Delhi District Court
Ms. Hansika Prabhunath Singh vs The State (Govt. Of Nct Of Delhi) on 30 November, 2021
IN THE COURT OF SH. SANJAY SHARMA-II : ADDL. SESSIONS JUDGE-03,
(CENTRAL): TIS HAZARI COURTS, DELHI
Criminal Revision No. 31/2020
CNR No.: DLCT01-000432-2020
Ms. Hansika Prabhunath Singh
W/o Sh. Anand Kumar Singh
R/o Bungalow No. 41, Gayatri Niwas,
Naka IES School, Charkop Sector-2,
Kandivali West, Mumbai,
Maharashtra-400 067
..... Petitioner
VERSUS
1. The State (Govt. of NCT of Delhi)
2. M/s. Dish TV India Private Limited
18th Floor, A Wing, Marathon Futurex,
N M Joshi Marg, Lower Parel,
Mumbai-400 013 ..... Respondents
Date of Institution : 14.01.2020
Date of Arguments : 17.09.2021
Date of Judgement : 30.11.2021
JUDGEMENT
1. The criminal revision petition under Section 397 of 'The Code of Criminal Procedure, 1973' (Hereinafter referred to as 'the Cr.P.C.') is directed against order dated 22.11.2018 arising from the complaint case vide CC No. 19196/2018 titled as 'Dish TV India Ltd. vs. Oscar India Pvt. Ltd. & Ors.' under Section 138 read with Section 142 of Negotiable Instruments Act, 1881 (Hereinafter referred to as 'NI Act') whereby Ld. MM- 01 (NI Act), Central District, Tis Hazari Courts, Delhi (the trial Court) summoned the petitioner.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 1 of 37 BRIEF FACTS:
2. The respondent No. 2 (Hereinafter referred to as 'the complainant') instituted a complaint case, through its Authorized Representative Mr. Ritesh Ranjan, under Section 138 NI Act against 'Oscar Media Private Limited' (the accused No. 1) and its directors, namely, Mr. Pawan Amar Singh (the accused No. 2) and the petitioner (the accused No. 3). It will be relevant to note that Mr. Pawan Kumar Singh (the accused No.
2) is the signatory of the cheques in question.
3. The case set-up in the complaint is that the complainant is a public limited company. The complainant is engaged in the business of establishing, maintaining and operating Direct-to-Home (DTH) transmission services on the satellite television platform, to its subscribers in the territory of India. 'Oscar Media Private Limited' (the accused No. 1) is a private limited company. Mr. Pawan Amar Singh (the accused No. 2) and the petitioner (the accused No. 3) are its directors and responsible for day to day affairs of the said company.
4. According to the complainant, Mr. Pawan Amar Singh (the accused No. 2) and the petitioner (the accused No.
3) approached 'Bharat Business Channel Limited' to carry its channel for the purpose of distribution through DTH platform for a period of 3 years w.e.f. 18.01.2014 to 17.01.2017 for technical fee in the sum of Rs. 2,60,00,000/- (Rupees Two Crore Sixty Lakhs only), vide 'Memorandum of Agreement' (MOA) dated 14.01.2014.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 2 of 37
5. According to the complainant, 'Bharat Business Channel Limited' was later renamed as 'VIDEOCON d2h Limited'. 'Oscar Media Private Limited' extended the said 'Memorandum of Agreement' for a period of 1 year w.e.f. 18.01.2017 to 17.01.2018 for technical fee of Rs. 1,11,00,000/- (Rupees One Crore Eleven Lakhs only) vide 'First Addendum Agreement' dated 16.01.2017. The said 'Memorandum of Agreement' was again extended for a period of 3 months w.e.f. 18.01.2018 to 17.04.2018 for technical fee of Rs. 27,75,000/- (Rupees Twenty Seven Lakhs Seventy Five Thousand only) vide 'Second Addendum Agreement' dated 01.02.2018. 'VIDEOCON d2h Limited' merged into the complainant w.e.f. 22.03.2018 and the rights and obligations of erstwhile of 'VIDEOCON d2h Limited' devolved upon the complainant.
6. The case of the complainant is that the complainant company extended the 'Memorandum of Agreement' for a period of 3 months w.e.f. 18.04.2018 to 17.07.2018 for technical fee of Rs. 27,75,000/- (Rupees Twenty Seven Lakhs Seventy Five Thousand only) after mutual discussion with 'Oscar India Private Limited' (the accused No.
1). The complainant shared the 'Distribution Agreement' with the accused persons. However, the accused persons did not execute the said 'Distribution Agreement'. The complainant continued to carry the channel of the accused persons on its DTH platform on the assurance and commitment made by Mr. Pawan Amar Singh (the accused No. 2).
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 3 of 37
7. According to the complainant, the accused persons acknowledged an amount of Rs. 36,00,000/-, vide e- mail dated 28.06.2016 and assured to clear the said amount within two months by way of two Equal Monthly Instalments (EMIs) in first week of July and August, 2018 respectively. The accused persons sent post dated cheques through courier on 02.07.2018, vide Cheque No. 177096 dated 10.07.2018 in the sum of Rs. 16,19,270/- and Cheque No. 177097 dated 10.08.2018 in the sum of Rs. 16,19,270/-, both drawn on 'Yes Bank Ltd., Kandivali (W), Mumbai-400 067' in favour of the complainant. On presentation, Cheque No. 177096 was returned unpaid with the remark 'FUNDS INSUFFICIENT' vide cheque returning memo dated 13.07.2018. The complainant sent demand-cum-removal notice dated 19.07.2018 to the accused No. 1 that 'Oscar Movies Channel' shall be removed from DTH platform w.e.f. 10.08.2018, if the accused No. 1 failed to comply with the said notice.
