Calcutta High Court (Appellete Side)
Pankaj Saraf & Anr vs The State Of West Bengal & Anr on 20 April, 2023
IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIOANL JURISDICTION
APPELLATE SIDE
The Hon'ble JUSTICE BIBEK CHAUDHURI
CRR/3955/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
With
CRR/3965/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
With
CRR/3956/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
With
CRR/3957/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
With
CRR/3958/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
With
CRR/3960/2022
Pankaj Saraf & Anr.
Vs. The State of West Bengal & Anr.
With
CRR/3961/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
With
CRR/3962/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
2
With
CRR/3963/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
With
CRR/3964/2022
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
With
CRR/2639/2022
In IA No: CRAN/1/2022, CRAN/2/2023
Pankaj Saraf & Anr.
Vs.
The State of West Bengal & Anr.
For the Petitioner: Mr. Dipanjan Chatterjee, Adv.,
Mr. Ashok Bhowmik, Adv.,
Ms. Richa Pramanik Adv.,
Mr. Sourodeep Singha, Adv.
For the O.P No.2: Mr. Debajyoti Deb, Adv.,
Mr. Shyamal Mondal, Adv.,
Ms. Somdyuti Parekh, Adv.,
Ms. Sanjana Maitra, Adv.
Heard on: 29.03.2023 & 12.04.2023.
Judgment on: 20.04.2023.
BIBEK CHAUDHURI, J. : -
1.
Since the identical question of facts and law are involved in the
above mentioned criminal revisions this Court is disposing of the said
criminal revisions by a composite judgment.
2. In CRR 3962 of 2022 the petitioners have prayed for quashing of a
complaint registered as CS Case No.419462 of 2015 pending before the
learned Metropolitan Magistrate, 14th Court at Calcutta under Section
138 read with Section 141 of the Negotiable Instruments Act.
3. It is alleged by the petitioners that they retired from the post of
Directors of Diamond Shipping Company Ltd by submitting their
resignations before the Ministry of Corporate Affairs on 10th June, 2014.
On 26th June, 2014 the two cheques were drawn on behalf of Diamond
Shipping Company Ltd in favour of opposite party No.2 for a total sum of
Rs.16,35,407/-. The said cheques were deposited by the opposite party
No.2 in his bank for encashment but both the cheques were dishonoured
on 23rd September, 2014 with the remarks "Account blocked situation
covered". Subsequently, the opposite party No.2 issued a notice upon M/s
Diamond Shipping Company Ltd demanding payment of the cheque
amount within the statutory period of time. However, the company failed
to pay the said sum and finally the opposite party No.2 lodged a
complaint against the company and the present petitioners.
4. It is contended by the petitioners that cheques were issued on 26th
June, 2014. While the petitioners retired from the post of Directors of the
said company with effect from 10th June, 2014. By an order dated 2nd
September, 2014 the Commissioner of Customs (Port), Government of
India requested the company to freeze the bank account
No.018705008342 of the said company.
5. It is the specific case of the petitioners that the petitioners were not
the Directors of the complainant company on the date on which the
cheques were issued. In support of his contention, Mr. Chatterjee, learned
Advocate for the petitioners refers to the decision of the Hon'ble Supreme
Court in Harshendra Kumar D. vs. Rebatilata Koley & Ors. reported in
(2011) 3 SCC 351. In the said decision it is held by the Hon'ble Supreme
Court that it is fairly well settled now that while exercising inherent
jurisdiction under Section 482 or the revisional jurisdiction under Section
397 of the Code in a case where complaint is sought to be quashed, it is
not proper for the High Court to consider the defence of the accused or
embark upon an enquiry in respect of merits of the accusations. However,
in an appropriate case, if on the face of the documents - which are
beyond suspicion or doubt - placed by the accused, the accusations
against him cannot stand, it would be travesty of justice if the accused is
relegated to trial and he is asked to prove his defence before the trial
court. In such a matter, for promotion of justice or to prevent injustice or
abuse of process, the High Court may look into the materials which have
significant bearing on the matter at prima facie stage. Thus, the Hon'ble
Supreme Court held that the High Court fell into grave error in not taking
into consideration the uncontroverted documents relating to the
appellant's resignation from the post of Director of the company. Since the
appellant resigned from the post of Directorship before issuance of
cheque, and his resignation was accepted, the erstwhile director cannot
be prosecuted in a complaint for dishonor of cheques. If the complaint is
allowed to proceed against the appellant, it would result in gross injustice
to the appellant and tantamount to an abuse of the process of the court.
6. The next limb of argument made on behalf of the petitioners is that
the bank account of the company was frozen by the Commissioner of
Customs (Port), Government of India with effect from 2nd September,
2014. Therefore, freezing of bank account of the petitioner had the effect
of disabling the company from operating or maintaining the said account.
