Delhi High Court
Bhardwaj Thirvenkata ... vs M/S Pvr Ltd. on 29 January, 2019
SHAKUN ANAND
31.01.2019 13:01
$~11
IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on:- 29th January, 2019
+ CRL. M.C. 2150/2018
BHARDWAJ THIRVENKATA VENKATAVARAGHAVAN
..... Petitioner
Through: Mr. Sushil Bajaj & Mr. Shalin
Arthwan, Advs.
versus
M/S PVR LTD. ..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
ORDER (ORAL)
1. On the criminal complaint case (573/1/2015 - new number
35421/2016) of the respondent, the petitioner along with certain
others, were summoned as accused by the Metropolitan Magistrate, by
order dated 11.04.2016, to answer the accusations of offence under
Section 138 of the Negotiable Instruments Act, 1881 (NI Act), the
gravamen thereof being that no payment was made inspite of notice of
demand after dishonor of certain cheques, which had been issued
against the account of Vasan Health Care Pvt. Ltd., a company in
which the petitioner and some of the other accused shown in the array
were described as directors at the relevant point of time.
2. The petitioner, feeling aggrieved, has come up to this Court by
the petition at hand invoking the inherent power and jurisdiction under
Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.)
contending that the proceedings taken out against him in the criminal
court are an abuse of the process of law, his position in the said
company i.e. Vasan Health Care Pvt. Ltd. (the company accused) at
the relevant point of time being that of "non-executive nominee
director", who had no role to pay in the day-to-day affairs or business
of the company.
3. Notice of the petition was served on the respondent in terms of
the order dated 25.04.2018 for 13.07.2018 on which day the matter
was adjourned giving liberty to the respondent to file a reply. No
reply has been filed till date. On the matter being called out, no one
has appeared for the respondent. It was kept in wait. Inspite of the
matter being passed over there is no appearance on behalf of the
respondent till 3.00 p.m. It is clear that the respondent does not seek
to put in any contest to the averments in the petition. In these
circumstances, the documents filed by the petitioner (to be specific
form no. 32) confirming his position to be that of "non-executive
nominee director" in the company accused, will have to be accepted as
indisputable.
4. In Pooja Ravinder Devidasani vs. State of Maharashtra &
Anr.(2014) 16 SCC 1, the Supreme Court ruled thus:-
"17. ...Non-executive Director is no doubt a custodian of the
governance of the company but is not involved in the day-to-day
affairs of the running of its business and only monitors the
executive activity. To fasten vicarious liability under Section 141
of the Act on a person, at the material time that person shall have
been at the helm of affairs of the company, one who actively
looks after the day-to-day activities of the company and is
particularly responsible for the conduct of its business. Simply
because a person is a Director of a company, does not make him
liable under the NI Act. Every person connected with the
Company will not fall into the ambit of the provision. Time and
again, it has been asserted by this Court that only those persons
who were in charge of and responsible for the conduct of the
business of the Company at the time of commission of an offence
will be liable for criminal action. A Director, who was not in
charge of and was not responsible for the conduct of the business
of the Company at the relevant time, will not be liable for an
offence under Section 141 of the NI Act. In National Small
Industries Corpn. [National Small Industries Corpn.
Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 : (2010) 1 SCC
(Civ) 677 : (2010) 2 SCC (Cri) 1113] this Court observed: (SCC
p. 336, paras 13-14)
"13. Section 141 is a penal provision creating vicarious
liability, and which, as per settled law, must be strictly
construed. It is therefore, not sufficient to make a bald cursory
statement in a complaint that the Director (arrayed as an
accused) is in charge of and responsible to the company for the
conduct of the business of the company without anything more
as to the role of the Director. But the complaint should spell out
as to how and in what manner Respondent 1 was in charge of or
was responsible to the accused Company for the conduct of its
business. This is in consonance with strict interpretation of
penal statutes, especially, where such statutes create vicarious
liability.
14. A company may have a number of Directors and to make
any or all the Directors as accused in a complaint merely on the
basis of a statement that they are in charge of and responsible
for the conduct of the business of the company without anything
more is not a sufficient or adequate fulfilment of the
requirements under Section 141."
5. In a similarly placed fact-situation in a batch of matters led by
Crl.M.C. 3729/2017 titled Chanakya Bhupen Chakravarti & Anr.vs.
Mrs. Rajeshri Karwa, 2018 SCC Online Del 12968, criminal
prosecution with reference to Section 141 of NI Act against similarly
placed individuals who were also non-executive directors and had
been arraigned as accused in those proceedings were set aside. It may
be added that on similar contentions raised by the petitioner in
Kanarath Payattiyath Balaraj vs. PVR Ltd., Crl.M.C. 2715/2017, the
said matter also having arisen out of the same case at hand, the
prosecution against him was set aside and quashed by a coordinate
bench, by its order dated 13.11.2017.
6. On parity, the petitioner herein deserves similar relief. Thus,
the impugned order insofar as thereby the petitioner was summoned as
accused in the aforementioned criminal complaint case of the
respondent is hereby quashed and set aside.
7. The petition and the application filed therewith are disposed of
in above terms.
R.K.GAUBA, J.
JANUARY 29, 2019
nk
