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Delhi District Court

Sham Udyog Ltd vs Chirag Garg on 14 March, 2018

        In the court of Sh. A.S. Jayachandra, Ld. District &
      Sessions Judge, Shahdara, Karkardooma Courts, Delhi

C.R. No. 222/17
C.R. no. 231/17 to C.R. No. 235/17
C.R. no. 237/17 to C.R. no. 239/17


1.      Sham Udyog Ltd.

2.      J.P. Goyal
        S/o late Sh. Kapoor Chand

3.      Shivam Goyal
        S/o Sh. J.P. Goyal

4.      Karan Goyal
        S/o Sh. J.P. Goyal

        All are R/o Dr. Waryam Singh Street,
        Nabha, Punjab.                                         ....Petitioner


Vs.

Chirag Garg
S/o Sh. R.S. Aggarwal
R/o 365, Jagriti Enclave,
Delhi-110092.                                                 ....Respondent

                 Date of institution :        18.11.2017
                 Order reserved on :          14.03.2018
                 Date of Order       :        14.03.2018
ORDER :

By a common order all the above nine petitions bearing C.R. No. 222/17, C.R. no. 231/17 to C.R. No. 235/17 & C.R. no. 237/17 to C.R. no. 239/17 are being disposed of since parties to the petition, facts and grounds urged are identical.

1. The petitioners herein have filed the present revision challenging the order dated 19.08.2017 in CC No. 11456/16, 11465/16, 859/16, 92/16, 3636/16, 193/16, 93/16, 91/16 and 888/15 respectively on the files of Ld. ACMM, Shahdara, Delhi in a complaint case filed under Sec. 138 of N.I. Act.

2. The contention of the petitioners are that :

(a) Ld. MM court did not apply its mind, failed to appreciate the facts and that the complainant did not file Form No.32 under the Companies Act to show the role of petitioners no. 3 & 4.

(b) The ruling of Sudeep Jain vs ECE Industries Cr.MC 1828/13 of our Hon'ble High Court is not followed.

(c) The agreement which the complainant relied is illegal and the complainant is extorting money.

(d) No notice under Sec. 251 of Cr.PC could have been framed against petitioners no. 3 & 4 in the absence of Form no.

32.

3. The trial court records which are alike in all the cases as submitted were summoned in one case and perused. Heard the ld. Counsel for the parties.

4. In SMS Pharmaceuticals Ltd. vs. Nita Bhalla 2005 (7) SCALES 397, it is held that the signatory of the cheque is clearly covered under Sec. 141 (2) of the N.I. Act. While dealing with Sec. 141 of N.I. Act is held that "by virtue of holding the office of managing director or joint managing director, such persons are responsible for conduct of the business of the company."

5. In National Small Industries vs. Harmeet Singh 2010 (2) SCALE p. 372, it is held that "To put it clear that for making a person liable under Section 141 (2) of N.I Act, the mechanical repetition of the requirements u/s 141 (1) will of no assistance but there should be necessary averments in the complaint as to how and in what manner the accused was guilty of consent and connivance.

6. The Ld. Counsel for the petitioner submits that in view of directions contained in Sudeep Jain (supra) which had profusely quoted the above two rulings, held that at the time of pre-summoning stage the courts should make sure that notices be directed only to those directors or employees of the company who satisfy the principles laid down in the aforesaid judgments.

7. There is a format also provided directing the magistrate to seek information concerning the particulars of cheques, reasons and the names and designations of the persons vicariously responsible. If there is any failure in following the guidelines of the Hon'ble Supreme Court in SMS Pharmaceuticals (supra) to comply section 141 of the N.I. Act, the complaint lacks necessary ingredients as held in Manoj Kumar Gupta vs. Barclays Bank Cr. MC 2002/11 (DD :

16.01.2018).

8. The contention of the Ld. Counsel for the petitioner that the cheques were issued as security cannot be looked into at the stage of summoning or even while entertaining in an intermediatory stage as held by the Hon'ble Supreme Court in MMTC Ltd. vs. M/s MEDCL Chemicals-Indian Kanoon Doc. No. 1438532.

