Delhi High Court
Ecl Finance Ltd. vs Ms. Sukhmani Bedi & Anr. on 20 August, 2018
$~9
IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on:- 20th August, 2018
+ CRL. M.C. 1655/2015 & Crl.M.A. 11097/2015
ECL FINANCE LTD. ..... Petitioner
Through: Mr. Sunil K. Mittal, Mr.
Gurpreet Singh, Mr. Raveesh
Thukral & Mr. Kshitij Mittal,
Advs.
versus
MS. SUKHMANI BEDI & ANR. ..... Respondents
Through: Mr. Ashim Vachher, Adv.
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
ORDER (ORAL)
1. The petitioner had instituted a criminal complaint (CC No.
541/2013) in the court of Metropolitan Magistrate on 03.04.2013
involving offence punishable under Section 138 of Negotiable
Instruments Act, 1881. The respondents herein were impleaded in the
said criminal complaint as third and fifth prospective accused, this in
addition to M/s Cedar Infonet Private Ltd. (accused no.1), Lt. Col.
H.S. Bedi (accused no.2) and Ms. Maninder Bedi (accused no.4). The
allegations in the case concerned a cheque bearing no. 933743 dated
28.02.2013 for Rs. 52,64,384/- which had been issued under the
signatures of Lt. Col. H.S. Bedi (second accused) against the account
of M/s Cedar Infonet Pvt. Ltd. (first accused) which, upon
presentation by the petitioner, was dishonoured. It was alleged that a
notice of demand was issued to all the five persons, arrayed as accused
on 05.03.2013, to which there was no response, nor any payment
received and consequently the offence under Section 138 of
Negotiable Instruments Act, 1881 had been committed.
2. The Metropolitan Magistrate, after preliminary inquiry, issued
summons, by order dated 04.06.2013, against all the five persons
shown in the array of accused, they including the respondents herein.
3. The respondents and Ms. Maninder Bedi (fourth accused)
approached the court of Sessions by petition (Crl.Rev. 25/2014)
impugning the summoning order. The revisional court, by order dated
13.10.2014, rejected the prayer of the fourth accused but accepted the
contention of the respondents that no case was made out for they to be
summoned only because they were alleged to be directors of the
concerned company (first accused). Thus, by order dated 13.10.2014
of the revisional court, the proceedings in the criminal case against the
respondents were closed. It is the aforesaid order which is challenged
by the petition at hand invoking the inherent power of this Court under
Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.).
4. The petitioner has placed reliance on judgments reported as
Standard Chartered Bank vs. State of Maharashtra & Ors. (2016) 6
SCC 62; Tamil Nadu News Print & Papers Ltd. vs. Dr. Karunakar &
Ors. 2015 SCC online SC 741; Shashi Jindal vs. Govt. of NCT 2015
SCC Online Del 13066; Gunmala Sales (P) Ltd. vs. Anu Mehta (2015)
1 SCC 103; Ashesh Devendrabhai Vyas v. The State of Delhi & Anr.
2015 (220) DLT 101; Paresh P. Rajda vs. State of Maharashtra AIR
2008 SC 2357 and Rajesh Kumar Gulati vs. National Agricultural
Cooperative Marketing Federation of India Ltd. & Anr. (2008) SCC
Online Delhi 2, to argue that a case has been properly made out for
criminal prosecution also of the respondents herein and consequently
the view taken by the revisional court is not correct.
5. Per contra, the respondents through counsel, referring to the
decisions of the Supreme Court in S.M.S. Pharmaceuticals Ltd. vs.
Neeta Bhalla & Anr. (2007) 4 SCC 70; National Small Industries
Corporation Ltd. vs. Harmeet Singh Paintal & Anr. (2010) 3 SCC
330; Central Bank of India vs. Asian Global Limited & Ors. (2010) 11
SCC 203; N.K. Wahi vs. Shekhar Singh & Ors. (2007) 9 SCC 481 and
Saroj Kumar Poddar vs. State (NCT of Delhi) & Anr. (2007) 3 SCC
693 and of the learned single Judge of this Court in Chintan Arvind
Kapadia & Anr. Vs. State & Anr. ILR (2013) III Delhi 2135, have
submitted that the view taken by the revisional court is correct in the
given facts and circumstances and that there is no case made out for
the same to be interfered with.
6. The case involves the application of the penal clause contained
in Section 138 of Negotiable Instruments Act, 1881, the liability of the
respondents requiring to be examined also in light of the provision
contained in Section 141 thereof. Similar questions had arisen before
this Court in Jwala Devi Enterprises P. Ltd. Vs. Fadi El Jaouni 2018
SCC Online Del 10030. In the context of the penal clause under
Section 138 of Negotiable Instruments Act, 1881, this Court in Jwala
Devi Enterprises P. Ltd (supra) had observed :-
"6. It is clear from the plain reading of the above quoted
provision and is now also well settled that the offence
under Section 138 of the Negotiable Instruments Act does
not stand constituted merely upon dishonor of a cheque.
