IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF MARCH 2019 BEFORE THE HON’BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.4832 OF 2013 A/W CRIMINAL PETITION NO.4834 OF 2013 CRIMINAL PETITION NO.4835 OF 2013 BETWEEN:
MR RAMAKRISHNA G DIRECTOR SALT MARCH MEDIA NO. 3/18, CORPORATION BUILDING RESIDENCY ROAD BANGALORE-560025 ... PETITIONER (COMMON) (BY SRI: ARVIND KAMATH, SENIOR ADVOCATE A/W SRI: BALA NIKIT, ADVOCATE) AND M/S PRINCIPAL OOH MEDIA PVT LTD NO.6, I FLOOR, GURUKRIPA BUILDING, 8TH CROSS, MALLESHWARAM BANGALORE-560003 REPRESENTED BY ITS DIRECTOR MR SABYASACHI HAZRA (BY SRI: SHOBHITH N SHETTY, ADVOCATE) ... RESPONDENT (COMMON) IN CRIMINAL PETITION NO.4832 OF 2013 THIS CRIMINAL PETITION IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE PROCEEDINGS IN C.C.NO.20511/2010 ON THE FILE OF THE XIII A.C.M.M., BANGALORE, IN SO FAR AS THE PETITIONER IS CONCERNED.
IN CRIMINAL PETITION NO.4834 OF 2013 THIS CRIMINAL PETITION IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE PROCEEDINGS IN C.C.NO.20513/2010 ON THE FILE OF THE XIII A.C.M.M., BANGALORE, IN SO FAR AS THE PETITIONER IS CONCERNED.
IN CRIMINAL PETITION NO.4835 OF 2013 THIS CRIMINAL PETITION IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE PROCEEDINGS IN C.C.NO.17221/2010 ON THE FILE OF THE XIII A.C.M.M., BANGALORE, IN SO FAR AS THE PETITIONER IS CONCERNED.
THESE CRIMINAL PETITIONS COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R These three petitions are filed by the petitioner/accused No.3 against whom, proceedings are initiated under Section 138 of N.I Act. Respondent herein filed three separate complaints against M/s. Buenos Entertainment Private Limited and others represented by its Directors viz., accused Nos.2 and 3, on the ground that the cheques issued by the said company have been dishonoured for ‘insufficient funds’ and ‘ stop payment’.
2. Learned counsel for the petitioner/accused No.3 submits that the petitioner herein ceased to be the Director of accused No.1 company w.e.f. 05.04.2009. All the three cheques were presented for encashment subsequent to resignation of the petitioner from the company and therefore, cause of action under Section 138 of N.I. Act having arisen subsequent to resignation of the petitioner, the petitioner is not answerable to the alleged dishonour of the cheques.
3. Learned counsel for the respondent however has strongly opposed the above submissions and would contend that the petitioner/accused No.3 herein was a signatory to the three cheques issued by him and therefore, by virtue of Section 138 r/w 141 of N.I. Act, the petitioner is liable for consequence of dishonour of the said cheques. Further, he submitted that the resignation of the petitioner was not brought to the notice of the respondent/complainant. The petitioner did not issue any reply to the legal notices issued by the complainant and therefore, the prosecution of the petitioner is in accordance with Section 138 r/w 141 of N.I. Act and the said cheques having been issued when the petitioner was the Director of accused No.1 company, by force of Section 141 of N.I. Act, the petitioner is liable for the alleged dishonour of the cheques.
4. I have bestowed my attention to the submissions made at the Bar and have carefully scrutinized the material on record. The documents produced by the petitioner disclose that the petitioner herein submitted his resignation from accused No.1 company by a letter dated 01.04.2009. The same was accepted by the Board of Directors and a resolution to this effect was passed on 01.04.2009. Based on said resolution, Form No.32 was submitted before the Registrar of Companies in terms of Sections 303(2), 264(2) or 266(1)(a) and 266(1)(b)(iii) of the Companies Act, 1956 and the said resignation was accepted w.e.f. 05.04.2009. The cheques in question are dated 21.05.2009, 13.07.2009 and 12.01.2009. The above cheques were dishonoured on 19.11.2009, 19.11.2009 and 10.07.2009 respectively. Therefore, it is clear that, much before the presentation of the aforesaid cheques for encashment and the consequent dishonour thereof, the petitioner herein had ceased to be the Director of accused No.1 company.
5. All the cheques bear the signature of the petitioner as the authorized signatory. As per Section 138 of N.I. Act, ‘Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, the drawer of the said cheque becomes liable of the consequence of dishonour under Section 138 of N.I. Act.
6. In the present cases, the offence is not committed by the petitioner as the drawer of the cheques, rather, the offence is committed by the company. The cheques in question are issued not on the account maintained by the petitioner, rather, the cheques in question are issued on the account maintained by the company. Therefore, essentially, the offence in question is governed by Section 141 of N.I. Act. Section 141 of N.I.Act, prescribes that “if the person committing an offence under Section 138 is a company, every person, who at the time of 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 liable to be proceeded against and punished accordingly.” An offence under Section 141 of the N.I. Act is deemed to have been committed when the cheque drawn on account of the company is dishonoured and when the notice of dishonour is failed to be complied within the time limit prescribed in Section 138 of N.I. Act.
7. Undisputedly, all the above cheques were presented for encashment only after the petitioner ceased to be the Director of the said company. Therefore, it goes without saying that as on the date of commission of the offence, the petitioner herein was neither incharge nor was responsible for the affairs of the company. Therefore, merely on the ground that the cheques in question bear the signature of the petitioner/accused No.3 as authorized signatory, cannot be a ground to prosecute the petitioner for the offence committed by the company under Section 141 of the Act. In that view of the matter, the prosecution of the petitioner being opposed to the provision of Section 141 of N.I.Act, the complaints filed against the petitioner/accused No.3 and the consequent proceedings initiated against him cannot be sustained.
Accordingly, the petitions are allowed. The proceedings pending against the petitioner in C.C.No.20511/2010, C.C.No.20513/2013 and C.C.No.17221/2010 on the file of XIII A.C.M.M, Bengaluru are quashed only insofar as the petitioner viz., accused No.3 is concerned. The proceedings shall continue against accused Nos.1 and 2 in accordance with law.
Sd/- JUDGE *mn/-