DECCAN CHRONICLE HOLDINGS LTD Vs. T. VENKATRAM REDDY

JUDGEMENT

(1.) CRL . P. No. 10179 of 2013 is filed by A -1 and A -2 and Crl. P. No. 10180 of 2013 is filed by A -3 and A -4 under Section 482 Cr.P.C. to quash the entire proceedings in C.C. Nos. 500 of 2013 on the file of the XI Special Magistrate, Erramanzil, Hyderabad. The brief averments in the complaint filed by the second respondent -Axis Bank Ltd., Ahmedabad, Gujarat State under Section 138 read with 141 of the Negotiable Instruments Act (for short 'the Act') may be stated as follows:

(2.) THE second respondent is the banking company incorporated under the Companies Act, 1956 having its registered office at Ahmedabad, Gujarat State and branches at various places including the present Corporate Branch at Begumpet, Hyderabad. A -1 is the private limited Company, A -2 is the Director and authorized signatory, A -3 and A -4 are the directors of A -1 company who are actively involved in the day -to -day activities of the Company in its functions and as such are responsible for the acts of the company. At the request of A -1 company from time to time, the complainant bank sanctioned certain additional loan facilities amounting to Rs. 100 Crores for the purpose of meeting various requirements of the company (cash credit) against the primary security of hypothecation of stock and current assets of the company and collateral security of immovable properties of the company held under equitable mortgage and also against personal guarantee of the guarantors i.e. A -3 and A -4. Subsequently, in discharge of the said amount, the accused issued five account payee cheques for discharge of amount of Rs. 83,33,00,000/ - in favour of the Axis Bank Limited towards part payment of the loan account maintained with Axis Bank. The cheques were sent to the service branch of the complainant bank, Hyderabad on 05.11.2012 for realization and crediting the same to the above said loan account of A -1. But, the said five cheques were returned by the bank of the accused i.e. ICICI bank Ltd. On 06.11.2012 adducing the reason for return as 'account blocked situation covered in 2125' vide five cheque return memos dated 06.11.2012 individually. Thereafter, the complainant bank issued notices to the accused and filed a complaint against them. The cognizance of the offence under Section 138 read with 141 of the Act was taken by the learned Magistrate and now it is pending trial on the file of the XI Special Magistrate, Erramanzil, Hyderabad which is sought to be quashed.

(3.) IT is contended by the accused that the complaint against the accused is not maintainable in view of the law laid down by the Supreme Court and various High Courts regarding the dishonour of the cheques as the cheques were not issued towards clearance of any legally enforceable debt but towards security without date mentioned in the cheque. It is further contended that to fasten liability against the accused for the offence under Sec. 138 of the Act, a specific role has to be attributed to the accused in the complaint showing as to how and in what manner the managing director or directors were responsible for the conduct of the business of the company. In the instant case, according to the accused only it is generally mentioned that the accused are actively involved in day -to -day activities of the company and its function and therefore they are not responsible for the acts of the company. Such a vague and general allegation according to accused is not sufficient to prosecute them for the offence under Section 138 read with 141 of the Act.