HONOURABLE SRI JUSTICE S.RAVI KUMAR CRIMINAL PETITION No.5766 OF 2012 Dated 18-7-2014 Between:
Radha Govindaraju and others.
..Petitioners.
And:
The State of A.P., represented by Public Prosecutor, High Court, Hyderabad and another.
…Respondents.
HONOURABLE SRI JUSTICE S.RAVI KUMAR CRIMINAL PETITION No.5766 OF 2012 ORDER:
This petition is filed to quash proceedings in C.C.No.211 of 2012 on the file of Judicial First Class Magistrate, Jedcherla against the petitioners.
Petitioners herein are A.3, A.4, A.6 and A.7 in the above referred C.C. and 2nd respondent herein is complainant.
Complainant filed a private complaint under Section 200 Cr.P.C. against eight accused for an offence under Section 138 of Negotiable Instruments Act. According to complaint averments, A.2 is Managing Director of A.1, A.3 is whole time Director, A.4 to A.8 are Directors of Company and are in-charge of day-to-day business affairs. It is also averred that A.2 to A.8 are regularly attending Board meetings and collectively taking decisions on behalf of the company. It is alleged that A.2 representing A.1 has been placing orders and a running account is maintained by complainant. It is further alleged that as on 1st April, 2010 outstanding amount payable is Rs.34,19,862/- and after repeated several requests, three post dated cheques are issued initially and they were revalidated and ultimately dishonoured for want of funds, thereafter, statutory notice was given and as there was no compliance, present complaint is filed.
Contention of petitioners is that A.4, A.6 and A.7 were earlier Directors of A.1 Company and they have resigned on 16-11-2009 which were accepted. According to them, the alleged transaction between 2nd respondent and A.1 and A.2 is unrelated to petitioners and only to harass them, they were also figured as accused. It is contended by petitioners that A.3 is only a sleeping partner and as she is wife of A.2, she is also implicated.
Heard arguments.
It is submitted on behalf of petitioners that the allegations made against the petitioners even if they are taken at their face value and accepted in toto do not constitute the alleged offence. It is further submitted that basic ingredients to attract offence under Section 138 of Negotiable instruments Act are missing. It is submitted that Statutory Notice was not even given to A.4, A.6 and A.7. It is submitted that present complaint is a clear abuse of process of court insofar as petitioners is concerned.
It is submitted on behalf of 2nd respondent that there are specific allegations against petitioners and the objections raised are matter of evidence.
Now the point that would arise for my consideration in this petition is whether proceedings in C.C.No.211 of 2012 on the file of Judicial First Class Magistrate, Jedcherla against the petitioners can be quashed or not?
POINT:
I have perused material papers filed along with quash petition. A reading of complaint would disclose that A.2 has been placing orders with the complainant company and cheques were also issued by A.2 only on behalf of A.1-company. Further, Statutory Notice was given to A.1 to A.3 only, it was not given to A.4, A.6 and A.7. The allegations relating to petitioners in the complaint are as follows:
“The accused No.2 is the Managing Director of the Accused No.1 and Accused No.3 is the whole-time Director of the Accused No.1 and both the Accused 2 and 3 were in charge of finances and A.2 to A.8 who are Directors of the Company are in charge of A.2 to A.8 who are Directors of the Company are in charge of day-to- day business affairs of the Accused No.1. A.2 to A.8 are regularly attending Board meetings and collectively taking decisions on behalf of the Company.”
From the above para, it is difficult to accept that petitioners were also in-charge and responsible for conduct of business of the company at the time of issue of cheque.
Allegation that petitioners regularly attending Board meetings and collectively taking decisions on behalf of the company will not mean that these petitioners at the time of offence were in-charge of and responsible for the conduct of business of the company. Attending Board meeting and taking decisions on behalf of company does not mean conduct of business of the company. Decisions in the Board meeting would be in respect of functioning of company.
According to Section 141 of Negotiable Instruments Act, to name a person as accused, that person at the time of offence shall be in-charge of and was responsible for conduct of the business of the company which alleged to have committed the offence. A reading of complaint should show that the substance of accusations disclose that the accused persons were in-charge and responsible for the conduct of the business of the company. Here, the entire reading of complaint would disclose that A.2 has transacted and he issued the cheques involved.
Advocate for petitioners relied on a ruling of Supreme Court in SAROJ KUMAR PODDAR Vs.
[1]
STATE (NCT OF DELHI) AND ANOTHER. ( ).
In that case, complaint under Section 138 of Negotiable Instruments Act was filed against director of company who was also shown as accused along with other accused. In that case, Honourable Supreme Court held as follows:
“The appellant did not issue any cheque. He had resigned from the directorship of the Company. It may be true that as to exactly on what date the said resignation was accepted by the Company is not known, but, even otherwise, there is no averment in the complaint petitions as to how and in what manner the appellant was responsible for the conduct of the business of the Company or otherwise responsible to it in regard to its functioning. He had not issued any cheque. How he is responsible for dishonour of the cheque has not been stated. The allegations, thus, do not satisfy the requirements of Section 141 of the Act.”
Facts of this case are almost similar to the facts of that case. In our case also petitioners did not issue cheque. Petitioners were not directors as on the date of issue of cheque, as seen from Form 32 submitted to Registrar of Companies. First petitioner is ceased to be director with effect from 10-8-2011, other petitioners ceased to be directors with effect from 16-11-2009. Here two cheques are dated 12th October, 2011 and one cheque is dated 12-8-2011. In the case of Supreme Court decision, there was no material to show even the resignation was accepted but in our case, material is produced to show the dates from which resignation of respective directors came into force. In respect of petitioners 2 to 4, there is not even Statutory Notice.
Considering the above facts and circumstances and also decision of Honourable Supreme Court, I am of the considered view that allegations in the complaint do not constitute the alleged offence against the petitioners and permitting such proceedings to continue by compelling the petitioners to face regimarole criminal trial would amount to improper use of legal process. Therefore, to secure ends of justice, proceedings are liable to be quashed.
Accordingly, petition is allowed and proceedings against petitioners in C.C.No.211 of 2012 on the file of Judicial First Class Magistrate, Jedcherla are hereby quashed.
As a sequel to the disposal of this Criminal petition, the Miscellaneous Petitions, if any, pending, shall stand dismissed.
JUSTICE S.RAVI KUMAR Dated 18-7-2014.
Dvs.
HONOURABLE SRI JUSTICE S.RAVI KUMAR Dvs CRIMINAL PETITION No.5766 OF 2012 Dated 18-7-2014
[1] (2007) 3 SCC 693