8. According to the complainant, the accused persons, vide e-mail dated 09.08.2018, again acknowledged their liability to pay Rs. 44,00,000/- to the complainant. The complainant presented the another cheque vide Cheque No. 177097 for payment to its banker. However, the said cheque was returned unpaid with the remark 'FUNDS INSUFFICIENT' vide cheque returning memo dated 16.08.2018. Thereafter, the complainant immediately informed the accused persons about dishonour of the said cheque and demanded cheque amount.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 4 of 37
9. On the assurance of the accused persons, the complainant again presented the said cheques for encashment. However, the said cheques were returned unpaid with the remarks 'PAYMENT STOPPED BY DRAWER' vide cheque returning memos dated 27.08.2018. The complainant sent demand notice dated 21.09.2018 to the accused persons. The accused No. 2 was served with the demand notice on 24.09.2018 sent through courier. The petitioner refused to receive the demand notice sent through speed post. The accused persons neither responded to the said demand notice nor made payment of the cheques amount and therefore, the complainant filed the complaint case under section 138 NI Act. THE IMPUGNED ORDER:
10. The trial Court, vide the impugned order, summoned the accused persons including the petitioner, as under:
"3. Complaint, affidavit of evidence and documents considered in light of above cited judgement. In opinion of this Court, there is no need to examine the complainant's evidence for purpose of issuance of process. In view of complaint, documents produced and verification in the form of affidavit of evidence, there are sufficient grounds for proceeding further against accused No. 1 (company), accused No. 2 (director / signatory) & No. 3 (director) also as per judgement of Hon'ble Supreme Court of India cited as (2015) 1 Supreme Court Cases 103 and (2016) SCC Online SC 304 as conditions for same are fulfilled.
4. Hence, issue summons against the accused person(s) on PF/RC/Approved Courier for 07.09.2019."
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 5 of 37 GROUNDS OF APPEAL:
11. Feeling aggrieved and dissatisfied with the summoning order, the petitioner impugned the said order on the grounds, as under:
(a) The impugned order is a non-speaking and unreasoned order;
(b) The trial Court did not consider that the complainant has made a bald statement regarding the responsibility of the petitioner without specifying the specific role of the petitioner in her capacity as a director;
(c) The trial Court did not consider that the cheques in question were signed by the accused No. 2 and Section 138 NI Act states that only signatory to the dishonoured cheque is liable for prosecution;
(d) The trial Court did not consider that 'Memorandum of Agreement' (MOA) was signed by the accused No. 2 and it is the accused No. 2 who manage the affairs of the accused No. 1;
(e) The petitioner was falsely implicated in this case and no offence is made out against the petitioner;
(f) The petitioner relied on judgement in Aparna A. Shah vs. M/s. Sheth Developers P. Ltd. & Anr., AIR 2013 SC 3210 that "Under Section 138 NI Act, it is only the drawer of the cheque who can be prosecuted. In the case in hand, admittedly, the appellant is not a drawer of the cheque and she has not signed the same. A copy of the cheque was brought to our notice, though it contains name of the appellant and her husband, the fact remains that her husband alone put his signature. In addition to the same, a bare reading of the complaint as also the affidavit of examination-in-chief of the complainant and a bare look at the cheque would show that the appellant has not signed the cheque";
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 6 of 37
(g) The petitioner relied on judgement in SMS Pharmaceuticals Ltd. vs. Neeta Bhalla & Anr., 2005 (7) Scale 397 that "16. (a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.
(b) Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases.
(c) The managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141.";
(h) The petitioner relied on Chintan Arvind Kapadia & Anr. vs. State & Anr., ILR (2013) III Delhi 2135 that "7.19. The High Court, therefore, rightly held that in the absence of any specific charge against the respondents, the complaint was liable to be quashed and the respondents were liable to be discharged.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 7 of 37
11. I have also extracted above para 2 of the complaint. There are simply bald allegations that the Petitioner (accused No. 6) and other directors were responsible for day to day affairs of the accused company. Following the law laid down in National Small Industries Corporation Ltd., Central Bank of India and Anita Malhotra, these averments were not sufficient to issue process against the Petitioner. The Petitioner's summoning is, therefore, quashed;
(i) The petitioner relied on judgement in National Small Industries Corporation Ltd. vs. Harmeet Singh Paintal & Ors., (2010) 3 SCC 330 that "24..... But if the accused is not one of the persons who falls under the category of "persons who are responsible to the company for the conduct of the business of the company" then merely by stating that "he was in-charge of the business of the company" or by stating that "he was in-charge of the day-to-day management of the company" or by stating that "he was in-charge of, and was responsible to the company for the conduct of the business of the company", he cannot be made vicariously liable under Section 141 (1) of the Act. To put it clear that for making a person liable under Section 141 (2), the mechanical repetition of the requirements under Section 141 (1) will be of no assistance, but there should be necessary averments in the complaint as to how and in what manner the accused was guilty of consent and connivance or negligence and therefore, responsible under Sub-section (2) of Section 141 of the Act.
25. From the above discussion, the following principles emerge:
(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.
(ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 8 of 37
(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint / petition, are made so as to make accused therein vicariously liable for offence committed by company alongwith averments in the petition containing that accused were in-charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.
(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.
(v) If accused is Managing Director or Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.
(vi) If accused is a Director or an Officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in complaint.
(vii) The person sought to be made liable should be in-charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases"; and
(j) The petitioner relied on judgement in Anita Malhotra vs. Apparel Exports Promotion Council & Ors., (2012) 1 SCC 520 that "17. This Court has repeatedly held that in case of a Director, complaint should specifically spell out how and in what manner the Director was in charge of or was responsible to the accused Company for conduct of its business and mere bald statement that he or she was in charge of and was responsible to the company for conduct of its business is not sufficient.
