Sh.Amit Kohli & Anr vs State & Ors
2008 Latest Caselaw 1231 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                      CRL.M.C.No.2517/2008

%                  Date of decision : 05.08.2008


Sh.Amit Kohli & Anr                       ....... Petitioners
                         Through:    Mr.Anil Rakhra with          Mr.Amit
                                     Pandey, Advocates.

                                 Versus

State & Ors                               ......... Respondents
                         Through :   Nemo.


CORAM :-
* HON'BLE MR. JUSTICE ANIL KUMAR

     1.       Whether reporters of Local papers may           YES
              be allowed to see the judgment?
     2.       To be referred to the reporter or not?          NO
     3.       Whether the judgment should be reported         NO
              in the Digest?


ANIL KUMAR, J.

*

The petitioners have challenged the order of summoning, dated

18th March, 2006, in complaint Case No.1906/2006 titled Bennett

Coleman and Co. Ltd. v. Duko Advertising Pvt. Ltd., on the ground that

though the petitioners were the Directors of respondent No.3, they had

resigned from directorship as back as 28th June, 2003 and their

resignation was duly accepted and from that day they have no

connection with the said respondent No.3 and did not take part in the

management and the affairs of the said company and are not

responsible for any activities of respondent No.3 after 28th June, 2003.

The learned counsel for the petitioners has very emphatically

contended that in the complaint filed against the petitioners, as well as

in the memo of parties, the petitioners have been described as Directors

of respondent no. 3, though the petitioners tendered their resignation

as Directors on 28th June, 2003 and they are not taking part in the day

to day management or affairs of the company.

The learned counsel for the petitioner has relied on (2007) JCC

171, J.N.Bhatia & Ors v. State & Anr; 2007(1) LRC 9 (SC), Sabitha

Ramamurthy & Anr v. R.B.S.Channabasavaradhya and 2007(1) LRC

165 (SC), Saroj Kumar Poddar v. State (NCT of Delhi) & Anr to contend

that since they are no more the directors and they have produced

certified copy of Form no.32, the complaint against them is liable to be

quashed.

Perusal of the complaint filed by the respondent No.2 reveals that

the allegation against the petitioners are not restricted only to

petitioners being the Directors and responsible for day to day work. The

respondent No.2 has categorically contended that the petitioners on

earlier occasions were representing themselves as authorized

representatives of the advertising agency and had released

advertisement on a regular basis to the respondent No.2. It has also

been categorically contended that respondent no.3 being the advertising

agency, the petitioners and other directors, respondents No.2 & 3 in the

complaint, namely Mrs.Kavita Vohra and Mr.Ravi Vohra, are the

authorized signatories and are handing the affairs of Delhi office. It is

also asserted that the petitioners and other authorized signatories are

looking after the day to day affairs of the advertising agency and it is

their responsibility to clear all such liabilities that fall on the

respondent No.3 and by giving the cheques of respondent No.3 to the

complainant company, the petitioners and other authorized signatories

have acknowledged their liability towards the complainant company. It

is also categorically pleaded that despite the notice received by the

petitioners they have refused to clear their outstanding dues and did

not even care to approach the respondent No.2/complainant company

to clear their outstanding dues. The relevant paragraphs containing the

specific averments against the petitioners are as under:-

"2. The Respondent No. 1 to 5 are running an advertising agency of which respondent No. 2 is the Managing Director, Respondent No. 3 is the Director and together they are running the affairs of the Delhi office located at D-6/6002-II, Vasant Kunj, New Delhi-110070 and D-3/3596, Vasant Kunj, New Delhi- 110070. The Respondent no 2 and Respondent no 3 have been in regular touch with the executives of the complainant company. On earlier occasions the Respondents 4 and 5 were also representing themselves as authorized representatives of the advertising agency and released advertisement on a regular basis to the company. The advertising agency is fully accredited by the Indian Newspaper Society (INS) and had been getting various advertisements published in various Newspaper and Magazines published by the Complainant Company from time to time. Since the Advertising agency is an accredited one, the Complainant newspaper Group I.e. The Times of India Group, is expected to give 60 days credit facility to the agency. Under the rules made by

the Indian Newspaper Society, Credit facility is extended/given to all such agencies, which are given accreditation by the society.

