Delhi High Court
Maj. Surendra Kumar Hooda (Retd.) vs Kapil Gupta on 8 February, 2021
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 22.01.2021
Pronounced on: 08.02.2021
(1) + CRL.M.C. 1779/2020 & CRL.M.A.12423/2020
(2) + CRL.M.C. 1782/2020 & CRL.M.A.12458/2020
(3) + CRL.M.C. 1783/2020 & CRL.M.A. 12460/2020
(4) + CRL.M.C. 1784/2020 & CRL.M.A. 12462/2020
MAJ. SURENDRA KUMAR HOODA (RETD.) ..... Petitioner
Through: Mr. Madhav Khurana &
Mr. Kartikeye Dang, Advocates
Versus
KAPIL GUPTA ..... Respondent
Through: Mr. Tanveer Ahmed Mir,
Mr. Yatharth Dohare &
Mr. Laksh Khanna, Advocates
CORAM:
HON'BLE MR. JUSTICE SURESH KUMAR KAIT
JUDGMENT
1. Vide above captioned four petitions, the petitioner seeks quashing of
orders dated 16.3.2017, 25.06.2018 and 25.06.2020, passed by the learned
Metropolitan Magistrate in complaints under Section 138 of Negotiable
Instrument Act, 1881 (NI Act).
2. The above captioned first petition [CRL.M.C.1779/2020] pertains to
Complaint No.612304/206. The second captioned petition [Crl.M.C.
1782/2020] pertains to Complaint No. 611606/2016. The above captioned
third petition [Crl.M.C. 1783/2020] pertains to Complaint No. 611608/2020.
The fourth captioned petition [Crl.M.C. 1784/2020] pertains to Complaint
No.612305/2016. Since the subject matter of these petitions pertain to four
different complaints (henceforth referred to as the "complaints in question")
relating to one residential real estate project, namely, "Spire Woods",
therefore, with the consent of learned counsel for the parties, these petitions
have been heard together and are being disposed of by this common
judgment.
3. These petitions have been preferred by the petitioner seeking quashing
of orders dated 16.3.2017 and 25.06.2018, passed by the Metropolitan
Magistrate vide which petitioner has been summoned to face trial and by
order dated 25.06.2020, Metropolitan Magistrate has framed Notices under
Section 251 Cr.P.C and dismissed petitioner‟s plea seeking discharge in the
complaints in question.
4. Brief facts of the complaints are that petitioner- Major Surendra
Kumar Huda and one other person, namely, Sunil Gandhi, are the Promoters/
Directors of M/S A N Buildwell (P) Ltd. (henceforth referred to as the
"accused company"). Respondent/complainant has alleged that petitioner
and one Mr.Ashish Gulati, induced him to invest in a residential real estate
project, namely, "Spire Woods" located at Sector 103, Gurugram, Haryana
and Builder Buyer Agreement and Agreement to Sell, both dated 27.03.2015
were executed between the accused company and the complainant and
residential unit No. 102, in Tower 7 of the aforesaid project was allotted to
the complainant. According to the complainant, in terms of aforesaid
Agreement, respondent/complainant deposited Rs.45,25,331/- (Rupees Forty
Five Lakhs Twenty Five Thousand Three Hundred and Thirty One only) into
the account of the accused company by way of RTGS. The Agreement to
Sell in question provided respondent/complainant the "Buy Back Option‟,
which required accused company to buy back the rights, interests and
entitlements of complainant‟s unit and it could be exercised by the
complainant/respondent by depositing the post dated cheques amounting to
Rs.1,14,74,703/- issued by the accused company. The said amount of
Rs.1,14,74,703/- was given to complainant/petitioner by way of four post
dated cheques, which are detailed as under:-
Cheque Number Amount Dated Signed by
046777 Rs.54,90,000.00 27/3/2016 Petitioner & another AR
046776 Rs.9,59,428.00 27/3/2016 Sunil Gandhi & another AR
046775 Rs.1,79,675.00 27/3/2016 Sunil Gandhi & another AR
046774 Rs.48,45,600.00 27/3/2016 Petitioner & another AR
5. In the complaint, respondent has alleged that in January, 2016, he
came to know that the accused company was on the verge of liquidation and
in March, 2016, he further came to know that a provisional Official
Liquidator has been appointed under the orders of this Court, and finding
