Sh. R.K. Sinha vs State & Anr.
2009 Latest Caselaw 3229 Del

*             THE HIGH COURT OF DELHI AT NEW DELHI

+                      Crl. M.C. No. 2307/2008

                                       Date of Decision : 18.8.2009

SH. R.K. SINHA                                    ......Petitioner
                                Through:   Mr. P.R.Chopra, Advocate

                                 Versus

STATE & ANR.                                    ...... Respondents

Through: Mr. Pawan Bahl, APP for the State.

CORAM :

HON'BLE MR. JUSTICE V.K. SHALI

1. Whether Reporters of local papers may be allowed to see the judgment? NO

2. To be referred to the Reporter or not ? YES

3. Whether the judgment should be reported in the Digest ? YES

V.K. SHALI, J. (oral)

1. The petitioner by virtue of the present petition has prayed

for quashing of the complaint case bearing No.929/02

under Section 138, 141, 142 of Negotiable Instruments Act

r/w Section 420/34 IPC pending in the Court of Shri

Ashutosh Kumar, learned MM, Delhi.

2. Briefly stated the facts of the case are that respondent no.2

M/s Moon times-SPMS filed a complaint under Section 138

read with Section 141 of the Negotiable Instruments Act

against M/s Anchor Beverages Ltd. a company duly

incorporated under the Companies Act and Sh.P.N.Das,

Sh.S.D.Tomar, Sh.Ajay Pal Singh Tomar, Bibha Das,

Sh.R.K.Sinha, Sh.H.K.Karna and Sh.Shyam Sunder Sarogi

stating them to be the promoter Directors of the aforesaid

company. It was alleged that all these promoter Directors

were incharge and responsible for the day to day business

of the aforesaid company. It is alleged that the company

M/s Anchor Beverages Ltd. had issued a cheque bearing

No.446583 dated 12.10.2000 for a sum of Rs.1,74,938.40/-

drawn on Indian Overseas Bank, Darya Ganj, New Delhi in

favour of the respondent no.2/complainant for discharge of

its legal debt/liability. However, the said cheque got

dishonoured on account of insufficiency of funds. As a

consequence of this, the respondent no.2 is purported to

have issued a notice both under postal certificate as well as

by registered AD on 24.11.2000 to the company M/s

Anchor Beverages Ltd. Since the payment was not made

despite the notice having been sent, the aforesaid

complaint came to be filed not only against the company

but all its so called promoter Directors.

3. The learned Magistrate after obtaining the statement of

Mr.Yatinder Seth, proprietor of M/s Moon Times

respondent no.2 herein by way of an affidavit issued

summons against M/s Anchor Beverages Ltd. and its

Directors including the petitioner Sh.R.K.Sinha herein. The

averments made in the affidavit is nothing but the

reproduction of the averments made in the complaint.

4. The petitioner who was referred to as accused no.6 in the

complaint feeling aggrieved by the aforesaid summoning

order has chosen to file the present complaint for quashing

of complaint and the summoning order against him.

5. I have heard the learned counsel for the petitioner

yesterday as well as today. The learned counsel for

respondent no.2 Ms.Seema Gulati had argued the matter

partially yesterday and requested for an adjournment for

today but today she has not appeared despite the case

being passed over twice.

6. The contention of the learned counsel for the petitioner is

to the effect that the entire case of the respondent no.2

hinges on the question of vicarious liability under Section

141 of Negotiable Instruments Act. It is urged that before

enroping the person under the concept of vicarious liability,

there should not only be the averments made in the

petition /complaint with regard to the Director in question

being incharge and responsible for the conduct of the

business, but it must also be established prima facie by

evidence or by documents on record.