3. The Complainant Carries on business in the field of Newspaper, magazine etc. and also printers and publishers of several daily newspapers, magazines and periodicals ie. The Times of India, Economic Times, Nav Bharat Times, Femina and Filmfare Etc. and are having a good standing and goodwill reputation in the publishing industry as also the eyes of the general public . It was during the course of its ordinary business, Complainant had got published several advertisements booked by the Respondent Advertising agency and their representatives, the same were published in the newspapers of the Complainant, duly and diligently. It is due to booking and subsequent publication of such advertisements in the newspapers, the Respondents had issued the following cheques-

           Cheque no            Amount              Dated

     01.   526591               20,00,000/-         31.05.2005

     02.   526598               6,74,090/-          10.06.2005

The cheques were drawn on Andhra Bank, R K Puram, New Delhi-110022, against the billings of the complainant.

4. The Respondent no 1 being the advertising agency, and the respondents 2 to 5 being authorized signatory on behalf of Duko Advertising were handling the affairs of the Delhi office. It was during the course of handling the affairs of the Delhi office that Respondent No. 2 and another issued cheques bearing no. 526591 dated 31.05.2005 for Rs 20,00,000/- and 526598 dated 10.06.2005 for Rs 6,74,090/- for payment of all the liabilities on behalf of the advertising agency, Duko Advertising Pvt. Ltd. and had undertaken the responsibility of clearing the total dues of Rs 26,74,090/- of agency.

The Respondents 2 to 5 are managing and controlling the day to day business affairs of Respondent No. 1. The Respondent 2 and another had issued the cheques from their account to liquidate the liability of all the Respondent. Since Respondent No. 2 to 5 are looking after day to day affairs of the advertising agency, it is their responsibility to clear all such liabilities that fall on the Respondent No. 1, and by duly giving the cheque to the

complainant company, the Respondents No. 2 to 5 have acknowledged their liability towards the Complainant Company. The cheque was drawn on Andhra Bank, R K Puram, New Delhi- 110022. (Attached as Annexure C(CW-1/3)

5. That the complainant presented the aforesaid cheques with their banker i.e. the HDFC Bank but the same were returned unpaid with the remark "Payment stopped by the drawer" for the first cheque and " Exceeds arrangement" for the second cheque. The complainant came to know about the dishonor of the aforesaid cheques from their bankers vide memo dated 22.6.2005 and 14.6.2005 received by the office of the complainant company. (Bank memo is attached as Annexure D)(CW-1/4).

6. That the complainant after coming to know that the cheque was dishonoured immediately contacted the Respondents for making the payments. The Complainant through its advocate sent a legal notice on 1.7.2005, which was sent on 2.7.2005. The legal notice is attached herewith, (Attached as Annexure E Colly)(CW-1/5) requesting for payment against the dishonoured cheques. The said legal notices were sent vide Postal receipts of Indraprastha HPO dated 2.7.2005. (Attached as Annexure F)(CW- 1/6). The Respondents nos 1, 4 and 5 have received the notice sent by the counsel for the complainant company. (A. D card received back by the complainants is attached herewith, as Annexure G colly (CW 1/7). The Respondents have refused to clear the outstanding amount due on them and have not even cared to approach or contact the Complainant Company, inspite of repeated reminders sent by the Complainant Company. The action of the Respondents seems suspect and dishonest and with malafide intentions, and have successfully evaded all queries of the Complainant; hence the Complainant is left with no other alternative but to file this complaint before the Hon‟ble Court."

