Case: Dcm Financial Services Ltd Vs. J.N.Sareen

3. The basic fact of the matter is not in disputeFirst Respondent herein was a Director of a Company known as M/s. International Agro Allied Products Ltd. (the Company). It had purchased certain agricultural equipments on hire purchase/lease from on 3rd April, 1995. As a part of the said transaction some post dated cheques were issued in favour of the appellant herein towards the payment of monthly hire/rentalFirst Respondent admittedly resigned from the Directorship of the Company on or about 25th May, 1996. It was accepted. One of the said post dated cheques which was issued in April, 1995 was dated 28th January, 1998 amounting to Rs.2,01,298/-, when presented to the bank by the appellant for encashment, was dishonoured. Pursuant thereto a notice for payment was issued. Amount having not been paid despite service of notice, a complaint petition was filed under Section 138 of the Act. It was inter alia averred therein:-8. That on assurance of the accused persons cheque No.0644739 dated 28th January, 1998 for a sum of Rs.2,01,298/- drawn on Bank of Baroda, Lucknow and delivered/issued by the accused towards payment of hire/lease rentals, were presented for encashment again by complainant company through their bankers and the same was returned unpaid by the bankers of the accused vide memo dated 22.6.1998 with the remarks Insufficient Funds to the bankers of complainant company. The complainant received the information only on 21.6.1998. (sic) (Copy of memo of cheque returned and above referred cheque are annexed herewith.)9. That the complainant company sent a legal notice to the accused persons through its advocate on 6th July, 1998, demanding the payment against these cheques within 15 days from the receipt of the notice. This notice was sent to the accused persons both through registered AD & UPC within 15 days from the date of receiving the information regarding dishonouring of the cheques10. That the accused persons failed to make the payment of the above said amount despite service of legal notice on him13. That the accused No.1 is a company/firm and accused No. 2 to 10 were in charge and were responsible to the accused No.1, at the time when offence was committed. Hence, the accused Nos. 2 to 10 in addition to the accused No.1 are liable to be prosecuted and punished in accordance with law by this Honble Court, as provided by section 141 of the N.I. Act, 1881. Further the offence has been committed by the accused No.1 with the consent and connivance of the accused Nos. 2 to 104. No allegation was made in the complaint petition that the 1st respondent was a signatory to the cheque or he was authorized therefor5. An application was filed by the 1st respondent for his dischargeBy reason of the order dated 5th July, 2003 the same was allowed by the learned Additional Sessions Judge, New Delhi, stating:-....It is a well-known fact that the Constitution of the Board of Directors of a company keeps on changing and a fixed ration of the directors of the company keep on retiring by rotation every year and new directors are inducted. The complainant cannot make directors of the year 1995 or 1996 as the accused person for a cheque dishonoured in the year 1998. He can make accused only those directors who were the directors of the company in the year 1998. The Companies Act has made specific provisions for all companies registered with the Registrar of Companies to file a return about the directors in the company. These provisions have been made for the benefit to the public so that the people can get information from Registrar of Companies about the change in the constitution of directors. Change of the constitution of the Board of Directors is not a private affair of the company. A complainant cannot take the plea that he had made those directors as accused which were known to him. If this plea of complainant is allowed then he would be at liberty to make all the person who at any point of time, had been the director of company as accused5. I consider in view of the documents placed by the applicant on record showing that applicant had resigned way back in 1996 and his resignation was informed to the Registrar of Companies in October 1996 by filing the statutory Form 32, the plea of complainant that applicant was a director cannot be considered without any affidavit of the Authorized Representative of the complainant that he has verified from the Registrar of Companies and Form No.32 filed by the accused was not genuine. It is not a trivial matter that a person has to face trial as an accused in the court. No person can be asked to face trial in the court without there being a basis of proceedings against him merely at the wishes of a complainant. The court must be satisfied that the persons who has been called as an accused against him there was sufficient grounds to proceed. In this case I consider that complainant has taken vague plea in reply to the application of accused regarding genuineness and non-admission of Form No.32 or about his being responsible for the function of the company. In view of specific documents by the accused applicant the vague pleas of the company do not and anywhere

Reasoning:
22. When post dated cheques are issued and the same are accepted, although it may be presumed that the money will be made available in the bank when the same is presented for encashment, but for that purpose, the harsh provision of constructive liability may not be available except when an appropriate case in that behalf is made out23. Section 140 of the Act cannot be said to have any application whatsoever. Reason to believe on the part of a drawer that the cheque would not be dishonoured cannot be a defence. But, then one must issue the cheque with full knowledge as to when the same would be presented. It appears to be a case where the appellant has taken undue advantage of the post dated cheques given on behalf of the company. The statute does not envisage misuse of a privilege conferred upon a party to the contract. Submission of Mr. Patwalia made in view of the decision of this Court in Adalat Prasad v. Rooplal Jindal and Others [(2004) 7 SCC 338] is misplaced. Had such a contention been raised even in terms of Adalat Prasad (supra), the respondents could have filed an application for quashing in terms of Section 482 of the Code of Criminal Procedure at that stage. Again such a contention had not been raised before the High Court. No such ground appears to have been taken even in the Special Leave Petition. While examining the issue, we have considered the case from a broader angle. Having found that the prosecution of the respondents being mala fide despite the fact that on technical grounds it may be lawful to set aside the order of the High Court, it, in our opinion, should not be done. Jurisdiction of this Court in terms of Article 136 of the Constitution of India need not be exercised only because it would be lawful to do so. Various factors including the conduct of the appellant will be relevant therefor. Having regard to the facts and circumstances of this case, it is not a fit case where we should allow the appellants to raise additional contentions, which have not been raised before the courts below24. For the reasons abovementioned we are of the opinion that no case has been made out for interference with the impugned judgment