[Vide National Small Industries Corporation Limited vs. Harmeet Singh Pental and Another, MANU/SC/0112/2010: (2010) 3 SCC 330].
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 9 of 37 In the case on hand, particularly, in para 4 of the complaint, except the mere bald and cursory statement with regard to the appellant, the complainant has not specified her role in the day to day affairs of the Company. We have verified the averments as regard to the same and we agree with the contention of Mr. Akhil Sibal that except reproduction of the statutory requirements the complainant has not specified or elaborated the role of the appellant in the day to day affairs of the Company. On this ground also, the appellant is entitled to succeed."
APPEARANCE:
12. I have heard arguments of Mr. Kamal Gupta, Advocate for the petitioner and Ms. Kanika Singh, Advocate for the complainant and carefully examined the trial Court record and perused the case law relied by the parties. CONTENTIONS OF THE PETITIONER:
13. Mr. Kamal Gupta, Advocate for the petitioner contended that besides bald averment in the complaint that the petitioner is responsible for the day to day affairs of the accused No. 1, there is no averment regarding the role of the petitioner in the management of affairs of the accused No. 1 in the capacity of its director. He contended that the petitioner did not sign any of 'Memorandum of Agreements'. He contended that the petitioner did not sign the cheques in question. He contended that the accused No. 2 signed 'Memorandum of Agreement'. He contended that the accused No. 2 signed the cheques in question. He contended that the petitioner cannot be prosecuted on the sole premise that she is one of the directors of the accused No. 1.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 10 of 37
14. Mr. Kamal Gupta, Advocate for the petitioner contended that the petitioner cannot be deemed to be in charge of and responsible for the conduct of business of the accused No. 1. He contended that the petitioner cannot be made vicariously liable by merely stating that she was responsible for the day to day affairs of the accused No. 1. He contended that there is no averment that the cheques in question were issued with the consent and connivance or knowledge of the petitioner.
He relied on the judgements, as stated above. He also relied on Dharna Goyal vs. Aryan Infratech Pvt. Ltd., Manu/DE/ 1994/2020 that Hon'ble Delhi High Court held as under:
"13. To elaborate the argument, it is submitted that the Courts have repeatedly affirmed that mere fact of being a Director is not enough and there must be specific allegations to make out a case against the Accused under Sections 138 and 141 of NIA. This according to the counsel has been so observed in the judgements in S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla & Ors., (2005) 8 SCC 89 and Sudeep Jain vs. M/s. ECE Industries Ltd.
26. It is also a settled law that it is not enough to state in the complaint that a particular person was a Director, Managing Director, CEO or Secretary etc. of the Company. As held by the Supreme Court in SMS Pharmaceuticals (supra) it may be that in a given case, a person may be a Director but may not know anything about the day to day functioning of the Company and there is no universal rule that a Director is in-charge of its everday affairs. The Court observed that mere use of a particular designation of an Officer, without more, may not be enough, in a complaint, more particularly, when the requirement of Section 141 is that such a person should be in-charge of and responsible to the Company for conduct of its business. Liability is cast on person who may have something to do with the transactions complained of.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 11 of 37
28. Thus, there is unanimity in judicial opinion that necessary and specific averments ought to be mentioned in a complaint before a person is subjected to criminal prosecution and it is not enough if the person accused is / was the Director / CEO of a Company. It is the obligation of the Complainant to clearly and unambiguously aver that the person accused of the offence was in charge of the conduct of the business, ascribe a specific role to him / her before any criminal liability can be fastened....."
CONTENTIONS OF THE COMPLAINANT:
15. Ms. Kanika Singh, Advocate for the complainant challenged the maintainability of the revision petition against the summoning order. She contended that there is no ground for challenging the summoning order. She contended that the complaint under Section 138 NI Act is required to contain the basic averment that the director was in charge of and responsible for the conduct of the business of the company at the relevant time. She contended that the petitioner has not disputed that she is a director of 'Oscar Media Private Limited' (the accused No. 1). She contended that the petitioner has not stated that she is not involved in the affairs of the company and responsible for day to day affairs of the company. She referred 'Company Master Data' that the petitioner is a 'whole time director' of 'Oscar Media Private Limited' (the accused No. 1) since its incorporation i.e. 30.04.2008. She contended that there are only two directors of 'Oscar Media Private Limited' (the accused No. 1). She contended that besides the petitioner, Pawan Amar Singh (the accused No. 2) is another director of the 'Oscar Media Private Limited' (the accused No. 1).
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 12 of 37
16. Ms. Kanika Singh, Advocate for the complainant contended that there are specific allegations pertaining to the role of the petitioner in para No. 2, 22 and 23 of the complaint.
