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2013 DIGILAW 1399 (PNJ)

Mahesh Sapra v. Siel Chemicals Complex

2013-10-24

REKHA MITTAL

body2013
Judgment REKHA MITTAL, J. CRM No. 44556 of 2013 Allowed as prayed for. Annexure P-8 is taken on record. CRM No. 11291 of 2010 The present petition under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “the Code”) has been filed seeking quashing of complaint No. 22 dated 29.1.2003 titled “M/s Siel Chemical complex vs. M/s Bakshi Chemical Complex (P) Limited and others” (Annexure P-6) filed under Section 138 of the Negotiable Instruments Act, 1881 (for short “the Act”) read with Section 420 of the Indian Penal Code as well as summoning order dated 9.4.2003 (Annexure P-7) and proceedings emanating therefrom. Briefly stated, the facts of this case are that M/s Seil Chemical Complex through its attorney Sh. Rajiv Marwah General Manager (Works) (hereinafter referred as ‘complainant’) filed complaint under Section 138 of the Act on the allegations that an amount of Rs. 79,75,343.70 was outstanding against the accused on 30.11.2002 against supply of chemicals. In discharge of that liability, the accused issued cheque No. 168248 dated 16.12.2002 amounting to Rs. 79,75,344/- in favour of the complainant drawn on account No.01600000012 in State Bank of India, SCB, Miller Ganj, Ludhiana. The cheque on its presentation to the drawee bank got dishonoured vide Memo dated 20.12.2002 with the remarks “not arranged for”. The accused failed to make payment of the cheque amount despite receipt of legal notice dated 31.12.2002. After recording preliminary evidence, the accused including the present petitioner were ordered to be summoned to face trial for offence under Section 138 of the Act. Counsel for the petitioner has submitted that the complaint filed by the complainant company does not disclose as to how the petitioner is incharge of and responsible for the affairs of the company M/s Bakshi Chemical Private Limited. It is further submitted that admittedly the petitioner is not the signatory of the cheque in dispute. It is argued with vehemence that in the absence of any averment in the complaint that the petitioner was in charge of and responsible to the company for the conduct of its business, the petitioner can not be summoned to face trial for dishonour of cheque issued on behalf of the company under the signatures of Mr. Neeraj Bakhsi, co-accused in the case. Neeraj Bakhsi, co-accused in the case. Another plea raised by counsel for the petitioner is that the petitioner resigned from the accused company on 25.11.2002 and an intimation by way of annual return in Form No. 32 was submitted to the Registrar of the company, Jalandhar on 10.1.2003 vide Annexure P-8. According to counsel, as the petitioner was not the Director of the accused company on the date of issuance of cheque in dispute, the petitioner cannot be held liable for any offence committed by the company or Mr. Neeraj Sharma under whose signatures the cheque in dispute was issued. Counsel for the respondent, while refuting the contentions of the petitioner would argue that the petitioner filed an application under Section 245 of the Code seeking his discharge but he withheld that material information from the Court while seeking relief under Section 482 of the Code. He has strenuously argued that as the petitioner is guilty of concealing the material fact from the Court, it disentitles him to seek any relief in exercise of inherent jurisdiction under Section 482 of the Code. In support of his contention, he has relied on M/s Manjit Singh vs. M/s Atma Singh and Sons and others, 2000(4) RCR (Criminal) 604, Auto Pins (India) Limited and others vs. Union Territory, Chandigarh and another, 2012(1) RCR (Criminal) 880 and Munish Kumar Bansal and others vs. State of Punjab and another 2012(2) RCR (Criminal) 518. With regard to the plea that the petitioner resigned from Directorship of the accused company prior to issuance of cheque in dispute, it is submitted that in the civil litigation pending between the parties for recovery of amount of more than Rs. 1 Crore, the petitioner filed written statement wherein he raised a plea that he resigned from the company subsequent to the date of issuance of the cheque in dispute. According to counsel, the averments contained in the written statement filed by the petitioner in the civil proceedings falsifies his plea that he was no longer Director of the accused company at the time of issuance of the cheque in dispute. I have heard counsel for the parties and perused the case file. A perusal of averments contained in the complaint (Annexure P-6) would reveal that there is no allegation against the petitioner that he is in-charge of and responsible to the company for the conduct of its business. I have heard counsel for the parties and perused the case file. A perusal of averments contained in the complaint (Annexure P-6) would reveal that there is no allegation against the petitioner that he is in-charge of and responsible to the company for the conduct of its business. In 'Monaben Ketanbhai Shah and another v. State of Gujarat and others', 2004(3) RCR (Criminal) 800, Hon’ble the Supreme Court held to the following effect:- "6. The criminal liability has been fastened on those who, at the time of the commission of the offence, were in charge of and were responsible to the firm for the conduct of the business of the firm. These may be sleeping partners who are required to take any part in the business of the firm; they may be ladies and others who may not know anything about the business of the firm. