Telangana High Court
Anish Kasturbhai Shah vs The State Of Telangana on 27 October, 2022
Bench: K.Surender
THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION NOS. 6885 AND 6936 OF 2022
COMMON ORDER:
1. Since the criminal petitions are filed in same calendar case,
they are being heard together and disposed of by way of this
Common Order.
2. Criminal Petition Nos.6936 of 2022 is preferred by A3 and
Criminal Petition No.6885 of 2022 is preferred by A4 in
C.C.N.I.No.2032 of 2022 on the file of VIII Metropolitan
Magistrate, Manoranjan Complex, Hyderabad.
3. The facts of the case are as follows:
a) The complainant alleged in the complaint stating that
A1 company represented by A2 to A7, are the Managing
Director, Directors, Executive Directors, CFO, Secretary, who are
authorized Signatories and all are in charge of and responsible
for the conduct of day to day affairs of the A1 company. A1
company approached the complainant with the consent and
knowledge of the A2 to A7 for borrowing funds through Inter
Corporate Deposit and based on such representation, the
complainant advanced a sum of Rs.50,00,000/- to A1 company
on 25.05.2016, on assurance made by all the accused that they
will repay the said amount within three months along with
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interest @ 14.5% per annum on or before 04.10.2016 being the
maturity date.
b) After receiving the said amount, A1 executed a Demand
Promissory Note dated 05.07.2016 in favour of the complainant
for a sum of Rs.51,62,678/- towards the principal amount and
also towards the accumulated interest thereon. The said Inter
Corporate Deposit Receipt dated 05.07.2016 was signed by A6
and A7 on behalf of A1 company with the knowledge and
consent of other accused. All the accused to clear the principal
amount and interest amount, have issued two cheques bearing
Nos.658198 & 658197 for Rs.50,00,000/- & 1,62,678/- both
dated 03.10.2016, drawn on Punjab National Bank, Large
Corporate Branch, Ashram Road, Ahmedabad, Gujarat to clear
the legally valid debt. When the said cheques were presented, the
same were dishonored with an endorsement as 'funds
insufficient' vide memo dated 02.11.2016. As such, legal notice
was issued to A1 to A7 to the address of A1 company.
4. Learned counsel for petitioner submits that there are
absolutely no specific allegations which are leveled against the
petitioners to prosecute them under Section 138 of the
Negotiable Instruments Act and unless there are specific
allegations regarding the role played by them in the transactions,
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they cannot be prosecuted for the offence under Section 138 of
the Negotiable Instruments Act.
5. The petitioners/A4 & A3 in Crl.P.No.6885 and 6936 of
2022 respectively, being non executive directors in A1 company
have no role in the day to day affairs of A1 company and in the
entire complaint, there are absolutely no allegations regarding
their involvement in the transactions in question. The Hon'ble
Supreme Court in the case of Pooja Ravinder Devidasani v.
State of Maharashtra1, held as follows:
"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."
6. As seen from the averments in the complaint, A4 and
A3 are the Directors, against whom it is alleged in the
complaint that they were responsible for the day to day
affairs of the company. Omnibus and vague allegations are
made in the complaint attributing knowledge of
transactions to all the directors. It is highly improbable
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(2014) 16 SCC 1
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and the statement made in the complaint appears to have
been made only for the purpose of implicating all the
directors in the case, which is being prosecuted by the 2nd
respondent.
7. For the reasons aforementioned, it is apparent that
the petitioner/A4 in Criminal Petition No.6885 of 2022 and
petiitioner/A3 Criminal Petition No.6936 of 2022
respectively, have no role at all in the entire transactions,
the judgment of the Hon'ble Supreme Court in the case of
Pooja Ravinder Devidasani v. State of Maharashtra (supra) is
squarely applicable to the present facts and accordingly,
the proceedings against petitioners/A4 and A3 in
Crl.P.No.6885 and 6936 of 2022 respectively in
CC.N.I.No.2032 of 2022 on the file of VIII Metropolitan
Magistrate, Manoranjan Complex are hereby quashed.
8. In the result, all the Criminal Petitions are allowed.
_________________
K.SURENDER, J
Date: 27.10.2022
kvs
THE HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION NOS. 6885 AND 6936 OF 2022
Dt.27.10.2022
kvs
