Karnataka High Court
Sri. Manoj Haralalka vs M/S Vf Brands India Private Limited on 1 October, 2013
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 1ST DAY OF OCTOBER 2013
BEFORE
THE HON'BLE Mr.JUSTICE K.N.KESHAVANARAYANA
CRIMINAL PETITION No.4840/13
c/w.CRIMINAL PETITION Nos. 4841, 4842,
4843, 4844 & 4845/2013
BETWEEN:
Sri.Manoj Haralalka,
Aged about 55 years,
S/o.Sri.Badrinarayan
Haralalka,
No.40/1, Sub-Urban
School Road,
Kolkata-700 025,
West Bengal.
Not available at:
M/s.Seabird Sales Private Limited,
No.722, Block 'P',
New Alipore,
Kolkata-700 053,
West Bengal.
(Since 8.3.2012). ... Petitioner
[By Smt.Sadhana S.Desai,
For Sri.Satyanarayana Chalke.S, Advocate]
AND :
M/s.VF Brands India Pvt. Ltd.,
Bagmane Laurel,
Block 'B', 8th Floor,
Bagmane Tech Park,
2
C.V.Raman Nagar,
Bangalore-560 093,
Rep. by its
Power of Attorney Holder,
Mr.Prakash Barnard. ...Respondent
(By Sri.G.Sridhar, Adv.)
(PARTIES COMMON IN ALL THE PETITIONS)
Criminal Petition No.4840/2013 is filed under
Section 482 Cr.P.C. praying to set aside the Order
dt.11.1.2013, registering the criminal case and issuing
process to secure his appearance in
C.C.No.26061/2013 pending consideration on the file of
the XIV Addl.CMM, Bangalore city, quashing the entire
proceedings in C.C.No.26061/2013 pending
consideration on the file of the XIV Addl.CMM,
Bangalore city, as against him.
Criminal Petition No.4841/2013 is filed under
Section 482 Cr.P.C. praying to set aside the Order
dt.11.1.2013, registering the criminal case and issuing
process to secure his appearance in
C.C.No.26060/2013 pending consideration on the file of
the XIV Addl.CMM, Bangalore city, quashing the entire
proceedings in C.C.No.26060/2013 pending
consideration on the file of the XIV Addl.CMM,
Bangalore city, as against him.
Criminal Petition No.4842/2013 is filed under
Section 482 Cr.P.C. praying to set aside the Order
dt.10.1.2013, registering the criminal case and issuing
process to secure his appearance in
C.C.No.26049/2013 pending consideration on the file of
the XIV Addl.CMM, Bangalore city, quashing the entire
proceedings in C.C.No.26049/2013 pending
consideration on the file of the XIV Addl.CMM,
Bangalore city, as against him.
Criminal Petition No.4843/2013 is filed under
Section 482 Cr.P.C. praying to set aside the Order
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dt.10.1.2013, registering the criminal case and issuing
process to secure his appearance in
C.C.No.26051/2013 pending consideration on the file of
the XIV Addl.CMM, Bangalore city, quashing the entire
proceedings in C.C.No.26051/2013 pending
consideration on the file of the XIV Addl.CMM,
Bangalore city, as against him.
Criminal Petition No.4844/2013 is filed under
Section 482 Cr.P.C. praying to set aside the Order
dt.10.1.2013, registering the criminal case and issuing
process to secure his appearance in
C.C.No.26050/2013 pending consideration on the file of
the XIV Addl.CMM, Bangalore city, quashing the entire
proceedings in C.C.No.26050/2013 pending
consideration on the file of the XIV Addl.CMM,
Bangalore city, as against him.
Criminal Petition No.4845/2013 is filed under
Section 482 Cr.P.C. praying to set aside the Order
dt.11.1.2013, registering the criminal case and issuing
process to secure his appearance in
C.C.No.26062/2013 pending consideration on the file of
the XIV Addl.CMM, Bangalore city, quashing the entire
proceedings in C.C.No.26062/2013 pending
consideration on the file of the XIV Addl.CMM,
Bangalore city, as against him.
These Criminal Petitions coming for admission,
this day, the Court made the following:
ORDER
Though the matter is listed today for admission, by consent of learned counsel appearing for both the sides, the matter is taken up for final disposal.
2. These criminal petitions are by common petitioner seeking to quash the prosecution launched 4 against him for the offence punishable under Section 138 of the Negotiable Instruments Act.
