THE HON’BLE SRI JUSTICE R.KANTHA RAO Crl.P.No.94 of 2009 In Crl.P.No.95 of 2009 Date:14-12-2010 Between: Sri Dilip Kumar @ Yousuf Khan …Petitioner/A2 And The State of A.P. and another …Respondents THE HON’BLE SRI JUSTICE R.KANTHA RAO Crl.P.No.94 of 2009 In Crl.P.No.95 of 2009 COMMON ORDER: These two criminal petitions are filed under Section 482 Cr.P.C. to quash the entire proceedings in C.C.Nos.505 of 1998 and 506 of 1998 on the file of the XIV Additional Chief Metropolitan Magistrate, Hyderabad. The above mentioned two cases which were sought to be quashed in these petitions are filed by M/s. Deccan Cements Ltd. and M/s. D.C.L. Polysters Ltd. alleging that the second respondent in each case (de facto complainants) had lent certain amounts as specified in the complaint petitions to the accused No.1 company and that the cheques have been issued on 30.06.1997 on behalf of the first accused company which were dishonored with remarks ‘not arranged for’ and the payment stopped by drawer when presented for encashment. Thereupon, both the complainant companies filed the above two complaints under Sections 138, 141 and 142 of the Negotiable Instruments Act, 1881. The petitioner is accused No.2 in both the cases. According to the petitioner, he was introduced to Mr.Gopal Krishna Rathi (A-5) one of the Directors of the accused No.1 company by one Sri Shyam Sunder Sajwani and later on the request of Mr.Gopal Krishna Rathi, the petitioner occupied the position of honorary Chairman of the Company. It is submitted that the petitioner is a film actor by profession and he had agreed to occupy the position of Chairman only on a clear undertaking that he had nothing to do with the day-to-day management of the company. His version is that he was holding the said position in the company in an honorary capacity but was never associated with financial or business activities of the company and was not even a signing authority of the company. It is further submitted that it is not mentioned in the complaints about the involvement of the petitioner in the alleged transactions concerning borrowing of the amounts and issuing of cheques. There is also no mention anywhere that the petitioner was responsible for the day-to-day business or affairs of the company. The petitioner has not issued the impugned cheques and therefore, he cannot be prosecuted for the offences under sections 138, 141 and 142 of the Negotiable Instruments Act. I have heard Sri C. Padmanabha Reddy, learned Senior Counsel appearing for the petitioner and Sri M.N.Narasimha Reddy, learned counsel appearing for the second respondent (complainant) in each case. Reliance is placed by the learned counsel appearing for the petitioner on S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA AND ANOTHER[1] wherein the Supreme Court held as follows: “Section 141 of the NI Act does not say that a Director of a company shall automatically be vicariously liable for commission of an offence on behalf of the company. What is necessary is that sufficient averments should be made to show that the person who is sought to be proceeded against on the premise of his being vicariously liable for commission of an offence by the company must be in charge of, and shall also be responsible to the company for the conduct of its business. Thus, the averments must state that the said person was both in charge of and responsible for the conduct of the business of the company. Requirements laid down in Section 141 must be read conjointly and not disjunctively. The liability of a Director must be determined on the date on which the offence is committed.” In the instant cases, admittedly there is no specific mention in the respective complaint petitions that the petitioner was at relevant point of time was in-charge of and was responsible to the company for the conduct of its business. Admittedly, the petitioner is the honorary Chairman of the company and he was made accused only on the sole ground that he was holding the said position in the company. Thus, in view of the settled legal position, the petitioner cannot be prosecuted for the offences under Sections 138, 141 and 142 of the Negotiable Instruments Act. Moreover, in Special Leave to Appeal (Crl.) No.1608 of 2010 filed against the judgment and order dated 07.10.2009 in Criminal Petition No.3499 of 2006 on the file of the High Court of Karnataka at Bangalore wherein the petitioner is one of the respondents (accused) and in relation to identical question, the Supreme Court dismissed the special leave petition. The said decision is directly applicable to the present criminal petitions which are under consideration of this Court. In view of the settled legal position and also by virtue of the order passed in Special Leave to Appeal (Crl.) No.1608 of 2010, this Court cannot take a different view. For the foregoing reasons, the entire proceedings in C.C.Nos.505 of 1998 and 506 of 1998 on the file of the XIV Additional Chief Metropolitan Magistrate, Hyderabad insofar as the petitioner (A-2) is concerned, are hereby quashed. Accordingly, both the criminal petitions are allowed. _______________ R.KANTHA RAO, J Date:14.12.2010 ccm THE HON’BLE SRI JUSTICE R.KANTHA RAO Crl.P.No.94 of 2009 AND Crl.P.No.95 of 2009 Date:14.12.2010 [1] (2007) 4 SCC 70