Case: Tamil Nadu News Print &amp; Papers Ltd Vs. D.Karunakar

3. The facts giving rise to the present appeals, in a nutshell, are as undert is a company manufacturing news prints and papers. It had business dealings with M/s Manito Electronics Pvt. Ltd., Accused No.1, a company of which Accused Nos. 2 to 9 were the Directors. Though, all the accused had not filed quashing petitions, the High Court has quashed the proceedings in respect of all the accused, other than Accused No. 1, which is the company and Accused No. 2, who was the Managing Director of the company, who had issued the cheque.A cheuqe for Rs.57,68,524/(Fifty Seven Lakhs Sixty Eight Thousand Five Hundred and Twenty Four) had been issued on behalf of Accused No. 1 company by Accused No. 2, the Managing Director to the appellant company. As the cheque had not been honoured and in spite of a statutory notice issued, no amount in respect of the said cheque had been paid to the present appellant, a complaint, being CC No. 3022 of 2000 had been filed in the Court of IX Metropolitan Magistrate, Saidpet, Chennai.4. The present respondents had filed two petitions under Section 482 of the Code of Criminal Procedure for quashing the said complaint, which the High Court has allowed to the limited extent, as stated hereinabove.5. The present appellant, in whose favour the cheque had been issued by Accused No. 2, on behalf of Accused no.1 company, has been aggrieved by the order whereby the proceedings have been quashed in part by the High Court and therefore, the present appeals have been filed by the complainant.

Court's reasoning:
12. We have carefully gone through the impugned order passed by the High Court and the complaint filed on behalf of the appellant.13. Upon perusal of the complaint, we find that an averment has been made to the effect that Accused Nos. 3 to 10 were, in fact,day business of Accused No. 1 – company.14. It is an admitted position that simply because someone is a Director in a company, he cannot be held responsible in respect of a cheque issued on behalf of the company, but if the concerned Director isof and is responsible to the company for its conduct of business, he can be held to be guilty of the offence under Section 138 of the Act and therefore, the High Court ought not to have quashed the proceedings against such directors.15. In our opinion, the High Court has committed an error by making an observation that not a single statement was made in the complaint to the effect that Accused Nos. 3 to 10 wereday business of Accused No.1 – company.16. It is also pertinent to note that on behalf of the accused company notice was refused and whereabouts of all the Directors are not known. Notices served upon them in normal course could not be served and therefore, by way of substituted service, a paper publication was made and an affidavit giving details about the publication has been placed on record of this Court. In spite of the said fact, no body has appeared on behalf of the respondents. This fact also indicates the intention of the accused.17. For the reasons stated hereinabove, in our opinion, as there was an allegation to the effect that Accused Nos. 2 to 10 were involved inbusiness of Accused No. 1 – company, we see no reason for sparing them by the High Court.