The learned counsel for the petitioners has contended that the

petitioners resigned as a Director on 28th June, 2003 and Form 32 was

also issued on 13th August, 2003 and a certified copy of the Form 32

has also been produced with the present petition. The cheques which

have been dishonoured were issued on behalf of respondent No.3

company on 31st May, 2005 and 10th June, 2005 and, therefore, there

cannot be any liability of the petitioners.

This cannot be disputed in the facts and circumstances that the

allegations against the petitioners is not only that they are the Directors

and responsible for day to day affairs and the business, but something

more than that. The complainant has pleaded categorically that the

petitioners are authorized representatives and were representing

themselves to be authorized representatives and releasing

advertisement on a regular basis to respondent No.2. It has also been

contended that petitioners along with other authorized representatives

are handling the affairs of Delhi office and by giving the cheques the

petitioners have acknowledged their liability towards the respondent

No.2 company.

In the circumstances, it cannot be inferred that there are just

bald allegations against the petitioners being liable as Directors of the

respondent No.3 company. Even if the petitioners had resigned as a

Director on 28th June, 2003 and have produced the Form 32 dated 13th

August, 2003, they being the authorized representatives and

responsible for day to day business of the company and since they have

been releasing advertisements representing themselves as the

authorized representatives of respondent No.2 company, their liability

cannot be negated at this stage merely on account of the petitioners

having resigned as Directors from 28th June, 2003. The precedents

relied on by the petitioners are also distinguishable. In J.N.Bhatia &

Ors (Supra) it was held that if a person is arraigned as an accused only

on the ground that he was a Director, then such a complaint against

such a person is to be dismissed and no summoning order could be

issued. However, if there are specific accusations against such persons

arraigned as accused which even obliquely suggest that such persons

were at any point of time directly or indirectly in charge of and

responsible to the accused company for the conduct of its day to day

business, then their liability cannot be negated in view of the specific

accusations made against each of them. It was held that whether a

person is responsible for the day to day affairs of the company would

depend on the respective roles assigned to the officers in the company.

This is not disputed that even a non director can be liable under

Section 141 of the Act. Since there are specific accusations against the

petitioners, the fact that the petitioners had resigned on 28th June,

2003 will not negate their liability at this stage. A clear case has been

spelt out in the complaint against the petitioners that they have been

duly authorized representatives of the company and had been looking

after the day to day business of the respondent No.3 company and by

issuing the cheques they have held themselves liable. They had been

given the notices as contemplated under the Negotiable Instrument Act

but even thereafter they have not tried to contact the respondent No.2

and absolve themselves of their liability. The petitioners have pleaded

categorically as to how the petitioners are liable and the allegations are

not based simply on account of the petitioners being Directors of

respondent no. 3.

From the perusal of the averments made in the complaint it is

also apparent that the allegations against the petitioners are not mere

repetition of the phraseology contained in Section 141 of the Negotiable

Instrument Act. In J.N.Bhatia & Ors (Supra) the allegations against the

Director were "that the accused petitioner No.1 is a limited company

and the accused Nos.2 to 6 are its Directors and persons in charge of,

and are responsible for day to day affairs or the business of the

accused, petitioner No.1 company." In contradistinction the allegations

against the petitioners in the present petition are categorical and

specific and consequently the petitioners cannot rely on the said

precedent to claim quashing of complaint against them. The other

judgments relied on by the petitioners are also distinguishable as the

averments made against the accused in those case were also generic

and were repetitive of the phraseology as contained in Section 141 of

the Code of Civil Procedure.

Consequently, in view of the specific averments made against the

petitioners, and the role assigned to them, and they being the duly

authorized representatives of the respondent No.3 company, and since

they have been carrying on the day to day business of the said

company, and since they have been earlier issuing cheques on behalf of

the company, and since they have continued to be the authorized

representatives of the company, they cannot be absolved of their

liability at this stage merely because they ceased to be the Directors of

the company. The complaint against them and the order issuing

summons cannot be quashed in the facts and circumstances against

them.

In the facts and circumstances, the petition is without any merit

and is, therefore, dismissed.

August 05, 2008                                   ANIL KUMAR, J.
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