that the residential project was nowhere near completion,
respondent/complainant exercised the Buy Back Option and presented all the
four afore-noted post dated cheques issued by the accused company in bank
on 25.04.2016 for payment, which were returned unpaid for the reasons as
under:-
Cheque Number Reasons for return by the bank
046777 Drawers signature to operate account not received
046776 Drawers signature to operate account not received
046775 Funds Insufficient
046774 Drawers signature to operate account not received
6. Respondent/complainant has alleged that after dishonouring of
cheques, his verbal requests for cancellation of unit and repayment were not
answered by the accused persons and he came to know that the accused
Directors had already resigned from the Board of Directors of the accused
company, he was left with no option but to send Demand Notices under
Section 138 of NI Act against the accused company and its Directors and
since no payment was received within the statutory period of 15 days, the
complaints in question were instituted under Section 138 of NI Act.
7. The learned trial court, after hearing arguments on the point of
summoning held that prima facie offence under Section 138 of NI Act was
made out and complaints were filed within limitation period and vide orders
dated 16.3.2017 and 25.06.2018, directed issuance of summons against the
petitioner and others and vide order dated 25.06.2020 framed Notices under
Section 251 Cr.P.C. while rejecting the plea of discharge, and the said orders
are under challenge in these petitions.
8. At the hearing, learned counsel for petitioner submitted that petitioner
had never met respondent or induced him to invest money in the accused
company. It was submitted that petitioner was only a nominee Director of
M/s Schleicher Intec Pvt. Ltd. which itself had only 22% share holding in
M/S A.N.Buildwell Pvt. Ltd and also that petitioner was not incharge of day
to day management of M/S A.N.Buildwell Pvt. Ltd. Learned counsel for the
petitioner submitted that out of four cheques in question, two were not
signed by the petitioner and these cheques were issued by M/S
A.N.Buildwell Pvt. Ltd. to the respondent and not by the petitioner in his
personal capacity. It was stated that petitioner had resigned from the post of
Nominee Director of M/S A.N.Buildwell Pvt. Ltd. on 11.09.2015 i.e. almost
06 months prior to the presentation of cheques in question, which is evident
from Form DIR 12 filed in the Ministry of Corporate Affairs, confirming
petitioner‟s resignation.
9. It was further submitted that on 25.4.2016, while M/S A.N.Buildwell
Pvt. Ltd. was under the control of provisional Official Liquidator appointed
under the Orders of this Court and despite respondent/complainant having
knowledge of the same, still he exercised the Buy Back Option and presented
all the four cheques with his banker, which were returned unpaid. It was
emphatically stated by learned counsel for the petitioner that the Demand
Notices qua these cheques were also sent to Sh.D.P.Ojha, Official Liquidator
and other Directors of M/S A.N.Buildwell Pvt. Ltd., namely, Mr. Michael
Brian Collins, Mr. Pawan Bhandari, Mr. Harish Mehrotra, Mr. Vipin Kumar,
Mr. Arun Kumar Kotwal, Mr. Rakesh Kumar Nagpal and Mr. Shashi
Bhushan Prasad. However, learned trial court has erred in permitting
prosecution of petitioner, Mr. Sunil Gandhi and M/S A.N.Buildwell Pvt.
Ltd., despite the fact that the Directors of the company were also served with
the Demand Notices and petitioner had already resigned from the Board of
Directors.
10. It was next submitted by learned counsel for the petitioner that the
learned trial court has passed the impugned summoning orders without
taking into consideration that at the time of hearing, accused company M/S
A.N.Buildwell Pvt. Ltd. was neither represented by any Authorized
Representative nor anyone appeared on behalf of provisional Official
Liquidator appointed pursuant to order dated 08.03.2016 of this Court.