9. The Ld. Counsel submits that while framing the notice the ld. MM had erred in not considering the compliance of Sec. 141 of the N.I. Act.

10. The trial court records show that in the complaint filed u/s 138 of N.I. Act, there is an averment that accused no.2 is the authorized signatory and accused no. 3 & 4 are the directors. It is also averred that accused no. 2 to 4 were incharge of, and responsible for the day to day conduct, affairs, functioning and running of the business of the accused no.1 company (para 1 of the complaint). Apart from the above, the para 3 says that accused no. 2 & 3 have signed the loan agreement from which the alleged cheque sprouts. Para no.4 of the complaint also perused which shows that the accused no. 3 and 4 visited the complainant and made negotiations and the cheques were handed over by accused no.4. This court for the purposes of satisfying itself with regard the grounds urged concerning non- compliance of sec. 141 (2) of N.I. Act had looked into the complaint. After such perusal, this court is unable to sail with the ld. Counsel for the petitioner that the ruling in Sudeep Jain (Supra) is not followed by the Ld. MM.

11. The second leg of the argument by Sh. Amit Gaba is that the accused have also prayed for stopping the proceedings which was also dismissed without application of mind. After having gone through section 258 of Cr.PC, the provisions to stop the proceedings in a summons case at any stage can be entertained by the court concerned, only in such proceedings which are instituted through the police complaint.

12. The Ld. Counsel submits that such an application was filed in compliance of the ruling of our Hon'ble High Court in Arvind Kejriwal & Ors. vs. Amit Sibal & Anr. 2014 (1) HCC (Del.) 719.

13. The ld. Counsel for the respondent submits that the said ruling is no longer a good law in view of Amit Sibal vs. Arvind Kejriwal 2016 (12) SCALE 487. He also relied on R.K. Aggarwal vs. Brig. Madan Lal Cr. MC 1507/15 dt. 13.06.2016 of our Hon'ble High Court which holds that there is no basis in the contention of the petitioners for discharge for the reasons that firstly, there is no stage of discharge in a summons case. Under Chapter XX of Cr. PC., after filing a private complaint, in a summons case, the accused is either convicted or acquitted. There is no stage of discharge of an accused at any stage under Chapter XX of Cr. PC.

14. However, the two major grounds urged by the petitioners in the revision that the order is opposed to law are that there is no compliance of section 141 (2) of N.I. Act. The same falls to the ground after verification of the trial court records and the pleadings made in the complaint u/s 138 of N.I. Act. The second ground that the application for dropping was made also does not sound to the conscience in view of the ruling in R.K. Aggarwal (Supra).

15. The role of this court u/s 397 of Cr. PC is very much constricted. It can only look into the legality, validity and correctness of the orders of the subordinate courts. Having gone through the trial court records, needless to say that the impugned order does not suffer from any impropriety and illegality. Hence Sham Udyog Ltd. & Ors. vs. Chirag Garg Dated : 14.03.2018 Page No.5/6 this court is of the humble opinion that the revision fails. Consequently, the following :

ORDER All the nine revision petitions bearing C.R. No. 222/17 & C.R. no. 231/17 to C.R. No. 235/17 & C.R. no. 237/17 to C.R. no. 239/17 titled as Sham Udyog Ltd. & Ors. vs. Chirag Garg stand dismissed. Any observation made in the course of this order be not read as an expression or opinion of this court affecting the merits of the case.

Original order be kept in Cr. Rev. No. 238/18 and a copy of the same be kept in the other files. Copy of this order be sent to the trial court along with the summoned record in one case. Revision files be consigned to record room.

                                                        A.S.        JAYACHANDRA
                                                        JAYACHANDRA
                                                                    Date: 2018.03.14
                                                                    16:21:20 +0530


Typed to the dictation directly,                    (A.S. Jayachandra)
corrected and pronounced in                     District & Sessions Judge,
open court on 14.03.2018                       Shahdara/KKD Courts, Delhi.




Sham Udyog Ltd. & Ors. vs. Chirag Garg     Dated : 14.03.2018           Page No.6/6