Punjab-Haryana High Court
Lavish Dewan vs M/S P.S. Maninder Singh Commission ... on 18 March, 2024
Neutral Citation No:=2024:PHHC:039337
2024:PHHC:039337
204 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CRM-M-16808-2019
Date of decision: 18.03.2024
Lavish Dewan ....Petitioner
Versus
M/s P.S. Maninder Singh Commission Agents and another ...Respondents
CORAM: HON'BLE MR. JUSTICE HARPREET SINGH BRAR
Present: Mr. Aditya Grover, Advocate
for the petitioner.
Ms. Sony, Advocate for
Mr. Rajeev Sharma, Advocate
for the respondents.
HARPREET SINGH BRAR, J. (ORAL)
Respondents have preferred a complaint under section 138-141 &
142 of the Negotiable Instruments Act, 1881 (in short 'the Act') against M/s VIR
Foods Limited and its Directors. Vide order dated 01.03.2018, learned Judicial
Magistrate 1st Class, Patti has summoned the Company as well as its
Directors/Proprietors for undergoing trial. This order is under challenge by the
petitioner on the ground that (a) he is a minority shareholder in the
accused/Company holding meagre 100 equity shares of Rs.10 each and for a
short duration i.e. with effect from 20.02.2013 to 20.05.2013 had been non-
working Director of the accused/Company, however, even at that time, had
never participated in the day to day functioning of the accused/Company and
accordingly is not responsible for running its affairs and (b) No specific
allegation regarding his role has been made against him in the complaint and
1 of 4
Neutral Citation No:=2024:PHHC:039337
2024:PHHC:039337
thus, vicarious liability cannot be fastened upon him.
2. Petitioner is accused No.4 in the complaint. Learned counsel for
the petitioner has relied upon the judgment of the Hon'ble Supreme Court of
India in 'National Small Industries Corporation Limited Vs. Harmeet Singh
Paintal and another', 2010(2) RCR (Criminal)122 and that of a single Bench
judgment of this Court in 'Anil Puri Vs. M/s Makhan Lal Vindo Kumar
andothers', 2006(2) RCR (Criminal) 939. Relevant paragraphs of the
complaint, are reproduced hereinbelow:
xxxxxxxxxx
That Accused No.1 is a Limited Company and Accused No-2 to 6 are
the Managing Director/Directors and accused No.-7 & 8 are the
authorised signatory of the Accused No-1 and are incharge and
responsible for the day to day conduct of the business of Accused
No.1. That the Accused No.1 is a Limited company having its office
at the address given here in above. The Accused No.-2 Mr. R.K.
Sharma is Managing Director of Accused No.-1 and as such is
overall incharge and responsible for the day to day affairs of the
business of Accused No.-1 and has been dealing and negotiating
with the complainant company for day to day conduct of the business
of Accused No-1. Accused No-3 Vinay Sharma, Accused No.4 Aswini
Sahoo, Accused No.5 Satyanarayan Nandi and Accused No.6
Ranganathan Srinivasan are also the directors of Accused no.1 and
are looking after day to day affairs of the business of Accused No.-1
and as such are incharge and responsible for the conduct of the
business of Accused company and have been dealing and negotiating
with the complainant company for day to day conduct of the business
of Accused No-1. All the accused persons were in constant touch
with the Management of the Complainant Company and had been on
their requests availing the services of the Complainant company.
Accused No. 7 & 8 are the signatory(s) of the dishonoured cheques
and as such are covered under the provisions of Negotiable
Instruments Act. Accused No.2 to 6 also assured and undertook to
the Complainant that the impugned cheques issued by Accused No.7
2 of 4
Neutral Citation No:=2024:PHHC:039337
2024:PHHC:039337
& 8 would be honoured on presentation. The dishonoured cheques
have been issued with the knowledge and active connivance of the
all the accused No.2 to 6 who are the Managing Director, Directors
of the Accused Company and Accused No.7 and 8 are signatories of
the impugned cheques and as such all the accused persons are liable
to be prosecuted for the offence committed by them under the
provisions of the Negotiable Instruments Act.
3. The above paragraphs of the complaint show that only general
allegations regarding the petitioner being responsible for and incharge of the
affairs in the Company, as mentioned in Section 141 of the Act, have been
made. No specific role has been explained.
4. Learned counsel for the petitioner also refers to Form No.32 issued
under Companies Act 1956, wherein it is stated that petitioner is the non-
working Promoter Director of the accused/Company w.e.f 20.02.2013.
5. The aforementioned evidence supports the contentions of the
learned counsel that the petitioner was not involved in the day to day running
affairs of company.
6. In National Small Industries Corporation Limited (supra), it has
been held by the Hon'ble the Supreme Court of India that to attract vicarious
lability under section 141 of the Act, the role of a particular Director in running
the affairs and business of a Company is to be specifically pleaded. General
allegations in terms of section 141 is not sufficient. The ratio of this judgment
supports the case of the petitioner. It has been established that the petitioner
was non-working Promoter Director in the Company on the basis of being the
minority shareholder in the accused/Company holding meagre 100 equity
shares of Rs.10 each. Thus, he could not have been involved in its day to day
business affairs. The allegations against him in the complaint, do not conform to
3 of 4
Neutral Citation No:=2024:PHHC:039337
2024:PHHC:039337
the test laid down in the National Small Industries Corporation Limited case
(supra) and therefore, his summoning for an offence under section 138 of the
Act, illegal.
7. The petition is accordingly allowed, complaint case No.403/2017
(Anneuxre P-3) alongwith summoning order dated 01.03.2018 (Anneuxre
P-4), pending in the Court of Judicial Magistrate 1st Class, Patti and subsequent
proceedings arising therefrom, are hereby quashed qua the petitioner.
8. Copy of this order be sent to the Court/successor Court of the trial
Court Magistrate concerned, for compliance.
(HARPREET SINGH BRAR)
JUDGE
18.03.2024
Neha
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
4 of 4
