Dishonored Cheque is drawn after Director resigned, Sec.138 NI Act not made out qua him, rules HC

On 16 July 2020 the Gauhati High Court,  in the case Neha Himatsingka and Anr. V. The State of Assam and 4 Ors. , comprising of Justice Manish Choudhury allowed a criminal petition under Section- 482 of the Criminal Procedure Code, 1973 and Dishonored Cheque drawn after Director resigned, Sec.138 NI Act not made out qua him.

FACTS

The complainant is a businessman and has financial dealings with the accused, company and are well acquainted with each other.

The Complainant approached the Chief Judicial Magistrate of Kamrup, Guwahati on the ground that the company and it’s Directors, Accused No. 1 and Accused No. 2 issued a cheque bearing the account in Allahabad Bank of worth rupees 5,00,000/- on 22-10-2018.

However, the amount of the cheque could not be received by the Complainant on various reasons that forced him to file a Criminal Petition and that was not in accordance with the provisions of Section – 138 of Negotiable Act, 1881.

ARGUMENTS

The complainant argued that when she went to HDFC Bank for encashment, she didn't receive the money as the cheque was bounced with the endorsement’ Exceeds Arrangement’

On 25-10-2018 the Complainant got the information regarding the dishonor of cheque and so a Demand Notice was issued as per the provisions of Section- 138 of NI Act, 1881.

It has been contended that the cheque amount shall be paid within 15 days of the issuance of the Notice.

JUDGEMENT-

The Learned Trial Court after going through the ‘merits of the case’ considered it an offence u/s 138 of NI Act, 1881 and after following all the required court proceedings issued an Order on 7-02-2019 in this regard.

The Court held that the Petitioners are not liable u/s 141 of the NI Act as they had already resigned from the post of Directors of the Company and so, it was not their responsibility to keep a check on these issues. The arguments are not in accordance with Section – 141 of NI Act, 1881.

The acting Directors of the Company have failed to discharge their duty in this regard and it was their responsibility to take all the charges of the post of Directors appropriately and efficiently.

The Court allowed the Criminal Petition under Section- 482 of the Code on the grounds such as the cheque was never presented for collection since 4r years and the acting Directors have not been able to take appropriate steps, after the resignation of the prior Director.so the Criminal proceedings will continue in this matter and no order shall be passed in this regard.