Vipul Kumar Mittal vs Varishtha Leasing (I) Ltd.
2005 Latest Caselaw 1002 Del

JUDGMENT

Manju Goel, J.

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1. This is a petition under Section 482 of the Code of Criminal Procedure for quashing the criminal complaint bearing No. 726/1 of 2003 qua the petitioner.

2. The petitioner Vipul Kumar Mittal is accused No. 4 in the complaint filed by the respondent M/s Varishtha Leasing (International) Ltd. In the complaint u/s 138 Negotiable Instruments Act (in short the `Act'), the petitioner is shown as the Director of the accused No. 1, M/s Ahaar Finvest Pvt. Ltd. It is alleged in the complaint that all the accused including the petitioner approached the complainant company for a loan of Rs. 5 lakhs for a period of 3 months, that in pursuance of the request made by them the loan was extended from time to time, that cheques towards interest issued in the meantime were dishonoured several times and in lieu of dishonoured cheques fresh cheques were issued and that eventually the loan along with interest was repaid by cheques bearing No. 181914, 181915 and 181916 for Rs. 75,050/- Rs. 25,016/- and Rs. 5,00,000/- dated 20.12.2002 and 20.03.2003 and 20.03.2003 respectively which were again dishonoured. The complainant thereafter proceeded to serve the accused with notice required by the provisions of Section 138 of the Act and filed the complaint on the default of the accused persons in complying with the notice. By the impugned order the petitioner along with other were summoned for the offence u/s 138 of the Act. The grounds on which the order is challenged is that no prima facie case is made out against the petitioner as the complainant has not established in what manner the petitioner was in charge of and responsible for the affairs of the company and that the petitioner was not a Director of the company at the relevant time.

3. On the basis of the complaint, the Metropolitan Magistrate has summoned all the accused including the petitioner. It is submitted that the petitioner does not fall in any of the categories of persons who can be summoned for an offence under Section 138 of the Act committed by a company. It is submitted that the prosecution is false and frivolous. I have carefully considered the plea of the petitioner and I find no substance in the same.

4. The persons who can be responsible for an offence under Section 138 of the Act when the same is committed by a company have been described in Section 141 of the Act. Section 141 reads 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:

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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.

Explanation.- 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. The petitioner heavily relies upon the judgment of the Supreme Court in the case of Katta Sujatha (Smt.) v. Fertilizers & Chemicals Travancore Ltd. & Anr. reported as in which the Supreme Court has held that the complainant must attribute some particular act to the accused who is sought to be prosecuted for the offence of the company. This court has held in the case of Crl. M.C. No. 2690 of 2004 titled Raminder Kaur Narula v. Prem Colour Chemicals (P) Ltd. decided on 6th July, 2005 that unless the complainant says that the particular Director or officer who is prosecuted by him is responsible for the offence being responsible for the aspect of the business relating to the offence in question by specifying how he is so responsible and on what basis such allegation is being made, the court cannot summon him for the offence under Section 138 of the Act. This judgment is also based on the Supreme Court judgment in the case of Katta Sujatha (Supra).

6. In the present case I find that the complainant has stated in so many words that the accused 2,3 & 4 approached the complainant company for a loan of Rs. 5 lakhs for a period of three months. In the present complaint, the complainant has categorically stated that accused Nos.2,3 & 4 approached the complainant company for loan of Rs. 5 lakhs. Thus, a specific allegation against the present petitioner, accused No. 4, has been made in the complaint. Therefore, the Metropolitan Magistrate is bound to summon the petitioner. The petitioner can prove his innocence by taking recourse to proviso to sub-Section (1) of Section 141 of the Act.

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7. In the case of S.V.Mazumdar and Ors. v. Gujarat State Fertilizers Co. Ltd. and Anr. reported as 2005 V AD (S.C.) 494, the Supreme Court has held that once the allegations sufficient to summon the accused has been made, the accused can be summoned and thereafter proving the truth or falsity of the allegation will be a matter of evidence to be led before the trial court.

8. In my opinion, the Metropolitan Magistrate was right in summoning the petitioner keeping in view the allegations made in the complaint. The petitioner will be at liberty to prove his innocence during trial as mentioned above. I find no ground to quash the impugned order. The petition is dismissed in liming.