Learned counsel submitted that a pedantic and mechanical approach was
adopted by learned Metropolitan Magistrate in issuing the summoning order
by ignoring the fact that respondent has deliberately not made
Directors/signatory or the Official Liquidator of M/S A.N.Buildwell Pvt.
Ltd. a party to the complaint cases, despite having served them Demand
Notice qua the cheques in question. It is also averred that the Metropolitan
Magistrate has failed to take notice of the fact that out of four cheques in
question, only two cheques were signed by the petitioner and other two
cheques were signed by the other Director and that petitioner was not
Director of M/S A.N.Buildwell Pvt. Ltd. at the time of presentation of
cheques or its dishonour or of issuance and acceptance of Demand Notices.
11. It was also submitted that factum of petitioner‟s resignation from the
Directorship of M/S A.N.Buildwell Pvt. Ltd. on 11.09.2015 and constitution
of new Board of Directors on the same day had resulted in replacement of
petitioner as the authorized signatory of the bank accounts of M/S
A.N.Buildwell Pvt. Ltd. and therefore, the cheques in question were
dishonoured with the remarks "Due to signature to operate account not
received" and this fact has been completely ignored by the learned
Metropolitan Magistrate while proceeding against the petitioner under
Section 138 of NI Act.
12. To submit that the Director, who was not Incharge, is not responsible
for conduct of business of the company, learned counsel for petitioner relied
upon Supreme Court‟s decision in DCM Financial Services Ltd. V/s. J.N.
Sareen & Anr. (2008) 8 SCC 1; Sudeep Jain Vs. M/s. ECE Industries Ltd.,
2013 SCC OnLine Del 1804; National Small Industries Corporation
Limited Vs. Harmeet Singh Paintal & Anr. (2010) 3 SCC 330. To submit
that if a Director has resigned before the cheque was presented for
encashment, he cannot be held liable under Section 138 of NI Act, learned
counsel for petitioner placed reliance upon decision in Kamal Goyal Vs.
United Phosphorus Ltd., 2010 SCC OnLine Del 447. To submit that a
complaint under Section 138 of NI Act is not maintainable against a Director
when on the date of presentation of the cheque, the company is in
liquidation, reliance is placed upon decision in M.L. Gupta & Anr. Vs. Ceat
Financial Services Ltd., 2006 SCC OnLine Del 1448.
13. Learned counsel for petitioner further submitted that the Official
Liquidator, who had taken charge of the company pursuant to order dated
08.03.2016 of this Court, has not yet been discharged and
respondent/complainant without deliberately making him party to the
complaints, has claimed almost double of the amount invested by him.
14. Learned counsel for petitioner submitted that the Demand Notice
dated 19.05.2016 were despatched by respondent on 23.05.2016 and was
delivered to the petitioner on 26.05.2016 and the complaints in question were
instituted by respondent on 14.07.2016 and so, there is delay of 04 days in
filing the complaints. Thus, the complaints filed by the
respondent/complainant are barred by limitation as prescribed under Section
138 read with Section 142 of NI Act, which were not even accompanied by
applications seeking condondation of delay. Lastly, learned counsel for
petitioner submitted that not only the impugned orders dated 16.3.2017,
25.06.2018 and 25.6.2020 deserve to be set aside, but the complaints in
question are also liable to be dismissed.
15. On the other hand, learned counsel for respondent/complainant
supported the impugned orders and submitted that the orders are well
merited and there is no error calling for any interference by this Court.
Learned counsel for respondent/complainant submitted that besides
respondent/ complainant, over 1400 investors have invested their hard
earned money in the real estate projects carried out by M/S A.N. Buildwell
which was owned, operated and controlled by the petitioner and petitioner is
a charge-sheeted accused in several FIRs registered in Delhi and NCR for
looting and plundering of money to the tune of Rs.450 crores. Learned
counsel submitted that with an intention to safe guard his hard earned
invested money in the project run by the petitioner, respondent/complainant
deposited the cheques in bank for payment, which were issued to him by the
accused company under the Directorship and signatures of petitioner and
after dishonouring of cheques, petitioner was left with no option but to have
recourse to law.
