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2009 DIGILAW 4845 (MAD)

S. Amudha, Daughter of, v. Subbaiah, Director, Srishti Estates & Investment (P) Ltd. VS Suresh Bafna Proprietor, Mansi Mercantile Co.

2009-11-11

K.MOHAN RAM

body2009
Judgment :- The petitioner in both the above Criminal Original Petition, who is the fifth accused in C.C.Nos.4789 and 3637 of 2001, respectively, on the file of the VIII Metropolitan Magistrate Court, George Town, Chennai, wherein she is facing trial for an alleged offence under Section 138 of the Negotiable Instruments Act, has filed the above Criminal Original Petitions seeking to quash all further proceedings therein. 2. A perusal of the complaints shows that towards the loan amount availed by the first accused-company from the respondent, the second accused, on instructions, insistence, inducement and consent of all the accused as directors of the first accused company, is alleged to have issued the cheques, (i) bearing Nos.865076, 837581 and 837591, all dated 12.03.2001, for a sum of Rs.75,000/- each, totaling Rs.2,25,000/-in favour of the respondent and (ii) No.865078, dated 12.03.2001, for a sum of Rs.75,525/-in favour of the respondent. When the said cheques were presented for encashment, the same have been returned / dishonoured with endorsements Insufficient Funds. After complying with the statutory requirements, the complaints were filed and the same have been taken on file. Being aggrieved by that, the above Criminal Original Petitions have been filed seeking to quash all further proceedings therein. 3. Heard the learned counsel on either side. 4. Learned counsel for the petitioner in both the above Criminal Original Petitions submitted that the petitioner herein was never the director of the first accused-company, who is the drawer of the cheques. In support of the said contention, the learned counsel sought to rely on two Form 32s filed by the first accused company before the Registrar of Companies, one is dated 210. 1991 and another is dated 30.06.1999. According to the learned counsel, the said two form 32s does not show that the petitioner was the director of the first accused- company either in the year 1991, when the company was incorporated, or on 30.06.1999 and therefore submitted that the complaints are not maintainable against her. He further submitted that in the complaints it is not stated as to how the petitioner is incharge of and responsible for the conduct of the business of the first accused-company and in the absence of such allegations, the provisions contained in Section 141 of the Negotiable Instruments Act ought not to have been invoked to array the petitioner as an accused. In support of the said contentions, the learned counsel based reliance on a decision of the Apex Court reported in 2009 (5) SCALE 670 (Ramrajsingh v. State of M.P. and Another). In the said decision, the Apex Court has referred to another decision of the Apex Court reported in 2007 (9) SCC 481 (N.K. Wahi v. Shekhar Singh and Ors.) wherein, in paragraph 8, it is laid down as under:- "8. To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them 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. The description should be clear. It is true that precise words from the provisions of the Act need not be reproduced and the court can always come to a conclusion in facts of each case. But still in the absence of any averment or specific evidence the net result would be that complaint would not be entertainable." The aforesaid view has been confirmed in 2009 (5) SCALE 670 (referred to supra) by a Full Bench. Learned counsel for the petitioner further submitted that if, in the light of the aforesaid decision, the allegations contained in the complaints are considered, no specific allegations are found in the complaints as to the nature of the part played by the petitioner. 5. On the aforesaid submissions the learned counsel for the respondent was heard. Learned counsel for the respondent, by referring to the averments contained in the complaints, submitted that it has been specifically averred in the complaints that the petitioner was the director of the first accused-company on the date of commission of the offence as well as on the date of issue of the cheques in question and it has also been averred in the complaints that she had participated in the negotiations and had induced the respondent to advance the amounts to the first accused and further submitted that it has also been stated in the complaints that the petitioner is incharge of and responsible for the conduct of the business of the first accused company and therefore submitted that these allegations are sufficient to attract Section 141 of the Act. 6. 6. As far as the two form 32s filed by the petitioner is concerned, the learned counsel for the respondent submitted that all the cheques in question were issued on 12.03.2001, but the two Form 32s relate to an anterior date and there is absolutely no material to hold that either on the date of cheques or on the date of arising of the cause of action the petitioner was not the director of the first accused-company and therefore submitted that this is a matter to the agitated before the trial court and that cannot be gone into by this Court in the above Criminal Original Petitions. 7. I have considered the said submissions made by the learned counsel on either side and perused the materials available on record. 