She contended that once process is issued on the basis of basic averments made in the complaint, the complaint must proceed against the directors as enunciated by Hon'ble Supreme Court of India in SMS Pharmaceuticals Ltd. (supra), the complaint must proceed against the directors and if the petitioner challenges the summoning order on the ground that only a bald averment is made in the complaint and she is not concerned with the issuance of the cheques, she must furnish some 'sterling uncontrovertible material' or 'acceptable circumstances' for seeking quashing. She contended that the petitioner has not furnished such uncontrovertible evidence. She contended that there is no legal principle that a complaint can be quashed against a director for not ascribing its role in the company. She contended that quashing of a complaint is a serious matter and it cannot be quashed on mere asking. She contended that there is no legal infirmity in the summoning order. She distinguished judgement in Aparna A. Shah vs. M/s. Seth Developer P. Ltd. & Anr. (supra) that the said case was not under Section 141 NI Act. In the said case, the husband had issued a cheque from a joint account held with his wife and the wife was sought to be made co-accused on account of being a joint account holder.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 13 of 37
17. Ms. Kanika Singh, Advocate for the complainant contended that judgement in SMS Pharmaceuticals Ltd. (II) (supra) lends support to the case of the complainant as in the said case, Hon'ble Supreme Court of India enunciated that the complaint must contain an averment that the accused was in charge of and responsible for conduct of business of the company at the relevant time which is present in the complaint filed by the complainant. She distinguished judgement in National Small Industries Corporation Ltd. (supra) that the entire para No. 24 must be read and in the said case, the accused was not a director of the company when the cheques in question were signed. She distinguished judgement in Anita Malhotra (supra) that in the said case, the appellant was a non- executive director who had resigned on 31.08.1998 whereas the cheques were issued on 01.06.2004 and statutory notice regarding dishonour of the cheques was issued on 10.12.2004. She distinguished judgement in Chintan Arvind Kapadia & Anr. (supra) that in the present case, there is specific averment that the petitioner is a full-time director and specific role is attributed to her. She distinguished judgement in Dharna Goyal (supra) that in the said case, the petitioner had resigned before the commission of the offence and she was not responsible for the conduct of business of the company on the date of commission of the offence. She contended that the judgements relied on maintainability of the revision petition do not relate to a case under Section 138 NI Act.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 14 of 37
18. Mr. Kamal Gupta, Advocate for the petitioner submitted that the summoning order is not an interlocutory order and it does not fall within mischief of Section 397 (2) of the Cr.P.C. He submitted that a revision petition is maintainable against the summoning order. He relied on judgements in Arvind Kumar Tewari & Ors. vs. The State of Uttar Pradesh & Ors., MANU/UP/1396/2004, S.K. Bhatt vs. State of U.P. & Ors., MANU/SC/0200/2005, Amar Nath & Ors. vs. State of Haryana & Ors., MANU/SC/0068/1977, Rajendra Kumar Sitaram Pande & Ors. vs. Uttam & Ors., MANU/SC/0093/ 1999 and Om Kr. Dhankar vs. State of Haryana & Ors., MANU/SC/0190/2012.
ANALYSIS OF THE IMPUGNED ORDER:
19. The trial Court issued summons, inter alia, to the petitioner on examination of the complaint, evidence by way of affidavit and documents.
LEGAL PROVISION:
20. Section 141 NI Act is as under:
"141. Offences by companies.- (1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 15 of 37 [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.- For the purposes of this section,-
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm.]"
INTERPRETATION OF SECTION 141 NI ACT:
21. In Standard Chartered Bank vs. State of Maharashtra & Ors., Crl. Appeal No. 271-273 of 2016 decided on 06.04.2016, Hon'ble Supreme Court of India delineated the scope of Section 141 NI Act, as under:
"12. On a perusal of the aforesaid provision, it is clear as crystal that if the person who commits an offence under Section 138 of the Act is a company, the company as well as other person in charge of or responsible to the company for the conduct of the business of the company at the time of commission of the offence is deemed to be guilty of the offence. Thus, it creates a constructive liability on the persons responsible of the conduct of the business of the company.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 16 of 37
16.....As far as the officers responsible for conducting the affairs of the company are concerned, the Court referred to various provisions of the Companies Act, 1956 and analysed Section 141 of the Act to lay down as follows:-
"What is required is that the persons who are sought to be made criminally liable under Section 141 should be, at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision. It is only those persons who were in charge of and responsible for the conduct of business of the company at the time of commission of an offence, who will be liable for criminal action. It follows from this that if a director of a company who was not in charge of and was not responsible for the conduct of the business of the company at the relevant time, will not be liable under the provision. The liability arises from being in charge of and responsible for the conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a company may be liable if he satisfies the main requirement of being in charge of and responsible for the conduct of business of a company at the relevant time. Liability depends on the role one plays in the affairs of a company and not on designation or status. If being a director or manager or secretary was enough to cast criminal liability, the section would have said so. Instead of "every person" the section would have said "every director, manager or secretary in a company is liable"....., etc. Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 17 of 37 The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action."
17. After so stating, the Court placed reliance on sub- Section 2 of Section 141 of the Act for getting support of the aforesaid reasoning as the said sub-Section envisages direct involvement of any Director, Manager, Secretary or other officer of a company in the commission of an offence. The Court proceeded to observe that the said provision operates when in a trial it is proved that the offence has been committed with the consent or connivance or is attributable to neglect on the part of any of the holders of the offices in a company. It has also been observed that provision has been made for directors, managers, secretaries and other officers of a company to cover them in cases of their proved involvement. It is because a person who is in charge of and responsible for conduct of business of a company would naturally know why a cheque in question was issued and why it got dishonoured and simultaneously it means no other person connected with a company is made liable under Section 141 of the Act. The liability arises, as the three-Judge Bench opined, on account of conduct, act or omission on the part of an officer and not merely on account of holding office or position in a company and, therefore, in order to bring a case within Section 141 of the Act, the complaint must disclose the necessary facts which makes a person liable....."
WHAT A COMPLAINT MUST AVER FOR MAKING A DIRECTOR VICARIOUSLY LIABLE UNDER SECTION 141 NI ACT?
22. The petitioner is the director of 'Oscar Media Private Limited' (the accused No. 1). She is not a signatory to the cheque. The accused No. 2 is another director.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 18 of 37
23. In SMS Pharmaceuticals Ltd. vs. Neeta Bhalla & Anr. (supra), Hon'ble Supreme Court of India held as under:
"19. In view of the above discussion, our answers to the questions posed in the reference are as under:-
"(a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint.
Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.
(b) The answer to the question posed in sub-para (b) has to be in the negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases.
(c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section
141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141."