16. Learned counsel for respondent/complainant submitted that
petitioner‟s claim of having resigned from the accused company on
11.09.2015 while the cheques in question were dishonoured on 27.04.2016,
is blatantly false as petitioner himself is signatory on the two cheques in
question and these cheques were issued by the accused company under the
Buy Back Option, as spelt out in the Builder Buyer Agreement and
Agreement to Sell dated 27.03.2015. It was stated that petitioner first created
financial crunch in the accused company by siphoning off the company
funds for personal benefits and then pushed company into the process of
liquidation and thereafter, with the mala fide intention to escape his
liabilities, he resigned from the Board of Directors.
17. Learned counsel for respondent submitted that the plea of petitioner
that he was not involved in the day to day affairs of the company has to be
rejected because at the time when respondent had invested his hard earned
money into the residential project in question, petitioner was the Promoter,
Director, person in charge and 40% share holder of the company i.e. M/S
A.N. Buildwell and therefore, he was the main person to induce the
respondent to invest and was the Director at the time of issuance of cheques
in question and was responsible for the acts performed in the name of the
company and, therefore, liable under Section 141 of the NI Act. Learned
counsel for respondent submitted that it is an admitted fact that out of the
four cheques in question, two cheques of the higher value, have been signed
by the petitioner in the capacity of Director of the Company which clearly
establish that petitioner was duly authorized to issue cheques in the course of
business transactions of the company.
18. Learned counsel for respondent next submitted that the plea of
petitioner that respondent presented the cheques for payment in bank after
M/S A.N. Buildwell had gone into liquidation is incorrect, as only
„Provisional Official Liquidator‟ was directed to be appointed by this Court
on 08.03.2016 and in fact, the cheques handed over to the
respondent/complainant were posted dated cheques bearing date of
27.03.2016, which could be presented in Bank only thereafter, and were
dishonoured and returned by the Bank on 27.04.2016. It was further
submitted that only provisional Official Liquidator was appointed by this
Court and the company had not gone into liquidation.
19. Learned counsel for respondent/ complainant further submitted that
petitioner has not approached this Court with clean hands, as he has not
disclosed in the petition that this Court vide order dated 17.02.2020, in the
case titled as Sunil Gandhi Vs. M/S A.N. Buildwell Private Limited has
approved revival of the accused company and petitioner has been re-
appointed as the Director of the company on 04.04.2020.
20. Regarding the plea of petitioner that the complaints in question are
barred by limitation as set out in Section 138 of NI Act, learned counsel for
respondent submitted that the said plea is to be rejected, as the Metropolitan
Magistrate, after examining the issue of filing of complaints, has
categorically stated in the impugned summoning orders dated 16.3.2017 and
25.06.2018 that the complaints were filed within period of limitation. It is
averred on behalf of respondent that the cheques in question were returned
from the bank vide Return Memo dated 27.04.2016 and legal Demand
Notice was sent on 23.05.2016, which was served upon the company on
30.05.2016 and the complaints were instituted on 14.07.2016 and therefore,
there is no delay in filing the complaints in question.
21. Learned counsel for respondent also submitted that the plea of
petitioner that in the complaints in question only he, Sunil Gandhi and M/S
A.N. Buildwell have been arrayed as accused despite the fact that Demand
Notices were sent to other Directors as well, cannot be taken note of as only
these persons were responsible for the day to day affairs of the company and
they were the majority share holders as well as signatories on the cheques in
question. Further, it was stated that petitioner himself has not disclosed the
name of other signatory on the cheques in question. Besides, the Demand
Notices qua the cheques in question were also served upon the Directors who
had joined the accused company on the same date when petitioner had
resigned from the Board of Directors i.e. 11.09.2015.
