Bombay High Court
M.M. Pangarkar vs Rajendra Modani on 16 October, 2012
Bench: Shrihari P. Davare
(1) Cri. W.P. No. 172 / 2012
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
AURANGABAD BENCH, AT AURANGABAD.
Criminal Writ Petition No. 172 of 2012
M.M. Pangarkar,
Age : About 76 years,
Residing at 11F, Flat No. 304, Phase II, .. Petitioner.
New Nilam Nagar, Mulund (East), (Original accused)
Mumbai - 400 081.
versus
Rajendra Modani,
Sole Proprietor of Nath Electricals,
Having his address at 22, .. Respondent.
Rokadiya Hanuman Colony, (Original complainant)
Aurangabad.
.......................
Mr. A.R. Borulkar, Advocate, for the petitioner.
Mr. P.K. Lakhotiya, Advocate, for the respondent.
........................
CORAM : SHRIHARI P. DAVARE, J.
DATE : 16TH OCTOBER 2012
(2) Cri. W.P. No. 172 / 2012
ORAL JUDGMENT :
1. Heard Adv. Mr. A.R. Borulkar for the petitioner, and Adv. Mr.
P.K. Lakhotiya for the respondent.
2. Rule. Rule made returnable forthwith. With the consent of
learned Counsel for the parties, taken up for final hearing.
3. At the request of learned Advocate for the petitioner, leave
granted to correct the number of the proceedings in the trial court,
appearing in prayer clauses of the present petition. Amendment be carried
out forthwith.
4. By the present petition filed under Articles 226 and 227 of the
Constitution of India, the petitioner herein prays that the complaint in
S.C.C. No. 6238/2011, against the petitioner, pending before learned
Judicial Magistrate (F.C.), Aurangabad, be quashed and set aside.
5. It is the contention of the petitioner, that he was Technical
Adviser of Asian Electronics Ltd. (hereinafter referred to as "said
Company") till 1st February 2009. The petitioner resigned from the
services as Technical Advisor of the said Company by resignation letter
dated 13th January 2009 (Copy thereof is annexed herewith at Exhibit
"B"). Thereafter, the petitioner was appointed as a Consultant / Advisor of
the said Company from 1st February 2009 till 31st May 2009 (Copy
thereof is annexed herewith at Exhibit "C"). According to the petitioner,
he was appointed as Consultant / Advisor for a particular project called
'GFSS Project'. He specifically stated that he was neither Director of the
(3) Cri. W.P. No. 172 / 2012
said Company nor was incharge of day-to-day affairs of business of the
said Company.
6. It is alleged that the said Company gave a work order (labour
contract) of Erection, Testing and Commission of 11 KV Lines, 63 KVA
DTC and LT Lines in Feeder, Gaothan Feeder Separation Scheme for five
different Fidder / Places to Nath Electricals, a proprietory firm represented
through its proprietor, namely, Rajendraprasad s/o. Jagannath Modani i.e.
the complainant in S.C.C. No. 6238/2011 (Hereinafter referred to as
"complainant"). It is also alleged that the complainant completed the
entire work in given time schedule. Accordingly, the said complainant
raised the bills towards each work done by it against the said Company as
per the work order. The said Company also made part payments to the
complainant towards the said work done. According to the complainant,
the complainant has maintained the account of the said Company in the
routine course of business and an amount of Rs. 13,93,401/- was
outstanding against the said Company towards the said work order. It is
alleged that the complainant made repeated efforts for recovery of the said
outstanding amount of the said Company. After repeated reminders, the
said Company issued an account payee cheque No. 005280 dated 23rd
September 2011 for Rs. 2,00,000/- drawn on Axis Bank, Fort Branch,
Mumbai, in favour of the complainant towards part payment of the legal
outstanding dues. It is further alleged that the said cheque bore signatures
of two signatories. The complainant deposited the said cheque with State
Bank of India, Samarthnagar Branch, Aurangabad, for encashment
purpose. However, the said cheque was dishonoured and returned unpaid
with the endorsement 'Funds insufficient', along with bank return memo
(4) Cri. W.P. No. 172 / 2012
dated 31-10-2011, which was received by the complainant from his banker
on 3-11-2011. Hence, the complainant issued legal notice dated 4-11-2011
through his Advocate by RPAD, calling upon the said Company to pay the
complainant, the amount of the said dishonoured cheque i.e. Rs. 2,00,000/-
at Aurangabad, within 15 days from the receipt of the said notice.
