Allahabad High Court
Vibhuti Mohan Singhal vs State Of U.P. And Another on 2 September, 2025
HIGH COURT OF JUDICATURE AT ALLAHABAD
Neutral Citation No. - 2025:AHC:155007
HIGH COURT OF JUDICATURE AT ALLAHABAD
APPLICATION U/S 528 BNSS No. - 27945 of 2025
Vibhuti Mohan Singhal
.....Applicant(s)
Versus
State of U.P. and Another
.....Opposite Party(s)
Counsel for Applicant(s)
:
Farough Ahmad
Counsel for Opposite Party(s)
:
G.A., Pankaj Kumar Govil
with
APPLICATION U/S 528 BNSS No. - 27685 of 2025
Vibhuti Mohan (Singhal)
.....Applicant(s)
Versus
State of U.P. and Another
.....Opposite Party(s)
Counsel for Applicant(s)
:
Farough Ahmad
Counsel for Opposite Party(s)
:
G.A., Pankaj Kumar Govil
Court No. - 75
HON'BLE VIKAS BUDHWAR, J.
1. Heard Shri Farough Ahmad, learned counsel for the applicant in the leading and connected applications and Sri S.P. Singh, learned State Law Officer for the State as well as Shri Rajneesh Pratap Singh, holding brief of Shri Pankaj Kumar Govil, counsel for opposite party no. 2.
2. The counsel for the rival parties have made a joint statement that they do not propose to file any further affidavits, thus, with the consent of the parties, the application is being decided at the fresh stage.
3. The case of the applicant in the leading application is that a complaint stood preferred by the opposite party no. 2 on 06.10.2020 against the applicant herein who was arraigned as an accused no. 2 in the complaint along with the company, Indu Bhusan Asthana with an allegation that the applicant herein happens to be CEO and a director of the firm and with respect to discharge of a liability, pursuant to an agreement, two cheques came to be issued bearing No. 101597, dated 30.04.2020 of Rs. 11,56,041/- and the second cheque bearing No.101596 dated 31.05.2020 of Rs. 8,58,084/- which on presentation in the bank came to be dishonored on 16.06.2020 and on representation on 29.07.2020 came to be dishonored on the same date, followed by a statutory demand notice dated 20.08.2020 came to be served upon the applicant on 24.08.2020 and the complaint on 06.10.2020 and the applicant came to be summoned on 04.12.2020 in complaint case No. 9235 of 2020 by the Court of Presiding Officer, Additional Court, Mathura.
4. As regards, the connected application, the same relates to lodging of a complaint on 27.11.2020/ 01.12.2020 under Section 138 of the N.I. Act against applicant company, Indu Bhushan Asthana with an allegation that the applicant happens to be the CEO and the director and the other co-accused, Indu Bhushan Asthana happens to be the director of the company which is arraigned as accused no. 1 and with respect to discharge of liability, a cheque bearing No. 101598 dated 30.06.2020 of an amount of Rs. 8,50,084/- came to be drawn which on presentation in the bank came to be dishonored on 30.07.2020 followed by re-presentation on 22.09.2020 which was dishonored, a statutory demand notice came to be issued on 14.10.2020 which came to be served on 19.10.2020 followed by a complaint under section 138 of the N.I. Act and the applicant came to be summoned on 15.01.2021 under Section 138 of the N.I. Act being complaint case No. 16091 of 2020.
5. Learned counsel for the applicant has submitted that first of all, the cheques which are two in number in the leading application and one in the connected applications have not been drawn by the applicant, he is non-signatory to the cheque as the said cheques was drawn by the co-accused, Indu Bhushan Asthana and, thus, the provisions contained under Section 138 of the N.I. Act would not come in his way. Further submission is that in the complaint, it has been alleged that the applicant happens to be the CEO and the director of the company in question. However, there happens to be a document which is at page 44 of the leading application (Annexure- 3), reference whereof has been made in paragraph-12 of the leading application and annexure-4 at page 43, reference whereof has been made in para 13 of the connected application that though the applicant happened to be the director of the company in question form 06.02.2018 but the date of season is 22.07.2019 and on the date when the said cheque is said to have been drawn, the applicant was not the director. Submission is that in order to entangle and rope in, the applicant with respect to the offences committed by the companies as provided under Section 141 of the N.I. Act, there has to be a mandatory recital that the applicant at the time, when the offence was committed In-charge of and was responsible to the company for the conduct of business of the company as well as the company. Submission is that the said recital is completely lacking as what has been recited in the complaint in para-2 is that the applicant happens to be CEO and a director. He submits that in absence of a specific recital in this regard, the complaint is bound to fail with an additional factor that on the date when the said cheque is being stated to have been drawn, the applicant ceases to be a director.
6. Reliance has been placed upon the judgment of the Hon'ble Apex Court in Ashok Shewakramani and others v. State of Andhra Pradesh and another; 2023 INSC 693 and K.S. Mehta v. M/s Morgan Securities and Credits Pvt. Ltd; 2015 LiveLaw (SC) 286.