8. As far as the contention of the learned counsel for the petitioner with respect to two Form 32s is concerned, it has to be pointed out that it is no doubt true that either in the year 1991 or in the year 1999, the petitioner is not shown as the director, as per Form 32s, but as rightly pointed out by the learned counsel for the respondent, the cheques in question were issued on 12.03.2001 and the cause of action for filing the complaints has arisen only in March 2001 and on that date there is no material to show that the petitioner was not a director of the first accused company and therefore on the basis of the two form 32s filed before this Court, it cannot be held that the petitioner was not the director of the first accused company on the date of arising of the cause of action. Therefore, the said contention of the petitioner has to be rejected and accordingly rejected. 9. But as far as the contention of the learned counsel for the petitioner regarding the want of specific allegations in the complaints are concerned, it is necessary to consider the exact averments contained in the complaints. 10. In both the complaints, in paragraphs 7 and 8, the following similar averments are found:- "7. ... accused No.2 is the Managing Director of the first accused company and accused No.3 to 5 are the directors of the first accused Company, and they are all managing and taking active part in the day to day administration of the first accused company. ... accused No.2 is the Managing Director of the first accused company and accused No.3 to 5 are the directors of the first accused Company, and they are all managing and taking active part in the day to day administration of the first accused company. It is further submitted that the above said persons informed the Complainant that as Board of Directors of the first accused Company they have ultimate control over the affairs of the first accused Company and assured due repayment of the loan taken from the Complainant, by the first accused company and they have undertook to clear the loan amount as well the cheques signed and issued to the Complainant by the second accused as Managing Director on behalf of the first accused Company. It is further submitted that on the instructions, insistence and inducement and with the consent of all the accused as Directors of the first accused Company, the second accused signed and issued cheques on behalf of the first accused Company as Managing Director of the first accused Company, for the loan amount availed to the first accused Company and as such accused No.2 to 5 are jointly and severally liable for the offence committed by them." 8. .... the said cheque was signed and issued by the second accused on the instructions, insistence inducement and consent of all the accused as directors of the first accused company, for the dues payable to the Complainant...." 11. The aforesaid averments have to be considered in the light of the law laid down by the Apex Court in the decision reported in 2007 (9) SCC 481 (referred to supra). As per the said decision, there must be a specific allegation in the complaint as to the part played by them in the transaction and there should be a clear and unambiguous allegation as to how the Directors are incharge and responsible for the conduct of the business of the company. The description should be clear. Thus, viewed in the light of the said decision, it has to be seen as to whether the allegations contained in the complaints satisfy the requirements. The description should be clear. Thus, viewed in the light of the said decision, it has to be seen as to whether the allegations contained in the complaints satisfy the requirements. It has been specifically averred in the complaints that as if the accused informed the complainant that as Board of Directors of the first accused Company they have ultimate control over the affairs of the first accused Company and assured due repayment of the loan taken from the complainant, by the first accused company and it is further alleged that they have undertook to clear the loan amount as well the cheques signed and issued to the complainant by the second accused as Managing Director on behalf of the first accused Company. It is further alleged that on the instructions, insistence and inducement and with the consent of all the accused as Directors of the first accused Company, the second accused signed and issued cheques. 12. In the considered view of this court, such clear averments do satisfy the requirements of Section 141 of the Act. Apart from the aforesaid averments, it cannot be excepted that the complainant should make further allegations and apart from that it has also been averred in the complaints that the petitioner is incharge of and responsible for the conduct of the business of the first accused company. Therefore, the said contention of the learned counsel for the petitioner cannot be countenanced. 13. For the aforesaid reasons, the above Criminal Original Petitions fail and the same are dismissed. Consequently, the connected Crl.M.Ps are closed. Since C.C.Nos.4789 and 3637 of 2001 on the file of the VIII Metropolitan Magistrate Court, George Town, Chennai, are pending right from the year 2001, the learned Magistrate is hereby directed to dispose of the same within a period of four months from the date of receipt of a copy of this order.