The dishonor of a cheque which had been issued by the
person (who is sought to be prosecuted) in favour of the
complainant must be followed by a notice of demand
within the stipulated period. It is the non-payment of the
amount of the cheque within the statutory period after
service of the notice of demand which constitutes the
offence that is punishable under the aforementioned
provision of law".
7. The questions relating to Section 141 of Negotiable Instruments
Act, 1881 were answered in the decision in Jwala Devi Enterprises P.
Ltd (supra) with reference, inter alia, to the decisions of the Supreme
Court in S.M.S. Pharmaceuticals (supra) and Gunmala Sales (P) Ltd.
(supra) and Standard Chartered Bank (supra). The law on the subject,
as declared in the authoritative pronouncement referred to above was
culled out in Jwala Devi Enterprises P. Ltd (supra) thus :
"The guiding principles with reference to Section 141 of
the Negotiable Instruments Act, 1881, which are now well
settled by judicial pronouncements, some of which have
been noted above, may be summarised thus :-
(i) It is only those persons who are in
charge of or responsible for the conduct of the
business of the company at the time of
commission of the offence under Section 138 of
the Negotiable Instruments Act, 1881 who can
be subjected to criminal action with reference
to Section 141;
(ii). If the person committing an offence
under Section 138 of the Negotiable
Instruments Act, 1881 is a company, the person
who was signatory to the cheque which is
dishonoured is clearly responsible for the
incriminating act and would be liable to be
proceeded against under Section 141 (2);
(iii). By virtue of the office they hold, the
persons working in the capacity of the
Managing Director or Joint Managing
Director are deemed to be in charge of, and
responsible for the conduct of the business of,
the company and, therefore, can be proceeded
against in terms of Section 141;
(iv). Merely because a person is a director of
the company is not sufficient to make him
liable under Section 141, there being no
deeming that by holding such position he is in
charge of, or responsible for the conduct of the
business of, the company within the meaning of
Section 141;
(v). It is necessary for the complainant to
specifically aver in the complaint that at the
time the offence was committed, the person
sought to be prosecuted was in charge of, or
responsible for the conduct of the business of,
the company in terms of Section 141, there
being no need for further particulars to be
given in the complaint about his role, this being
subject to proof at the trial;
(vi). The person who has been summoned as
an accused for offence under Section 138 of the
Negotiable Instruments Act, 1881 on the basis
of averment that he was director of the
company accused, he being in charge of or
responsible for the conduct of its business
cannot get the complaint quashed by the High
Court by filing a petition under Section 482 of
the Code of Criminal Procedure, 1973 merely
on the ground that no particulars as to his role
have been set out in the complaint; and
(vii). The person who has been summoned as
an accused for offence under Section 138 of the
Negotiable Instruments Act, 1881 by invoking
the provision contained in Section 141 may
persuade the High Court to quash the process
in exercise of its inherent power under Section
482 of the Code of Criminal Procedure, 1973
by furnishing "some sterling incontrovertible
material or acceptable circumstances"
substantiating his contention that he was not in
charge of nor responsible for the conduct of the
business of the company "at the time the
offence was committed" and thereby showing a
case that making him stand the trial would be
an abuse of the process of court, but not
otherwise".
8. In the criminal complaint from which the present proceedings
arise, the allegations against the respondents were set out as under:-
"That the accused no.1 is a company duly incorporated
under the Companies Act, 1956 and is engaged in the
trade of computer hardware and networking equipment. It
is submitted that the Accused No. 2 to 5 are the directors
of the company and are in-charge and responsible for the
day to day affairs of the Accused no.1. It is submitted that
accused no.2 is signatory to the cheque, accused no.4 is
whole time director of the company and is also responsible
for the day to day affairs of the company, accused no.3 &
5 are directors of accused no.1 are active participants in
the management and day-to-day affairs of the company.
Computer generated copy of list of directors taken from
the official website of Ministry of corporate affairs is
annexed herwith as AnnexureA-2".
(emphasis supplied)
9. Mere allegations that these respondents were directors or
"active participants" in the management or day to day affairs of the
company are not sufficient. There is no averment, not even remotely
made, that they were incharge of or responsible for affairs of the
company "at the time of commission of the offence". The opinion
leading to the revisional court's order, thus, cannot be faulted.
10. The petition and the pending application are dismissed.
R.K.GAUBA, J.
AUGUST 20, 2018
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