Zenith Mining Pvt. Ltd. And Mr. ... vs National Agricultural ...
2007 Latest Caselaw 1687 Del

JUDGMENT

V.B. Gupta, J.

1. Since the common question of law is involved, by this common judgment the above mentioned two petitions are being disposed of.

2. These petitions have been filed under Section 482 Cr.P.C. seeking quashing of the proceedings and discharge under Section 138 of the Negotiable Instruments Act in criminal complaint case Nos.948/1/06 and 884/1 pending in the court of Magistrate.

3. The brief facts of the case are that the respondent/complainant filed complaints under Section 142 read with Section 138 of Negotiable Instruments Act against the present petitioners as well as one Sh.Som Nath Sahu on the allegation that cheques were issued by the accused to the respondent/complainant under covering letter dated 15th October, 2005 towards part payment of the outstanding dues amounting to Rs.67 crores out of total amount of Rs.90 crores taken by the accused persons from the complainant. The above said covering letter was signed by petitioner No. 2 and cheque has been signed by Mr.Som Nath Sahu. The cheques issued by the accused were dishonoured and accordingly complaints under Section 138 of Negotiable Instruments Act were filed. Petitioner No. 1 is a private limited company whereas petitioner No. 2 is the Chairman-cum-Managing Director of petitioner No. 1 and Sh.Som Nath Sahu is the person who has signed the cheques.

4. It has been contended by learned Counsel for the petitioners that petitioner No. 1 and respondent entered a deed of agreement on 12th February, 2004 for supply of iron ore fines and dispute arose between the parties regarding supply of iron ore fines. Sh.Som Nath Sahu, accused No. 3who has nothing to do with the petitioner-company, issued cheques amounting to Rs. 15 crores and Rs.18 crores in favor of the respondents and those cheques were dishonoured. Admittedly, neither petitioner No. 1 nor petitioner No. 2 had issued any cheques in favor of the respondent nor petitioner No. 2 has issued any covering letters in support of the cheques amount and the same are forged and fabricated by the respondent and as such the complaints filed against the present petitioners are not maintainable since they have nothing to do with the cheques in question.

5. On the other hand, it has been contended by learned Counsel for the respondent, that petitioner No. 2 is the in charge of the affairs of the company being Chairman-cum-Managing Director and the cheques in question have been issued by the company along with covering letter dated 15th October, 2005 under the signatures on behalf of petitioner No. 2 towards the discharge of liability by the petitioner No. 1 company. Further, the petitioners have not denied or disputed the liability towards the respondent and the present petitions are nothing but an abuse of the process of law and are liable to be dismissed.

6. Admittedly, there was agreement between petitioner and respondent for supply of iron ore fines and dispute has arisen between them. As per covering letter dated 15th October, 2005 of the petitioner No. 1-company placed on record by the petitioners themselves, petitioner No. 2 has sent three post dated cheques as mentioned in the covering letter to the respondent-company with regard to the repayment of advances. So, now it does not lie in the mouth of the petitioners to say that they are not responsible or the cheques have not been issued by them. Admittedly, petitioner No. 2 is the Chairman-cum-Managing Director of the petitioner No. 1-company and he has sent three cheques along with covering letter duly signed by him. The question as to whether the covering letters are forged or not is a matter of evidence and this defense, the petitioners can take up during the course of trial.

7. In a recent decision of the Apex Court reported as N.Rangachari v. Bharat Sanchar Nigam Ltd. AIR 2007 S.C. 1682, a cheque issued by the company was dishonoured and a complaint under Section 138 of the Negotiable Instruments Act was filed in which allegations were made against the appellant and another who were the Directors and the question was whether they were in-charge of affairs of the company at the relevant time or not. It was held by the Apex Court that it can be adjudged only during the course of trial and the complaint cannot be quashed under Section 482 Cr.P.C. Dealing with the provisions of Section 138 and 141 of the Negotiable Instruments Act. The Apex Court held that-

A person normally having business or commercial dealings with a company, would satisfy himself about its creditworthiness and reliability by looking at the promoters and Board of Directors and the nature and extent of its business and its Memorandum or Articles of Association. Other than that, he may not be aware of the arrangements within the company in regard to its management, daily routine, etc. Therefore, when a cheque issued to him by the company is dishonoured, he is expected only to be aware generally of who are in charge of the affairs of the company. It is not reasonable to expect him to know whether the person who signed the cheque was instructed to do so or whether he has been deprived of his authority to do so when he actually signed the cheque. Those are matters peculiarly within the knowledge of the company and those in charge of it. So, all that a payee of a cheque that is dishonoured can be expected to allege is that the persons named in the complaint are in charge of its affairs. The Directors are prima facie in that position.

In the instant case, reading the complaint as a whole, it is clear that the allegations in the complaint are that at the time at which the two dishonoured cheques were issued by the company, the appellant and another were the Directors of the company and were in charge of the affairs of the company. It is not proper to split hairs in reading the complaint so as to come to a conclusion that the allegations as a whole are not sufficient to show that at the relevant point of time the appellant and the other are not alleged to be persons in charge of the affairs of the company. Obviously, the complaint refers to the point of time when the two cheques were issued,their presentment, dishonour and failure to pay in spite of notice of dishonour. Thus, it cannot be said that the allegations in the complaint against the appellant did not contain sufficient averments to justify the issue of process to the appellant and therefore, the complaint ought to be quashed under Section 482, CrPC. In fact, an advertence to Sections 138 and 141 of the Negotiable Instruments Act shows that on the other elements of an offence under Section 138 being satisfied, the burden is on the Board of Directors or the Officers in-charge of the affairs of the company to show that they are not liable to be convicted. Any restriction on their power or existence of any special circumstance that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish at the trial such a restriction or to show that at the relevant time they were not in charge of the affairs of the company. Reading the complaint as a whole, it is a case where the contentions sought to be raised by the appellant can only be dealt with after the conclusion of the trial.

8. In the present case, petitioner no. 2 who is the Chairman cum Managing Director has sent three cheques to the respondent along with a covering letter duly signed by him and as such complaint under Section 138 rule with Section 142 of the Negotiable Instruments Act is maintainable against him.

9. Under these circumstances, the present petitions are nothing but an abuse of the process of law and they are legally not maintainable and the same are, hereby dismissed with costs of Rs. 5,000/- each. Petitioners are directed to deposit the costs in respect of each petition with the trial court within a period of one month from today failing which the trial court shall recover the same in accordance with law.

10. Copy of this judgment be sent to the trial court for compliance.