1 WP 2407/10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO.2407 OF 2010 Mr. Gurinder Mohan Singh Nindrajog .... Petitioner V/s The State of Maharashtra and another ..... Respondents. Mr. Nitin Pradhan i/b K.H. Rajani for the Petitioner. Mrs. M.R. Tidake, APP for the State. CORAM: V. M. KANADE, J. DATE : 27th September, 2010 P.C.:- 1. Heard the learned Counsel appearing on behalf of the Petitioner. 2. Petitioner is challenging the order of issuance of process passed by the learned Magistrate under section 138 read with section 141 of the Negotiable Instruments Act. 3. The learned Counsel appearing on behalf of the Petitioner firstly submitted that the Petitioner is a nominal Director of the Company and that he is not responsible for day-to-day affairs and conduct of the Company and that the 2 WP 2407/10 Petitioner is neither an authorized signatory to the transaction nor he is a signatory to the cheques. It is submitted that he has also not participated in the meeting, discussion or conference with Respondent No.2. Secondly, it is submitted that even the verification which is recorded by the learned Magistrate does not contain any averment indicating that the Petitioner is in charge of the day-to-day affairs of the company and, therefore, he is liable under the provisions of section 138 read with section 141 of the Negotiable Instruments Act. In support of the said submissions, the learned Counsel for the Petitioner relied upon the judgment of the Supreme Court in Sabitha Ramamurthy and another vs. R.B.S. Channabasavaradhya1 and more particularly para 7 of the said judgment. 4. So far as the first submission that the Petitioner is a nominal Director of the Company and is not in charge of the day-to-day affairs of the Company is concerned, it is a settled position in law that the complainant, in order to make other Directors vicariously responsible for issuance of cheque, has to make necessary averments in the complaint describing their role in day-to-day management of the Company. Perusal of the complaint discloses that the said averments have been made in the complaint. Petitioner is an original accused No.2. In the complaint, specific averments have been made in para 2 stating that accused Nos. 2 and 3 have been in charge and control of the day-to- 1 (2006) 10 SCC 581 3 WP 2407/10 day affairs and management of accused No.1 and that the cheques were issued under the express authority of the Board of Directors of accused No.1 under the Company’s Board Resolution to enter into liability and discharge the same in repaying the amount. Then, in para 4 of the complaint, the role of the petitioner has been mentioned. It is stated that in the ordinary course of business the complainant was approached by accused No.1 through accused Nos. 2 and 3 requesting for sanctioning the credit facility of a sum of Rs 50 crores and, accordingly, the said facility was sanctioned. It is also stated in para 5 that the terms and conditions in the sanction letter were accordingly entered into with the complainant by the accused and an agreement was executed. Then, in para 7, the manner in which the cheques were issued has been stated. Thus, in my view, there are sufficient averments which clearly indicate that the Petitioner was in charge of day-to-day affairs of the Company and his role also has been clearly stated in the complaint. Therefore, first submission of the learned Counsel for the Petitioner that the Petitioner was only a nominal Director cannot be accepted at this stage. 5. So far as the second submission is concerned, a perusal of the verification statement of the complainant which is recorded by the learned Magistrate clearly discloses that in para 3 of the said verification, the complainant has stated that he relies on the relevant facts as mentioned in the complaint alongwith all original documents relied in the 4 WP 2407/10 complaint. In para 1 of the verification, it is also stated that accused Nos.1, 2 and 3 issued three cheques under their authority and signature to the complainant company towards part discharge of clearing the legal liability. The learned Magistrate has, while issuing the order of process, clearly mentioned that he has perused the complaint and the verification and thereafter issued the process. Therefore, the submission of the learned Counsel for the petitioner that since the specific averment regarding the role of the accused is not mentioned in the verification, the order of issuance of process is defective cannot be accepted particularly when, in the verification, the complainant has specifically relied on the complaint as well as the original documents. So far as the judgment of the Supreme Court in the case of Sabitha Ramamurthy (supra) on which reliance is placed by the learned Counsel for the Petitioner is concerned, in para 7 of the said judgment, the Supreme Court has observed as under:- “7 A bare perusal of the complaint petitions demonstrates that the statutory requirements contained in Section 141 of the Negotiable Instruments Act had not been complied with. It may be true that it is not necessary for the complainant to specifically reproduce the wordings of the section but what is required is a 5 WP 2407/10 clear statement of fact so as to enable the court to arrive at a prima facie opinion that the accused are vicariously liable. Section 141 raises a legal fiction. By reason of the said provision, a person although is not personally liable for commission of such an offence would be vicariously liable therefor. Such vicarious liability can be inferred so far as a company registered or incorporated under the Companies Act, 1956 is concerned only if the requisite statements, which are required to be averred in the complaint petition, are made so as to make the accused therein vicariously liable for the offence committed by the company. Before a person can be made vicariously liable, strict compliance with the statutory requirements would be insisted. Not only the averments made in para 7 of the complaint petitions do not meet the said statutory requirements, the sworn statement of the witness made by the son of the respondent herein, does not contain any statement that the appellants were in charge of the 6 WP 2407/10 business of the Company. In a case where the court is required to issue summons which would put the accused to some sort of harassment, the court should insist strict compliance with the statutory requirements. In terms of Section 200 of the Code of Criminal Procedure, the complainant is bound to make statements on oath as to how the offence has been committed and how the accused persons are responsible therefor. In the event, ultimately, the prosecution is found to be frivolous or otherwise mala fide, the court may direct registration of case against the complainant for mala fide prosecution of the accused. The accused would also be entitled to file a suit for damages. The relevant provisions of the Code of Criminal Procedure are required to be construed from the aforementioned point of view.” Perusal of the said paragraph clearly reveals that, in the said case, no averments were made in the complaint so as to meet the statutory requirements and under the said 7 WP 2407/10 circumstances, the Apex Court has observed that neither the averments were found in the complaint nor any statement was made in the verification recorded by the learned Magistrate. In view of the said facts, the Apex Court has observed that the complainant is bound to make statement on oath as to how the offence has been committed and how the accused persons are responsible therefor. The ratio of the said judgment, therefore, will not apply to the facts of the present case. 6. Hence, it is not possible to interfere with the order of issuance of process passed by the learned Magistrate. Petition is dismissed. However, the contentions raised by the Petitioner are kept open. The learned Magistrate shall consider the same at the time of hearing of the trial. 7. Petition is accordingly disposed of. (V.M. KANADE, J.) 8 WP 2407/10