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. 37/2019
CNR No. DLSE010002212019
1. AMIT KUMAR SHARMA
120, Gandhi Nagar,
Agra, UP.
2. HARI MOHAN GUPTA
25, CDS Nagar,
Mohali Road,
Agra, UP.
.... Petitioners
VERSUS
CDPS ELECTRONICS
G76, UPSIDC Industrial Area,
Selakui, Dehradun248197.
Also At:
B209, Naraina Industrial Area,
PhaseI, New Delhi110028.
.... Respondent
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Date of institution : 11.01.2019
Date of reserving the order : 28.10.2021
Date of pronouncement : 17.12.2021
JUDGMENT
1. This is criminal revision u/s 397 of the Code of Criminal Procedure preferred by accused/petitioners against impugned orders dated 09.03.2018 passed by court of Ms. Tanya Bamniyal, Ld. MM ( N. I. Act), South East, Delhi whereby Ld. MM ordered for summoning of accused / petitioners in cases filed by respondent u/s 138 of NI Act bearing CC No. 2100/2018, 2101/2018 and 2102/2018.
2. In the revision petition, it is stated that petitioners have been falsely implicated in the aforesaid complaints by respondent u/s 138 and 142 read with Section 141 NI Act wherein Ld. Trial Court without applying judicial mind has summoned petitioners because of which petitioners were constrained to file present revision petition.
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3. It is stated that complaints were filed by respondent on the allegations that petitioners were Directors of accused No. 1 company and issued cheques as per instructions of accused No.1 which cheques were dishonoured on presentation for the reason "Funds Insufficient". Thereafter, respondent / complainant served composite demand notice for dishonour of cheques.
4. Following grounds have been taken by petitioners to challenge impugned orders:
a) Because petitioners have resigned from post of Director of accused No. 1 w.e.f. 03.10.2017 whereas cheques forming subject matters of complaints were dishonoured after about two and half months from date of resignation of petitioners.
b) Because petitioners were neither Incharge of accused No. 1 company nor were responsible for affairs of the company when alleged offence u/s 138 of NI Act was committed.
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c) Because perusal of complaints filed by complainant
shows that petitioner Hari Mohan Gupta 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 complaint, Ld. Trial Court passed common summoning orders vide orders dated 09.03.2018 without stating name of accused persons.
d) Because no averments have been made in the complaints assigning any role of petitioners to fasten any criminal liability against them. There is no averment as to how the petitioners were looking after or responsible for affairs of accused No.1 company to invoke provisions of Section 141 of NI Act against them.
e) 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. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....4 of 24 unequivocally establishes that petitioners were not Director of accused No. 1 company when alleged cheques were dishnoured on presentation.
f) Because there is not even single iota of allegation against petitioners 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 committed was in charge of ....". It is submitted that there is no single iota of allegation against petitioners made by complainant in complaints that petitioners are in charge of the company. So, no criminal liability can be fastened upon applicants 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 petitioners are in charge of company.
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g) 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, petitioners occupied any such position on account of which, they continued to be person Incharge and responsible to the accused No.1 company for conduct of its business. Vicarious liability of petitioners has been invoked solely on the presumption of they being Directors of accused No.1 company when the alleged offence u/s 138 of NI Act was committed.
h) Because in the complaints covering subject matter of present revision petition, petitioners had already resigned from Directorship of the company much before cheques in question were presented for encashment. Therefore, they were not in a position to compel accused No. 1 company to ensure that cheques when presented were honoured. Similarly, they were not in a position to compel accused No.1 company to comply with notice of demand by making payment towards dishnoured Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....6 of 24 cheques.
i) Because Ld. Trial Court erred in passing common summoning order against petitioners in complaint cases. Both the petitioners were not signatory to cheques in question and rather signatures of petitioner Hari Mohan Gupta were forged and petitioners can not be held liable for affairs of accused No.1 company if petitioners were not signatory to cheques in question. Cheques in question were stolen from petitioners and same have been misused by forging signatures.
j) Because cheques in question were never issued by accused No.1 company to respondent but that respondent forged signatures on cheques in question after stealing the same from employee of accused No. 1 / after employee of accused No. 1 company misplaced the same after respondent visited him regarding which FIR No. 1083/2017 dated 24.08.2017 PS Sadar, Agra, UP has been lodged.
