Anirudh Agarwal & Another vs State Of N.C.T Of Delhi & Another
2010 Latest Caselaw 5341 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                               Judgment reserved on: November 22, 2010
                               Judgment delivered on:November 24, 2010


+      CRL.M.C. 1333/2010 & CRL.M.A. 5398/2010
+      CRL.M.C. 1334/2010 & CRL.M.A. 5396/2010


       ANIRUDH AGARWAL & ANOTHER               ....PETITIONERS
           Through: Mr.Ramesh Gupta, Senior Advocate with
                    Mr.A.Singhal, Advocate.

                               Versus

       STATE OF N.C.T. OF DELHI & ANOTHER ....RESPONDENTS
           Through:   Mr.R.N.Vats and Mr.Pawan Bahl, APPs for
                      the State.

                               Mr.Ranjan Sabharwal, Advocate for
                               respondent No.2.


        CORAM:
        HON'BLE MR. JUSTICE AJIT BHARIHOKE

1.     Whether Reporters of local papers
       may be allowed to see the judgment?

2.     To be referred to the Reporter or not ?
3.     Whether the judgment should be
       reported in Digest ?



AJIT BHARIHOKE, J.

1. Anirudh Agarwal and Anup Kumar Agarwal, the petitioners herein

are seeking the quashing of complaint case titled as "M/s Shubhakaran

Chaudhary & Associates Pvt. Ltd. Vs. M/s Sonal Garments (India) Pvt. Ltd.

and Others" being CC No.4165/N/09 and CC No.4167/N/09 pending in the

Court of Metropolitan Magistrate, Delhi and the consequential proceedings

arising out of the same.

2. Briefly stated, facts relevant for the disposal of this petition are that

respondent No.2 M/s. Shubhakaran Chaudhary & Associates Pvt. Ltd. filed

a complaint case under Section 138 of the Negotiable Instruments Act (for

short `N.I. Act') against the petitioners and others claiming that

respondent No.2 supplied goods to M/s Sonal Garments (India) Pvt. Ltd.

and as against the consideration amount of those goods, said Company

issued post-dated cheques to the complainant/respondent No.2. The

aforesaid cheques, when presented for encashment, were dishonoured by

the drawee bank. Respondent No.2 served the petitioners as well as the

Company with requisite notice of demand but the petitioners or M/s Sonal

Garments (India) Pvt. Ltd. failed to make the payment within the requisite

period, which led to filing of the complaint under Sections 138 to 142 of

the N.I. Act.

3. Learned Shri Ramesh Gupta, Senior Advocate appearing for the

petitioners submits that the impugned orders of summoning in the

respective complaints are bad in law and liable to be set aside for the

reason that petitioners were merely non-executive Directors of the

company and they were not concerned with the day-to-day business

affairs of the company. He further contended that the complaints in

question are bereft of any specific allegations against the petitioners to

bring them within the purview of Section 141(1) of the N.I. Act in order to

foist vicarious liability for the offence punishable under Section 138 of the

N.I. Act upon them. In support of this contention, he has relied upon the

judgment of Supreme Court in the matter of S.M.S. Pharmaceuticals

Ltd. Vs. Neeta Bhalla & Anr., (2005) 8 SCC 89 as also the judgment of

Supreme Court in SLP(Crl.) No.5093/2008 in the matter of Central Bank

of India Vs. M/s Asian Global Ltd. & Ors.

4. Learned counsel for the respondents, on the contrary, has drawn my

attention to the copies of the complaints filed against the petitioners and

others and submitted that the respondents, in Para 2 of the respective

complaints, had made a specific allegation that as per the record of the

Registrar of Companies, all the Directors of the company M/s Sonal

Garments (India) Pvt. Ltd., including the petitioners herein, are also the

authorised signatories of the company. Learned counsel submitted that

once a person is authorised by the company to operate a bank account,

by implication he is concerned with the day-to-day affairs of the company.

Thus, it is contended that the petitioners have been rightly summoned to

withstand trial under Section 138 of the N.I. Act.

5. Vide order dated 17th August 2010 of this court, petitioners were

directed to file affidavits disclosing whether or not they were authorised

signatories of M/s Sonal Garments(India) Pvt. Ltd. Pursuant to said

directions, the petitioners have filed their respective affidavits wherein

they have admitted that they are authorised signatories of the aforesaid

company but they have come out with a defence that in October 2008,

some differences arose between the Directors and it was orally agreed

between the petitioners and other Directors that the operation of the

business at Mumbai will be exclusively handled by Shri Naveen Kumar

Agarwal whereas petitioner no.1 Anirudh Agarwal will exclusively look

after the business affairs of the company at Delhi and petitioner No.2

Anup Kumar Agarwal will exclusively look after and carry on the business

affairs of the company at Bangalore. It was also decided that none of the

Directors, including the petitioners, shall interfere in the business affairs

being handled by the other Directors in the respective cities and each of

them will be responsible for affairs of the business relating to their cities

only and shall not be responsible for the business affairs of the other city.

6. From the affidavits of the petitioners, it is obvious that they are

authorised signatories of M/s Sonal Garments (India) Pvt. Ltd. The

explanation given by them about the distribution of the business affairs

pertaining to respective cities is a question of evidence which can be

determined only during trial. From the affidavits of the petitioners, it is

clear that they are authorised signatories of the company, as such, they

are prime facie concerned with the day-to-day business affairs of the

company. Thus, prima facie, a case under Section 138 read with Section

141 of the N.I. Act is made out against the petitioners.

7. In view of the above, I do not find any merit in the contention of the

petitioners and find no reason to interfere with the impugned orders of

summoning in the respective complaints.

8. Petitions, as well as the pending applications, are accordingly

dismissed.

(AJIT BHARIHOKE) JUDGE NOVEMBER 24, 2010 ks