Full Text
HIGH COURT OF DELHI
2246/2022 BINA JAIN & ORS. ..... Petitioners
Through: Ms. Kaur and Mr. Manmeet Singh Arora and Mr. Mudit Dewan, Advocates
Through: Mr. Naresh Kumar Chahar, APP the for State
Mr. Nishad L.S., Advocate for R- 2.
JUDGMENT
1. By way of the present petition filed under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter ‘Cr.P.C.’), the petitionersseek quashing of summoning order dated 22.10.2018 passed by learned Metropolitan Magistrate (NI Act)-02, Patiala House Courts, New Delhi in Criminal Complaint No. 15254/18 titled as “S.A. Consultants and Forwarders Pvt. Ltd. vs. M/s Cargo Planners Private Limited and Ors.” and all its consequent proceedings, so far as it relates the petitioners.
SWARANA KANTA SHARMA, J.
2. A perusal of the complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter ‘NI Act’) reveals that the complainant/respondent no. 2 i.e. ‘S.A Consultants & Forwarders Pvt. Ltd.’, a Private Limited Company, had filed the present complaint against the accused company/accused no. 1 i.e. ‘M/s Cargo Planners Ltd.’, whose directors were accused no. 2 Bina Jain (petitioner no. 1), accused no. 3 Shikhar Chandra Jain, accused no. 4 Shivi Jain and accused no. 5 Ramesh Chand Jain (petitioner no. 2) whereas accused no. 6 Tulika Gaharwar (petitioner no. 3) was the Company Secretary. The case of complainant was that it was involved in providing services of air freight, ocean freight, customs house agent, warehousing, distribution, etc, and since it was a member of ‘International Air Transport Association’, it used to work as an agent of various airlines and was authorized to provide services of transportation of goods. It was stated that accused company was also an IATA agent but it was not having enough stocks of airlines to satisfy its requirement for cargo transport, and in December, 2016, the complainant and accused company had agreed to carry out business together. It was further stated that complainant used to send its invoices on fortnightly basis and initially, the accused used to pay regularly to the complainant and this continued till September, 2017. However, thereafter, the accused started defaulting in payments to the complainant and the same was duly informed to the accused many times and the same was duly acknowledged by the accused vide its email on 24.03.2018. It was alleged that the last payment made by the accused company was of Rs.1,00,000/- on 05.05.2018, and after adjusting all the amounts received towards the outstanding invoices, Rs.97,31,247/- remained as outstanding in the accounts maintained by the complainant. Thereafter, the complainant had issued a demand notice dated 11.05.2018 to the accused company, pursuant to which the accused had issued a cheque bearing no.2044[4] dated 15.06.2018 drawn on HDFC Bank, G-3-4, Suryaklran Building, 19, Kasturba Gandhi Marg, New Delhi-110001, for an amount of Rs.19,98,779/-(Rupees Nineteen Lakhs Ninety-Eight Thousand Seven Hundred and Seventy-Nine Only) in favour of the complainant as part-payment for discharge of its debt. Upon presentation of said cheque by the complainant for encashment with its bank i.e. The Development Bank of Singapore Limited, Connaught Place, New Delhi, the cheque was returned unpaid vide memo dated 30.08.2018 with the remarks ‘Exceeds Arrangement’. Thereafter, the complainant issued a demand notice dated 05.09.2018 to accused company, to which the accused company replied vide reply to legal notice dated 15.09.2018 wherein it was mentioned that the said cheque was a blank security cheque and the allegations leveled by the complainant were incorrect and baseless. Having not received any payment from the accused persons, the complainant filed the present complaint bearing no. 15254/2018 before the Court of learned Metropolitan Magistrate (NI Act)-02, Patiala House Courts, New Delhi.
3. Learned counsel for the petitioners argues that there are no specific allegations against the present petitioners that they were involved in day-to-day affairs of the company so as to warrant their summoning by the learned Magistrate. It is stated that the complainant has levelled general allegations against the present petitioners and as per the settled law, in case of only general allegations and absence of specific role assigned to a person, he/she cannot be summoned as an accused in a case under Section 138/141 of NI Act. It is also argued that petitioner no. 2 was not even present in India at the time of alleged acts and issuance of cheques etc., and therefore, this is also a ground that the impugned order be set aside. It is also argued that merely because petitioner no. 1 and 3 have attended the meetings of the accused company and are part of minutes of the meeting of the company, they cannot be presumed to be involved in the day-to-day affairs of the company. It is also stated that petitioner no. 3 is merely a Company Secretary in the accused company and has no role in the day-to-day affairs of the same.