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k) Because there is no provision in the eyes of law to file
cases u/s 138 NI Act through authority letter. There must be SPA or GPA in favour of representative of complainant / respondent but in present case only authority letter was issued by partners in favour of another person for filing complaint before Ld. MM, Saket Courts.
l) Because Ld. Trial Court while taking cognizance had not carried out any inquiry or ordered investigation as contemplated u/s 202 Cr.P.C. before issuing process considering the fact that petitioners are residents of Agra and Mathura which does not fall within jurisdiction of Ld. Trial Court at Saket and hence, it was incumbent upon Ld. Trial Court to carry out inquiry or order investigation as contemplated u/s 202 Cr.P.C. before issuing process.
m) Because petitioners or accused No.1 company never received goods / material from respondent / complainant against Bill / Invoice generated by respondent.
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5. It is prayed to set aside impugned summoning orders dated 09.03.2018 qua petitioners and discharge petitioners in CC No. 2100/2018, 2101/2018 and 2102/2018 or to pass any other order which this Court may deem fit in facts and circumstances of case.
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 petitioners that petitioners have resigned from post of Director of accused No.1 company w.e.f. 03.10.2017 and that cheques in question were dishonoured after more than two months of resignation of petitioners from accused No. 1 company i.e. M/s. Wholly Joy Products Pvt. Ltd. It is contended by petitioners that at the time of commission of offence u/s 138 r/w Section 141 of NI Act by accused No.1 company, petitioners were not Incharge and responsible for day to day affairs of accused No. 1 company in any manner and Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....9 of 24 so they can not be proceeded against as per settled law. Copy of DIR12 (ROC Record) has been filed by petitioners in order to support their contentions in this regard coupled with separate affidavits of petitioners jointly for present revision petition and for other revision petitions affirming that DIR12 filed alongwith revision petition has been taken from government website i.e. www.mca.gov.in in presence of petitioners and the same is reflecting true and correct status of Director.
8. Judgment in case titled as "Anita Malhotra Vs. Apparel Export Promotion Council & Anr. (2012) 1 SCC 520" was relied upon by petitioners in order to support their arguments that if a person has proved his resignation on the relevant date when the offence was committed, then proceeding against such a person is liable to be quashed.
9. Petitioners further relied on judgment of Hon'ble Supreme Court of India in case titled as "Harshendra Kumar D. Vs. Rebatilata Koley Etc. (2011) 3 SCC 351" wherein Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....10 of 24 Hon'ble Apex Court held as below: "Criminal Prosecution is a serious matter; it affects the liberty of a person. No greater damage can be done to the 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 aboved, the appellant resigned from 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 Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....11 of 24 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 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."
10. It was argued on behalf of petitioners that petitioners already resigned from post of Directors before cheques in question were presented for encashment which is very clear from DIR12 and thus no criminal liability can be attached to petitioners in case cheques were not honoured.
11. It was argued on behalf of respondent that respondent obtained company Master data of accused No. 1 company from Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....12 of 24 Ministry of Corporate Affairs website in order to ascertain as to who were Directors in accused No.1 company before filing complaints before Ld. Trial Court which is an authentic data and that complainant / respondent can not be denied of remedy at the stage of summoning when supporting document was filed by respondent with complaints filed.
12. To rebut this contention of respondent, petitioners 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 companies at the presummoning stage and make sure that notice be directed only to those Directors or employees of the Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....13 of 24 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 named in the complaint mechanically, without ascertaining whether they played any actual role in the transaction, not only Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....14 of 24 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 complete picture of the persons arrayed by the complainant so as to hold them vicariously liable for the commission of the Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....15 of 24 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."
13. It was argued on behalf of petitioners that in view of law laid down in Sudeep Jain's case (supra), it was incumbent upon Ld. Trial Court to ask respondent for Form32 (present day DIR12) in order to ascertain as to who were Directors of accused No.1 company before issuing summons to petitioners. It was argued that now DIR12 has replaced Form32 which is the most authentic data to ascertain Directors of a company.
14. It is in common parlance that Form32 has been replaced by DIR12 and 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 file DIR12 before issuing summons to petitioners. Hence, impugned orders in CC No. 2100/2018, Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....16 of 24 2101/2018 and 2102/2018 are not in accordance with law and hence, can not be sustained.
15. It was submitted by counsels for petitioner that respondent in complaints filed before Ld. Trial Court has not mentioned as to how petitioners played any part in the 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, petitioners have got lodged FIR regarding misplacement / theft of cheques vide FIR No. 1083/2017 PS Sadar, Agra, UP. It was submitted that invoices in the present complaints filed before Ld. Trial Court have been raised by respondent against M/s. Sunrise Milk Foods LLP, then how come accused No. 1 company i.e. M/s. Wholly Joy Products Pvt. Ltd. became responsible to discharge liability of M/s. Sunrise Milk Foods LLP in the scenario when Directors of M/s. Sunrise Milk Foods LLP and M/s. Wholly Joy Products Pvt.