According to the complainant, the said legal notice was duly served upon
the said Company on or about 9-11-2011. The said Company sent a reply
which was received by the complainant on 23-11-2011, and the said
Company admitted issuance of the cheque and amount due towards
cheque, and promised to pay the amount by way of another cheque.
However, it is the contention of the complainant that the complainant has
not received any amount till the date of cause of action to file the
complaint. Accordingly, it is further contention of the complainant that
inspite of receipt of legal notice, the said Company has not paid cheque
amount within the statutory stipulated period. Hence, the complainant
filed the complaint against the said Company and Directors under Section
138 of the Negotiable Instruments Act, on 1-12-2011. Accordingly,
process was issued against the accused persons in the said complaint and
they appeared before the learned Judicial Magistrate (F.C.). It is reported
that plea of the said accused also has been recorded.
7. On the aforesaid background, grievance of the petitioner is
that he was never Director of the aforesaid Company i.e. Asian Electronics
Ltd. and he was Technical Advisor to the said Company. According to the
petitioner, he resigned from the said Technical Advisorship of the said
Company by letter of resignation dated 13th January 2009 (Exhibit "B")
with effect from 31st January 2009. Moreover, it is also contention of the
(5) Cri. W.P. No. 172 / 2012
petitioner that by letter dated 2nd February 2009 (Exhibit "C"), the said
Company appointed him as Consultant for a particular project for a
specified period i.e. from 1st February 2009 to 31st May 2009, on the
basis of payment of Retainership Fees. It is also grievance of the
petitioner that he was never served with the legal notice dated 4-11-2011,
and it is further canvassed that he was never party to the said legal notice
dated 4-11-2011 (Exhibit "H", page 35). Accordingly, learned Counsel for
the petitioner submitted that since the petitioner was never Director of the
aforesaid Company, he was not incharge and responsible of the day-to-day
affairs of business of the said Company, and further he was not issued any
legal notice before filing complaint against him, nor the petitioner has
signed the disputed cheque in question, and therefore, he cannot be
compelled to undergo ordeal of facing the trial before learned trial court.
To substantiate the said contention, learned Counsel for the petitioner has
tendered photocopies of annual reports for the years 2008-09, 2009-10 and
2010-11, and submitted that the name of the petitioner has not been shown
in the list of Board of Directors in the aforesaid reports which clarifies that
the petitioner was never Director of the aforesaid Company, and therefore,
he is not liable to face the trial in the complaint filed by the complainant.
Accordingly, learned Counsel for the petitioner urged that the present
petition be allowed and the complaint filed by the complainant, qua the
petitioner, be quashed and set aside.
8. Mr. P.K. Lakhotiya, learned Counsel for the respondent,
countered the said arguments and opposed the present petition vehemently,
and submitted that since the petitioner is responsible and incharge of day-
to-day affairs of business of the Company, even though petitioner herein is
(6) Cri. W.P. No. 172 / 2012
not party to the legal notice dated 4-11-2011, complaint can be filed
against the petitioner and the complaint filed by the respondent against the
said Company and its Directors is maintainable, contending that Section
141 of Negotiable Instruments Act does not contemplate that the persons
who faced indictment under Section 141 are entitled to notice under the
proviso (b) to Section 138 of Negotiable Instruments Act, since they face
the indictment because the Company has committed the offence under
Section 138 of Negotiable Instruments Act and they happen to be persons
incharge and responsible to the Company for the conduct and its affairs.
