D. M. Kulkarni @ Dilip M. Kulkarni v. State of West Bengal
2013-07-26
TARUN KUMAR GUPTA
body2013
DigiLaw.ai
JUDGMENT This is an application under Section 482 of the Code of Criminal Procedure, 1973 raying for quashing of the proceedings of Case No.C/2012 of 1997 under Sections 138 /141 of the Negotiable Instruments Act pending before the Court of the learned Metropolitan Magistrate, 9th Court at Calcutta. 2. The petitioner’s case, in short, is that the authorized representative of M/s. Magma Leasing Limited (O. P. No.2) filed a petition of complaint being case No.C/2012 of 1997 under Sections 138 / 141 of the Negotiable Instruments Act against M/s. Western Paques India Limited, one Nandan Gadgil being chairman and managing director of said company and six others including the present petitioner D. M. Kulkarni as directors and / or officers of said company. It is the specific case of the petitioner that he resigned from the post of the directorship of M/s. Western Paques India Limited with effect from 8th April, 1996 and that the company also sent an information to that effect to the registrar of companies on 7th of May, 1996 through Form-32. According to the petitioner the cheque was alleged to be drawn on 26th of June, 1997 being dishonoured on 2nd of April, 1997. As either on the date of issuance of cheques or its alleged dishonour the present petitioner was no longer a director of the accused company he was not liable for any criminal liability for said alleged dishonour of cheque. His further contention is that the petition of complaint did not contain necessary and specific averments against the present petitioner being an alleged director of the accused No.1 company to attract vicarious liability under Section 141 of the Negotiable Instruments Act. 3. Mr. Ayan Bhattacharyya appearing for the petitioner accused submits that from the certified copy of the Form-32 it is apparent that the present petitioner resigned from the directorship of accused No.1 company with effect from 8th April, 1996 and that it was filed by the chairman and managing director of said company on 7th of May, 1996 through Form-32.
3. Mr. Ayan Bhattacharyya appearing for the petitioner accused submits that from the certified copy of the Form-32 it is apparent that the present petitioner resigned from the directorship of accused No.1 company with effect from 8th April, 1996 and that it was filed by the chairman and managing director of said company on 7th of May, 1996 through Form-32. According to him, as the cheque in question was alleged to be issued on 26th of June, 1997 and was dishonoured on 2nd of July, 1997 i.e., much after said resignation of the petitioner accused from the directorship of the accused No.1 company, the petitioner is entitled to get an order of quashing of said criminal case so far as the present petitioner is concerned. In support of his contention he has referred a case law reported in AIR 2011 SC 1090 (Harshendra Kumar D. vs. Rebatilata Koley). In said case it was held by Hon’ble Apex Court at para 15 as follows:- “Every company is required to keep at its registered office a register of its directors, managing director, manager and secretary containing the particulars with respect to each of them as set out in clauses (a) to (e) of sub-section (1) of Section 303 of the Companies Act, 1956. Sub-section (2) of Section 303 mandates every company to send to the Registrar a return in duplicate containing the particulars specified in the register. Any change among its directors, managing directors, managers or secretaries specifying the date of change is also required to be furnished to the Registrar of Companies in the prescribed form within 30 days of such change. There is, thus, statutory requirement of informing the Registrar of Companies about change among directors of the company. In this view of the matter, in our opinion, it must be held that a director - whose resignation has been accepted by the company and that has been duly notified to the Registrar of Companies - cannot be made accountable and fastened with liability for anything done by the company after the acceptance of his resignation. The words ‘every person who, at the time the offence was committed’, occurring in Section 141(1) of the NI Act are not without significance and these words indicate that criminal liability of a director must be determined on the date the offence is alleged to have been committed.” 4. Mr.
The words ‘every person who, at the time the offence was committed’, occurring in Section 141(1) of the NI Act are not without significance and these words indicate that criminal liability of a director must be determined on the date the offence is alleged to have been committed.” 4. Mr. Bhattacharyya next submits that save and except a bare averment in the petition of complaint that accused Nos. 2-9 (petitioner was accused No.3) being officer in-charge and responsible to the said company for his day to day affairs and management and each of them was jointly with others as well as severally enjoyed the over all control over the regular business and activities of accused No.1 company, there was no specific averment in what way present petitioner being alleged director was responsible for the day to day business of the accused No.1 company or how he had control over the regular business activities of the accused No.1 company. According to Mr. Bhattacharya in absence of any specific averments as to the role played by the petitioner accused being an alleged director of the accused No.1 company he cannot be saddled with vicarious liability of offence under Section 141 of N. I. Act. In support of his contention he has referred case laws reported in AIR 2012 SC page 31 (Mrs. Anita Malhotra vs. Apparel Export Promotion Council and Anr.), 2012 CRI. L.J. page 104 (Shankar Menon vs. State of W. B.) and (2012) 3 C Cr. LR (Cal) page 71 (Anu Mehta vs. Gunmala Sales Pvt. Ltd.). In all those cases it was held by the Hon’ble Apex Court as well as by this High Court that when averments in complaint made against the petitioner director were not specific as to his role in the matter of issuance of alleged cheque by accused company, the accused director cannot be roped with the vicarious liability of commission of offence for dishonour of cheque issued by the accused No.1 company under Section 141 of the N.I. Act. Accordingly, Mr. Bhattacharyya prays for quashing of the criminal proceeding so far as the present petitioner is concerned. 5. Mr.
