VIJAYAKUMAR Vs. LAB AND GENERAL EXPRTS PVT LTD

JUDGEMENT

(1.) Are the averments made in the complaint filed by the respondent/ complainant under Sectionl38 of the Negotiable Instruments Act sufficient to justify the issue of process against the petitioners accused 3, 4 and 5 This is the short question to be considered in these cases.

(2.) It is important to ascertain the precise factual matrix. To my mind, there appears no confusion about the law applicable though in the application of the law doubts and confusion appear to linger. The 1st accused is a company. The 2nd accused is its Chairman and Managing Director. He is the sole signatory on behalf of the 1st accused in the cheque in question. Accused 3,4 and 5, the petitioners herein are Directors of the Company. The following are the crucial averments in paras 2 to 6 and 7:

(3.) .....A meeting of the Board of Directors of the accused Company held on 21.5.1999 passed a resolution to borrow the said sum of 5 lakhs from the complainant for a period of 4 months from 22.5.1999. Accused 2 to 5 had participated in the said meeting. The amount earned interest at the rate of 14% per annum. The interest was payable on monthly basis.