3. The common respondent M/s.VF Brands India Private Limited filed six private complaints before the XIV Addl. CMM, Bangalore, against M/s.Sea Birds Sales Private Limited a company incorporated under the Companies Act and its directors and other functionaries alleging the offence punishable under Section 138 of the Negotiable Instruments Act. The learned Magistrate before whom the complaints are filed, took cognizance of the offence, recorded sworn statement of the complainant and directed registering of criminal case against all the persons arrayed as accused and ordered issue of summons against all of them. On coming to know of the same, the petitioner arrayed as Accused No.3 in all these complaints, presented these petitions seeking to quash the prosecutions launched against him in C.C.Nos.26061/2013, 26060/13, 26049/13, 26051/13, 26050/13 and 26062/13. The principal contention on which the quashing of prosecution is sought is that much prior to the date of issuance of the 5 cheques in question, the petitioner had resigned from the post of Director of 1st accused-Company and therefore, as on the date of the cause of action for filing the complaints alleging offence under Section 138 of the Negotiable Instruments Act, he had nothing to do with the affairs of the company, as such, he cannot be prosecuted for the aforesaid offence by invoking the provisions of Section 141 of the Negotiable Instruments Act. In support of this contention, the petitioner has produced copies of the resignation letter submitted to the Board of Directors, a copy of the resolution passed by the Board of Directors as also the certified copy of the Form No.32 filed with Registrar of Companies.
4. The common respondents, upon service of notice in these petitions, have entered appearance.
5. I have heard both sides.
6. The respondent opposing the prayer sought in this petition, contended that the grounds urged in support of the prayer made in these petitions are matters of defence which are required to be established at the trial and this Court, in exercise of power under 6 Section 482 of Cr.P.C., cannot look into the documents now sought to be produced by the petitioner by way of defence and therefore, the petitions are not maintainable. Therefore, learned counsel for respondent sought for dismissal of the petitions with a direction to the petitioner to appear before the trial Court and participate in the trial.
7. In this behalf, reliance was placed on the decision of the Apex Court in N.RANGACHARI v/s.BHARAT SANCHAR NIGAM LTD. (2007)5 SCC 108). On the other hand, learned counsel for the common petitioner submitted that though the contention urged by the petitioner in support of the prayer sought is in the nature of the defence, still this Court is entitled to look into the undisputed public documents which clearly establishes beyond doubt that the petitioner had resigned from the directorship of the company much prior to the date of issuance of the cheque, as such on the date of the cause of action, the petitioner had nothing to do with the affairs of the accused No.1- company, therefore, the prosecutions lauched against 7 the petitioner is liable to be quashed. In this behalf, reliance was placed on the decision of the Apex Court in HARSHENDRA KUMAR v/s.REBATILATA KOLEY etc., (2011 AIR SCW 1199).
8. Having heard the learned counsels on both sides and on perusal of the two decisions of the Supreme Court cited, I see considerable force in the contention of the petitioner.
9. There is no dispute that the petitioner is sought to be prosecuted in the capacity as Director and authorized signatory of Accused No.1-Company by invoking the provisions of Section 141 of the Negotiable Instruments Act. According to Section 141 of the Negotiable Instruments Act, where the offence is committed by a Company, Company as well as every person, who at the time of commission of the offence was in-charge of and was responsible for the conduct of the business of the Company, shall be deemed to be guilty of the offence and shall be liable to be punished accordingly.
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10. As noticed supra, according to the petitioner, he resigned from the post of directorship of the 1st accused-company on 07.03.2012 and his resignation was accepted by the Board of Directors of the 1st accused-company in its meeting held on 08.03.2012 and thereafter, the Registrar of Companies was notified about the resignation of the petitioner from the directorship and the said change has been duly effected in the registers maintained with the Registrar of Companies. In that behalf, necessary form was also submitted to the Registrar of Companies. Copies of these documents produced would indicate that the resignation submitted by the petitioner from the post of Director of Accused No.1-company was accepted by the Board of Directors and the said change was intimated to the Registrar of Companies by filing the requisite form No.32 and such changes have been effected in the registers maintained by the Registrar of Companies. According to these documents, petitioner resigned on 07.03.2012 and Registrar of Companies has accepted the said change with effect from 08.03.2012. According 9 to the complaint averments, the cheques which are subject matter of all these complaints were dated 18.07.2012. They were presented to the complainant's banker for encashment on 24.08.2012 and they were returned unpaid on 25.08.2012. Thereafter, statutory notice dated 04.09.2012 were issued. Ultimately, the complaints came to be filed on 19.10.2012. Thus, from the above, it is clear that much prior to the date of issuance of the cheques in question, the petitioner had resigned from the Directorship of the 1st accused- Company. As such he ceased to be the Director of Accused No.1-company as on the date of the cause of action for initiating the prosecution for the