Criminal Misc.No.36667 of 2010 (O&M) : 1 : IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: November 17, 2011 Bajrang Lal .....Petitioner VERSUS Bhup Singh & others ...Respondents CORAM:- HON'BLE MR.JUSTICE RANJIT SINGH 1. Whether Reporters of local papers may be allowed to see the judgement? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? PRESENT: Mr.Dinesh Arora, Advocate, for the petitioner. Mr.Narender Sura, Advocate, for the respondents. **** RANJIT SINGH, J. This order will dispose of two CRM-M Nos.36667 of 2010 (Bajrang Lal Vs. Bhup Singh & others) and 6515 of 2010 (Kapil & another Vs. Bhup Singh & others). The prayer made in these two petitions is for quashing the complaints titled “Bhup Singh and others Vs. M/s Soni Buildcon Pvt.Ltd.”, which are filed under Sections 138, 141 and 142 of the Negotiable Instruments Act read with Sections 420 and 422 IPC. Criminal Misc.No.36667 of 2010 (O&M) : 2 : The facts, in brief, taken from CRM-M No.36667 of 2010 are that the complainant had entered into an agreement to sell with M/s Soni Buildcon Pvt.Ltd. An amount of `68,00,000/- was given as earnest money and the date for executing sale deed was fixed upto 6.9.2007. On 4.9.2010, the sale deed was executed in favour of M/s Soni Infratech Pvt.Ltd. and the remaining amount of `5,37,75,000/- was paid to the respondents through cheques signed by Kapil Soni Managing Director of the Company. The petitioner avers that he was only a mediator and facilitated to get the sale deed executed. Subsequently, however, Mr.Kashi Nath Shukla bought some shares of the company and became its Managing Director. Kapil Soni, who signed the cheques as Director, was removed and thereafter he had no concern with the company. Mr.Kashi Nath Shukla statedly took over the liability. The cheques, which were issued, were presented to the banker but were returned with the remarks “payment stopped by drawer”. Respondents filed a civil suit for permanent injunction and for declaring the sale deed as executed to be illegal, void, nonest, unjust and unreasonable etc. The petitioner was not made a party to the suit. Thereafter, the complainant sent a legal notice to the company and its Managing Director Kapil Soni. The petitioner states that he was never a Director. Subsequently, complaint was filed under Section 138 of the Negotiable Criminal Misc.No.36667 of 2010 (O&M) : 3 : Instruments Act. As per the petitioner, there is no allegation made against him. The petitioner has a grievance that without considering the essential requirement of Section 138 of the Negotiable Instruments Act and without applying judicious mind, the Magistrate has summoned the petitioner. He has already appeared and has been released on bail. He moved an application for his discharge, which is rejected. As per the petitioner, the Magistrate has erred in rejecting this application as well and he has accordingly filed this petition. The second petition is filed by Kapil Soni and the company seeking quashing of the complaint and the summoning order. Their grievance is that the summoning order has been issued without complying with the provisions of Section 202 Cr.P.C. Otherwise, it is vaguely averred that no case for summoning the petitioners is made out. The counsel for the respondents has pointed out that having entered into an agreement, the cheques were issued amounting to sum of more than `5.00 crores, which was dishonoured. The respondents have also filed an application before the trial Court that the company had already transferred the land to some other company and it is on this basis pleaded that the individual, who had played the role, would not be vicariously liable for the liability on the company. The counsel for the petitioner has referred to Criminal Misc.No.36667 of 2010 (O&M) : 4 : number of precedents in support of his plea. He would first refer to Dr.Anand Kumar Goyal Vs. State of Haryana and another, 2009(1) R.C.R. (Criminal) 380. While discussing the vicarious liability under Section 138 of the Act in regard to dishonour of a cheque issued by a partnership firm, this court has observed that the complaint is totally silent with regard to the role of the petitioner in the conduct of business and hence the complaint qua the petitioner is quashed. Reference is also made to Monaben Ketanbhai Shah & Anr. Vs. State of Gujarat & Ors., 2004((7) S.C.C. 15. The Hon'ble Supreme Court in this case has observed that in the complaint it is not stated that the partners in charge were responsible to the company for conduct of business. In this background, the Court upheld the order of discharge passed by the Magistrate. The court has otherwise observed that it is not necessary to reproduce the language of Section 141 in verbatim for determining the complaint, besides observing that power to quash a criminal complaint under Section 482 Cr.P.C.is required to be exercised very sparingly and where, read as a whole, factual foundation for the offence has been laid down in the complaint, then it should not be quashed. If the ingredients of the offence are altogether lacking, then the court may interfere. In K.P.G. Nair Vs. Jindal Menthol India Ltd., (2001) 10 SCC 218, the Hon'ble Supreme Court has held that the substance of allegations read as a whole Criminal Misc.No.36667 of 2010 (O&M) : 5 : should answer and fulfill the requirements of ingredients of the ingredients of Section 141. In some of the cases, the complaint was quashed, where it was not stated that the accused was not in charge of the business and was responsible for conduct of the business of the firm. In S.M.S.Pharmaceuticals Ltd. Vs. Neeta Bhalla and Anr. AIR 2005 (SC) 3512, the Hon'ble Supreme Court has observed that signatory of dishonoured cheque is responsible for the incriminating act and will be covered under Section 141(2) of Negotiable Instruments Act. In this case, it was further held that a person who is even not holding any office can be held responsible for the offence under Section 138 of the Act. It is observed that the liability arises from being in charge of and responsible for conduct of the business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in the company. A person not holding any office or designation may be liable if he satisfies the main requirement of being in charge of and responsible for conduct of business of a company at the relevant time. In this case, the company has entered into an agreement. A cheque of huge amount of over `5.00 crores issued by and on behalf of the company. The cheque was signed by Kapil Soni, who was the Managing Director of the company. The petitioner Bajrang Lal has also been arrayed Criminal Misc.No.36667 of 2010 (O&M) : 6 : as the accused as he was the Managing Director of the company. The petitioner has purposely not described himself in the title of the petition being the Managing Director. Managing Directors, by virtue of their office, are in charge and responsible to the company for the conduct of business and this was so observed in S.M.S.Pharmaceuticals Ltd.'s case (supra). Thus, the petitioners cannot escape responsibility on the ground that there are no averments made in the complaint etc. The petitioner would remain responsible being the Managing Director and so would be the fate of the company. The company apparently is acting with dishonest intention by transferring the land to some other company, which would further reveal their conduct. No case for interference in exercise of jurisdiction under Section 482 Cr.P.C. is made out. The petitions are accordingly dismissed. November 17 ,2011 ( RANJIT SINGH ) ramesh JUDGE