ARVIND SIVAKUMARAN Vs. RAJKUMAR JAIN

JUDGEMENT

(1.) This petition has been filed to quash the proceedings in STC.No.640 of 2020 on the file of the learned Judicial Magistrate-I, Tirupur, having been taken cognizance for the offences punishable under Sections 138 and 142(2) (a) of Negotiable Instruments Act.

(2.) The learned counsel for the petitioner would submit that the learned Magistrate ought not to have taken cognizance for the offences under Sections 138 and 142(2)(a) of Negotiable Instruments Act, since there is absolutely no offence is made out as against the petitioner for the offences as alleged by the respondent herein. Even according to the defacto complainant, it is alleged that the petitioner's father in the capacity of the Managing Director of the company by name M/s.Kumaran Gin And Pressing Private Limited, with the consent of other Directors had availed loan for the business of the company from the defacto complainant on 16.04.2019. On the same day, in order to discharge the said liability, the petitioner's father being the authorised signatory to the company, with the consent of the other Directors issued two post-dated cheques. Thereafter, the father of the petitioner revalidated those two cheques on altering the date of the cheques as 18.07.2019 from 22.04.2019. On the request of the petitioner's father and another Director, the cheques were presented for collection on 29.08.2019 and both the cheques were dishonoured for the reason "Exceeds Arrangements". Again, on the request of the petitioner's father and another Director of the company, the cheques were re-presented for collection on 14.10.2019, and again both the cheques were returned dishonoured for the reaon " Exceeds Arrangements". The Managing Director of the Company, namely the father of the petitioner herein died on 03.09.2019 and the cheques were admittedly re-presented for collection on 14.10.2019, namely subsequent to the death of the authorised signatory of the Company. After the death of the Managing Director, namely the father of the petitioner herein, the petitioner was inducted as one of the Directors of the company on 17.09.2019. Therefore, the petitioner had absolutely no role in the alleged transaction and he cannot be liable for the offences under Sections 138 and 142(2)(a) of Negotiable Instruments Act.

(3.) Per contra, the learned counsel for the respondent submitted that the first accused company availed loan from the respondent / complainant to the tune of Rs.50 lakhs, and towards repayment of the said loan, the first accused company issued two cheques signed by its authorised signatory cum Managing Director of the first accused company on 22.04.2019. Both the cheques have been again revalidated by the authorised signatory cum Managing Director of the first accused company on 18.07.2019. On their request, both the cheques were presented for collection on 29.08.2019 and both were returned dishonoured. Again the first accused instructed the respondent to re-present the cheques on 14.10.2019. On 03.09.2019, the authorised signatory cum Managing Director of the first accused company died. After the death of the Managing Director of the first accused company, the petitioner being the son of the erstwhile Managing Director of the first accused company has been inducted as Director and he has been conducting the business of the first accused company. In fact, he received statutory notice and issued reply notice to the respondent herein. On the instruction, again both the cheques were presented for collection and both were returned dishonoured on the second occasion also. Thereafter, the respondent issued statutory notice and initiated proceedings for the offences punishable under Sections 138 and 142(2)(a) of NI Act. He further contended that the petitioner has been inducted as Director of the first accused company on 17.09.2019. From 17.09.2019 onwards, the petitioner acted as Director and he involved in the day to day affairs of the business of the first accused company. Therefore, he has full knowledge about the business transaction between the first accused company and the respondent. While presentation of the cheques, the petitioner very much acted as Director of the Company and he involved in the day to day affairs of the company. Therefore, the offences under Sections 142(2) of NI Act is clearly attracted as against the petitioner and is liable to be punished for the offences punishable under Sections 138 and 142 of NI Act. In support of his contention, he relied upon the following judgments and sought for dismissal of the quash petition.