The petitioners could not exercise their rights either to deposit into or
withdraw from the said account. It is not the case of the complainant that
the cheques in question were dishonoured due to insufficient fund or
those cheques exceeded the arrangement made in the bank account. The
company was not able to operate the bank account as it was frozen by a
government authority, namely the Commissioner of Customs (Port),
Government of India. Under such circumstances, the complainant
company cannot be held to be liable for dishonor of cheque within the
meaning of Section 138 of the Negotiable Instruments Act in support of
his contention he refers to a decision of Delhi High Court in Vijay
Chaudhary vs. Gyan Chand Jain reported in 151 (2008) Delhi Law
Times 237.
7. The learned Advocate for the petitioners also refers to the decision
of this Court in Saroj Kumar Jhunjhunwala vs. The State of West
Bengal & Anr. reported in (2007) 1 C Cr. LR (Cal) 793, wherein a
Coordinate Bench of this Court held that a director who resigned from the
post of Directorship prior to the issuance of cheque by the company, is
not responsible for the dishonourment of the cheques in question and the
proceeding against such director being not maintainable is liable to be
quashed.
8. Learned Advocate for the opposite party, on the other hand submits
that even if the directors of the company resigned before issuance of
cheques and the account of the accused company was freezed by the
order of a statutory authority or on account of the winding-up
proceedings as against the accused company, but the accused company
having issued the cheques for the subsisting liability is bound to see that
the cheques are honoured at any cost. The freezing of the account was not
on account of the act of the complainant, but it was on account of the act
of the accused. The accused company, therefore cannot escape from the
criminal liability on the ground that the cheques were returned
dishonoured only on account of the freezing of the accounts of the
accused.
9. It is further submitted by learned Advocate for the opposite party
that the Negotiable Instruments Act is a Special Act which overrides the
provisions of the Companies Act, the legal liability contemplated
under Section 446 of the Companies Act does not synchronise with the
criminal proceedings under the Negotiable Instruments Act and the
personal criminal liability and not the civil liability of the company is
enforced under Section 138 read with Section 142 of the Negotiable
Instruments Act. Therefore, the company and his directors cannot shirk
their criminal liability on the ground that the company was already
wound up and the Official Liquidator had taken charge of the affairs of
the company. In support of his contention the learned Advocate for the
opposite party refers to a decision of Madras High Court in the case of
Counter Point Advt. P. Ltd vs. Harita Finance Ltd. reported in 2006
(2) Crimes 368.
10. The learned Advocate for the opposite party next refers to another
decision of this Court in the case of Fateh Chand Bhansali vs.
Hindusthan Development Corporation Limited reported in (2005) 2
CHN 454. In the aforesaid judgment a Coordinate Bench of this Court
held that the order of the Reserve Bank of India freezing a bank account
of the accused company is not at all a ground to quash the complaint
against the petitioners. Order of Reserve Bank of India cannot operate as
a ban to lodge criminal proceeding against petitioners for alleged offence
under Section 138 of the NI Act. Moreover, it would be a question of fact
which can be decided on the basis of evidence in the Trial Court whether
default on the part of accused No. 1 company and its Directors in paying
the amount of the dishonoured cheque to the holder of the cheque had
occurred because of overriding supervening event namely, the Order of
the Reserve Bank of India restraining the petitioner company and its
Directors from making payment by disbursing funds or disposing of its
properties. This point can be decided on the basis of cogent oral and
documentary evidence at the time of trial. Therefore, application filed for
winding-up of the company cannot save the company and its directors
from penal liability under Section 138 of the N.I Act.
11. Having heard the learned Counsels for the parties and on careful
perusal of the entire materials on record I like to record at the outset that
Diamond Shipping Limited has not come forward seeking encashment of
the criminal proceeding instituted against it. The petitioners were
erstwhile directors of the company who retired from the post of directors
of the said company with effect from 10th June, 2014. Therefore, the
factual circumstance is similar to the facts and circumstance of
Harshendra Kumar D. (supra) wherein the Hon'ble Supreme Court was
pleased to hold that on the date the offence was committed under Section
138 of the N.I Act by the company the appellant was not the director; he
had nothing to do with the affairs of the company. Thus, it was held by
the Hon'ble Supreme Court that in such view of the matter, if the criminal
complaints are alleged to proceed against the appellant, it would result in
gross injustice to the appellant and tantamount to an abuse of the
process of the court.
12. In the instant case similar is the situation. The petitioners were not
directors of the company on the date when the cheques were issued. It is
not the case of the opposite party No.2/complainant that they were the
signatories of the cheques. It is also pertinent to note that in the above
mentioned decision the Hon'ble Supreme Court considered both the
decisions of this Court in Fateh Chand Bhansali and Saroj Kumar
Jhunjhunwala and the Hon'ble Supreme Court held that the directors
who retired from the post before issuance of cheques cannot be held liable
under Section 138 of the N.I Act.
13. For the reasons stated above, I do not have any other alternative
but to quash the criminal proceedings against the present petitioners.
14. The instant revision is, accordingly, allowed on contest.
(Bibek Chaudhuri, J.)
