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2025 DIGILAW 93 (CHH)

Ashutosh Mishra S/o Shri M. N. Mishra v. Sky High Media Through Its Partner, Shri Ajay Sharma S/o Shri Satyapal Sharma

2025-02-10

ARVIND KUMAR VERMA

body2025
Order : (Arvind Kumar Verma, J.) 1. With the consent of the parties, matter is heard finally. 2. The present petition under Section 482 of the Code of Criminal Procedure, 1973 has been preferred by the petitioner for quashment of Criminal Proceedings bearing Case No.4823/2018 which is pending in the Court of Judicial Magistrate First Class, Raipur (Annexure P/2) and the subsequent revision order dated 13.09.2023 passed by the learned 4 th ADJ, Raipur (C.G.) (Annexure P/1). 3. Brief facts of the case is that the petitioner was made Director's of Net Ink Technologies Pvt. Ltd. without his knowledge on 31.03.2018 and in a matter of few hours were removed from the post of Director. Two cheques bearing No.000268 and 000269 dated 21.03.2018 and 11.04.2018 were issued by Respondent No. 2 in favour of Respondent No. 1 for an amount of Rs. 17,50,000/- (Rupees Seventeen Lacs Fifty Thousand Only) and Rs. 50,00,000/- (Rupees Fifty Lacs Only) respectively and the same had been dishonoured by drawee Bank on 20.06.2018. At a later stage, Respondent No. 1 (Sky High Media) preferred a complaint u/s 138 of Negotiable Instruments Act, 1881 against Respondent No. 2. (Net Ink Technology) and made many random persons a party in capacity of a Director of Respondent No. 2 Company one of which was petitioner. 4. Learned counsel for the petitioner contended that continuation of proceeding against the petitioner is an abuse of process of law in as much as the instant proceeding is not maintainable against the petitioner who is a non-relevant former Director of Respondent No. 2 and was not the concerned/relevant Director for the purposes of this trial. The petitioner was not responsible for the conduct of business of the company at any given stage nor was he an authorized signatory or relevant person for this alleged transaction. The aforesaid cheques were issued before and after the petitioner became Director and was dishonoured after he was removed from the position, the petitioner was a Director only for a matter of hours and was then dismissed from that position all without the knowledge of the petitioner. It is pertinent to note that the present petitioner was not the Director when the cheques were issued nor was he one at the time of dishonor and was only Director of the company for a few hours on 31.03.2018. It is pertinent to note that the present petitioner was not the Director when the cheques were issued nor was he one at the time of dishonor and was only Director of the company for a few hours on 31.03.2018. He further contended that no statutory demand notice was received by the petitioner before filing of the proceeding u/s 138 of Negotiable Instruments Act, 1881 and hence, the proceedings u/s 138 are not maintainable. It is, therefore, prayed that this Court may kindly be pleased set-aside/quash the Revision Order dated 13.09.2023 passed by Learned 4th ADJ, Raipur (Annexure P/1), set-aside/quash the proceedings in Criminal Case No. 4823/2018 to the extent of petitioner's role and liability. 5. On the other hand, learned counsel for the respondents contended that after due investigation the petitioner has been charge-sheeted for the aforesaid offence and prima-facie material collected are sufficient to put the petitioner at trial and he is standing trial also and considering the material available on record, it cannot be held that no prima-facie case against the petitioner for standing trial is made out, as such, it is the case where the petition deserves to be dismissed. 6. I have heard learned counsel for the respective parties and considered their submissions made herein above and also went through the records with utmost circumspection. 7. On perusal of the records, it reveals that the cheques were issued on 21.03.2018 and 11.04.2018 while the petitioner was appointed as the Director of the company on 31.03.2018 at 11:00 AM and he resigned on the same day at 03:00 PM, therefore, it is crystal clear that when the cheques were issued, petitioner was not holding the post of Director of the company. He was not conducted the day to day business of the Company. Therefore, petitioner is not responsible for the conduct of business of the company at any given stage nor was he an authorized signatory or relevant person for this alleged transaction. The aforesaid cheques were issued before and after the petitioner became Director and was dishonoured after he was removed/resigned from the position. 