offence under Section 138 of the Negotiable Instruments Act. Thus, as on the relevant date, the petitioner had nothing to do with the affairs of the accused No.1- Company. Now, the question is as to whether this Court, in a petition under Section 482 of Cr.P.C., can look into the documents produced by the petitioner in support of his contention. Though in Rangachari's case referred to supra, the Apex Court has held that such 10 contentions are matter of defence which are required to be substantiated at the trial, the Apex Court in Harshendra Kumar's case referred to supra, while considering almost identical circumstances, has held that the High Court in a petition under Section 482 of Cr.P.C., would be entitled to look into the uncontroverted public documents which would establish that the petitioner therein had nothing to do with the affairs of the Company as on the relevant date and in such an event, the High Court could exercise its inherent power to quash the proceedings to prevent abuse of process of the Court and prevent gross injustice that would be caused to the person. The relevant observations made in this behalf are found in Para Nos.21 and 22 of the decisions which reads as under:
"21. In our judgment, the above observations cannot be read to mean that in a criminal case where trial is yet to take place and the matter is at the stage of issuance of summons or taking cognizance, materials relied upon by the accused which are in the nature of public documents or the 11 materials which are beyond suspicion or doubt, in no circumstance, can be looked into by the High Court in exercise of its jurisdiction under Section 482 or for that matter in exercise of revisional jurisdiction under Section 397 of the Code. It is fairly settled now that while exercising inherent jurisdiction under Section 482 or revisional jurisdiction under Section 397 of the Code in a case where complaint is sought to be quashed, it is not proper for the High Court to consider the defence of the accused or embark upon an enquiry in respect of merits of the accusations. However, in an appropriate case, if on the face of the documents - which are beyond suspicion or doubt - placed by accused, the accusations against him cannot stand, it would travesty of justice if accused is relegated to trial and he is asked to prove his defence before the trial court. In such a matter, for promotion of justice or to prevent injustice or abuse of process, the High Court may look into the materials which have significant bearing on the matter at prima facie stage.
22. Criminal prosecution is a serious matter; it affects the liberty of a person. No greater damage can be done to the 12 reputation of a person than dragging him in a criminal case. In our opinion, the High Court fell into grave error in not taking into consideration the uncontroverted documents relating to appellant's resignation from the post of Director of the Company. Had these documents been considered by the High Court, it would have been apparent that the appellant has resigned much before the cheques were issued by the Company. As noticed above, the appellant resigned form the post of Director on March 2, 2004. The dishonoured cheques were issued by the Company on April 30, 2004, i.e., much after the appellant had resigned from the post of Director of the Company. The acceptance of appellant's resignation is duly reflected in the resolution dated March 2, 2004. Then in the prescribed Form (Form No.32), the Company informed to the Registrar of Companies on March 4, 2004 about appellant's resignation. It is not even the case of the complainants that the dishonoured cheques were issued by the appellant. These facts leave no manner of doubt that on the date the offence was committed by the Company, the appellant was not the Director; he had nothing to do 13 with the affairs of the Company. In this view of the matter, if the criminal complaints are allowed to proceed against the appellant, it would result in gross injustice to the appellant and tantamount to an abuse of process of the court.
11. In fact in Harshendra Kumar's case, the Apex Court has referred to the decision in Rangachari's case.
Therefore, in the light of the law laid down in the later decision of the Apex Court, this Court is entitled to look into the uncontroverted and undisputed public document. The certified copy of Form No.32 issued by the Registrar of Companies which is produced along with these petitions being a public document as held by the Apex Court in Harshendra Kumar's case referred to supra, this Court is entitled to look into those documents and proceed accordingly. Having regard to the contention in the certified copy of Form No.32, which clearly establish that the common petitioner had resigned from the Directorship of the accused No.1/Company with effect from 08.03.2012 much prior to the issuance of the show-cause notice in question, 14 the prosecution launched against the petitioner is without any basis and since the petitioner had nothing to do with the accused No.1/company on the relevant date, he cannot be asked to participate in the trial and establish the same at the trial. Having regard to the above discussion, I find no substance in the contention of the learned counsel for the respondent.
12. In view of the above discussion and in the light of the evidence that the petitioner had resigned from the directorship of the 1st accused/company much prior to the date of issuance of the cheques in question, prosecutions launched against the petitioner cannot be allowed to be pursued. The prosecutions launched against him are liable to be quashed.
13. Accordingly, the Petitions are allowed. The prosecution launched against the petitioner/Accused No.3 in C.C.Nos.26061/2013, 26060/13, 26049/13, 26051/13, 26050/13 and 26062/13 on the file of XIV Addl. CMM, Bangalore, are hereby quashed.
SD/-
JUDGE bnv*