Ranjit Chaudhary & Anr. vs M/S. Max International Company
2008 Latest Caselaw 2261 Del

*     HIGH COURT OF DELHI AT NEW DELHI

+       Crl. M. C. No. 3422/2007


                     Date of decision : 16th December, 2008

#     RANJIT CHAUDHARY & ANR. ...... Petitioners
!              Through : Mr. S.K. Sharma, Adv. with
                         Mr. Dhruv Kumra, Adv.

                            Versus


$     M/S MAX INTERNATIONAL
      COMPANY                   ..... Respondent
^              Through : Mr. K.K. Sharma, Adv.

%
      CORAM:
      HON'BLE MS. JUSTICE ARUNA SURESH

     (1) Whether reporters of local paper may be
         allowed to see the judgment?

     (2) To be referred to the reporter or not?

     (3) Whether the judgment should be reported
         in the Digest ?

                          JUDGMENT

ARUNA SURESH, J.

1. Petitioner no. 1 Sh. Ranjit Chaudhary and petitioner

no. 2 B.K. Chaudhary seek quashing of complaint case

no.175/1/2003 under section 138 of the Negotiable

Instruments Act titled „Max International Company v.

Bombay Bazaar & Ors.‟ and proceedings arising there

from which is pending adjudication in the court of

learned Metropolitan Magistrate Ms. Kiran Bansal.

2. Concisely, cheque bearing no. 168980 dated

10.12.2002 for Rs. 42,637/- drawn on Punjab and

Sindh Bank was issued by M/s Bombay Bazaar Ltd.

(hereinafter referred to as company) in favour of

complainant/ respondent Max International Company

as commission amount since complainant was allotted

dealership/franchisee for distribution of products of

Bombay Bazaar Ltd. on commission of Rs. 7,500/- per

month. Complainant presented these cheques for

encashment to his banker in Canara Bank, DDU Marg.

However, the cheques were dishonoured by the

bankers with the remarks "insufficient funds" vide

memo dated 27.1.2003. Complainant sent legal notice

dated 28.1.2003 to the company, its Managing

Director/CEO as well as the present petitioners and

all the directors of the company calling upon them to

pay the amount of the bounced cheque. Reply was

sent by the petitioners to the said legal notice and

consequently somewhere in May 2003 complaint

under Section 138 of the Negotiable Instruments Act

was filed by the complainant. The petitioners have

however not been served with the notice of the case,

though on 14.9.2007 the learned metropolitan

magistrate issued non-bailable warrants against the

petitioners. Hence, the present petition.

3. It is submitted by learned counsel for the petitioners

that the cheques in question were signed and issued

by Vijay Tata, director/CEO of the company Bombay

Bazaar Ltd. Also the petitioner no. 1 had sent reply on

25.2.2003 to the advocate of the respondent against

the legal notice for demand of payment dated

28.1.2003 thereby informing that petitioner nos. 1

and 2 had resigned from the company w.e.f.

14.9.2002 and a copy of Form-32 was also attached

thereto. It is further submitted that petitioners have

not been served with the notice of the case and only

recently the petitioners came to know of the non-

bailable warrants issued against him by the trial

court.

4. It is further asserted by counsel for the petitioners

that on the date when the cheque was issued that is

on 10.12.2002; petitioners were not directors of the

company as both of them had already resigned on

14.9.2002. Even for the period when they were the

directors of Bombay Bazaar Ltd., petitioners were not

involved in the day to day functioning of the company.

5. Learned counsel for the respondent has refuted the

submissions put forth by counsel for the petitioners

challenging the relevancy and admissibility of Form-

32 produced by the petitioners for the reason that

Form-32 being prepared by the company is not a

public document. Therefore, the petition cannot be

allowed and warrants dismissal.

6. Perusal of reply dated 25.2.2003 sent to the

complainant by the petitioner no. 1 reflects that there

was shuffling in the constitution of directors of the

company and Vijay Tata took charge of the company

whereas petitioners resigned from the company w.e.f.

14.9.2002. He has also stated in the reply that cheque

no. 168980 dated 10.12.2002 for Rs. 42,637/- was

issued by Vijay Tata, Director of Bombay Bazaar Ltd.

Form No. 32 filed with the Registrar of Companies,

Mumbai also makes it clear that both the petitioners,

Ranjit Chaudhary and B.K. Chaudhary, Directors in

Bombay Bazaar Ltd., had resigned on 14.9.2002.

7. Therefore, it is lucid that petitioners had resigned

from the company long before the cheques in question

were issued and production of Form-32 filed with the

Registrar of Companies by the petitioners to establish

their resignation is also ample proof for this petition

to succeed. On the contrary respondent has not given

any evidence to show that petitioners were involved in

the day to day functioning or were involved in the

conduct of business of the company at any time either

after resignation on 14.9.2002 or till after the cheques

were issued.

8. Hitherto, admissibility and reliability of form-32 is

concerned, Form -32 was submitted to the Registrar

of Companies by Vijay Tata being the director,

responsible person in Bombay Bazaar Ltd. Certified

copy of Form-32 is a public document as per Section

74 of the Evidence act and the Court has to presume

the genuineness of such certified copies as per

Section 79 of the Evidence Act when no counter

documentation is projected by the complainant.

9. In Dr.(Mrs.) Sarla Kumar Vs Srei International

Finance Ltd.) 132 (2006) DLT 363 , the cheque was

issued in 2003 and the petitioner ceased to be the

director of the Company in 1994. A certified copy of

Form-32 issued by the Registrar of companies was

filed by the petitioner and this court held that form 32

it was a conclusive proof that the petitioner resigned

in 1994 and was not the director at the material time

and quashed the proceedings against the petitioner.

10. This view was again upheld in another judgment of

this court H.R. Kapoor v. Securities and Exchange

Board of India 149(2008) DLT 591 wherein

petitioners filed petitions under Section 482 Cr.P.C.

and filed certified copies of Form-32 and it was

observed by the court that the document Form-32

being a public document, which can be easily verified

even on inspection of the records of the company with

the Registrar of the Companies, does not require

elaborate evidence on trial.

11. In J.N. Bhatia v. State 139 (2007) DLT 361 this

court pointed out that Form-32 if filed before the

issuance of the dishonoured cheque then such Form-

32 can be safely acted upon to quash the complaint.

12. In the present case Form-32 was filed with the

Registrar of Companies before the cheque was even

issued. The cheques pertaining to the case were

drawn between the period 10.12.2002 to 27.1.2003

and during that period, the petitioners did not

function as Chairman or Directors of the accused

company and they were also not in-charge of and

responsible for the affairs of the company when the

cause of action arose for non payment of the cheque

amount on receipt of respective statutory notices. It is

a settled law that only a person who is responsible for

conduct of business of the company at the time of

commission of the offence can be made liable for the

offence. Acceptance of resignation and filing of Form

32 with registrar of companies establishes the fact

that petitioners ceased to be the directors of the

company. Therefore, criminal liability cannot be

fastened on the petitioners after they ceased to be

directors of the company.

13. Hence in the light of facts and circumstances of the

case, the petition is allowed. Complaint case no.

175/1/2003 and non-bailable warrants issued against

the petitioners by the trial court on 14.9.2007 only

qua the petitioners Ranjit Chaudhary and B.K.

Chaudhary are hereby quashed.

14. Attested copy of the order be sent to the trial court

( ARUNA SURESH ) JUDGE December 16, 2008 hm/San.