8. In the matter of S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla & Another reported in (2005) 8 SCC 89 , the Hon’ble Supreme Court has held that as under :- “A. Negotiable Instruments Act, 1881-Ss. The aforesaid cheques were issued before and after the petitioner became Director and was dishonoured after he was removed/resigned from the position. 8. In the matter of S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla & Another reported in (2005) 8 SCC 89 , the Hon’ble Supreme Court has held that as under :- “A. Negotiable Instruments Act, 1881-Ss. 141 and 138- Dishonour of cheque – Offence by company – Essential averments to be made in complaint filed in respect thereof- Held, it is necessary to aver 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- Without this averment being made in the complaint, the requirements of Section 141 cannot be said to be satisfied.” 9. Further, in the case of Hitesh Verma Vs. M/s Health Care at Home India Pvt. Ltd. & Ors., passed in Criminal Appeal No(s). 462 of 2025 , the Hon’ble Supreme Court has held in Para Nos. 4 , 5 & 6 are as under :- “4. As the appellant is not a signatory to the cheque, he is not liable under Section 138 of the 1881 Act. As it is only the signatory to the cheque is liable under Section 138, unless the case is brought within the four corners of Section 141 of the 1881 Act, no other person can be held liable. Section 141 reads thus: "141. As it is only the signatory to the cheque is liable under Section 138, unless the case is brought within the four corners of Section 141 of the 1881 Act, no other person can be held liable. Section 141 reads thus: "141. Offences by companies.-(i) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. (ii) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section, (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in firm.” 5. There are twin requirements under sub-Section (1) of Section 141 of the 1881 Act. In the complaint, it must be alleged that the person, who is sought to be held liable by virtue of vicarious liability, at the time when the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company. In the complaint, it must be alleged that the person, who is sought to be held liable by virtue of vicarious liability, at the time when the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company. A Director who is in charge of the company and a Director who was responsible to the company for the conduct of the business, are two different aspects. The requirement of law is that both the ingredients of sub-Section (1) of Section 141 of the 1881 Act must be incorporated in the complaint. Admittedly, there is no assertion in the complaints that the appellant, at the time of commission of the offence, was in charge of the business of the company. Therefore, on a plain reading of the complaints, the appellant cannot be prosecuted with the aid of sub-Section (1) of Section 141 of the 1881 Act. 6. Accordingly, the impugned orders are set aside and the order taking cognizance of the complaints filed by the first respondent stands quashed and set aside only as against the present appellant who is arraigned as accused no.3. We make it clear that we have made no adjudication on the merits of the complaints and all issues are left open to be decided by the Trial Court.” 10. In view of the above, applying the well settled principle of law in the facts of the case and considering the fact that the petitioner is not a signatory to the cheques which were issued on 21.03.2018 & 11.04.2018 and at that time he was not holding the post of the Director and he was not conducted the day to day business of the Company, hence, he is not liable under Section 138 of the 1881 Act. As it is only the signatory to the cheque is liable under Section 138 of the Negotiable Instruments Act, 1881. 11. Thus, no useful purpose would be served in continuing the proceedings and in order to secure the ends of justice, the criminal proceedings in the present case deserve to be quashed, sine-qua to the petitioner only. 12. As it is only the signatory to the cheque is liable under Section 138 of the Negotiable Instruments Act, 1881. 11. Thus, no useful purpose would be served in continuing the proceedings and in order to secure the ends of justice, the criminal proceedings in the present case deserve to be quashed, sine-qua to the petitioner only. 12. Resultantly, the present petition is allowed and the revision order dated 13.09.2023 passed by the 4 th Additional Sessions Judge, Raipur (C.G.) (Annexure P/1) is hereby set-aside/quashed and the proceedings in Criminal Case No. 4823/2018 to the extent of petitioner's liability is set aside. 13. Accordingly, the present CrMP is disposed of.