7. On the contrary, it is stated that the allegations made in

the complaint qua the petitioner that he is incharge and

responsible in the capacity of the promoter and Director is

not fortified from the record inasmuch as the petitioner has

placed on record the certified copy of the documents

purported to have been issued by the Registrar of

Companies which shows that on 21.9.1995, the petitioner

had only 500 shares in the company M/s Anchor Beverages

Ltd. in the capacity of only a promoter. A certificate

purported to have been issued by the Registrar of

Companies on 15.10.2003 is also placed on record which is

not disputed and shows that there were only three

Directors of the said company namely Sh. P.N.Das, Sh.Ajay

Pal Singh Tomer and Smt.Sanjana D.Tomer. On the

strength of these two documents, it has been contended by

the learned counsel for the petitioner that the petitioner

was only a promoter of the company and not the Director

and therefore, he could not be prosecuted for having

committed an offence under Section 138 of the Negotiable

Instruments Act under the concept of vicarious liability. It

has also been contended by the learned counsel for the

petitioner that no notice under Section 138 of the

Negotiable Instruments Act was sent to any of the Directors

including the petitioner and thus the statutory requirement

was also not complied with qua him.

8. The learned counsel in support of his contention has cited

a judgment of this Court in case titled Jayshree Khemka

& Anr. Vs. Prema Kanodia 2008 (106) DRJ 809, wherein

it has been observed that the person who is neither the

signatory to the cheque nor responsible in any manner

whatsoever in respect of the transaction and also did not

hold post of a Director in a company at the time of issuance

of the cheque cannot be saddled with the liability of having

committed an offence under Section 138 of the Negotiable

Instruments Act.

9. I have carefully considered the submissions made by the

learned counsel for the petitioner and gone through the

record. I have also gone through the judgment cited by the

learned counsel for the petitioner.

10. The position of law is very well settled in SMS

Pharmaceuticals Ltd. Vs. Neeta Bhalla (2007) 4 SCC 70

and Sabitha Ramamurthy Vs. R.B.S.

Channabasavaradhya (2006) 10 SCC 581 and number of

other cases with regard to the liability of a Director. The

complainant before enroping a person under vicarious

liability of Section 141 of Negotiable Instruments Act being

the Director of a company has not only to make an

averment in the complaint that the said Director was

incharge and responsible for the conduct of the business of

the company but he must also establish the said fact by

prima facie evidence either by way of his own affidavit or by

way of the documents placed on record. Mere repetition of

the words stated in the Section 141 of the Negotiable

Instruments Act have been held to be not necessary but

what must be shown is the fact that the person who is

sought to be brought within the concept of vicarious

liability was actually incharge and responsible for the day

to day conduct of the business of the company or the firm

and thus he was in the knowledge of the cheque having

been issued on behalf of the company for discharge of it

debt or liability.

11. In the present complaint except that it reproduces the

language given u/S 141 of Negotiable Instruments Act both

in the complaint as well as in the affidavit, there is nothing

on record to show as to how the petitioner was incharge

and responsible for the conduct of the company in

question. On the contrary, the petitioner has placed on

record the two vital documents purported to have been

issued by the Registrar of Companies. The veracity or the

correctness of these two documents has not been disputed

by the learned counsel for the respondent no.2 during the

course of oral submissions.

12. One document shows that so far as the petitioner is

concerned, he was only a promoter and he had been

allotted 500 shares initially. This document does not show

that he was a Director. There is no document which shows

that he was Director of the Company in question at the

time when the cheque in question was issued. On the

contrary, there is a document which is issued by the

Registrar of Companies which shows that there were three

Directors at the relevant time but the name of the petitioner

does not appear in the list of the said three Directors.

Therefore, the respondent no.2 has not been able to

discharge the initial burden of proving the fact that the

petitioner was incharge and responsible for the conduct of

the business of the firm in the capacity of the Director but

on the contrary the petitioner has been able to place on

record the documents to the contrary in this regard.

13. For the reasons mentioned above, I, therefore, deem it a fit

case where the complaint against the petitioner deserves to

be quashed. Ordered accordingly.

14. Copy of the order be sent to the Court concerned.

V.K.SHALI, J.

AUGUST 18, 2009 RN