Gujarat High Court
Anuradha Menon vs State Of Gujarat on 14 February, 2025
NEUTRAL CITATION
R/SCR.A/11195/2024 ORDER DATED: 14/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 11195 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11229 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11369 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11231 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11227 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11197 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11326 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11230 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11313 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11226 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11330 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11312 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11232 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11224 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11324 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11309 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11233 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11222 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11333 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11196 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11198 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11200 of 2024
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NEUTRAL CITATION
R/SCR.A/11195/2024 ORDER DATED: 14/02/2025
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R/SPECIAL CRIMINAL APPLICATION NO. 11203 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11214 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11215 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 11216 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 9890 of 2024
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ANURADHA MENON
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR. VIPUL B SUNDESHA(6689) for the Applicant(s) No. 1
NOTICE SERVED for the Respondent(s) No. 2
MR ADITYA JADEJA, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 14/02/2025
COMMON ORAL ORDER
1. All these petitions are filed under Articles 226 and 227 of the Constitution of India read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (`BNSS' for short) (para materia with Section 482 of the Code of Criminal Procedure) for quashing and setting aside the complaints being Criminal Case Nos.522 of 2019, 25301 of 2019, 25300 of 2019, 518 of 2019, 519 of 2019, 520 of 2019, 521 of 2019, 523 of 2019, 524 of 2019, 526 of 2019, 528 of 2019, 59 of 2019, 60 of 2019, 61 of 2019, 63 of 2019, 66 of 2019, 68 of 2019, 69 of 2019, 77 of 2019, 64 of 2019, 73 of 2019, 62 of 2019, 527 of 2019, 65 of 2019, 79 of 2019 and 525 of 2019, Page 2 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined respectively, pending before the competent Court at District Surat and Criminal Case No.2053 of 2019 pending before the learned Additional Chief Judicial Magistrate, Gandhidham, Kutch, under the provisions of the Negotiable Instruments Act (`NI Act' for short).
2. As the common question of facts and law are involved in these petitions, the company is same and the director is the same, at the request of learned advocates for the parties, they are heard together and disposed of by this common oral order.
3. Rule returnable forthwith. Learned APP Mr.Jadeja waives service of notice of rule for respondent no.1. Though served, none appears for respondent no.2-complainant.
4. For the sake of convenience, the facts of Special Criminal Application No.11195 of 2024 are considered, as stated in the petition, which are as under:
4.1 It is averred in the petition that respondent no.2-
complainant has filed the complaint inter alia stating that the complainant is proprietorship firm and doing business of plywood; that the accused approached the complainant- company for sale of various size of plywood and as per the Page 3 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined request of the accused, the complainant sold goods-plywood and the goods were delivered from time to time to the accused; that as a capacity of director of the company, the accused no.2 issued the cheque, which was presented for payment, however, it was dishonoured with an endorsement `payment stop by drawer'; therefore, the respondent no.2 issued a statutory demand notice under Section 138(B) of the NI Act against all accused persons and as the amount was not paid by the accused persons, the impugned complaint was filed under the provisions of Section 138 of the NI Act, which is prayed to be quashed by way of these petitions.
5. Heard learned advocates for the parties. 5.1 Learned advocate for the petitioners submitted that on 11.9.2007, a company namely Opal Asia (India) Private Limited came to be incorporated under the Companies Act for purpose of running the different businesses i.e. shipping, import-export and others; that the petitioner is wife of original accused no.2-Ajith Menon and joined the company as director with effect from 1.4.2098; that the petitioner is not the signatory to the instrument in question issued on behalf of the company; that the petitioner is also not responsible for the day-to-day affairs of the company; therefore, the impugned complaint is absolute abuse of process of law and Page 4 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined not maintainable against the present petitioner; that the petitioner cannot be made vicariously liable to be prosecuted under Section 138 read with Section 142 of the NI Act since the petitioner was not in charge of the day-to-day affairs and was not responsible to the company for the conduct of the business of the company when the cheques in question were issued by the company and therefore the present petitions are filed for quashing of the impugned criminal cases. 5.2 In support of his submissions, learned advocate for the petitioner has relied on the following citations:
(1) Hitesh Verma V/s M/s Health Care at Home India Pvt.Ltd. & Ors, decided on 29.1.2025 in Criminal Appeal No.462 of 2025.
(2) Career Institute Educational Society V/s Om Shree Thakurji Educational Society reported in 2023 LiveLaw (SC) 380. (3) S.P.Mani and Mohan Dairy V/s Dr.Snehalatha Elangovan decided on 16.9.2022 passed in Criminal Appeal No.1586 of 2022.
(4) Yashovardhan Biral V/s Cecil Webber Engineering Ltd. & Ors. decided on 11.4.2023 in Crl.M.C.1409 of 2018 by the Delhi High Court.
(5) Nandlal B Chauhan V/s State of Gujarat & Ors. decided Page 5 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined on 8.2.2022 passed in Special Criminal Application No.1839 of 2013, by this Court.
(6) Susela Padmavathy Amma V/s M/s Bharti Airtel Limited decided on 15.3.2024 in Special Leave Petition (Criminal) No.12390-12391 of 2022.
6. Per contra, learned APP for respondent no.1-state has objected these applications and submitted that this Court should not exercise its powers by interfering with the proceedings of recovery of amount and the proceedings initiated under Section 138 of the Act are perfectly justified.
7. Though served, none appears for the respondent no.2-complainant.
8. I have considered the submissions made at the bar and perused the material on record.
9. At the outset, the provisions of Sections 138 and 141 of the NI Act are required to be seen, which read as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any Page 6 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined 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, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for "a term which may extend to two year", or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) The cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, "within thirty days" of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen Page 7 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability"
means a legally enforceable debt or other liability."
