K.K. Chug vs State And Ors.
1999 Latest Caselaw 331 Del

Citation : 1999 Latest Caselaw 331 Del
Judgement Date : 22 April, 1999

Delhi High Court

K.K. Chug vs State And Ors. on 22 April, 1999

Equivalent citations: 84 (2000) DLT 563, 2000 (56) DRJ 135

Author: S Kapoor

Bench: S Kapoor

JUDGMENT

S.N. Kapoor, J.

1. Heard. In this case, only one short question arises for consideration: "Whether the petitioner, Sh. K.K. Chug, simply being Director of M/s. K.K. Overseas (Pvt.) Ltd. could be prosecuted?"

2. The allegations made in para-2 of the complaint for offence under Section 138 of the Negotiable Instruments Act (hereinafter called the 'Act' for short) read as under:

"2. That the accused persons were in need of money in the month of July, 1995 and requested the complainant for a friendly loan of Rs. two Lacs for a period of three months and accordingly a cheque drawn on Oriental Bank of Commerce, Darya Ganj, Delhi for Rs. 2 lacs was issued by the complainant which was duly received and encashed by the accused persons."

3. The entire complaint does not indicate anywhere that the petitioner being Director at the time of commission of offence was in-charge and responsible to the company for the conduct of the business of the company. It is also not the case of the complainant that the petitioner has signed the loan documents. It is again not the case of the complainant that he has signed the cheques. In such circumstances, it is evident that since requirements of Section 141 of the Act as mentioned earlier have not been satisfied, the petitioner could not be prosecuted for offence under Section 138 read with Section 141 of the Act. Similar view has been taken in Mahendra Pratap Singh Ratra and Anr. v. N.K. Metals and Anr., and Prakash Industries Ltd. and Ors. v. Bajaj Auto Finance Ltd., 1998(2) JCC (Delhi) 284. Not only this Court but other High Courts have also taken the view that it is for the complainant to allege as well as prove that the concerned Director of the company or a partner of the partnership firm was in charge and was responsible to the company for the conduct of its business at the relevant time. So long it is not alleged, the liability of under Section

141(1) of the Act cannot be made applicable to the petitioner. For the foregoing reasons I feel that the petition has to be allowed and it is allowed accordingly.