22. Learned counsel for respondent/complainant also drew attention of
this Court to the fact that FIR No. 114/2016 has been registered at police
station Sarita Vihar, Delhi against the petitioner for the offences under
Sections 406/400/420 read with Sections 34 & 120 B IPC and charge sheet
in that case has already been filed and as per documents placed on record
therein, the account from which the cheques in question were issued by the
petitioner, did not even have sufficient balance to honour the legally
enforceable debt of the respondent on the date when the cheques were issued
or when the petitioner resigned from the company or when the cheques were
presented for payment.
23. Learned counsel for respondent/complainant submitted that reliance
placed by petitioner upon Hon‟ble Supreme Court‟s decision in M.L.Gupta
(Supra), is misplaced as in the said case, the complainant had presented the
cheque much after winding up of the company whereas in the present case,
only publication/citations have been issued which is the first step for
liquidation and in fact, till date liquidation has not taken place and rather,
revival of the company has been approved by this Court. Learned counsel for
respondent/complainant emphasized that petitioner has hatched an elaborate
conspiracy with co-accused Sunil Gandhi and committed this premeditated
crime by creating financial crunch and pushing the accused company into
liquidation, resigning from the Board of Directors and thereafter, reviving it
and rejoining as Director.
24. To submit that provisions of Section 446(1) of the Companies Act can
have apparently and in essence no application to the proceedings under
Section 138 of NI Act, learned counsel for respondent/complainant relied
upon decision of this Court in W.P.(Crl.) 1280/2010, M/s Indorama
Synthetics (I) Ltd vs. State of Maharashtra and Anr. and decision of High
Court of Calcutta in MBL Infrastructure Ltd. Vs. Sh. Manik Chand
Somani [CRR 3455/2018]. Reliance is also placed upon decision of this
Court in Krishna Texport Industries Ltd. Vs. DCM Limited (C.O.Appeal
No. 44/20025) and decision of High Court of Bombay in Tayal Cotton Pvt.
Ltd. Vs. State of Maharashtra and others (W.P.(Crl.) 1437/2017) in support
of respondent‟s case.
25. Lastly, it was submitted on behalf of respondent/complainant that
none of the grounds raised by the petitioner merit any consideration and
these petitions deserve to be dismissed.
26. Arguments advanced by learned counsel representing both the sides
were heard in detail and I have also perused the impugned orders, material
placed on record as well as decisions relied upon by the parties.
27. It is not in dispute that petitioner was Director of M/S A N Buildwell
(P) Ltd. when respondent/complainant invested in the residential project by
the name of "Spire Woods" located in Gurugram, Haryana and Builder
Buyer Agreement and Agreement to Sell was entered between the accused
company and respondent/complainant on 27.03.2015. It is further not in
dispute that out of the four post dated cheques issued in the name of
respondent/complainant, two cheques of higher value were signed by
petitioner in the capacity of Director as well as one another authorized
representative of the accused company, whose name petitioner has not
disclosed. It is also not in dispute that in terms of aforesaid agreement
entered between the parties, respondent/complainant was given "Buy Back
Option" and in terms thereof, petitioner handed over four post dated cheques
bearing the date of 27.03.2016 to him, which could be presented in bank
only after one year of entering into Builder Buyer Agreement and Agreement
to Sell dated 27.3.2015.
28. As per the complaint, when respondent got to know in March, 2016
that the accused/company is facing financial crunch and its Directors had
resigned from the Board of the Directors and new Directors were inducted
and also that the accused company had primarily reached at the stage of
liquidation, he, therefore, presented the cheques in bank for payment, which
were handed over to him by the accused company under the Buy Back
Option. In such a situation, any prudent person would have adopted the
similar approach to safeguard his interests, as adopted by the
respondent/complainant herein.
