IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF MARCH, 2019 BEFORE THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.5914 OF 2015 BETWEEN:
SHRI BHASKAR BODAPATI S/O DASARATHI BODAPATI, AGED ABOUT 56 YEARS R/AT NO.702, BLOCK II KRISHNA APARTMENTS, 13, ALI ASKAR ROAD, BENGALURU-560 052 ... PETITIONER (BY SMT : SUSHMA NAVEEN, ADVOCATE) AND ICICI BANK LIMITED HAVING ITS REGISTERED OFFICE AT LAND MARK, RACE COURSE CIRCLE, VADODARA-390 007 AND HAVING ITS BRANCH OFFICE AT SHOBHA PEARLS, NO.1, COMMISSARIAT ROAD, BENGALURU-560 025 REPRESENTED BY ITS OFFICER AND POWER OF ATTORNEY HOLDER MR VISHAL SHUKLA ... RESPONDENT (BY SMT : LEELA RANI, ADVOCATE ) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING TO QUASH THE COMPLAINT DATED 22.6.2015 REGISTERED IN C.C.NO.17177/2015 (ANNEXURE-A) AND ENTIRE PROCEEDINGS IN C.C.NO.17177/2015 INCLUDING THE ORDER DATED 16.7.2015, WHEREBY PROCESS WAS ISSUED (ANNEXURE- B) PENDING ON THE FILE OF XXVI A.C.M.M., BENGALURU FOR OFFENCE P/U/S 138 OF N.I.ACT, 1881 AS AGAINST THE PETITIONER/ACCUSED NO.3.
THIS CRIMINAL PETITION COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R The petitioner is prosecuted in his capacity as the Director of accused No.1-Company M/s.OPTO Circuits (INDIA) Limited.
2. According to the complainant, against the facility availed by the accused No.1-Company, accused No.1 represented by accused Nos.2 to 10 issued a cheque bearing No.606222 dated 31.3.2015 for a sum of Rs.6,10,00,000/- (Rupees Six Crores Ten Lakhs only) drawn on United Bank of India, Electronic City Branch. The said cheque when presented for encashment, was dishonoured for “insufficient funds”. After complying with the requisite formalities, the complainant initiated action against the petitioners under Section 138 of the Negotiable Instruments Act by presenting a complaint under Section 200 Cr.P.C. In the complaint, M/s.OPTO Circuits (INDIA) Limited is arrayed as accused No.1. Accused No.2 is the Managing Director of the said company. Accused Nos.3 to 9 are shown as the Directors and accused No.10 is shown as the authorized signatory of M/s. OPTO Circuits (INDIA) Limited.
3. Even though in the complaint it is stated that accused Nos.2 to 10 being the Managing Director, Directors and Authorized Signatory of accused No.1, are actively involved in the day-to-day business and financial transaction of accused No.1-company, there are no averments in the complaint that the present petitioner was involved in the affairs of the business of the accused No.1- Company as on the date of issuance of the cheque.
4. It is now well settled that officers of the Company could be vicariously held liable for the offences committed by the Company, provided the accused, at the time of commission of the offence was in charge of and responsible to the Company for conduct of the business of the Company.
5. In the instant case, undisputedly, the Managing Director of accused No.1-Company is arrayed as co- accused and the authorized signatory is also shown as accused No.10. Accused Nos.3 to 9 are arrayed as accused merely on the ground that they are the Directors of the said company. As held by the Hon’ble Supreme Court in the case of N.K.Wahi Vs. Shekhar Singh reported in (2007)9 SCC 481, ‘To launch a prosecution 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 in-charge 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”.
6. The decision relied on by the learned counsel for the respondent-complainant in N.Rangachari Vs. Bharath Sanchar Nigam Ltd., reported in 2007 Crl.L.J. 2448 is not applicable to the facts of this case. In the said decision it is held that ‘the burden is on the Board of Directors or Officers in charge of the affairs of the Company to show that they are not liable to be convicted. Any restriction on their power or existence of any special circumstances that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish at the trial such a restriction or to show that at the relevant time they were not in charge of the affairs of the Company.
7. In the instant case, petitioner having ceased to be the Director of the Company and there being no averments whatsoever in the Company that at the relevant time the petitioner was in charge of the affairs of the Company and was aware of the transaction in question, the burden of proving the negative cannot be placed on the petitioner. In the case on hand, except making a general statement that accused Nos.2 to 10 were the Directors and involved in the day-to-day business of the Company, the complainant has not averred any specific details as to the part played by the petitioner in the transaction in question. Moreover, the petitioner has produced copy of Form No.12 submitted before the Registrar of Companies, which discloses that the resignation submitted by the petitioner under Section 168 of the Companies Act was accepted and the petitioner herein ceased to be the Director of the accused No.1- Company with effect from 9.1.2015. The cheque in question was dishonoured on 31.3.2015 and the offence was committed only subsequent to the petitioner ceasing to be the Director of the said Company. Hence, even on that score, the prosecution instituted against the petitioner being contrary to Section 141 of the Negotiable Instruments Act, is liable to be quashed.
8. Accordingly, petition is allowed. Proceedings initiated in C.C.No.17177/2015 pending on the file of 26th Additional Chief Metropolitan Magistrate, Bengaluru for the offence under Section 138 of the Negotiable Instruments Act, are quashed only insofar as the petitioner-accused No.3 is concerned.
bkp Sd/- JUDGE