Sudesh Jain vs State Of Nct (Delhi) & Anr.
2009 Latest Caselaw 4202 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    Crl. M.C. No. 2687/2009

                                        Date of Decision : 20.10.2009

Sudesh Jain                                             ......Petitioner
                                 Through:       Mr.    Nitesh Kr. Singh,
                                                Adv.

                                     Versus

State of NCT (Delhi) & Anr.                           ...... Respondents
                           Through:             Mr. Pawan Bahl, APP


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

1.     Whether Reporters of local papers can be
       allowed to see the judgment?                         YES
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. This is a petition filed by the petitioner for quashing of the

complaint case no. 4123/2008 under Section 138 of the

Negotiable Instruments Act registered at P.S. Mandawali,

Delhi in case titled Anil Kumar Jain Vs. State & Ors.

pending before Mr. Sanatan Prasad, the learned

Metropolitan Magistrate, Karkardooma Courts, Delhi.

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

no. 2 filed a criminal complaint against the present

petitioner, her husband Mr. Anil Kumar Jain and their

company, M/s Freedom Measures Pvt. Ltd. (hereinafter

referred as "the company") to whom he had advanced the

loan of Rs.2,40,000/-. The said loan amount carried the

interest @18% per annum. It is alleged that in discharge of

the said liability of repayment of loan, the company M/s

Freedom Measures Pvt. Ltd. through its Director Anil

Kumar Jain issued a cheque of Rs.2,68,000/- drawn on

The Jammu & Kashmir Bank Ltd. Chawri Bazar, Delhi

dated 23rd April, 2008, however, the said cheque on

presentation had bounced. It is alleged that the present

petitioner was the Director of the company in question, and

therefore, the petitioner was vicariously liable for the

offence under Section 141 of the Negotiable Instruments

Act. Since the aforesaid liability was not discharged despite

a statutory demand notice having been issued, accordingly,

the complaint in question was filed. The learned

Metropolitan Magistrate after recording the pre summoning

evidence passed the summoning order not only against the

petitioner but also against her husband Anil Kumar Jain

and the Company M/s Freedom Measures Pvt. Ltd. The

petitioner feeling aggrieved by virtue of the said summoning

order has not only challenged the same by way of present

petition but has also prayed for quashing of the complaint.

3. I have heard the learned counsel for the petitioner as well

as the learned counsel for the respondent. The main

contention of the learned counsel for the petitioner has

been that before making a Director of a Company

vicariously liable under the provisions of 141 of the

Negotiable Instruments Act the complainant must not only

make an averment in the complaint that the said Director

was in-charge and responsible for the day to day conduct of

the business of the company but he must also adduce the

evidence in this regard. Reliance in this regard is placed

on S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla & Anr.

(2005) 8 SCC 89, T. Stanes & Co. Ltd. Vs. A. Jaffarullah

(2000) 1 SCC 1 174, K.K. Ahuja Vs. V.K. Vora & Anr.

2009(9) SCALE 87, Sabhitha Ramamurthy Vs. R.B.S.

Channabasavaradhya AIR 2006 SC 3086.

4. The learned counsel for the respondent has contested the

plea of the learned counsel for the petitioner and urged that

the question as to whether the petitioner was in-charge and

responsible for the conduct of the business of the company

at the time when the cheque was dishonoured is the

question of fact which can be proved only when the parties

adduce their respective evidence before the Court for

adjudication of the case on merits.

5. I have gone through the judgments cited by the learned

counsel for the petitioner. This is a settled legal

proposition of law by now that in order to bring the Director

of the company within the ambit of vicarious liability in

terms of the Section 141 of the Negotiable Instruments Act

for commission of an offence under Section 138 of the

Negotiable Instruments Act, not only there has to be an

averment in the complaint that the said Director was in-

charge and responsible for day to day conduct of the

business of the firm or a company at the time when the

cheque was dishonoured but it must also be prima facie

established by way of documents or by way of evidence

which is led at the stage of preliminary evidence to show

that he was actually holding such a position so as to

conduct the day to day business. It is not merely holding of

an office of a Director which would be considered sufficient

to bring a person within the ambit of vicarious liability for

having committed an offence. Reliance in this regard is

placed on S.M.S. Pharmaceuticals' case (supra).

6. The recent trend in these cases of Section 138 of the

Negotiable Instruments Act especially where there are

private limited companies closely held by the family

members and where female family members are holding the

position of a Director, the complainant wants to enrope

such family members knowingly fully well that once such

lady Directors are made as an accused and she is

summoned, it is bound to put pressure on the other co-

accused persons to come round and either pay the debt or

settle the same across the table. I feel that this is a gross

abuse of the processes of law in case there is a person who

is simply alleged to be a Director but it is not shown as how

he is the incharge of day to day conduct of the business of

the company at the relevant time is summoned to face the

trial. In the light of the aforesaid legal position the only

averment which has been made in the complaint against

the present petitioner is that she is the Director of the

company. There is not even an iota of averment that she

was in-charge and responsible for day to day conduct of

business of the company at the relevant time when the

cheque in question is purported to have been issued or

bounced much less is there prima facie evidence in this

regard. The affidavit which has been sworn by the

petitioner at the pre-summoning stage is nothing but the

replica of the complaint. This factual matrix in my

considered opinion does not satisfy the basic requirement

of law under Section 141 of the Negotiable Instruments Act

for making the petitioner vicariously liable for having

committed an offence under Section 138 of the Negotiable

Instruments Act.

7. For these reasons mentioned above, there is a merit in the

contention of the petitioner that the complaint does not

make out a prima facie a case against the present

petitioner for having committed an offence under Section

138 read with Section 141 of the Negotiable Instruments

Act vicariously and accordingly the complaint itself against

her is quashed. A copy of this order be sent to the learned

Trial Court.

V.K. SHALI, J.

October 20, 2009 KP