29. Different question of facts and law have been raised in these petitions.
The foremost question which is required to be determined by this Court is
the preliminary objection raised by the petitioner that the complaints in
question are barred by limitation. Though impugned orders dated 16.3.2017
and 25.06.2018 simply noted that the complaints filed are within the
limitation period, petitioner claims that the Demand Notices were served
upon him on 26.05.2016 and the complaints in question were filed on
14.07.2016 and so, there is a delay of 04 days in filing the complaints. On
the other hand, the stand of respondent/complainant is that the Demand
Notices were served upon the accused company on 30.05.2016 and the
complaints were instituted on 14.07.2016, and, therefore, the complaints
have been filed within the stipulated period as prescribed under Section 138
of NI Act and there was no requirement of filing application under Section
142 (b) NI Act for condoning the delay.
30. The Hon‟ble Supreme Court and High Courts in a catena of judgments
have worded the liability of Directors, Managers and Officials of a company
in complaints arising out of Section 138 & 141 NI Act. The pertinent
observations of Hon‟ble Supreme Court in N. Rangachari Vs. BSNL, (2007)
5 SCC 108, are as under:-
"15. By the fall in moral standards, even these negotiable
instruments like cheques issued, started losing their
creditability by not being honoured on presentment. It was
found that an action in the civil court for collection of the
proceeds of a negotiable instrument like a cheque tarried,
thus defeating the very purpose of recognising a negotiable
instrument as a speedy vehicle of commerce. It was in that
context that Chapter VII was inserted in the Negotiable
Instruments Act by the Banking, Public Financial
Institutions and Negotiable Instruments Laws (Amendment)
Act, 1988 (Act 66 of 1988) with effect from 1-4-1989. The
said Act inserted Sections 138 and 142 in the Negotiable
Instruments Act. The objects and reasons for inserting the
chapter were:
"to enhance the acceptability of cheques in
settlement of liabilities by making the
drawer liable for penalties in case of
bouncing of cheques due to insufficiency of
funds in the accounts or for the reason that
it exceeds the arrangements made by the
drawer, with adequate safeguards to
prevent harassment of honest drawers."
16. While Section 138 made a person criminally liable on
dishonour of a cheque for insufficiency of funds or the
circumstances referred to in the section and on the
conditions mentioned therein, Section 141 laid down a
special provision in respect of issuance of cheques by
companies and commission of offences by companies under
Section 138 of the Negotiable Instruments Act. Therein, it
was provided that if the person committing an offence under
Section 138 of the Act was a company, every person who at
the time the offence was committed, was in charge of and
was responsible to the company for the conduct of the
business of the company as well as the company, shall be
deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly. The scope of
Section 141 has been authoritatively discussed in the
decision in S.M.S. Pharmaceuticals Ltd. [(2005) 8 SCC 89 :
2005 SCC (Cri) 1975] binding on us and there is no scope
for redefining it in this case. Suffice it to say, that a
prosecution could be launched not only against the company
on behalf of which the cheque issued has been dishonoured,
but it could also be initiated against every person who at the
time the offence was committed, was in charge of and was
responsible for the conduct of the business of the company.
In fact, Section 141 deems such persons to be guilty of such
offence, liable to be proceeded against and punished for the
offence, leaving it to the person concerned, to prove that the
offence was committed by the company without his
knowledge or that he has exercised due diligence to prevent
the commission of the offence. Sub-section (2) of Section 141
also roped in Directors, Managers, Secretaries or other
officers of the company, if it was proved that the offence was
committed with their consent or connivance."
31. In view of the above, respondent/complainant was right in affecting
service of Demand Notice upon the accused company and its erstwhile and
current Directors as well. The accused company has been served on
30.05.2016, therefore, complaints having been filed on 14.07.2016, are well
within the limitation period.
