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. 519/2018
CNR No. DLSE010058652018
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 : 18.07.2018
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 case filed by respondent /complainant u/s 138 of NI Act.
2. In the revision petition, it is stated that as per allegations, complainant/ respondent filed a complaint U/sec 138 of Negotiable Instruments Act, 1981 on the allegations that present petitioner /accused is Director 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 composite demand notice for dishonor of cheques.
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3. It is stated that on basis of above allegations, respondent filed a complaint U/sec 138 N.I. Act before Ld. MM registered as complaint case. It is stated that Ld. MM without considering allegations in complaint and in total disregard to provision of law vide summoning order dated 16.05.2018 passed in complaint case bearing No. 4228/2018 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 cheque in question and that he can not be held liable for affairs of the company if he is not signatory to cheque in question. Complainant / respondent was well aware of the fact that petitioner Amit Kumar Sharma has no concern in any manner with working and affairs of the company.
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b) Because petitioner had resigned from post of Director of
accused No. 1 w.e.f. 03.10.2017 whereas cheque was 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 complaint filed by complainant shows that accused No. 1 company issued purported cheque in favour of complainant which was dishonoured and thereafter, respondent filed complaints u/s 138 NI Act before Ld. Trial Court. On filing of complaint, Ld. Trial Court passed 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) unequivocally establishes that petitioner was not Director of Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....4 of 20 accused No. 1 company when alleged cheque was dishnoured on presentation.
e) Because it is not case of complainant / respondent nor there is any averment in the complaint by respondent that even after resigning as Director 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 committed was in charge of ....". It is submitted that there is no Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....5 of 20 single iota of allegation against petitioner made by complainant 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 u/s 202 Cr.P.C. before issuing process as petitioner is resident Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....6 of 20 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 cheque in question was never issued by accused no. 1 company to respondent and respondent forged signatures on cheque in question and misused the misplaced cheque 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 qua petitioner and discharge petitioner or for passing 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.
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7. It is contended by petitioner that petitioner can not be proceeded against so far as CC No. 4228/2018 is concerned as he is not signatory to cheque 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. 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 Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....8 of 20 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."
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: Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....9 of 20 "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 complaint filed before Ld. Trial Court has not mentioned as to how petitioner played any part in the transaction between respondent and accused No. 4. It was argued that regarding cheque in question and other cheques regarding which complaints u/s 138 of NI Act have been filed Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....10 of 20 by respondent, petitioner has got lodged FIR regarding misplacement / theft of cheques vide FIR No. 1083/2017 PS Sadar, Agra, UP. It was submitted that invoice in the present complaint filed before Ld. Trial Court has 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. 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.
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. 4 i.e. M/s. Sunrise Milk Foods LLP.
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Respondent in complaint 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 complaint filed before Ld. Trial Court. Respondent in complaint 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, petitioner has stated in the revision petition that FIR No. 1083/2017 PS Sadar, Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....12 of 20 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 petitioner. In addition to this, to be more specific, petitioner Amit Kumar Sharma is not drawer of cheque in question. So, impugned order to my mind is not in accordance with law.
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.
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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 order as respondent in complaint filed had not mentioned residential address of petitioner. Hence, this contention of petitioner is without merits and hence, rejected.
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 order is liable to be set aside on this ground alone. In support of this argument, petitioner relied upon Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....14 of 20 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 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 Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....15 of 20 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 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 Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....16 of 20 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 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 Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....17 of 20 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 itself before passing impugned summoning order. 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 cheque in question was dishonoured on 26.03.2018 and in fact, cheque in question was also issued on 17.01.2018. Non compliance of this mandate on part of Ld. Trial Court makes impugned order unsustainable in law and impugned order is Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....18 of 20 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.
21. In view of law laid down in Anita Malhotra's case (Supra), since petitioner resigned before issuance of cheque in question and before presentation of the same for encashment, summoning order of petitioner vide impugned order can not be sustained and are liable to be set aside.
22. Petitioner has 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 petitioner did not press on this ground and hence, I am not discussing the same Case Registration No. 519/18 Amit Kumar Sharma Vs. CDPS Electronics Page no....19 of 20 for the purpose of present revision petition.
23. In view of my above made discussion, I am of the view that impugned order dated 16.05.2018 in CC No. 4228/2018 is not legally sustainable and hence, set aside. Revision petition filed by petitioner stands disposed of as allowed.
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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