K K AHUJA Vs. V K VORA

JUDGEMENT

(1.) The question as to who can be said to be persons "in-charge of, and was responsible to the company for the conduct of the business of the company" referred to in Section 141 of the Negotiable Instruments Act, 1881 (for short 'the Act') arises for consideration in this appeal by special leave by a complainant.

(2.) The appellant filed two complaints (Crl. Comp. No. 58/2001 and 59/2001) in the Court of the Metropolitan Magistrate, Delhi, against M/s. Motorol Speciality Oils Ltd. ('the Company' for short) and eight others under Section 138 of the Act. The first complaint was in regard to dishonour of five cheques (each for Rs. 5,00,000/-, all dated 28.2.2001). The second complaint was in regard to dishonour of three cheques (for Rs. 3 lakhs, 3 lakhs and 10 lakhs dated 31.10.2000, 30.11.2000 and 20.12.2000 respectively). The cheques were alleged to have been drawn in favour of the appellant's proprietary concern (M/s Delhi Paints & Oil Traders) by the company represented by its Chairman. In the said complaints, the appellant had impleaded nine persons as accused, namely, the company (A-1), its Chairman (A-2), four Directors (A-3 to A-6) as also its Vice-President (Finance), General Manager and Deputy General Manager (A-7, A-8 and A- 9 respectively). In the complaint the complainant averred that "at the time of the commission of offence, accused 2 to 9 were in-charge of and responsible for the conduct of day to day business of accused No. 1" and that therefore they were deemed to be guilty of offence under Section 138 read with Section 141 of the Act and Section 420 of the Indian Penal Code. The appellant also alleged that respondents 2 to 9 were directly and actively involved in the financial dealings of the company and that the accused had failed to make payment of the cheques which were dishonoured. In the pre- summoning evidence, the appellant reiterated that accused 2 to 9 were responsible for the conduct of day to day business of first accused company at the time of commission of offence. The learned Magistrate by order dated 3.10.2001 directed issue of summons to all the accused.

(3.) Accused No. 9 (first respondent herein) filed two petitions under Section 482 Cr.P.C. for quashing the proceedings against him on the ground that as "Deputy General Manager", he was not "in-charge of and was responsible to the company for the conduct of the business of the company". He also contended that merely stating that he was directly and actively involved in the financial dealings of the accused or was responsible for the conduct of day to day business would not be sufficient to fasten criminal liability on him. He submitted that neither the complaint nor the sworn statement gave any particulars of the part played by him or part attributed to him in the alleged offence. At the hearing before the High Court, the Learned Counsel for the appellant-complainant conceded that details as to how the first respondent could be said to be "in charge of, and was responsible to the company for the conduct of the business of the company" were not given in the complaint or the statement on oath. It was also conceded that the averments necessary to make out an offence under Section 420 IPC were not contained in the complaint. The High Court by order dated 10.10.2002 allowed the said petitions and quashed the orders summoning the first respondent on the ground that he was not a signatory to the cheques nor was a party to the decision to allow the cheques to be dishonoured. The said order is under challenge.