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 19 of 37
24. In Gunmala Sales Pvt. Ltd. & Ors. vs. Annu Mehta & Ors., 2014 (145) DRJ 530 SC, Hon'ble Supreme Court of India held as under:
"26.....So far as Directors who are not signatories to the cheques or who are not Managing Directors or Joint Managing Directors are concerned, it is clear from the conclusions drawn in the above-mentioned cases that it is necessary to aver in the complaint filed under Section 138 read with Section 141 of the NI Act that at the relevant time when the offence was committed, the Directors were in charge of and were responsible for the conduct of the business of the company. This is a basic requirement. There is no deemed liability of such Directors."
WHETHER THERE ARE BASIC AVERMENTS IN THE CASE?
25. The complainant, in the complaint, has made averments relating to the directors of the 'Oscar Media Private Limited' (the accused No. 1), as under:
"2. That the Accused No. 1 is a private limited company incorporated under the provisions of the Companies Act, 1956, and having its registered office at the address given in the memo of parties. That Accused Nos. 2 and 3, are the Directors of Accused No. 1 and are responsible for the day to day affairs of Accused No. 1. The Accused Nos. 2 and 3, on behalf of the Accused No. 1 approached Bharat Business Channel Limited whose name later changed to erstwhile Videocon d2h Limited (hereinafter referred to as VDL) for carriage and distribution of their channel namely 'Oscar Movies' on the DTH platform of VDL under the brand name 'd2h' for a term of 03 years. That it is humbly submitted that erstwhile Videocon d2h Limited has merged with and into the present Complainant Company i.e. Dish TV India Limited w.e.f. 22.03.2018, after obtaining all statutory approvals and pursuant to the same all rights and obligations of erstwhile Videocon d2h Limited has devolved with and into the present Complainant Company.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 20 of 37 That as submitted above, the Accused No. 2 & 3 are the Directors of the Accused No. 1 company and are responsible for the day to day affairs of Accused No. 1 and the Accused No. 2 issued the cheques in question in favour of the present Complainant company towards the due and outstanding liability of Accused No. 1.
4. That in the year 2014, the Accused persons, approached Bharat Business Channel Limited which was later renamed as Videocon d2h Limited and the said business entity i.e. Videocon d2h Limited got merged with and into the present Complaint Company w.e.f. 22.03.2018. That the Accused persons approached with a request for carriage and distribution of their channel i.e. 'Oscar Movies' (hereinafter referred to as 'Channel') from the DTH Platform of the Videocon d2h Ltd. and thereafter with that of the Complainant, post merger.....
22. That it is again stated that the Accused Nos. 2 and 3 are in-charge of the day to day business affairs of the Accused No. 1 and are responsible for the conduct of business of Accused No. 1 Company. That Accused Nos. 2 and 3, on behalf of the Accused No. 1, approached the complainant for carriage and distribution of the Channel i.e. 'Oscar Movies'. That on the basis of representations and assurances made by Accused Nos. 2 and 3, the Complainant entered into the aforesaid MOA and Addendums thereto with Accused No. 1, from where the legally enforceable liability arose. That the aforesaid MOA and Addendums thereto was signed by Accused No. 2 for and on behalf of Accused No. 1. That Accused Nos. 2 and 3 extended repeated assurances, that the outstanding liability would be cleared and held various discussions wherein the Accused Persons acknowledged the liability to pay the due and outstanding amount, as detailed hereinabove and induced the Complainant to continue to carry the said Channel of Accused No. 1. That the concerned Cheques were issued by the Accused No. 2 for and on behalf of Accused No. 1. That thus the Accused Nos. 1-3 are liable for the offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881."
(emphasis supplied) Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 21 of 37
26. Therefore, it is evident that the complainant has made basic and essential averment empowering the trial Court to issue process against her.
WHEN THE ORDER OF ISSUANCE OF PROCESS CAN BE QUASHED?
27. In Gunmala Sales Pvt. Ltd. & Ors. (supra), Hon'ble Supreme Court of India held that the process can be quashed despite the basic averment if there is unimpeachable evidence or acceptable circumstances leading to the conclusion that the Director could never have been in charge of and responsible for the conduct of the business of the company at the relevant time, as under:
"29. When a petition is filed for quashing the process, in a given case, on an overall reading of the complaint, the High Court may find that the basic averment is sufficient, that it makes out a case against the Director; that there is nothing to suggest that the substratum of the allegation against the Director is destroyed rendering the basic averment insufficient and that since offence is made out against him, his further role can be brought out in the trial. In another case, the High Court may quash the complaint despite the basic averment. It may come across some unimpeachable evidence or acceptable circumstances which may in its opinion lead to a conclusion that the Director could never have been in charge of and responsible for the conduct of the business of the company at the relevant time and therefore, making him stand the trial would be abuse of the process of Court as no offence is made out against him.
30. When in view of the basic averment process is issued the complaint must proceed against the Directors.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 22 of 37 But, if any Director wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he is really not concerned with the issuance of the cheque, he must in order to persuade the High Court to quash the process either furnish some sterling uncontrovertible material or acceptable circumstances to substantiate his contention. He must make out a case that making him stand the trial would be abuse of the process of Court. He cannot get the complaint quashed merely on the ground that apart from the basic averment no particulars are given in the complaint about his role, because ordinarily the basic averment would be sufficient to send him to trial and it could be argued that his further role could be brought out in the trial. Quashing of a complaint is a serious matter. Complaint cannot be quashed for the asking. For quashing of a complaint it must be shown that no offence is made out at all against the Director.
31.....
25.....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 the accused, the accusations against him cannot stand, it would be travesty of justice if the 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.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 23 of 37
33. We may summarize our conclusions as follows:
(a) Once in a complaint filed under Section 138 read with Section 141 of the NI Act the basic averment is made that the Director was in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed, the Magistrate can issue process against such Director;
(b) If a petition is filed under Section 482 of the Code for quashing of such a complaint by the Director, the High Court may, in the facts of a particular case, on an overall reading of the complaint, refuse to quash the complaint because the complaint contains the basic averment which is sufficient to make out a case against the Director;
(c) In the facts of a given case, on an overall reading of the complaint, the High Court may, despite the presence of the basic averment, quash the complaint because of the absence of more particulars about role of the Director in the complaint. It may do so having come across some unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of cheques and asking him to stand the trial would be abuse of the process of the court.