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction. The obligation of the appellants to prove that at the time the offence was committed they were not in charge of and were not responsible to the firm for the conduct of the business of the firm, would arise only when first the complainant makes necessary averments in the complaint and establishes that fact. The present case is of total absence of requisite averments in the complaint." In 'S.M.S.Pharmaceuticals Limited v. Neeta Bhalla and another', 2005(4) R.C.R.(Criminal) 141, Hon’ble the Supreme Court of India mandated that there must be specific averment of vicarious liability for making Director of the company liable for criminal proceedings initiated against the company and another. Para 21 of the judgment reads thus:- 21. 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 under Section 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. 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 question posed in sub-para (b) has to be in negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for 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 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 conduct of its business. When that is so, holders of such positions in a company become liable under Section 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 under Section 141. So far as 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.” The averments contained in the complaint filed by the complainant (respondent herein) when examined in the light of observations made by Hon’ble the Supreme Court of India in the above referred authorities, I have no hesitation to hold that the petitioner cannot be tried for offence under Section 138 of the Act. The complaint filed by the complainant does not contain any averment in compliance with the mandatory requirements laid down in S.M.S.Pharmaceuticals Limited’s (supra) to hold the petitioner vicariously liable for the criminal liability of the company. This brings me to the contention of the complainant (respondent herein) that the petitioner is not entitled to any relief as he is guilty of concealing the fact of filing an application under Section 245 of the Code. This brings me to the contention of the complainant (respondent herein) that the petitioner is not entitled to any relief as he is guilty of concealing the fact of filing an application under Section 245 of the Code. Now the question arises whether non-disclosure of filing of an application under Section 245 of the Code can be construed as concealment of a material fact to dis-entitle the petitioner to claimed relief even if he has a good case on merits. The petitioner has been summoned to face trial under Section 138 of the Act and the proceedings are summary in nature. The trial Court invariably follow the procedure of a summons case. An application for discharge under Section 245 of the Code can be maintained in proceedings instituted otherwise on a police report in a warrant case. Under these circumstances, the filing of an application under Section 245 of the Code or non-disclosure thereof in the present petition, cannot be termed as concealment of 'material fact' to accept the submission of the complainant in the light of the judgments relied upon by counsel for the complainant. The petitioner has raised another plea that he had resigned from the Directorship of the accused company prior to issuance of the cheque in dispute. The plea of the petitioner is denied in view of written statement filed by the petitioner before the civil court (Annexure P-2). Keeping in view the discussion on the main plea raised by the petitioner, I am of the opinion that it is no longer required for this Court to enter into discussion on the disputed question of fact with regard to the date on which the petitioner resigned from directorship. In view of what has been discussed hereinabove, the petition is allowed. Complaint No. 22 dated 29.1.2003 titled “M/s Siel Chemical complex vs. M/s Bakshi Chemical complex (P) Limited and others” (Annexure P-6), summoning order dated 9.4.2003 (Annexure P-7) and proceedings emanating therefrom are ordered to be quashed qua Mahesh Sapra. Any observations made in this order will not cause prejudice to proceedings against the other accused.