"141 Offences by companies. (1) 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 proceeded against and punished accordingly:
Provided that nothing contained in this subsection 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. (2) Notwithstanding anything contained in subsection (1), where any offence under this Act has been committed by a company and it is proved that the offence has been Page 8 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined committed with the consent or connivance of, or is attribute to, any neglect on the part of, any director, Manager, secretary, or other office 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 relating to a firm, means a partner in the firm."
10. Now, if the facts of the present case are perused, it transpires from the material on record and the averments made in the complaint as well as this application that the petitioner was the director of the company; that the statutory notice was issued before filing the complaints and there is no averment in the petitions and there is nothing coming on record to show that the same was replied by the petitioner to clear her stand that she is not responsible for the day-to- day affairs of the company; the said contention is taken for the first time in these petitions which ought to have been taken at the time of giving reply to the notice itself. He could have filed reply to the statutory notice itself and could have pointed out all these facts at the notice stage itself as Page 9 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined a foundation, which he is stating at this stage. A bald statement at this stage would not help the petitioner to come out of the allegations in the criminal case. The same has to be proved by leading unimpeachable and uncontrovertible evidence, for which, full-fledged trial is required. Without testing the defence in a full-fledged trial, quashing of the criminal cases at this stage would not be just and proper and, therefore, this Court cannot exercise the powers under Section 528 of the BNSS, at this initial stage.
11. At this stage, it is also fruitful to refer to the judgment rendered by the Hon'ble Apex Court in the case of S.P.Mani and Mohan Dairy V/s Dr.Snehalatha Elangovan reported in 2022(13) Scale, page 543, more particularly, paragraphs 43 to 46, which read as under:
"43. In the case on hand, we find clear and specific averments not only in the complaint but also in the statutory notice issued to the respondent. There are specific averments that the cheque was issued with the consent of the respondent herein and within her knowledge. In our view, this was sufficient to put the respondent herein to trial for the alleged offence. We are saying so because the case of the respondent that at the time of issuance of the cheque or at the time of the commission of offence, she was in no manner concerned wtih the firm or she was not in-Page 10 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025
NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined charge or responsible for day-to-day affairs of the firm cannot be on the basis of mere bald assertion in this regard.
The same is not sufficient. To make good her case, the respondent herein is expected to lead umimpeachable and incontrovertible evidence. Nothing of the sort was adduced by the respondent before the High Court to get the proceedings quashed. The High Court had practically no legal basis to say that the averments made in the complaint are not sufficient to fasten the vicarious liability upon the respondent by virtue of Section 141 of the NI Act.
44. We may also examine this appeal from a different angle. It is not in dispute, as noted above, that no reply was given by the respondent to the statutory notice served upon her by the appellant. In the proceedings of the present type, it is essential for the person to whom statutory notice is issued under Section 138 of the NI Act to give an appropriate reply. The person concerned is expected to clarify his or her stance. If the person concerned has some unimpeachable and incontrovertible material to establish that he or she has no role to play in the affairs of the company/ firm, then such material should be highlighted in the reply to the notice as a foundation. If any such foundation is laid, the picture would be more clear before the eyes of the complainant. The complainant would come to know as to why the person to whom he has issued notice says that he is not responsible for the dishonour of the cheque. Had the Page 11 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined respondent herein given appropriate reply highlighting whatever she has sought to highlight before us then probably the complainant would have undertaken further enquiry and would have tried to find out what was the legal status of the firm on the date of the commission of the offence and what was the status of the respondent in the firm. The object of notice before the filing of the complaint is not just to give a chance to the drawer of the cheque to rectify his omission to make his stance clear so far as his liability under Section 138 of the NI Act is concerned.
45. Once the necessary averments are made in the statutory notice issued by the complainant in regard to the vicarious liability of the partners and upon receipt of such notice, if the partner keeps quiet and does not say anything in reply to the same, then the complainant has all the reasons to believe that what he has stated in the notice has been accepted by the noticee. In such circumstances what more is expected of the complainant to say in the complaint.
46. When in view of the basic averment process is issued the complaint must proceed against the Directors or partners as the case may be. But if any Director or Partner wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he is really not concerned Page 12 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined with the issuance of the cheque, he must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his contention. He must make out a case hat making him stand the trial would be an abuse of process of court. He cannot get the complaint quashed merely on the ground that apart from the basic averment no particulars are given in the complaint about his role, because ordinarily the basic averment would be sufficient to send him to trial and it could be argued that his further role could be brought out in the trial. Quashing of a complaint is a serious matter. Complaint cannot be quashed for the asking. For quashing of a complaint, it must be shown that no offence is made out at all against the Director or Partner."
12. In view of above discussion as well as settled position of law and after considering the facts as alleged in the complaint filed under Section 138 of the NI Act and considering that no reply to notice under Section 138 of the NI Act was given by the petitioner and circumstances of the present case and considering the disputed question involved in the matters which are required to be tested by a proper trial of the matters, I am of the opinion that this is not a fit case to exercise the inherent powers under Section 528 of the BNSS and quash the impugned complaints. Let the trial Page 13 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025 NEUTRAL CITATION R/SCR.A/11195/2024 ORDER DATED: 14/02/2025 undefined Court decide all the contentions raised by the parties after giving proper opportunity to the parties in the proceedings of trial of respective criminal cases in accordance with law.
13. Resultantly, all these petitions are dismissed. Notice/Rule is discharged. Interim relief, if any, stands vacated.
(SANDEEP N. BHATT,J) SRILATHA Page 14 of 14 Uploaded by U. SRILATHA(HC00185) on Mon Feb 17 2025 Downloaded on : Mon Feb 17 23:55:26 IST 2025