4. Learned counsel for the respondent/complainant, on the other hand, argues that the complainant has sufficiently complied with the provisions of Section 138/141 of NI Act while filing the complaint and there are sufficient allegations against the present petitioners. It is stated that minutes of meetings of the accused company clearly indicate the presence of petitioners and the fact that they were involved in day-today functioning of the business of accused company and were responsible for the issuance as well as dishonoring of cheque in question. It is further stated that since a prima facie case is made out against all the accused persons, the issue regarding role of each accused in dishonoring of cheque is a triable issue and cannot be decided by this Court while exercising powers under Section 482 Cr.P.C.
5. The rival contentions of both the parties have been heard and the material on record has been carefully perused.
6. Before considering the case on its merits, it will be appropriate to first refer to Section 138 and 141 of the NI Act, which are reproduced as under:
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: 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.”
7. Recently, the Hon’ble Apex Court in S.P. Mani & Mohan Dairy v. Dr. Snehalatha Elangovan 2022 SCC OnLine SC 1238, while analysing Section 141 of the Act, had observed as under:
8. Thus, it is settled law that only those directors, who were incharge of and responsible for day to day affairs of the company can be made liable under Section 141(1), or those directors, managers, officers etc. of the company due to whose negligence, connivance or consent the offence under Section 138 has been committed can be made liable under Section 141(2).
9. In the present case, the complainant has alleged that the accused company had issued the cheque in question for an amount of Rs. 19,98,779/- in favour of the complainant as part-payment for discharge of its debt, however, the same had got dishonored upon its presentation for the purpose of encashment. The complainant has averred in the complaint that accused no. 2 to 5 are the directors of the accused company and accused no. 6 is the company secretary as well as signatory of the accused company, as per the details available on MCA website, and all of them were therefore, responsible for day to day functioning of the accused company.
10. Upon perusal of record, including the minutes of meetings annexed with the present petition, it is revealed that petitioner no. 1 was present in every meeting, minutes of which have been annexed, which prima facie indicate that she was responsible for day to day functioning of the accused company. As far as petitioner no. 2 is concerned, the mere fact that he was, at the relevant time, not present in India does not absolve her of her responsibilities towards the company and at times it may be possible that though one may not be physically present in India, however, in this age of technology one can take part in day-to-day affairs of the company and perform all the acts that a director is required to perform while being in a foreign country. Even otherwise, the veracity of such claims cannot be examined at this stage by this Court. It is also not the case of these petitioners that they were not thewhole time directors or were non-functional directors of the accused company.
11. Similarly, the presence of petitioner no. 3 can be seen in majority of the minutes of meetings annexed with the petition. As observed above, a company secretary can also be held liable as per Section 141(2) of NI Act if it can be proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of company secretary. As per details of MCA website and as also averred by complainant, petitioner no. 3 is also a signatory of the accused company.
12. Since petitioners seek quashing of summoning order and complaint qua them, in a case of commission of offence under Section 138 and 141 NI Act, this Court also takes note of the observations of Hon’ble Apex Court in S.P. Mani & Mohan Dairy (supra) in this regard, which are as under:
13. Thus, considering the overall facts and circumstances of the case as well as the material placed on record, this Court is of the opinion that the contentions raised before this Court at this stage are triable issues which can be decided only during the course of trial by leading evidence before the learned Trial Court and therefore, this Court does not deem it a fit case to exercise its powers under Section 482 Cr.P.C. for setting aside the summoning order and complaint qua petitioners at this stage when trial has still not yet commenced and the accused persons have merely been summoned by the Trial Court.
14. In view thereof, the present petition, alongwith pending applications, stands dismissed.
15. It is, however, clarified that observations made hereinabove are only for the purpose of deciding present petition and the learned Trial Court shall not be influenced by the same.
16. The judgment be uploaded on the website forthwith.
SWARANA KANTA SHARMA, J MAY 8, 2023