in respect of the 4th accused, the petitioner herein is liable to be quashed. 8. In the result, this petition is allowed. The proceedings in C.C.No.6762 of 2000 on the file of VII Metropolitan Magistrate, George Town, Madras, against the petitioner/A-4 is quashed. The lower court is directed to proceed against A-1 to A-3 in accordance with law. Consequently, connected Crl.M.Ps. are closed.