Delhi District Court
Amit Kumar Sharma vs Cdps Electronics on 17 December, 2021
IN THE COURT OF SH. SONU AGNIHOTRI
ADDL. SESSIONS JUDGE03
SAKET COURTS, NEW DELHI
Case Registration No. 550/2018
CNR No. DLSE010062232018
AMIT KUMAR SHARMA
120, Gandhi Nagar,
Agra, UP.
.... Petitioner
VERSUS
CDPS ELECTRONICS
G76, UPSIDC Industrial Area,
Selakui, Dehradun248197.
Also At:
B209, Naraina Industrial Area,
PhaseI, New Delhi110028.
.... Respondent
Date of institution : 31.07.2018
Date of reserving the order : 28.10.2021
Date of pronouncement : 17.12.2021
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JUDGMENT
1. This is criminal revision u/s 397 of the Code of the Criminal Procedure preferred by accused/petitioner against impugned order dated 16.05.2018 passed by court of Ms. Tanya Bamniyal, Ld. MM ( N. I. Act), South East, Delhi whereby Ld. MM ordered for summoning of accused / petitioner in cases filed by respondent /complainant u/s 138 of NI Act bearing CC No. 4229/2018, 4230/2018, 4231/2018 and 4232/2018.
2. In the revision petition, it is stated that as per allegations, complainant/ respondent filed complaints U/sec 138 of Negotiable Instruments Act, 1981 on the allegations that present petitioner /accused is Directors of accused No. 1 company. It is alleged that accused/petitioner had issued cheques and as per instructions of accused No. 1, complainant presented cheques to his banker but cheques were dishonoured for reason "Funds Insufficient". It is stated that complainant/respondent served Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....2 of 19 composite demand notice for dishonor of cheques.
3. It is stated that on basis of above allegations, respondent filed common complaints U/sec 138 N.I. Act before Ld. MM registered as complaints cases. It is stated that Ld. MM without considering allegations in complaints and in total disregard to provision of law vide summoning order dated 16.05.2018 passed in complaint case bearing No. 4229/2018, 4230/2018, 4231/2018 and 4232/2018 has summoned petitioner without application of judicial mind.
4. Following grounds have been taken by petitioner to challenge impugned order:
a) Ld. Trial Court failed to take into consideration that petitioner Amit Kumar Sharma is not signatory to cheques in question and that he can not be held liable for affairs of the company if he is not signatory to cheques in question. Complainant / respondent was well aware of the fact that petitioner Amit Kumar Sharma has no concern in any manner Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....3 of 19 with working and affairs of the company.
b) Because petitioner had resigned from post of Director of accused No. 1 w.e.f. 03.10.2017 whereas cheques were dishonoured after about 5 and half months from date of resignation of petitioner from accused No. 1 company. Copy of DIR12 (ROC record) is appended to support this ground.
c) Because perusal of complaints filed by complainant shows that accused No. 1 company issued purported cheques in favour of complainant which were dishonoured and thereafter, respondent filed complaints u/s 138 NI Act before Ld. Trial Court. On filing of complaints, Ld. Trial Court passed common summoning order vide order dated 16.05.2018 without stating name of accused persons.
d) Because copy of DIR12 (ROC Record) is a public document under provisions of Companies Act, 1956 r/w Section 74(2) of Indian Evidence Act and no oral evidence is required to prove the said document. Copy of DIR12 (ROC Record) Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....4 of 19 unequivocally establishes that petitioner was not Director of accused No. 1 company when alleged cheques were dishnoured on presentation.
e) Because it is not case of complainant / respondent nor there is any averment in the complaints by respondent that even after resigning as Directors of accused No.1 company, petitioner occupied any such position on account of which, he continued to be person Incharge and responsible to the accused No.1 company for conduct of its business. Vicarious liability of petitioner has been invoked solely on the presumption of he being Director of accused No.1 company when the alleged offence u/s 138 of NI Act was committed.
f) Because there is not even single iota of allegation against petitioner to fasten liability covered u/sec 141 of N. I. Act. Because Section 141 of Negotiable Instruments Act, 1881 provides that "If a person committing an offence under section 138 is a company, every person who at the time the offence was Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....5 of 19 committed was in charge of ....". It is submitted that there is no single iota of allegation against petitioner made by complainants in complaint that petitioner is in charge of the company. So, no criminal liability can be fastened upon petitioner as statute provide that for making a person liable for offence under Section 141 N. I. Act, the person must be in charge of company and in present case there is no averment in complaint that petitioner is in charge of company. Petitioner was not Director of accused No. 1 company when the alleged offence u/sec 138 of N. I. Act was committed.
g) Because there is no provision in the law to file a case u/s 138 of NI Act through authority letter. There must be SPA or GPA in favour of representative of complainant but in the present matter, authority letter was issued by partners in favour of another partner for filing complaint before Ld. Trial Court.
h) Because Ld. Trial Court while taking cognizance has not carried out any inquiry or ordered investigation as contemplated Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....6 of 19 u/s 202 Cr.P.C. before issuing process as petitioner is resident of Agra which does not fall within jurisdiction of Ld. Trial Court at Saket and therefore, it was incumbent upon Ld. Trial Court to carry out an inquiry or order for an investigation as contemplated u/s 202 Cr.P.C.
i) Because cheques in question were never issued by accused no. 1 company to respondent and respondent forged signatures on cheques in question and misused the misplaced cheques in question (from employee of accused No. 1) regarding which FIR No. 1083/2017 dated 24.08.2017 PS Sadar, Agra, UP has been got lodged.