7. Shri Rajneesh Pratap Singh, holding brief of Shri Pankaj Kumar Govil, counsel appears for the opposite party no. 2, complainant in both the complaints submits that once the applicant happens to be CEO then he is wholesale person In-charge and, thus, he would come within the rigors of the provisions contained under Section 138 of the N.I. Act, as according to him, it would be rather meaningless whether the applicant at the time of issuance of the cheque was director or not.
8. I have heard learned counsel for the parties and gone through the records carefully.
9. Apparently, with respect to the leading application and the connected application complaint stood lodged by the opposite party No. 2 with respect to dishonouring of cheque which have been issued on 30.04.2020 and 31.05.2020 in the leading application and in the connected application on 30.06.2020. The document at page 43 Annexure- 4, reference whereof has been made in para-13 of the leading application and Annexure-4 at page 43, reference whereof has been made in para-13 of the connected application shows that the same is a document downloaded from the official website of Ministry of Corporate Affairs relatable to company OTAF Overseas Private Limited and insofar as the applicant is concerned, he has been shown to be the director of the said company whose appointment was made on 06.02.2018 and the date of season is dated 22.07.2019.
10. Importantly, the said cheques had been issued subsequent to the date when he seized to be a director. Moreover, the recital contained in para 2 of the leading application reads as under:
"2. ?? ?? ?? ??????? ??0 2 ??? ?????? ?? ??????? ??? ???????? ??? ??? ?? ??????? ??0 3 ??? ?????? ?? ????????? ??? ?????? ?????? ???? ???? ??? ????? ?? ????????? ???? ???? ?????? ????"
11. Insofar as the connected application is concerned, para-2 of the complaint reads as under:
"2. ?? ?? ?? ??????? ??0 2 ??? ?????? ?? ??????? ??? ???????? ??? ??? ?? ??????? ??0 3 ??? ?????? ?? ????????? ??? ?????? ?????? ???? ???? ??? ????? ?? ????????? ???? ???? ?????? ????"
12. A close reading of the averments made in para-2 of the leading and connected applications, it would reveal that the same do not satisfy the mandatory conditions which ought to have been recited in the complaint, particularly, there is no recital that the applicant at the time of the offence committed was In-charge or responsible to the company for the conduct of the business as well as the company. The recital contained in the complaint is thoroughly insufficient so to entangle and to rope in the applicant to bring within the rigors of the Section 138 of the Act.
13. In Ashok Shewakramani and others (supra) had the occasion to consider the said aspect and in para- 9, it is held as under:
"9. Sub-section 1 of Section 141 of the NI Act required the complainant to aver that the present appellants at the time of the commission of the offence were in charge of, and were responsible to the company for the conduct of the business of the company. In the present case, all that the second respondent has alleged is that the appellants were liable for transactions of the company and that they were fully aware of the issuance of the cheques and dishonour of the cheques."
14. The said law came to be followed in K.S. Mehta (supra), wherein the Para 17 and 18, the following was observed as under:
"17. Upon perusal of the record and submissions of the parties, it is evident that the Appellant(s) neither issued nor signed the dishonoured cheques, nor had any role in their execution. There is no material on record to suggest that they were responsible for the issuance of the cheques in question. Their involvement in the company's affairs was purely non-executive, confined to governance oversight, and did not extend to financial decision- making or operational management.
18. The complaint lacks specific averments that establish a direct nexus between the Appellant(s) and the financial transactions in question or demonstrate their involvement in the company's financial affairs. Additionally, the CGR(s) and ROC records unequivocally confirm their non-executive status, underscoring their limited role in governance without any executive decision-making authority. The mere fact that Appellant(s) attended board meetings does not suffice to impose financial liability on the Appellant(s), as such attendance does not automatically translate into control over financial operations."
15. Since the requirement is absolutely lacking and a pointed query being raised to the learned counsel for the opposite party no. 2 whether the document which has been annexed is downloaded from the official website of the Ministry of Corporate Affairs is genuine or not. The submission is that he does not dispute the said factual position. However, he submits that passing of the order today in favor of the applicant may not be construed to be an expression so as to foreclose the right of the complainant to take other remedies which are available under law.
16. Bearing in mind, the aforesaid factual position and the submissions so made across the bar, the summoning order insofar as it seeks to summon the applicant cannot be sustained.
17. Accordingly, the present application is decided in the following term:
(a) The order dated 04.12.2020 passed in Criminal Case No. 9235 of 2020 (M/s Payal Wala v. OTAF Overseas Pvt. Ltd. and others) in leading application as well as the order dated 15.01.2021 passed in Criminal Case No. 16091 of 2020 (M/s Payal Wala v. OTAF Overseas Pvt. Ltd. and others) is set aside.
(b). The matter stands remitted back to pass fresh order strictly in accordance with law
(c). The passing of the order may not be a ground to give any benefit to the other accused in the complaint.
(d). Needless to point out, it is always open for the applicant to take legal remedies as available under law.
18. Accordingly, the application stands disposed of.
(Vikas Budhwar,J.)
September 2, 2025
A. Prajapati
