Karnataka High Court

Mahira Wahab W/O H.Abdul Wahab vs Smt.Asha Parasrampuria on 15 March, 2021

Author: Mohammad Nawaz

           IN THE HIGH COURT OF KARNATAKA
                   DHARWAD BENCH
        DATED THIS THE 15TH DAY OF MARCH 2021
                          BEFORE
       THE HON'BLE MR. JUSTICE MOHAMMAD NAWAZ
               CRL.P. NO.101114    OF 2019
                          C/W
               CRL.P. NO.101115    OF 2019
               CRL.P. NO.101116    OF 2019
               CRL.P. NO.101117    OF 2019
IN CRL.P.NO.101114/2019
BETWEEN:

MR. HOTHUR SHADAB WAHAB S/O H. ABDUL WAHAB
AGED ABOUT 41 YEARS,
R/AT # 11/5, 3RD CROSS,
NANDIDURGA ROAD EXTENSION,
BENGALURU-560046.
                                         ...PETITIONER
(BY SRI.K. RAGHAVENDRA RAO & SMT. V. VIDYA, ADVS.)

AND:

SMT. ASHA PARASRAMPURIA
W/O SRIKANTH PARASRAMPURIA
AGE NOT KNOWN TO THE PETITIONER,
SOLE PROPRIETRIX,
R/AT C/O SUDARSHAN LODGE,
GROUND FLOOR, BEHIND NATARAJ THEATRE,
BALLARI CITY-583103.
                                             ...RESPONDENT

(SERVED)

NEGOTIABLE INSTRUMENTS ACT INSOFAR AS THE PETITIONER CONCERNED, AND ALSO CONSEQUENTLY SET- ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED PRL. SESSIONS JUDGE, BALLARI IN CRL.R.P. NO.261/2018 DATED 31.07.2018 FOUND AT ANNEXURE-D, ALLOW THIS CRIMINAL PETITION AND GRANT SUCH OTHER RELIEFS AS THIS HON'BLE COURT DEEMS FIT TO GRANT IN THE CIRCUMSTANCES OF THE CASE.

IN CRL.P.NO.101115/2019 BETWEEN:

MAHIRA WAHAB W/O H. ABDUL WAHAB AGED ABOUT 65 YEARS, R/AT # 11/5, 3RD CROSS, NANDIDURGA ROAD EXTENSION, BENGALURU-560046.

...PETITIONER (BY SRI.K. RAGHAVENDRA RAO & SMT. V. VIDYA, ADVS.)

AND:

SMT. ASHA PARASRAMPURIA W/O SRIKANTH PARASRAMPURIA AGE NOT KNOWN TO THE PETITIONER, SOLE PROPRIETRIX, R/AT C/O SUDARSHAN LODGE, GROUND FLOOR, BEHIND NATARAJ THEATRE, BALLARI CITY-583103.

...RESPONDENT (SERVED)

THIS PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING THIS HON'BLE COURT TO QUASH THE ENTIRE PROCEEDINGS IN CC NO.517/2017 PENDING ON THE FILE OF THE LEARNED I ADDL. CIVIL JUDGE AND JMFC, BALLARI FOR THE OFFENCE UNDRE SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT INSOFAR AS THE PETITIONER CONCERNED, AND ALSO CONSEQUENTLY SET- ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED

PRL. SESSIONS JUDGE, BALLARI IN CRL.R.P. NO.268/2018 DATED 31.07.2018 FOUND AT ANNEXURE-D, ALLOW THIS CRIMINAL PETITION AND GRANT SUCH OTHER RELIEFS AS THIS HON'BLE COURT DEEMS FIT TO GRANT IN THE CIRCUMSTANCES OF THE CASE.

IN CRL.P.NO.101116/2019 BETWEEN:

MR. HOTHUR SHADAB WAHAB S/O H. ABDUL WAHAB AGED ABOUT 41 YEARS, R/AT # 11/5, 3RD CROSS, NANDIDURGA ROAD EXTENSION, BENGALURU-560046.

...PETITIONER (BY SRI.K. RAGHAVENDRA RAO & SMT. V. VIDYA, ADVS.)