5. It is prayed to set aside impugned summoning order dated 16.05.2018 qua petitioner and discharge petitioner in CC No. 4229/2018, 4230/2018, 4231/2018 and 4232/2018 or for passing any other order which this Court may deem fit in facts and circumstances of case.
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6. I have heard arguments addressed by respective counsels and perused record including written submissions / judgments filed by parties and trial court record.
7. It is contended by petitioner that petitioner can not be proceeded against so far as CC No. 4229/2018, 4230/2018, 4231/2018 and 4232/2018 are concerned as he is not signatory to cheques in issue.
8. Perusal of trial court record shows that indeed petitioner Amit Kumar Sharma is not signatory to cheque in question.
9. Counsels for respondent during course of arguments to this argument of petitioner submitted that case of petitioner is covered by section 141 of NI Act and that as petitioner was In charge of and was responsible to the accused No. 1 company for conduct of business of accused No. 1 company, petitioner is liable to be proceeded against for commission of offence u/s 138 of NI Act. It was submitted that the same averment has been made by respondent in complaint filed by it before Ld. Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....8 of 19 Trial Court u/s 138 of NI Act.
10. Counsels for petitioner to this submission on behalf of respondent submitted that mere repetition of phraseology contained in Section 141 of NI Act is not sufficient and something more is required to be shown that petitioner was responsible for conduct of day to day affairs of accused No. 1 company.
11. Petitioner relied upon law laid down in case titled as J.N. Bhatia & Ors. Vs. State & Anr. 2007 III AD (Delhi) 142 wherein Hon'ble High Court of Delhi held as below: "It can therefore, be safely concluded that the view, which is now accepted by the Supreme Court, is that mere repetition of phraseology contained in Section 141 of the NI Act i.e. "the accused is incharge of and responsible for the conduct of the day to day affairs of the company" may not be sufficient and something more is to be alleged to show as to how he was so responsible."
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12. Petitioner further relied on judgment of "N.K. Wahi Vs. Shekhar Singh & Ors. 2007 (1) JCC (NI) 112" wherein Hon'ble Apex Court held as below: "To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. There should be clear and unambiguous allegation as to how the Directors are incharge and responsible for the conduct of the business of the company. The description should be clear. It is true that precise words from the provisions of the Act need not be reproduced and the Court can always come to a conclusion in facts of each case. But still in the absence of any averment or specific evidence the net result would be that complaint would not be entertainable."
13. It was submitted by counsels for petitioner that respondent in complaints filed before Ld. Trial Court has not mentioned as to how petitioner played any part in the Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....10 of 19 transaction between respondent and accused No. 1. It was argued that regarding cheques in question and other cheques regarding which complaints u/s 138 of NI Act have been filed by respondent, petitioner has got lodged FIR regarding misplacement / theft of cheques vide FIR No. 1083/2017 PS Sadar, Agra, UP.
14. In view of law relied on by petitioner in N.K. Wahi's case (Supra), I am of the view that respondent in the complaint filed before Ld. Trial Court should have described as to how petitioner played any part in transaction between respondent and accused No. 1. Mere repetition of phraseology used in Section 141 of NI Act is not sufficient to attract provisions of Section 138 NI Act against petitioner. Further, petitioner has got lodged FIR regarding misplacement / theft of cheques vide FIR No. 1083/2017 PS Sadar, Agra, UP. In addition to this, to be more specific, petitioner Amit Kumar Sharma is not drawer of cheque in question.
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15. It is contended by petitioner that Ld. Trial Court failed to conduct mandatory inquiry u/s 202 Cr.P.C. before issuance of process against petitioner vide impugned order as petitioner is resident of Agra i.e. place beyond jurisdiction of Ld. Trial Court. It was argued on behalf of petitioner that petitioner is resident of Agra and before summoning petitioner, Ld. Trial Court should have made inquiry or ordered for investigation to be made by a police officer in terms of Section 202(1) Cr.P.C.
16. Perusal of Trial Court record shows that address of petitioner has been mentioned by respondent to be of Delhi i.e. at address of accused No. 1 company M/s. Wholly Joy Products Pvt. Ltd. and in view of address of petitioner mentioned to be that of Delhi, I am of the view that Section 202(1) Cr.P.C. had no application at the time of passing of impugned orders as respondent in complaints filed had not mentioned residential address of petitioner. Hence, this contention of petitioner is without merits and hence, rejected.