Accordingly, Mr. Bhattacharyya prays for quashing of the criminal proceeding so far as the present petitioner is concerned. 5. Mr. Sandipan Ganguly appearing for the O.P. defacto complainant submits that the petitioner appeared before the learned court below on 14th of July, 2003 and thereafter filed an application under Section 205 of the Code of Criminal Procedure but did not take the plea of his alleged resignation from accused No.1 company with effect from 8th April, 1996. According to him, said delayed claim raises serious doubt about the genuinity of the claim. He further submits that some other dates namely 03.06.1997, 22.07.1997, 22.07.2002 etc. were found to appear on the copy of said Form-32 and that it raised some doubt about the genuinity of said document. 6. His next submission is that the case was filed as far back as in 1997 and that other accused persons remained absconder causing delay of the trial. According to him, the allegation as to whether there was any ingredient of offence under Section 141 N. I. Act against the petition can be decided during trial. 7. In reply Mr. Bhattacharyya submits that at the time of filing of said criminal case and before 2010 it was the view of this High Court that even if accused director left the accused company before issuance of cheque (as is evident from Form-32) but said fact can only be raised as a defence during trial but not at an earlier point. According to him, only since 2010 there were case laws of Apex Court followed by other case laws of this High Court to entitle an accused director of an accused company to pray for quashing of the criminal case against him under Section 141 N. I. Act on the ground of his resignation from the accused company before issuance of cheque. Mr. Bhattacharyya submits that on that ground the plea of resignation was not taken in the court below at any earlier point of view. In this connection he further submits that there is no time limit for approaching this Court for quashing of criminal proceeding under Section 482 of the Code of Criminal Procedure. In support of his contention he refers a case law reported in 1998 CRI.
In this connection he further submits that there is no time limit for approaching this Court for quashing of criminal proceeding under Section 482 of the Code of Criminal Procedure. In support of his contention he refers a case law reported in 1998 CRI. L. J. 2218 (Nuswan Burjor Madan and another vs. Biswanath Das and another) wherein it was held that the Court should not stick to a particular time limit but to other relevant factors to assess whether the delay in approaching the Court under Section 482 of the Code of Criminal Procedure is reasonable or not. 8. Admittedly, before 2010 the view of this High Court was that the defence of an accused director of resigning from the accused company before issuance of cheque (as reflected in Form-32) can only be taken during trial and not in any earlier stage. However, since 2010 there is a change of outlook in this regard. It has now been settled that documents relating to accused director’s resignation from the post of the director of the accused company before commission of the act of dishonour of cheque, may be taken into account by a court exercising powers under Section 482 of the Code of Criminal Procedure as it would be traverse of justice if accused is relegated to trial and he is asked to prove his defence on this score before trial court. From the certified copy of the document in Form-32 it is clear that there was reporting by the chairman and managing director of the accused No.1 company on 7th May, 1996 to the registrars of companies through Form-32 that present petitioner accused resigned from his directorship of said accused No.1 company with effect from 8th April, 1996. It is true that there were stamps on said documents showing some other dates for other purposes. But those notings and dates given on the stamps affixed thereupon cannot have any bearing on the fact that the resignation of the petitioner accused from the accused No.1 company was with effect from 8th April, 1996 and that said information was given through Form-32 by the competent person on 7th May, 1996. 9. Admittedly, there are catena of decisions, some of which have already been referred by Mr.
9. Admittedly, there are catena of decisions, some of which have already been referred by Mr. Bhattacharyya, to show that mere averments in complaint that the petitioner director was responsible for day to day affairs of the accused company without specifying his roles in the matter of day to day affairs or in the matter of issuance of alleged cheques by accused company cannot rope him with the vicarious liability of dishonour of cheque under Section 141 N. I. Act. In the case in hand also there is no averment to describe the specific role played by the petitioner director in the matter of issuance of cheque in question. It is true that the case was pending for long for absconsion of other accused persons but for that the petitioner accused should not be blamed. 10. In view of the discussions as made above I am of the opinion that further continuation of the criminal proceeding against the present petitioner accused will be an abuse of the process of the court. 11. Accordingly, this application is hereby allowed on contest. The criminal proceeding being C/2012 of 1997 under Section 138/141 N.I. Act pending in the learned Metropolitan Magistrate, 9th Court at Calcutta is hereby quashed so far as the present petitioner D.M. Kulkarni alias Dilip M. Kulkarni is concerned. The petitioner is released from his bail bond, if any. 12. However, the pending case may proceed against other accused persons as per law. Urgent photostat certified copy of this order be supplied to the learned counsels of the parties, if applied for.