Sh. Jagmohan Chawla vs Yes Bank & Ors.
2009 Latest Caselaw 4675 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    Crl. M.C. No. 1668/2009

                                          Date of Decision : 17.11.2009

Sh. Jagmohan Chawla                                  ......Petitioner
                                  Through:     Ms. Shobhana, Adv.

                                   Versus

Yes Bank & Ors.                                       ...... Respondents
                                  Through:     Mr. S. Das, Adv. for R-1.



CORAM :
HON'BLE MR. JUSTICE V.K. SHALI

1.     Whether Reporters of local papers can be
       allowed to see the judgment?                         NO
2.     To be referred to the Reporter or not ?              NO
3.     Whether the judgment should be reported
       in the Digest ?                                      NO

V.K. SHALI, J. (oral)


1.     This is a petition filed by the petitioner for quashing of a

complaint titled M/s Yes Bank. Vs. M/s Three Star Paper Mills

Ltd & Anr. bearing no. 723/2009 pending in the Court of Sh.

Ankur Jain, the learned Metropolitan Magistrate, Dwarka, Delhi

and the proceedings arising therefrom.


2.     Briefly     stated   the   facts   of   the   case   are   that    the

respondent/complainant M/s Yes Bank filed a complaint under

Section 138 read with section 142 of the Negotiable Instruments

Act read with section 420 IPC against M/s Three Star Paper Mills

Ltd and Jagmohan Chawla, the Director of the said paper mills.




Crl. M.C. No. 1668/2009
                                                                  Page 1 of 6
 The allegations were that the aforesaid company through its

Director had availed certain loan facilities, and thereafter, issued

cheques for repayment of the outstanding amount due.            It is

alleged that cheques no. 871063 and 871065 dated 15th August,

2008 for a sum of Rs.53,479/- each were issued in favour of the

respondent/complainant M/s Yes Bank.          These cheques were

drawn on Bank of Baroda, Asaf Ali Road, New Delhi.                On

presentation both these cheques bounced on the ground that

they exceeded the arrangement.       The return memo dated 29 th

October, 2008 was issued by the banker of the accused person to

the respondent no. 1 herein.        The respondent/complainant

issued a notice dated 4th November, 2008 to the paper mills as

well as to the present petitioner Jagmohan Chawla accused

through registered post requiring them to make the payment

within a period of 15 days from the date of receipt of this notice.

It is alleged that this notice of the petitioner was replied by the

present petitioner on 25th November, 2008 wherein it was stated

that the petitioner has resigned as a Director on 20th September,

2007 which was accepted by the company on 21st September,

2007 and a requisite form no. 32 was also filed with the Registrar

of Companies on 5th February, 2008, and therefore, the petitioner

was not responsible for the commission of any offence as the

cheque got dishonoured at a later date.


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

that the factum of reply sent by the present petitioner was not


Crl. M.C. No. 1668/2009
                                                          Page 2 of 6
 mentioned in the complaint and as a consequence of this the

learned Metropolitan Magistrate after recording preliminary

evidence passed the order of summoning dated 15th January,

2009 against the petitioner.     The petitioner feeling aggrieved

both by filing of the complaint as well as by the summoning

order has challenged the same.


4.     The learned counsel for the petitioner has placed reliance

on case titled DCM Financial Services Ltd. Vs. J. N. Sareen &

Anr. 2008 VII AD (S.C.) 446 the Court held that as the person

concerned had ceased to be the Director much prior to the

alleged dishonour of the cheque, therefore, he could not be held

liable. Similarly, it was contended that since the petitioner had

ceased to be the Director much before the presentation of the

cheque by the respondent, and therefore, on that ground also he

could not have been summoned.


5.     The learned counsel for the respondent contested the claim

of the petitioner and urged that the present petitioner is raising

disputed question of fact as to whether he had resigned as a

Director much before the date of presentation of cheque or not,

which can be decided only after the parties are permitted to

adduce evidence and secondly the petitioner admittedly is the

signatory of the cheque in question, and therefore, he could not

escape the liability of facing the prosecution by this method.    It

was also contended that the judgment which is sought to be



Crl. M.C. No. 1668/2009
                                                        Page 3 of 6
 relied upon by the petitioner is distinguishable from the facts of

the present case.


6.     I have carefully considered the respective submissions and

gone through the record.       There is no denial of the fact that the

complaint is not very happily drafted.       It is not the job of the

Court to find the defects in the complaint and throw the

complaint away, only on account of the bad drafting, if from a

plain reading of the entire complaint the offence against the

petitioner is made out.     Admittedly, in the instant case there are

two accused persons one is the paper company and the other is

present petitioner Jagmohan Chawla.          Sh. Jagmohan Chawla

has been shown in the memo of parties both in the official

capacity as well as in the individual capacity.       Sh. Jagmohan

Chawla is the person who has signed the offending cheque and

thus he is a signatory to the cheque which was dishonoured.

The other accused is a company which is admittedly a juristic

person. The juristic person cannot operate a bank account of its

own, the cheque has to be signed by some natural person which

in the instant case has been signed by the present petitioner Sh.

Jagmohan Chawla.          Noticeably the complainant does not make

any averment in the complaint that Jagmohan Chawla is sought

to be made vicariously liable in the instant case by invoking

Section 141 of the Negotiable Instruments Act.       This is the point

which the learned counsel for the petitioner is missing when she

contends that the petitioner had resigned much prior to the date


Crl. M.C. No. 1668/2009
                                                            Page 4 of 6
 of issuance of the offending cheque.        Since the petitioner has

been a signatory to the cheque, therefore, the question of

resignation of the petitioner even if it is assumed to be correct

pales into irrelevance because the petitioner is impleaded as a

party in his capacity as a drawer of the cheque rather than as a

Director.


7.     The judgment of the Apex Court in DCM Financial Services

(supra) which is sought to be relied upon by the petitioner in the

instant case is distinguishable on facts.        In the said case a

person was sought to be enroped as an accused in a complaint

under Section 138 of the Negotiable Instruments Act by invoking

Section 141 of the Negotiable Instruments Act unlike in the

present case.        Further, there was no averment in the complaint

regarding the role of the said Director and thirdly it was in this

back ground that the resignation of the said Director before the

dishonour of the cheque which was in the knowledge of the

complainant was considered fatal by the Apex Court.           In the

instant case, the plea of the learned counsel for the petitioner

that is the resignation of the Director is not a plea which can be

considered as a ground for quashing of the complaint or the

summoning order especially when he is summoned as an

accused as drawer of the cheque and not as the Director by

invoking Section 141 of the Negotiable Instruments Act.




Crl. M.C. No. 1668/2009
                                                           Page 5 of 6
 8.     For the foregoing reasons mentioned above, I am of the

considered opinion that the present petition of the petitioner is

totally misconceived and accordingly the same is dismissed.




                                                 V.K. SHALI, J.

November 17, 2009 KP

Crl. M.C. No. 1668/2009