Delhi High Court
Sh. R.K. Sinha vs State & Anr. on 18 August, 2009
Author: V.K.Shali
Bench: V.K. Shali
* THE HIGH COURT OF DELHI AT NEW DELHI
+ Crl. M.C. No. 2307/2008
Date of Decision : 18.8.2009
SH. R.K. SINHA ......Petitioner
Through: Mr. P.R.Chopra, Advocate
Versus
STATE & ANR. ...... Respondents
Through: Mr. Pawan Bahl, APP for
the State.
CORAM :
HON'BLE MR. JUSTICE V.K. SHALI
1. Whether Reporters of local papers may be
allowed to see the judgment? NO
2. To be referred to the Reporter or not ? YES
3. Whether the judgment should be reported
in the Digest ? YES
V.K. SHALI, J. (oral)
1. The petitioner by virtue of the present petition has prayed
for quashing of the complaint case bearing No.929/02
under Section 138, 141, 142 of Negotiable Instruments Act
r/w Section 420/34 IPC pending in the Court of Shri
Ashutosh Kumar, learned MM, Delhi.
2. Briefly stated the facts of the case are that respondent no.2
M/s Moon times-SPMS filed a complaint under Section 138
read with Section 141 of the Negotiable Instruments Act
against M/s Anchor Beverages Ltd. a company duly
incorporated under the Companies Act and Sh.P.N.Das,
Sh.S.D.Tomar, Sh.Ajay Pal Singh Tomar, Bibha Das,
Sh.R.K.Sinha, Sh.H.K.Karna and Sh.Shyam Sunder Sarogi
Crl.M.C.No.2307/2008 Page 1 of 7
stating them to be the promoter Directors of the aforesaid
company. It was alleged that all these promoter Directors
were incharge and responsible for the day to day business
of the aforesaid company. It is alleged that the company
M/s Anchor Beverages Ltd. had issued a cheque bearing
No.446583 dated 12.10.2000 for a sum of Rs.1,74,938.40/-
drawn on Indian Overseas Bank, Darya Ganj, New Delhi in
favour of the respondent no.2/complainant for discharge of
its legal debt/liability. However, the said cheque got
dishonoured on account of insufficiency of funds. As a
consequence of this, the respondent no.2 is purported to
have issued a notice both under postal certificate as well as
by registered AD on 24.11.2000 to the company M/s
Anchor Beverages Ltd. Since the payment was not made
despite the notice having been sent, the aforesaid
complaint came to be filed not only against the company
but all its so called promoter Directors.
3. The learned Magistrate after obtaining the statement of
Mr.Yatinder Seth, proprietor of M/s Moon Times
respondent no.2 herein by way of an affidavit issued
summons against M/s Anchor Beverages Ltd. and its
Directors including the petitioner Sh.R.K.Sinha herein. The
averments made in the affidavit is nothing but the
reproduction of the averments made in the complaint.
Crl.M.C.No.2307/2008 Page 2 of 7
4. The petitioner who was referred to as accused no.6 in the
complaint feeling aggrieved by the aforesaid summoning
order has chosen to file the present complaint for quashing
of complaint and the summoning order against him.
5. I have heard the learned counsel for the petitioner
yesterday as well as today. The learned counsel for
respondent no.2 Ms.Seema Gulati had argued the matter
partially yesterday and requested for an adjournment for
today but today she has not appeared despite the case
being passed over twice.
6. The contention of the learned counsel for the petitioner is
to the effect that the entire case of the respondent no.2
hinges on the question of vicarious liability under Section
141 of Negotiable Instruments Act. It is urged that before
enroping the person under the concept of vicarious liability,
there should not only be the averments made in the
petition /complaint with regard to the Director in question
being incharge and responsible for the conduct of the
business, but it must also be established prima facie by
evidence or by documents on record.