Despite the presence of basic averment, it may come to a conclusion that no case is made out against the Director. Take for instance a case of a Director suffering from a terminal illness who was bedridden at the relevant time or a Director who had resigned long before issuance of cheques. In such cases, if the High Court is convinced that prosecuting such a Director is merely an arm-twisting tactics, the High Court may quash the proceedings. It bears repetition to state that to establish such case unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or some totally acceptable circumstances will have to be brought to the notice of the High Court. Such cases may be few and far between but the possibility of such a case being there cannot be ruled out. In the absence of such evidence or circumstances, complaint cannot be quashed; and Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 24 of 37
(d) No restriction can be placed on the High Court's powers under Section 482 of the Code. The High Court always uses and must use this power sparingly and with great circumspection to prevent inter alia the abuse of the process of the court. There are not fixed formulate to be followed by the High Court in this regard and the exercise of this power depends upon the facts and circumstances of each case. The High Court at that stage does not conduct a mini trial or roving inquiry, but, nothing prevents it from taking unimpeachable evidence or totally acceptable circumstances into account which may lead it to conclude that no trial is necessary qua a particular director."
WHETHER THE SPECIFIC ROLE OF A DIRECTOR MUST BE ELABORATED IN THE COMPLAINT ITSELF?
28. In Gunmala Sales Pvt. Ltd. & Ors. (supra), it was contended by the appellants that SMS Pharma - (1) does not lay down any general proposition of law that the specific role of a director sought to be arrayed as an accused must be elaborated in the complaint itself whereas the respondents contended that reproduction of statutory language of Section 141 NI Act is not sufficient and the necessary requirements of the complaint which need to be indicted in the complaint are 'how', 'in what manner', 'the role', 'description' and 'specific allegation' as to the part played by a person before he could be made an accused. Dealing with the said contention, the Hon'ble Supreme Court of India observed as under:
"15.....It must be noted that when the attention of this Court was drawn to observations made in Saroj Kumar Poddar that the complaint must not only contain averments justifying the requirements of Section 141 of the NI Act but must also show as to how and in what manner the appellant therein was Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 25 of 37 responsible for the conduct of the business of the company or otherwise responsible to it in regard to its functioning, this Court, observed that a plain reading of the said judgement would show that no such general law was laid down therein and the observations were made in the context of the said case as it was dealing with the contention that although no direct averment was made as against the appellant therein fulfilling the requirements of Section 141 of the NI Act, but, there were other averments which would show that the appellant therein was liable therefor."
29. The aforesaid clarification was reiterated in para No. 21 of the judgement of Hon'ble Supreme Court of India in Standard Chartered Bank vs. State of Maharashtra & Ors. (supra). In the said judgement, it was further observed as under:
"22. The said clarification was reiterated in Everest Advertising (P) Ltd. v. State, Govt. of NCT of Delhi and others, (2007) 5 SCC 54.
24. Be it noted, the observations made in Saroj Kumar Poddar (supra) and clarification given in SMS Pharma II (supra) and Everest Advertising (P) Ltd. (supra) were taken note of in K.K. Ahuja v. V.K. Vora and Anr. In the said case, the Court explaining the position under Section 141 of the Act has stated thus:-
(iii) In the case of a Director, secretary or manager [as defined in Section 2(24) of the Companies Act] or a person referred to in clauses (e) and (f) of Section 5 of the Companies Act, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company is necessary to bring the case under Section 141(1) of the Act. No further averment would be necessary in the complaint, though some particulars will be desirable....."
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 26 of 37 WHETHER THE BURDEN OF PROOF LIES UPON THE PETITIONER TO PROVE THAT CRIMINAL LIABILITY CANNOT BE FASTENED ON HER?
30. In the presence of basic averments against the petitioner in the complaint and absence of 'sterling uncontrovertible material' or 'acceptable circumstances', the burden of proof that the petitioner was not concerned with the issuance of the cheques and she exercised due diligence to prevent the commission of the offence lies upon her. In Rallis India Ltd. vs. Poduru Vidya Bhusan & Ors., Crl. Appeal No. 924/2011 decided on 13.04.2011, Hon'ble Supreme Court of India held as under:
"12. The primary responsibility of the complainant is to make specific averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no legal requirement for the complainant to show that the accused partner of the firm was aware about each and every transaction. On the other hand, proviso to Section 141 of the Act clearly lays down that if the accused is able to prove to the satisfaction of the Court that the offence was committed without his knowledge or he had exercised due diligence to prevent the commission of such offence, he will not be liable of punishment. Needless to say, final judgement and order would depend on the evidence adduced. Criminal liability is attracted only on those, who at the time of commission of the offence, were in charge of and were responsible for the conduct of the business of the firm. But vicarious criminal liability can be inferred against the partners of a firm when it is specifically averred in the complaint about the status of the partners 'qua' the firm. This would make them liable to face the prosecution but it does not lead to automatic conviction. Hence, they are not adversely prejudiced - if they are eventually found to be not guilty, as a necessary consequence thereof would be acquitted.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 27 of 37
13. At the threshold, the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court. The High Court could not have discharged the respondents of the said liability at the threshold. Unless parties are given opportunity to lead evidence, it is not possible to come to definite conclusion as to what was the date when the earlier partnership was dissolved and since what date the Respondents ceased to be the partners of the firm."