In the said context, he has relied upon judicial pronouncement of Kerala
High Court, in the case of M/s. Target Overseas Exports Pvt. Ltd. and others
Vs. A.M. Iqbal and another, reported at 2005 Cri.L.J. 1931, wherein the Court
has observed thus :
"17. Going by the language of proviso (b) to Sec. 138
of the N.I. Act, the person entitled to notice is the
drawer and not the persons who have signed the
cheque on behalf of the drawer. The purpose of notice
must also be borne in mind. Notice is not an empty
ritualistic formality. The drawer of the cheque must be
given an opportunity to reverse the effect of dishonour
within the specified period. Such notice by its very
purpose need be given only to the drawer and not those
who do acts on behalf of such drawer. In these
circumstances, it appears to me to be evident that only
the 1st accused / company and not accused 2 and 3, the
signatories / Directors are entitled to notice under
proviso (b) to Sec. 138 of the N.I. Act.
18. ...........................................................
19. Thus, going by the language of Secs. 138 and
141 of the N.I. Act and considering the purpose of
(7) Cri. W.P. No. 172 / 2012
notice under proviso (b) to Sec. 138, it follows that
accused 2 and 3 who face prosecution under Section
141 of the N.I. Act are not entitled to any notice under
proviso (b) to Sec. 138 of the N.I. Act. "
9. Learned Counsel for the respondent further submitted that the
averments made in the complaint are self-explanatory wherein it is
categorically stated by the complainant i.e. respondent herein, that the
accused no.4 i.e. petitioner herein is one of the Directors of accused no.1
Company, and is also responsible for day-to-day affairs of the Company.
Hence, in view of the said averments, learned Counsel for the respondent
submitted that although the petitioner herein is not signatory to the
disputed cheque in question, he is liable for the dues of the complainant.
Moreover, it is further submitted that the averments made in the complaint
are required to be seen and whether the petitioner herein is Director of the
Company, or not, or whether he is merely a Technical Advisor of the said
Company, is the matter of evidence and the said aspect can be ascertained
during trial only, and hence, urged that the present petition deserves to be
dismissed. To substantiate the said contention, learned Counsel for the
respondent has relied upon the judicial pronouncement of Apex Court in
the case of Rallis India Ltd. Vs. Poduru Vidya Bhusan & others, reported at
2011(3) Bom.C.R. 450.
10. I have perused the present petition, its annexures, and heard
rival submissions advanced by the learned Counsel for the parties
anxiously, and also considered the judicial pronouncements cited by the
learned Counsel for the parties carefully.
(8) Cri. W.P. No. 172 / 2012
11. At the outset, a bare perusal of the complaint under S.C.C.
No. 6238/2011 filed by the respondent against the petitioner herein and
other co-accused reflects that Asian Electronics Ltd. is the accused no.1
and Arun B. Shah, Executive Chairman & Managing Director of the said
Company is accused no.2, and Rasik D. Goradia, Sr. Vice President
Finance & Company Secretary, is accused no.3, whereas the petitioner
herein is accused no.4 in the capacity of Director of the said Company.
The averments made in the said complaint disclose that the accused no.4 is
one of the Directors of the accused no.1 Company, and is responsible for
day-to-day affairs of the said Company. It is also averred in the said
complaint, that the cheque is issued from the account of accused no.1
Company and it was signed by accused nos.2 and 3, and other Directors
are also responsible for the day-to-day affairs of business of the accused
no.1 Company, and all of them are responsible and vicariously liable for
the action done by the others for the Company as they have actively
participated in the day-to-day affairs of the Company. Hence, all of them
are equally responsible for the offence. Hence, apparently, the said very
averments made in the complaint make the petitioner herein liable, at least,
to face the trial.
