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J U D G M E N T CRIMINAL APPEAL NO 592 OF 2007 (Arising out of SLP (Cri.) No. 1844 of 2006) P.K. BALASUBRAMANYAN, J.

1. Leave granted.

2. Heard both sides.

3. On behalf of the Data Access (India) Limited, two cheques were issued to the respondent  Bharat Sanchar Nigam Limited (hereinafter referred to as, "B.S.N.L."). The cheques were dated 31.8.2004. The cheques were duly presented by the B.S.N.L. but were dishonoured for insufficiency of funds. B.S.N.L. thereupon issued requisite notices calling upon the Data Access (India) Limited to pay the amounts due under the cheques. The payments not having been made, B.S.N.L. filed a compliant under Section 138 of the Negotiable Instruments Act.

4. In the complaint, B.S.N.L. alleged that the cheques were issued to it by the Data Access (India) Limited in discharge of a pre-existing liability based on the business transactions between the companies. The appellant herein and respondent No. 2 in the complaint were the Directors of respondent No. 1 Company and they were in charge of and responsible for the conduct of the business of Data Access (India) Limited. The relevant statement in the complaint read:

"That accused No. 1 is a company incorporated under the Companies Act. Accused Nos. 2 and 3 are its Directors. They are incharge of and responsible to accused No.1 for conduct of business of accused No. 1 Company. They are jointly and severally liable for the acts of accused No. 1."

The complaint also stated that in response to the notice issued by B.S.N.L., a reply had been sent claiming that the appellant was no longer the Chairman or Director of Data Access (India) Limited and accused No. 2 was not aware of the issuance of the cheques. These statements were false and by not keeping sufficient funds in their account and failing to pay the cheque amount on the service of the notice, all the accused committed an offence as contemplated in Section 138 of the Negotiable Instruments Act and they were liable to be proceeded against. The complaint also asserted that all the accused were guilty of the offence in terms of Section 138 of the Negotiable Instruments Act and were liable to be punished therefor.

6. On behalf of B.S.N.L., it was contended that the Petition under Section 482 of the Code of Criminal Procedure was not maintainable and that the questions sought to be raised by the appellant were questions that had to be decided at the trial. The complaint disclosed sufficient materials justifying the commencement of the proceedings against Data Access (India) Limited and the other two accused including the appellant. The appellant who was the Chairman of the Data Access (India) Limited was incharge of and responsible to the Company for the conduct of its business, and no occasion had arisen for quashing the complaint. The question whether a person is incharge of and responsible for the conduct of the business of the Company, is to be adjudged during the trial on the basis of the materials to be placed on record by the parties. That could not be decided at the stage of a motion under Section 482 of the Code of Criminal Procedure.