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17. It was also argued on behalf of petitioner that Ld. Trial Court while issuing summons to petitioner did not insist on production of Form32 by respondent and simply relied upon Company Master data which did not contain upto date information and at the time of commission of alleged offence u/s 138 of NI Act, petitioner was not Director of accused No. 1 company and impugned orders are liable to be set aside on this ground alone. In support of this argument, petitioner relied upon judgment of Hon'ble High Court of Delhi in case titled as "Sudeep Jain Vs. M/s. ECE Industries Ltd. Crl. M.C. 1821/2013 order dated 06.05.2013" wherein it was held as below: "The prime objective of this Court is to remind all the Metropolitan Magistrates in Delhi to carefully scrutinize all the complaint cases being filed under section 138 r/w 141 of the Negotiable Instruments Act, 1881 against the accused Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....13 of 19 companies at the presummoning stage and make sure that notice be directed only to those Directors or employees of the company who satisfy the principles laid down in the aforesaid judgments. Summons must be issued only after giving due consideration to the allegations and the materials placed on record by the complainant. Undeniably, as per the aforesaid legal pronouncements, Managing Director and the Joint Managing Director are deemed to be vicariously liable for the offence committed by the company because of the position they hold in the company. Problem arises in cases where all the persons holding office in the company are sought to be prosecuted by the complainant , irrespective of whether they played any specific role in the incriminating act. It is surprising to see that in plethora of cases, the complaint contains allegations even against those persons who might have been Directors at any point in time in the accused company, but had resigned from such company much prior to the period when the alleged offence was committed. Issuing summons to all persons Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....14 of 19 named in the complaint mechanically, without ascertaining whether they played any actual role in the transaction, not only pesters the innocent directors/employees named in the complaint, but also upsurges the load on the High Courts as the Magistrates once issuing the summoning orders against the accused, are precluded from reviewing their summoning orders in view of the decision of the Apex Court in Adalat Prasad v. Rooplal Jindal and Ors., (2004) 7 SCC 338. One can also not lose sight of the fact that once such innocent persons are summoned, they have no choice but to seek bail and face the ordeal of trial. Many of such persons also approach the High Court under Section 482 Cr.P.C. to seek quashing of the summoning order and the complaint filed against them and this further increases the burden on the already overburdened Courts.
10. With a view to ensure that the Metropolitan Magistrates dealing with the complaint cases filed under Section 138 r/w Section 141 of the Negotiable Instruments Act have a clear and Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....15 of 19 complete picture of the persons arrayed by the complainant so as to hold them vicariously liable for the commission of the offence by the accused company, I am inclined to direct that the Magistrates must seek copies of Form-32 from the complainant to prima facie satisfy the Court as to who were the directors of the accused company at the time of commission of the alleged offence and on the date of filing of the complaint case."
18. Perusal of Trial Court record shows that respondent has not filed Form32 but has filed copy of Company Master data and Ld. Trial Court relied upon the same for summoning petitioner. During course of arguments, it was argued on behalf of respondent that Company Master data contained upto date information and that this contention of petitioner should be dismissed.
19. In view of law laid down in Sudeep Jain's case (supra), I am of the view that Ld. Trial Court should have asked respondent to produce Form32 (present day DIR12) before Case Registration No. 550/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....16 of 19 itself before passing impugned summoning orders. As per DIR 12 (ROC Record) filed by petitioner with revision petition, petitioner ceased to be Director of accused No. 1 company from 03.10.2017 meaning thereby that petitioner already disassociated before commission of offence U/sec 138 of N. I. Act as cheques in question were dishonoured on 26.03.2018 and 05.03.2018 and in fact, cheques in question were also issued in the year 2018. Non compliance of this mandate on part of Ld. Trial Court makes impugned orders unsustainable in law and impugned orders are liable to be set aside.
20. Petitioner has also relied upon law laid down in case titled as "Anita Malhotra Vs. Apparel Export Promotion Council & Anr. (2012) 1 SCC 520" wherein Hon'ble Supreme Court of India quashed complaint u/s 138 of NI Act inter alia on the ground that petitioner was not a Director on date of issuance of relevant cheque and its presentation.
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21. In view of law laid down in Anita Malhotra's case (Supra), since petitioner resigned before issuance of cheques in question and before presentation of the same for encashment, summoning order of petitioner vide impugned orders can not be sustained and are liable to be set aside.
22. Petitioner has also taken ground that complaints before Ld. Trial Court were not filed by a duly authorized person and thus, impugned summoning orders are liable to be set aside. During course of arguments, counsels for petitioner did not press on this ground and hence, I am not discussing the same for the purpose of present revision petition.
23. In view of my above made discussion, I am of the view that impugned orders dated 16.05.2018 in CC No. 4229/2018, 4230/2018, 4231/2018 and 4232/2018 are not legally sustainable and hence, set aside. Revision petition filed by petitioner stands disposed of as allowed.
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24. Let copy of this judgment be sent to Ld. Trial Court alongwith TCR.
Dictated and Announced (Sonu Agnihotri)
in the open court on 17.12.2021 ASJ03 (SouthEast),
Saket Courts, Delhi
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