12. As regards the contention of the petitioner, that he was not
made party to legal notice dated 4-11-2011, and without issuing any legal
notice, he was made party / accused in the aforesaid complaint,
considering the aforesaid averments made in the complaint, it is apparently
clear that the petitioner herein is facing indictment because the Company
has allegedly committed offence under Section 138 of Negotiable
Instruments Act, and as per averments made in the complaint, the
(9) Cri. W.P. No. 172 / 2012
petitioner herein happens to be person incharge and responsible to the
Company for the conduct of its affairs, and therefore, he is facing the
indictment only under Section 141 of Negotiable Instruments Act, and
language of Section 141 of Negotiable Instruments Act does not indicate
that the person who faces indictment under Section 141 of Negotiable
Instruments Act would be entitled to notice under the proviso (b) to
Section 138 of Negotiable Instruments Act, and such stipulation is not
there at all under Section 141 of Negotiable Instruments Act, since the
notice was issued to the Company, drawer, and therefore, the person facing
indictment with the help of Section 141 is not entitled to insist on a
separate notice, and hence, the submission made by the learned Counsel
for the petitioner, apparently, bears no substance and he can very well be
made accused in the complaint without issuance of notice to him
considering the aforesaid averments and conjoint reading of Sections 138
and 141 of Negotiable Instruments Act.
13. In so far as other contentions made by the learned Counsel for
the petitioner, that the petitioner has already resigned from the aforesaid
Company by resignation letter dated 13th January 2009 with effect from
31st January 2009, and he was appointed as a Consultant for a specified
project on Retainership Fees basis by letter dated 2nd February 2009
(Exhibit "C") for a specified period i.e. 1st February 2009 to 31st May
2009, and he was merely Technical Advisor of the said Company, and not
Director of the said Company, apparently, letter dated 13th January 2009
(Exhibit "B") does not bear acknowledgment of the said Company
showing that the said letter was received by the said Company. Moreover,
it is pertinent to note that the petitioner has not produced any authentic
(10) Cri. W.P. No. 172 / 2012
document issued by the Registrar of Companies showing that he was never
Director of the aforesaid Company, nor he has produced any cogent
evidence by Registrar of Companies to establish that he was merely a
Technical Advisor of the aforesaid Company and resigned with effect from
31st January 2009. Besides, the photocopies of Annual Reports for the
years 2008-09, 2009-10 and 2010-11 produced by the petitioner do not
bear any authenticity, and hence, same cannot be considered to decide
whether he was Director of the said Company, or not, at the relevant time.
Hence, on the face of aforesaid very averments made by the complainant
in the complaint, that the petitioner herein is one of the Directors of
accused no.1 Company, and is also responsible for day-to-day affairs of
business of the said Company, and in the absence of any authentic
document produced by the petitioner showing that he was never Director
of the said Company or he has resigned from Technical Advisorship with
effect from 31st January 2009, the submissions made by the learned
Counsel for the petitioner cannot be accepted.
14. Apart from that, needless to state that this Court is not a fact
finding court and the very averments made by the complainant in the
complaint are required to be considered, pertinently, in the absence of any
authentic proof produced by the petitioner, as mentioned herein above, and
whether the petitioner was Director of the aforesaid Company at the
relevant time, or not, or whether he was merely Technical Advisor of the
said Company, and whether he is a mere Consultant on Retainership Fees
basis of the said Company, are the issues to be decided during the course
of trial, after giving opportunities to the parties to adduce evidence in that
respect, which can be tested on cross examination, and therefore, today at
(11) Cri. W.P. No. 172 / 2012
this stage, in the present petition, one cannot jump to the conclusion that
the petitioner is not responsible for the day-to-day affairs of business of
the Company. Hence, present petition deserves to be rejected.
15. In the result, present Petition, which is sans merits, stands
dismissed, and ad interim relief stands vacated. Rule is discharged
accordingly.
(SHRIHARI P. DAVARE)
JUDGE
ig .........................
bgp/172kwp