AND:

SMT. ASHA PARASRAMPURIA W/O SRIKANTH PARASRAMPURIA AGE NOT KNOWN TO THE PETITIONER, SOLE PROPRIETRIX, R/AT C/O SUDARSHAN LODGE, GROUND FLOOR, BEHIND NATARAJ THEATRE, BALLARI CITY-583103.

...RESPONDENT (SERVED)

THIS PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING THIS HON'BLE COURT TO QUASH THE ENTIRE PROCEEDINGS IN CC NO.518/2017 PENDING ON THE FILE OF THE LEARNED I ADDL. CIVIL JUDGE AND JMFC, BALLARI FOR THE OFFENCE UNDRE SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT INSOFAR AS THE PETITIONER CONCERNED, AND ALSO CONSEQUENTLY SET- ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED PRL. SESSIONS JUDGE, BALLARI IN CRL.R.P. NO.260/2018 DATED 31.07.2018 FOUND AT ANNEXURE-D, ALLOW THIS CRIMINAL PETITION AND GRANT SUCH OTHER RELIEFS AS

THIS HON'BLE COURT DEEMS FIT TO GRANT IN THE CIRCUMSTANCES OF THE CASE.

IN CRL.P.NO.101117/2019 BETWEEN:

MAHIRA WAHAB W/O H. ABDUL WAHAB AGED ABOUT 65 YEARS, R/AT # 11/5, 3RD CROSS, NANDIDURGA ROAD EXTENSION, BENGALURU-560046.

...PETITIONER (BY SRI.K. RAGHAVENDRA RAO & SMT. V. VIDYA, ADVS.)

AND:

SMT. ASHA PARASRAMPURIA W/O SRIKANTH PARASRAMPURIA AGE NOT KNOWN TO THE PETITIONER, SOLE PROPRIETRIX, R/AT C/O SUDARSHAN LODGE, GROUND FLOOR, BEHIND NATARAJ THEATRE, BALLARI CITY-583103.

...RESPONDENT (SERVED)

THIS PETITION IS FILED UNDER SECTION 482 OF CR.P.C. PRAYING THIS HON'BLE COURT TO QUASH THE ENTIRE PROCEEDINGS IN CC NO.518/2017 PENDING ON THE FILE OF THE LEARNED I ADDL. CIVIL JUDGE AND JMFC, BALLARI FOR THE OFFENCE UNDRE SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT INSOFAR AS THE PETITIONER CONCERNED, AND ALSO CONSEQUENTLY SET- ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED PRL. SESSIONS JUDGE, BALLARI IN CRL.R.P. NO.267/2018 DATED 31.07.2018 FOUND AT ANNEXURE-D, ALLOW THIS CRIMINAL PETITION AND GRANT SUCH OTHER RELIEFS AS THIS HON'BLE COURT DEEMS FIT TO GRANT IN THE CIRCUMSTANCES OF THE CASE.

THESE PETITIONS COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:

COMMON ORDER

The petitioners are arraigned as accused

Nos.3 and 4 in CC No.517/2017 and 518/2017

respectively on the file of the I Addl. Civil Judge

and JMFC, Ballari.

2. Heard the learned counsel for the

petitioners. Respondent is served but

unrepresented.

3. Respondent herein filed a private

complaint against accused Nos.1 to 5 alleging

offence punishable under Sections 138 and 142 of

Negotiable Instruments Act, 1881 (for short,

being the Directors of the Company registered

under the provisions of the Companies Act, 1956,

borrowed a business finance in a sum of Rs.15

lakhs and Rs.20 lakhs respectively and in

discharge of the said liability, issued cheques for

the said amount, which on presentation came to

be dishonoured for the reasons that "payment

stopped by drawer" and thereby committed

aforesaid offences.

4. Insofar as CC No.517/2017 is concerned,

it is alleged that cheque bearing No.178665 dated

10.04.2017 for Rs.15 lakhs drawn on State Bank

of India, Hosapete Branch was issued by accused

No.2 and the said cheque on presentation to the

Bank was dishonoured and thereafter, the

complainant issued a legal notice dated

22.04.2017 calling upon accused Nos.1 to 5 to pay

an amount of Rs.15 lakhs and in spite of service of

notice on accused No.2, amount was not paid.