32. It is a matter of record that at the time when Builder Buyer Agreement
and Agreement to Sell, dated 27.03.2015 were entered into between the
parties, petitioner was the Director of the company. In terms of Buy Back
Option, as spelt out in the aforesaid Agreements, petitioner handed over four
post dated cheques dated 27.03.2016, out of which two cheques of higher
value were signed by him in the capacity of Director. It is not the case of
petitioner that the two cheques in question did not bear his signatures or that
at the time of issuance of cheque, he was not the Director of the accused
company. The stand taken by petitioner is that at the time of presentation of
cheques in bank, he was not on the role of Board of Directors and has placed
on record copy of Form DIR 12 in support of his claim, which shows that he
had resigned on 11.09.2015. However, this Court cannot lose sight of the
fact that he was the Director/Promoter of the accused company at the time of
issuance of cheques and was also signatory on two cheques. The Hon‟ble
Supreme Court in S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla AIR 2005
SC 3512, while affixing the liability of the signatory on the cheque, has held
as under:-
"19. In view of the above discussion, our answers to the
questions posed in the reference are as under:
(a) It is necessary to specifically aver in a complaint under
Section 141 that at the time the offence was committed, the
person accused was in charge of, and responsible for the
conduct of business of the company. This averment is an
essential requirement of Section 141 and has to be made in a
complaint. Without this averment being made in a complaint,
the requirements of Section 141 cannot be said to be
satisfied.
(b) The answer to the question posed in sub-para (b) has to
be in the negative. Merely being a director of a company is
not sufficient to make the person liable under Section 141 of
the Act. A director in a company cannot be deemed to be in
charge of and responsible to the company for the conduct of
its business. The requirement of Section 141 is that the
person sought to be made liable should be in charge of and
responsible for the conduct of the business of the company at
the relevant time. This has to be averred as a fact as there is
no deemed liability of a director in such cases.
(c) The answer to Question (c) has to be in the affirmative.
The question notes that the managing director or joint
managing director would be admittedly in charge of the
company and responsible to the company for the conduct of
its business. When that is so, holders of such positions in a
company become liable under Section 141 of the Act. By
virtue of the office they hold as managing director or joint
managing director, these persons are in charge of and
responsible for the conduct of business of the company.
Therefore, they get covered under Section 141. So far as the
signatory of a cheque which is dishonoured is concerned, he
is clearly responsible for the incriminating act and will be
covered under sub-section (2) of Section 141."
33. In the present case, there are specific allegations in the complaint
against the petitioner that he was the Director of the accused company, who
had acted as a Promoter to induce petitioner to invest his money in the
project and allured him of higher returns if money is paid in one instalment
and issued the post dated cheques under his signatures, which shows that
petitioner was authorised to make financial transaction of the accused
company and was therefore, responsible for business of the accused
company.
34. Be that as it may. It is pertinent to mention here that the four cheques
in question, which were handed over to respondent/complainant on
27.03.2015, were bearing dates of 27.03.2016 and could be presented in the
bank only thereafter, and in between petitioner had resigned from the Board
of Directors. But, this by itself would not dilute the responsibility of
petitioner or accused company to fulfil their responsibility to honour the
cheques.
35. The petitioner has approached this Court against his summoning and
framing of Notices under Section 251 Cr.P.C in the complaints in question. It
is settled law that a Magistrate at the stage of taking cognizance and
summoning is required to only consider whether a prima facie case has been
made out for summoning the accused persons or not and is not required to go
into the merits of the case or material placed on record. However, since
petitioner has also sought dismissal of the complaints on merits, this Court
while exercising its extra ordinary inherent jurisdiction under Section 482
Cr.P.C. heard the parties at length on the merits of the case as well.
36. What has shocked the conscience of this Court is that for purchase of
one residential unit, respondent/complainant had paid a sum of
Rs.45,25,331/- to the accused company through RTGS, whereas the total
sum value of four post dated cheques in question is Rs.11,4,74,703/- which
were given to respondent by the petitioner‟s company. It appears that the
accused company guaranteed significant returns to the customers/ investors
who paid the entire amount in one instalment for the properties which were
yet to be developed. Attention of this Court has been drawn to copy of
charge sheet filed in FIR No. 114/2016, registered at police station Sarita
Vihar, Delhi, in which petitioner herein is also an accused.