31. In Rangachari, N. vs. Bharat Sanchar Nigam Limited, 2007 (3) Indian Law Reports 473, Hon'ble Supreme Court of India held as under:
"19. We think that, in the circumstances, the High Court has rightly come to the conclusion that it is not a fit case for exercise of jurisdiction under Section 482 of the Code of Criminal Procedure for quashing the complaint. In fact, an advertence to Sections 138 and 141 of the Negotiable Instruments Act shows that on the other elements of an offence under Section 138 being satisfied, the burden is on the Board of Directors or the Officers in charge of the affairs of the company to show that they are not liable to be convicted. Any restriction on their power or existence of any special circumstance that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish at the trial such a restriction or to show that at the relevant time they were not in charge of the affairs of the company. Reading the complaint as a whole, we are satisfied that it is a case where the contentions sought to be raised by the appellant can only be dealt with after the conclusion of the trial."
32. In S.V. Muzumdar & Ors. vs. Gujarat State Fertilizer Co. Ltd., (2005) 4 SCC 173, the directors of the accused company contended before the High Court that there was no material to show that they were in charge and / or responsible for the conduct of the business of the company.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 28 of 37
33. Hon'ble Gujarat High Court held that the controversy was to be adjudicated at the trial. Hon'ble Supreme Court of India held as under:
"8. We find that the prayers before the courts below essentially were to drop the proceedings on the ground that the allegations would not constitute a foundation for action in terms of Section 141 of the Act. These questions have to be adjudicated at the trial. Whether a person is in charge of or is responsible to the company for conduct of business is to be adjudicated on the basis of materials to be placed by the parties. Sub-section (2) of Section 141 is a deeming provision which as noted supra operates in certain specified circumstances. Whether the requirements for the application of the deeming provision exist or not is again a matter for adjudication during trial. Similarly, whether the allegations contained are sufficient to attract culpability is a matter for adjudication at the trial.
9. Under the scheme of the Act, if the person committing an offence under Section 138 of the Act is a company; by application of Section 141 it is deemed that every person who is in charge of and responsible to the company for conduct of the business of the company as well as the company are guilty of the offence. A person who proves that the offence was committed without his knowledge or that he had exercised all due diligence is exempted from becoming liable by operation of the proviso to sub- section (1). The burden in this regard has to be discharged by the accused.
10. The three categories of persons covered by Section 141 are as follows:
(1) The company who committed the offence. (2) Everyone who was in charge of and was responsible for the business of the company. (3) Any other person who is a Director or a manager or a secretary or officer of the company with whose connivance or due to whose neglect the company has committed the offence.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 29 of 37
11. Whether or not the evidence to be led would establish the accusations is a matter for trial. It needs no reiteration that proviso to sub-section (1) of Section 141 enables the accused to prove his innocence by discharging the burden which lies on him."
34. In dealing with identical facts and circumstances, Hon'ble Supreme Court of India in A.R. Radha Krishna vs. Dasari Deepthi & Ors., (2019) 15 SCC 550, held as under:
"7. Having heard the learned counsel for the parties and carefully scrutinising the record, we are of the considered opinion that the High Court was not justified in allowing the quashing petitions by invoking its power under Section 482 Cr.P.C. In a case pertaining to an offence under Section 138 and Section 141 of the Act, the law requires that the complaint must contain a specific averment that the Director was in charge of, and responsible for, the conduct of the company's business at the time when the offence was committed. The High Court, in deciding a quashing petition under Section 482 Cr.P.C. must consider whether the averment made in the complaint is sufficient or if some unimpeachable evidence has been brought on record which leads to the conclusion that the Director could never have been in charge of and responsible for the conduct of the business of the company at the relevant time. While the role of a Director in a company is ultimately a question of fact, and no fixed formula can be fixed for the same, the High Court must exercise its power under Section 482 Cr.P.C. when it is convinced, from the material on record, that allowing the proceedings to continue would be an abuse of process of the Court.
8. A perusal of the record in the present case indicates that the appellant has specifically averred in his complaint that Respondents 1 and 2 were actively participating in the day-to-day affairs of Accused 1 company. Further, Accused 2 to 4 (including Respondents 1 and 2 herein) are alleged to be from the same family and running Accused 1 company together.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 30 of 37 The complaint also specifies that all the accused, in active connivance, mischievously and intentionally issued the cheques in favour of the appellant and later issued instructions to the bank to 'stop payment'. No evidence of unimpeachable quality has been brought on record by Respondents 1 and 2 to indicate that allowing the proceedings to continue would be an abuse of process of the court."
THE CASE LAW RELIED BY THE PETITIONER:
35. Aparna A. Shah (supra) is not applicable to this case as the said case was not against a director of a company under Section 141 NI Act. In that case, the husband had issued a cheque from a joint account held with his wife who was made a co-accused as she was a joint account holder.
36. National Small Industries Corp. Ltd. (supra) is not applicable to this case as in that case, the accused was not a director of the company when the cheque was signed. He had no connection with the affairs of the company on the date of issuance of cheque. The accused furnished annual report for the year 1996-97 whereas the cheque in question was presented for encashment on 28.10.1998.
37. The observation in the judgement in National Small Industries Corp. Ltd. (supra) that "To put it clear that for making a person liable under Section 141(2), the mechanical repetition of the requirements under Section 141(1) will be of no assistance, but there should be necessary averments in the complaint as to how and in what manner the accused was guilty of consent and connivance or negligence and therefore, responsible under Sub-section (2) of Section 141 of the Act." was made in respect of the persons who are not responsible to the company for the conduct of its business.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 31 of 37
38. The relevant portion of the said judgement is as under:
"24.....
But if the accused is not one of the persons who falls under the category of "persons who are responsible to the company for the conduct of the business of the company" then merely by stating that "he was in- charge of the business of the company" or by stating that "he was in-charge of the day-to-day management of the company" or by stating that "he was in-charge of, and was responsible to the company for the conduct of the business of the company", he cannot be made vicariously liable under Section 141(1) of the Act....."
