Research › Search › Judgment

J&K High Court · body

2011 DIGILAW 542 (JK)

Devender Kumar Aggarwal v. State J&K and Anr.

2011-10-11

J.P.SINGH

body2011
1. The petitioner-Devender Kumar Aggarwal seeks quashing of proceedings in respondent-JSB Aluminium's Complaint under Section 138 of the Negotiable Instrument Act, 1881 against him as Director AR Industries Private Limited for non-payment of Rs. 7,61,603/-, Rs. 5,26,056/-, Rs.6,28,619/- and Rs. 4, 48, 037/- covered by the dishonoured Cheques drawn on the State Bank of India SIB Faridabad Haryana which the Company had issued in favour of the Complainant to discharge its existing liability. 2. Learned counsel for the petitioner submitted that the process issued against the petitioner as one of the Directors of AR Industries Private Limited was an abuse of the process of Court, in that, he was not the Director of the Company when the Cheques in question were issued and, as such, could not be proceeded against on alleged plea of his vicarious liability and that in the absence of requisite detailed statement in the Complaint that he was responsible for the business and conduct of day to day affairs of the Company, no prima facie case could be said to have been made out against him justifying issuance of process on the complaint. 3. Reliance is placed on National Small Industries Corporation Limited Corporation Ltd. v. Harmeet Singh Panital and anr., reported as (2010) 3 SCC 330 . 4. Documents indicating that the petitioner had resigned as Director of AR Industries Private Limited have been placed on records. 5. Justifying the process issued against the petitioner, the Complainant's learned counsel submitted that the petitioner's plea of having severed his relationship as Director with the Company, was factually incorrect in view of Resolution dated March 1, 2008 of the Company in terms whereof the petitioner is shown as the effective Director of the Company, concerned with its day to day affairs. A copy of the Board Resolution produced by the Complainant's learned counsel at the time of consideration of the petition has been taken on records. 6. A copy of the Board Resolution produced by the Complainant's learned counsel at the time of consideration of the petition has been taken on records. 6. Learned counsel further submitted that the Complainant has made requisite statement in the Complaint indicating that the petitioner was responsible for the business and conduct of day to day affairs of AR Industries Private Limited and the process issued on the basis of complainant's statement cannot be construed abuse of the process of Court in view of the law laid down by the Hon'ble Supreme Court of India in S.M.S Pharmaceuticals Ltd v. Neeta Bhalla and another, reported as (2005) 8 SCC 89 . 7. Considered the submissions of learned counsel for the parties and perused the case law cited at the Bar. 8. Petitioner's plea that there was no material on records, on the basis whereof, he could be proceeded against for his vicarious liability for the acts of the Company justifying issuance of process against him, is found without merit in view of the specific statement of the Complainant in the Complaint saying that the petitioner along with others was responsible for the business and conduct of day to day affairs of AR Industries Private Limited. The petitioner's reply to Complainant's Notice dated 19.12.2008 wherein he says that the petitioner was Director of the Company and looking after the Technical Marketing and Product Development, being a Technical person, but was never Incharge or responsible to the Company for the conduct of business of the Company, does prima facie, lend support to the Complainant's statement in the Complaint that the petitioner was connected with day to day affairs of the Company. 9. It cannot, therefore, be said that the allegations appearing in the Complaint were bald allegations on which no process could be issued. Even otherwise, the plea raised by the petitioner that he was not responsible for the business and conduct of day to day affairs of the Company, needs to be considered by the Trial Magistrate and not in these proceedings in view of the law laid down in three Judge Bench decision of Hon'ble Supreme Court of India reported as S.M.S Pharmaceuticals Ltd v. Neeta Bhalla and another, (2005) 8 SCC 89 . 10. 10. Petitioner's second plea that he had ceased to be the Director of AR Industries when the Cheques are stated to have been issued by the Company to the Complainant, cannot be considered for adjudication in these proceedings in view of the documents placed on records by the Complainant which prima facie indicate the petitioner as Director of the Company at the time when the Cheques were issued. Even otherwise, the documents placed on records by the petitioner cannot be considered by this Court to accept his plea that he was not the Director of the Company at the time of issuance of the Cheques, in view of Company's Resolution of March 1, 2008 which indicates him as Director of the Company. The plea raised by the petitioner that he was not the Director of the Company can be considered only by the Trial Magistrate on the basis of the evidence that the parties to the complaint may produce in this behalf. 11. Both the contentions raised by the petitioner's learned counsel, therefore, fail. 12. For all what has been said above, there is no merit in this Petition, which is, accordingly, dismissed.