Mrs. Monica Gogia vs State And Ors.
2005 Latest Caselaw 261 Del

JUDGMENT

Manju Goel, J.

1. These are six petitions under Section 482 Cr. P.C. for dropping/quashing the proceedings under Section 138 of the Negotiable Instrument Act, 1981 (in short 'N.I. Act'). The complaints under Section 138 N.I. Act have been filed by Shri Neeraj Gupta, proprietor of Colts Contec. The principal accused in these complaints is M/s. Gogia International Securities Ltd., respondent No. 3 herein. Accused No. 2-Mr. Satish Gogia (respondent No. 4 herein) is said to be the Managing Director and Principal Officer while the petitioner, Ms. Monica Gogia-accused No. 3 in the complaint, is shown to be the person responsible for the business of the principal accused M/s. Gogia International Securities Ltd. Six complaints have been filed under the same provisions over different cheques issued by accused No. 1. The ground on which the proceedings and the complaint are sought to be quashed are common in all the petitions. Therefore, by this judgment all these six petitions will be disposed of.

2. All the petitions have been filed by Mrs. Monica Gogia who is arrayed as respondent No. 3 in all the complaints. It is contended by the petitioner that she is neither the Director nor the Principal Officer of the company known as Gogia International Securities Limited, that she is not the person in charge of the day-to-day affairs of the company, that the allegations in respect of her involvement in the company is merely a bold assertion unsupported by any evidence, that in the annual report of the company for the years 1999-2000 and 2000-01 the name of the petitioner does not appear as the Director, that she was not a party to the transaction, that although initially she was the subscriber as shown in the Memorandum and Articles of Association the company was actually being managed by Shri Satish Gogia, respondent No. 4/accused No. 2 in the complaint, that respondent No. 4 being 100% disabled below his waist was being assisted by the petitioner who is his wife and that without considering all these aspects the M. M. has issued summons to her under Section 138 of the N.I. Act.

3. The petition is vehemently opposed on the ground that on none of her averments made in petition the complaint under Section 138 N.I. Act can be quashed. It is contended on behalf of respondent No. 2, Neeraj Gupta, that there is sufficient averment in the complaint that the petitioner was responsible for the conduct of the business of the company and, therefore, liable to be prosecuted under Section 138 N.I. Act. Reliance is also placed on the judgment of the Supreme Court in the case of S.A. Nanjundeswara v. M.S. Varlak Agrotech Pvt. Ltd. reported as 2002 Dishonour of Cheque Reporter 6 where the Supreme Court has observed that the High Court can be justified in quashing the proceedings only if it comes to the conclusion that even the statements taken on the face value do not make out any offence. In the facts of the case before the Supreme Court it was found that a case for quashing the complaint had been made out.

4. What has to be examined by this court is whether prima facie a case has been made out on which summons can be issued. The complaint can be quashed only if on a plain reading of the complaint no offence under Section 138 of N.I. Act is made out. There is no challenge to the fact that an offence under Section 138 N.I. Act has been made out in the case. The only thing being agitated is that the petitioner cannot be held liable for the offence. The petitioner, it is stated, is neither the Director nor an Officer of the company and, therefore, cannot be prosecuted under Section 138 of the N.I. Act. The relevant provisions of the N.I. Act can be found in the Section 141 of the Act which is as under:

"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 punished accordingly:

Provided that nothing contained in this sub-section 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 sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer 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.

Explaination. - 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 relation to a firm, means a partner in the firm."

5. Sub-section (1) of Section 141 quoted above shows that the persons who can be prosecuted for an offence by a company are those who at the time the offence was committed were in charge of and responsible to the company for the conduct of the business of the company as well as the company. This sub-section does not use the words either Director or officer. What is to be seen is whether the person was in charge of and was responsible to the company. It has to be seen that the complainant is an outsider and cannot know the internal arrangement of the company. His knowledge, vis-a-vis, the company has to be limited to his personal knowledge which he derives from his dealings with the company. He cannot be expected to be in hold of the internal documents of the company. What is the exact situation of a person in a company is a matter of evidence to be adduced during trial. Before the summons are issued or cognizance is taken the court cannot be expected to give a finding as to the truth of the allegations. The allegations alone are the material at this point. In this respect the complaint specifically says that the petitioner actively officiates in the business and assists the principal officer in the day-to-day operation and affairs of the company. That the petitioner is involved in the affairs of the company is not disputed. The petitioner herself says that she assists her husband in the business because the husband is 100% paralyzed below his waist. Thus the allegation that the petitioner actively officiates in the business cannot be brushed aside lightly. Admittedly, the petitioner was a subscriber in the business. The two factors that she was the initial subscriber and has been associated with the business is sufficient to lend credence to the allegations, at least, for the purpose of taking cognizance. It cannot be said that no material was before the court of learned M.M. on the basis of which summons could be issued to the petitioner.

6. What the petitioner wants basically is an adjudication about her status in the business and on that basis withdrawal of summons or quashment of criminal proceedings. This cannot be done under the scope of Section 482 Cr. P.C. which has been defined so well in the judgment of Zandu Pharmaceutical Works Ltd. and Ors. v. Mohd. Sharaful Haque and Anr. by the Supreme Court. The Supreme Court has laid down the guidelines for exercising the jurisdiction u/s 482 Cr. P.C. while entertaining such prayers for quashing. The Court has advised as under:-

It is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is clearly inconsistent with the accusations made, and a case where there is legal evidence which, on appreciation, may or may not support the accusations. When exercising jurisdiction under Section 482 of the Code, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained. That is the function of the trial Judge. Judicial process should not be an instrument of oppression, or, needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into consideration before issuing process, lest it would be an instrument in the hands of a private complainant to unleash vendetta to harass any person needlessly. At the same time the section is not an instrument handed over to an accused to short-circuit a prosecution and bring about its sudden death.

7. At the same time the judgment in the case of State of Orissa v. Debendra Nath Padhi was to be kept in mind. In this judgment the Supreme Court has clearly ruled that at the stage of charge evidence and documents produced by the accused cannot be taken into account. The same principle will apply at the stage of issuing summons. On the basis of the averments before the M.M. , the summons have been rightly issued. No interference in the order is called for. The petitions are dismissed.