7. On the contrary, it is stated that the allegations made in
the complaint qua the petitioner that he is incharge and
responsible in the capacity of the promoter and Director is
not fortified from the record inasmuch as the petitioner has
placed on record the certified copy of the documents
Crl.M.C.No.2307/2008 Page 3 of 7
purported to have been issued by the Registrar of
Companies which shows that on 21.9.1995, the petitioner
had only 500 shares in the company M/s Anchor Beverages
Ltd. in the capacity of only a promoter. A certificate
purported to have been issued by the Registrar of
Companies on 15.10.2003 is also placed on record which is
not disputed and shows that there were only three
Directors of the said company namely Sh. P.N.Das, Sh.Ajay
Pal Singh Tomer and Smt.Sanjana D.Tomer. On the
strength of these two documents, it has been contended by
the learned counsel for the petitioner that the petitioner
was only a promoter of the company and not the Director
and therefore, he could not be prosecuted for having
committed an offence under Section 138 of the Negotiable
Instruments Act under the concept of vicarious liability. It
has also been contended by the learned counsel for the
petitioner that no notice under Section 138 of the
Negotiable Instruments Act was sent to any of the Directors
including the petitioner and thus the statutory requirement
was also not complied with qua him.
8. The learned counsel in support of his contention has cited
a judgment of this Court in case titled Jayshree Khemka
& Anr. Vs. Prema Kanodia 2008 (106) DRJ 809, wherein
it has been observed that the person who is neither the
signatory to the cheque nor responsible in any manner
Crl.M.C.No.2307/2008 Page 4 of 7
whatsoever in respect of the transaction and also did not
hold post of a Director in a company at the time of issuance
of the cheque cannot be saddled with the liability of having
committed an offence under Section 138 of the Negotiable
Instruments Act.
9. I have carefully considered the submissions made by the
learned counsel for the petitioner and gone through the
record. I have also gone through the judgment cited by the
learned counsel for the petitioner.
10. The position of law is very well settled in SMS
Pharmaceuticals Ltd. Vs. Neeta Bhalla (2007) 4 SCC 70
and Sabitha Ramamurthy Vs. R.B.S.
Channabasavaradhya (2006) 10 SCC 581 and number of
other cases with regard to the liability of a Director. The
complainant before enroping a person under vicarious
liability of Section 141 of Negotiable Instruments Act being
the Director of a company has not only to make an
averment in the complaint that the said Director was
incharge and responsible for the conduct of the business of
the company but he must also establish the said fact by
prima facie evidence either by way of his own affidavit or by
way of the documents placed on record. Mere repetition of
the words stated in the Section 141 of the Negotiable
Instruments Act have been held to be not necessary but
what must be shown is the fact that the person who is
Crl.M.C.No.2307/2008 Page 5 of 7
sought to be brought within the concept of vicarious
liability was actually incharge and responsible for the day
to day conduct of the business of the company or the firm
and thus he was in the knowledge of the cheque having
been issued on behalf of the company for discharge of it
debt or liability.
11. In the present complaint except that it reproduces the
language given u/S 141 of Negotiable Instruments Act both
in the complaint as well as in the affidavit, there is nothing
on record to show as to how the petitioner was incharge
and responsible for the conduct of the company in
question. On the contrary, the petitioner has placed on
record the two vital documents purported to have been
issued by the Registrar of Companies. The veracity or the
correctness of these two documents has not been disputed
by the learned counsel for the respondent no.2 during the
course of oral submissions.
12. One document shows that so far as the petitioner is
concerned, he was only a promoter and he had been
allotted 500 shares initially. This document does not show
that he was a Director. There is no document which shows
that he was Director of the Company in question at the
time when the cheque in question was issued. On the
contrary, there is a document which is issued by the
Registrar of Companies which shows that there were three
Crl.M.C.No.2307/2008 Page 6 of 7
Directors at the relevant time but the name of the petitioner
does not appear in the list of the said three Directors.
Therefore, the respondent no.2 has not been able to
discharge the initial burden of proving the fact that the
petitioner was incharge and responsible for the conduct of
the business of the firm in the capacity of the Director but
on the contrary the petitioner has been able to place on
record the documents to the contrary in this regard.
13. For the reasons mentioned above, I, therefore, deem it a fit
case where the complaint against the petitioner deserves to
be quashed. Ordered accordingly.
14. Copy of the order be sent to the Court concerned.
V.K.SHALI, J.
AUGUST 18, 2009 RN Crl.M.C.No.2307/2008 Page 7 of 7