5. Insofar as CC No.518/2017, it is alleged

that cheque bearing No.178664 dated 10.4.2017

for a sum of Rs.20 lakhs was issued by accused

No.2 drawn on State Bank of India, Hosapete

Branch, which on presentation got dishonoured

and legal notice dated 22.4.2017 was issued to

accused Nos.1 to 5 to pay the said amount of

Rs.20 lakhs and in spite of service of notice on

accused No.2, accused failed to repay the amount.

6. Accused No.1 is stated to be the Chairman

of the Company and Accused No.2 is the Managing

Director of the Company. Accused No.3 to 5 are

the Directors of the Company. In the complaint, it

is categorically stated that accused No.2 was the

one who issued cheques in question. According to

the complainant, the accused Company issued the

above cheques to the complainant with an

intention to defraud the amount payable to the

complainant and the accused have cheated the

complainant knowing very well that the above

cheques are issued for discharging the said

liability of the company. It is alleged that

accused Nos.1 to 5 being the registered

members/subscribers of the company are held

equally liable for civil and criminal prosecution. It

is also averred in the complaint that subsequent to

the retirement of accused No.1, accused No.5

became a Member of the company by amendment

to the registered Deed of the Company and when

cheques in question were issued, accused No.5

was a Director of the Company.

7. In the case of S.M.S. Pharmaceuticals

Ltd. Vs. Neeta Bhalla and Another reported in

(2007) 4 SCC 70, the Hon'ble Apex Court has

held that the Director of the company shall not

automatically be liable for commission of an

offence on behalf of the company. Under Section

141 of the NI Act, what is required is that the

persons who are sought to be made criminally

liable should be, at the time of offence was

committed, in charge of and was responsible to

the conduct of business of the company. Every

person connected with the company shall not fall

within the ambit of the provision. It is 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 the offence, who will be

liable for criminal action. The liability arises on

account of conduct, act or omission on the part of

a person and not merely on account of holding an

office or a position in a company.

8. In the case of Shailendra Swarup Vs.

Deputy Director, Enforcement Directorate,

reported in AIR 2020 SC 3890, the Hon'ble Apex

Court has held that, for proceeding against the

Director of a Company, he must be in-charge of

and responsible to Company for conduct of its

business. His liability depends on role he played in

affairs of company and not on mere designation or

status.

9. In the instant case, there is a bald

allegation in the complaint that accused Nos.1 to 5

being the registered members/subscribers of the

company are held equally liable for civil and

criminal prosecution. The complaint does not

disclose any averment as to whether the

petitioners were in-charge of and were responsible

for day-to-day affairs of the company. It is also

brought to the notice placing reliance on

Annexure-B (Form-32) that on 1.9.2008 itself, the

petitioners retired as Directors of the company.

Admittedly, the transaction in question has taken

place in the year 2011. It is specifically stated in

the complaint that accused No.2 was the one who

issued cheques in question on behalf of the

company.

10. The petitioners herein by way of

Crl.R.P.Nos.260, 261, 267 and 268 of 2018

challenged the issuance of process against them

by the trial Court and the said revision petitions

were dismissed by the learned Sessions Judge by a

common order dated 31.7.2018. However, the

said order was not passed on merits, but holding

that the High Court has got jurisdiction to

entertain the petition under Section 482 of Cr.P.C.

to decide the validity or otherwise of the order of

issuing process after taking cognizance by the

Magistrate.

11. It is relevant to mention that similarly

placed accused No.5, who was also shown as one

of the Directors of the Company approached this

Court in Crl.P.Nos.100478-479/2018 and a co-

ordinate Bench of this Court after considering the

facts and circumstances of the case held that

merely because the said accused was holding

designation as a Director of the Company, he

cannot be arraigned as an accused. This Court

relied on the judgment of the Hon'ble Apex Court

in S.M.S. Pharmaceutical Ltd. and Shailendra

Swarup's case (supra) and quashed the

proceedings against the said accused. The same

benefit has to be extended to the present

petitioners.

12. For the foregoing reasons, I proceed to

pass the following:

ORDER

a) Petitions are allowed.

b) The entire proceedings against the petitioners/accused Nos.3 and 4 in CC Nos.517 and 518 of 2017 pending on the file of the I Addl. Civil Judge and JMFC, Ballari, are hereby quashed.