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Ltd. are different and no summoning of M/s. Sunrise Milk Foods LLP and its Directors has been done by Ld. Trial Court vide impugned order.
16. Petitioners 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."
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17. In view of law relied on by petitioners in N.K. Wahi's case (Supra), I am of the view that respondent in the complaints filed before Ld. Trial Court should have described as to how petitioners played any part in transaction between respondent and accused No. 4 i.e. M/s. Sunrise Milk Foods LLP. Respondent in complaints filed before Ld. Trial Court has merely stated accused No.1 M/s Wholly Joy Products Pvt. Ltd. to be sister concern of accused No. 4 i.e. M/s. Sunrise Milk Foods LLP. Perusal of record of Master data of M/s. Sunrise Milk Foods LLP and M/s. Wholly Joy Products Pvt. Ltd. annexed by respondent before Ld. Trial Court shows that Directors of both the companies are different and registered addresses of both the companies are also different. Further, invoices annexed by respondent before Ld. Trial Court is in name of M/s. Sunrise Milk Foods LLP and how M/s. Wholly Joy Products Pvt. Ltd. is sister concern of M/s. Sunrise Milk Foods LLP has not been made clear by respondent in Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....19 of 24 complaints filed before Ld. Trial Court. Respondent in complaints filed before Ld. Trial Court has rather stated that it received purchase order from M/s. Sunrise Milk Foods LLP and not from M/s. Wholly Joy Products Pvt. Ltd. Additionally, petitioners have stated in the revision petition that FIR No. 1083/2017 PS Sadar, Agra, UP has been lodged with regard to misplacement / theft of cheques regarding which complaints u/s 138 NI Act have been filed by respondent. Mere repetition of phraseology used in Section 141 of NI Act is not sufficient to attract provisions of Section 138 NI Act against petitioners. In addition to this, to be more specific, petitioner Amit Kumar Sharma is not drawer of cheque in question.
18. It is contended by petitioners that Ld. Trial Court failed to conduct mandatory inquiry u/s 202 Cr.P.C. before issuance of process against petitioners vide impugned order as petitioners are residents of Agra i.e. place beyond jurisdiction of Ld. Trial Court. It was argued on behalf of petitioners that petitioners are Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....20 of 24 residents of Agra and before summoning petitioners, 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.
19. Perusal of Trial Court record shows that addresses of petitioners 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 addresses of petitioners 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 order as respondent in complaint filed had not mentioned residential addresses of petitioners and to carry out an inquiry or to order investigation was not a must in this scenario. Hence, this contention of petitioners is without merits and hence, rejected.
20. It is contended by petitioners that they did not receive any material / goods from complainant / respondent against invoices generated by respondent.
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21. Perusal of TCR shows that no record of transport of allegedly purchased articles to accused No. 1 company has been annexed by respondent before Ld. Trial Court which could show that the said articles were indeed delivered by respondent to accused No.1 company. Without delivery of articles, to fasten any pecuniary liability is not just and it can not be said prima facie that indeed cheques in question were issued to discharge any liability of accused No.1 company towards respondent / complainant. Further, FIR No. 1083/2017 PS Sadar, Agra, UP has been got lodged qua cheques in question and other cheques being stolen / misplaced by accused No.1 company. In these circumstances, impugned orders of summoning passed by Ld. Trial Court can not be said to be in accordance with law.
22. Petitioners have also taken ground that complaint before Ld. Trial Court was not filed by a duly authorized person and thus, impugned summoning order is liable to be set aside. During course of arguments, counsels for petitioners did not Case Registration No. 37/2019 Amit Kumar Sharma and Anr. Vs. CDPS Electronics Page no....22 of 24 press on this ground and hence, I am not discussing the same for the purpose of present revision petition.
23. Perusal of present revision petition shows that an application u/s 5 of Limitation Act seeking condonation of delay in filing present revision petition has also been filed by petitioners with present revision petition but no arguments were addressed on this application by either of the parties and that arguments on merits were addressed by both the sides. When arguments on merits have been heard by this Court and when neither of the parties even drew attention of this Court qua aforesaid application, I am of the view that aforesaid application should be allowed as it is well settled that matter should be tried to be decided on merits rather than on technicalities. Hence, application u/s 5 of Limitation Act seeking condonation of delay in filing of revision petition is allowed and delay if any in filing of the revision petition is condoned.
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24. In view of my above made discussion, I am of the view that impugned orders dated 09.03.2018 passed in CC No. 2100/2018, 2101/2018 and 2102/2018 are not legally sustainable and hence, set aside. Revision petition filed by petitioners stands disposed of as allowed.
25. 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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