37. Attention of this Court was also drawn to the order of 17.02.2020 in
Sunil Gandhi Vs. M/S A.N. Buildwell Private Limited, vide which a
Coordinate Bench of this Court has approved revival of the accused
company and petitioner has been re-appointed as the Director of the
company on 04.04.2020.
38. Whether petitioner who had issued the post dated cheques in the
capacity of Director of the accused company, had already resigned on the
date of presentation of cheque or whether there was sufficient balance in the
account to honour the legally enforceable debt or what shall be petitioner‟s
liabilities after being re-appointed as the Director of the Company, are the
questions which cannot be gone into at this stage.
39. A Single Bench of this Court in J.N. Bhatia & Ors. Vs. State & Anr.
2006 SCC OnLine Del 1597, dealt with bunch of complaints under Section
138 & 142 of NI Act based on dishonour of cheques. In one of the petition,
(Crl.M.C.1162/2003), while taking note of the fact that the
petitioner/accused was one of the signatory, dismissed the petition while
holding as under:-
"53. Though at the time of arguments it was denied that the
petitioner had signed the cheques, Trial Court record, which
was summoned, shows that he is one of the signatories.
When these are the facts appearing, the complaint cannot be
quashed under Section 482 of the Code of Criminal
Procedure. The disputes raised by the petitioner would form
his defence for which evidence would be required and they
are disputed questions of fact. This petition is accordingly
dismissed."
40. The Hon‟ble Supreme Court in N. Rangachari (Supra) has also held
as under:-
"21. A person normally having business or commercial
dealings with a company, would satisfy himself about its
creditworthiness and reliability by looking at its Promoters
and Board of Directors and the nature and extent of its
business and its memorandum or articles of association.
Other than that, he may not be aware of the arrangements
within the company in regard to its management, daily
routine, etc. Therefore, when a cheque issued to him by the
company is dishonoured, he is expected only to be aware
generally of who are in charge of the affairs of the company.
It is not reasonable to expect him to know whether the
person who signed the cheque was instructed to do so or
whether he has been deprived of his authority to do so when
he actually signed the cheque. Those are matters peculiarly
within the knowledge of the company and those in charge of
it. So, all that a payee of a cheque that is dishonoured can
be expected to allege is that the persons named in the
complaint are in charge of its affairs. The Directors are
prima facie in that position.
XXXXX
XXXXX
27. We think that, in the circumstances, the High Court has
rightly come to the conclusion that it is not a fit case for
exercise of jurisdiction under Section 482 of the Code of
Criminal Procedure for quashing the complaint. In fact, an
advertence to Sections 138 and 141 of the Negotiable
Instruments Act shows that on the other elements of an
offence under Section 138 being satisfied, the burden is on
the Board of Directors or the officers in charge of the affairs
of the company to show that they are not liable to be
convicted. Any restriction on their power or existence of any
special circumstance that makes them not liable is
something that is peculiarly within their knowledge and it is
for them to establish at the trial such a restriction or to show
that at the relevant time they were not in charge of the
affairs of the Company. Reading the complaint as a whole,
we are satisfied that it is a case where the contentions
sought to be raised by the appellant can only be dealt with
after the conclusion (sic commencement) of the trial."
41. Applying the dictum of N. Rangachari (Supra), to the facts of present
cases, I find that the correctness of allegations levelled by the parties, have to
be tested at trial and therefore, in my opinion Metropolitan Magistrate while
framing notices under Section 251 Cr.P.C. has rightly rejected petitioner‟s
prayer for discharge while observing that the points raised by the parties are
triable issues which can be agitated during trial.
42. In view of the aforesaid, the above captioned four petitions are
dismissed, while refraining to comment upon the merits of their case and
with liberty to the parties to raise the pleas taken herein before the trial court
during trial.
43. Pending applications also stand disposed of accordingly.
44. A copy of this order be sent to the court concerned for information and
compliance.
45. The judgment be uploaded on the website of this Court forthwith.
(SURESH KUMAR KAIT)
JUDGE
FEBRUARY 08, 2021
r
