IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CRM No. M-63 of 2009 (O/M). Date of Decision : November 10, 2009. Anurag Mehra ...... Petitioner(s). Versus. M/s S.D. Traders ..... Respondent(s). CORAM: HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH. Present:- Mr. Wills Mathews, Mr. R.S. Mamli, and Ms. Minakshi Poswal, Advocates, for the petitioner (s). Mr. Shiv Kumar, Advocate, for respondent. AUGUSTINE GEORGE MASIH, J. (ORAL). The present petition has been filed for quashing of complaint dated 23.05.2007 (Annexure-P-4), filed by respondent under Section 138 of the Negotiable Instruments Act, 1881, (hereinafter referred to as “the Act”), against the petitioner, who has been arrayed as accused No. 3 alongwith accused No. 1 M/s Varun Udyog and accused No. 2 A.K. Marwaha, partner. Copy of the complaint is appended as Annexure-P-4 with the petition. Apart from the complaint, the challenge in the present petition is to the summoning order dated 24.05.2007 (Annexure-P-6), passed by the learned Judicial Magistrate 1st Class, Faridabad, summoning the petitioner as an accused to face prosecution. Counsel for the petitioner contends that the complaint does not disclose any offence, which would be punishable under the provisions of the Act. He further contends that the cheque was issued by the Company and CRM No. M-63 of 2009 (O/M). was signed by Shri Vikram Marwaha, who is the partner of the Company. He further contends that the petitioner is not the signatory to the cheque. The account is maintained by the Company and he is not at all concerned with the Company. His contention is that there is no specific allegation about the role of the petitioner in the Company or in the issuance of cheque, which is alleged to have bounced, leading to committing of offence under Section 138 of the Act. There is nothing in the complaint, which would disclose any relationship between the Company and the petitioner, which would fall within the realm of Section 141 of the Act. His contention, therefore, is that the complaint dated 23.05.2007 (Annexure-P-4) as also the summoning order dated 24.05.2007 (Annexure-P-6), impugned herein, qua the petitioner, cannot be sustained. He relies upon the judgments of Hon'ble the Supreme Court in the case of N.K. Wahi Versus Shekhar Singh and others (2007) 9 Supreme Court Cases, 481, as also D.C.M. Financial Services Limited Versus J.N. Sareen and another (2008) 8, Supreme Court Cases, 1, in support of his contentions. Counsel for respondent, on the other hand, submits that the requirement of law is not that the specific role of a person, who is arrayed as an accused, is to be spelt out in the complaint itself, but the same is a matter of evidence, which is yet to be led before the learned Trial Court, which would determine the role of the accused. He contends that the petitioner is stated to be Liaison Accounts and Consultant Manager of the partnership firm and, therefore, his designation itself suggests the role of the petitioner in the partnership firm. In support of his contention that it is at the stage of evidence that the role of the accused is to be brought out, he relies upon the judgment of Hon'ble the Supreme Court in the case of S.V. Mazumdar and -2- CRM No. M-63 of 2009 (O/M). others Versus Gujarat State Fertilizer Co. Ltd. and another, 2005 (4) S.C.C. 173, and Karnataka High Court judgment in the case of Chairman M.S. Zahed, M/s HMT Watches Ltd., and another Versus The Cosmos Co- operative Bank Limited, 2006 (3) R.C.R. (Criminal) 911. I have heard counsel for the parties and have gone through the records of the case as also the judgments relied upon by them. It is not in dispute that the cheque in question was neither issued by the petitioner nor was signed by him. It was also not issued from an account, which is maintained by him. The cheque had been issued by Shri Vikram Marwaha, who is the partner of M/s Varun Udyog. It is also not in dispute that the cheque had been issued by the partnership firm. To bring an offence under Section 138 of the Act as also under the provisions of Section 141 of the Act, the basic requirement of a person to be an accused is that he should be connected with the day-to-day working of the Company. Every person, who at the time the offence was committed, was incharge of or responsible to the Company for the conduct of the business of the Company, as well as the Company, is deemed to be guilty of the offence and would be liable to be proceeded against and punished in accordance with law and that person would be held to have committed an offence under Section 138 of the Act. Nothing has been said in the complaint, which would suggest that the petitioner was responsible for the conduct of the business of the Company, or was incharge of, and responsible for the conduct of the business of the partnership firm at the relevant time. Hon'ble the Supreme Court, after discussing the provisions with regard to Sections 138 and 141 of the Act, has culled out the following proposition of law, as -3- CRM No. M-63 of 2009 (O/M). has been stated in para-19 of the judgment in N.K. Wahi's case (supra), which reads as follows :- “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 incharge 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.” -4- CRM No. M-63 of 2009 (O/M). In view of the above, complaint dated 23.05.2007 (Annexure-p- 4) and summoning order dated 24.05.2007 (Annexure-P-6), qua the petitioner cannot be sustained as the basic ingredients for maintaining the complaint against the petitioner, as per provisions of Sections 138 and 141 of the Act, are not available in the complaint, which has been preferred by respondent. The judgments relied upon by counsel for respondent were cases, where there were allegations that the concerned person was related to the functioning of the Company, but the specific role was not prescribed therein. In those circumstances, Hon'ble the Supreme Court in the case of S.V. Mazumdar and others (supra), has held that it would be a question of evidence, which has to be led before the Trial Court. In the light of judgment passed by Hon'ble the Supreme Court in the case of N.K. Wahi (supra), the judgment rendered by the Karnataka High Court in the case of Chairman M.S. Zahed (supra), will have no application to the case in hand. In view of the above, the present petition is allowed. The complainant dated 23.05.2007 (Annexure-P-4) and summoning order dated 24.05.2007 (Annexure-P-7), are hereby quashed qua the petitioner. (AUGUSTINE GEORGE MASIH) JUDGE November 10, 2009. sjks. -5-