39. In the said judgement, the persons who are responsible to the company for the conduct of the business of the company are described as under:
"24.....A combined reading of Sections 5 and 291 of Companies Act, 1956 with the definitions in Clause 24, 26, 30, 31 and 45 of Section 2 of that Act would show that the following persons are considered to be the persons who are responsible to the company for the conduct of the business of the company:
(a) the Managing Director/s;
(b) the whole-time Director/s;
(c) the Manager;
(d) the Secretary;
....."
40. This was also clarified in K.K. Ahuja (supra), as under:
"17. Therefore, the averment in a complaint that an accused is a director and that he is in charge of and is responsible to the company for the conduct of the business of the company, duly affirmed in the sworn statement, may be sufficient for the purpose of issuing summons to him.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 32 of 37 But if the accused is not one of the persons who falls under the category of 'persons who are responsible to the company for the conduct of the business of the company' (listed in para 14 above), then merely by stating that 'he was in charge of the business of the company' or by stating that 'he was in charge of the day to day management of the company' or by stating that 'he was in charge of, and was responsible to the company for the conduct of the business of the company', he cannot be made vicariously liable under Section 141(1) of the Act."
41. In the present case, the petitioner is one of the two directors since incorporation of the 'Oscar Media Private Limited' (the accused No. 1) on 30.04.2008. The petitioner falls under the category of the persons who are considered to be responsible to the company for the conduct of the business of the company. Therefore, the complainant is not required to make averments in the complaint as to how and it what manner the petitioner is responsible to the company for the conduct of its business.
42. The judgement in Anita Malhotra (supra) is also not applicable to this case as the appellant retired on 20.11.1998. The annual return of the company dated 30.09.1999 was considered as a public document reflecting that she was not a director at the relevant time. The cheques were issued on 01.06.2004 and statutory notice was issued on 10.12.2004.
43. The judgement in Dharna Goyal (supra) is not applicable to the present case as the petitioner had retired w.e.f. 15.06.2016 whereas cheque was issued on 28.10.2016.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 33 of 37 WHETHER THE CRIMINAL REVISION PETITION IS MAINTAINABLE AGAINST THE SUMMONING ORDER?
44. Ld. Counsel for the complainant challenged the maintainability of the criminal revision petition against the summoning order on the ground that the summoning order is an interlocutory order and revision against the summoning order is barred under Section 397 (2) of the Cr.P.C.
45. Ld. Counsel for the petitioner submitted that summoning order is not an interlocutory order as the said order is not an order in aid of the proceedings. He submitted that revision against the summoning order is not barred under Section 397 (2) of the Cr.P.C.
46. A summoning order is not an interlocutory order. A summoning order is an intermediary order. Summoning of a person to face the prosecution affect valuable right of a person. Criminal revision petition is maintainable against the summoning order.
47. In Rajender Kumar Sitaram Pande & Ors. vs. Uttam, (1999) 3 SCC 134, Hon'ble Supreme Court of India held as under:
"6.....This being the position of law, it would not be appropriate to hold that an order directing issuance of process is purely interlocutory and, therefore, the bar under Sub-section (2) of Section 397 would apply. On the other hand, it must be held to be intermediate or quasi final and, therefore, the revisional jurisdiction under Section 397 could be exercised against the same."
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 34 of 37
48. In Amar Nath & Ors. vs. State of Haryana & Ors., (1997) 4 SCC 137, Hon'ble Supreme Court of India held as under:
"10.....It is difficult to hold that the impugned order summoning the appellants straightway was merely an interlocutory order which could not be revised by the High Court under Sub-sections (1) and (2) of Section 397 of the 1973 Code....."
CONCLUSION:
49. We may summarize the conclusion as under:
(a) The complaint contains the basic averment that the petitioner was in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed which is sufficient to make out a case against the director under Section 138 read with Section 141 NI Act;
(b) The petitioner has not furnished 'sterling uncontrovertible material' or 'acceptable circumstances' to indicate that she could not have been concerned with the issuance of cheques and requiring her to stand the trial would be an abuse of the process of the Court;
(c) The complainant is not required to show as to how and in what manner the petitioner was responsible for the conduct of the business of the company or otherwise responsible to it in regard to its functioning;
(d) The burden of proof that the petitioner was not in charge and / or responsible for the conduct of the business of the company or that the offence was committed without her knowledge or she had exercised due diligence to prevent the commission of the offence would lies upon her; and
(e) There is no legal infirmity, material irregularity or jurisdictional error of law and procedure in the impugned order justifying quashing of the summoning order.
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 35 of 37
50. Accordingly, the criminal revision petition filed by the petitioner is dismissed. Trial Court record be sent back alongwith a copy of the present judgement. Revision file be consigned to record room.
Digitally signed SANJAY by SANJAY
SHARMA
SHARMA Date: 2021.12.01
16:32:29 +0530
Announced in the open Court SANJAY SHARMA-II
on this 30th November, 2021 Addl. Sessions Judge-03 (Central)
Tis Hazari Courts, Delhi
Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 36 of 37
Hansika Prabhunath Singh vs. State & Anr. CNR No.: DLCT010004322020 Cr. Revision No. 31/2020 30.11.2021 Present : None.
Vide separate judgement, the criminal revision petition filed by the petitioner is dismissed. The revision file be consigned to record room. Digitally signed SANJAY by SANJAY SHARMA SHARMA Date: 2021.12.01 16:32:48 +0530 Sanjay SharmaII ASJ03, Central District, Tis Hazari Courts, Delhi 30.11.2021 Crl. Rev. No. 31/2020 Hansika Prabhunath Singh vs. State & Anr. Page No. 37 of 37