LALIT MOHAN MEHTA Vs. STATE OF PUNJAB

JUDGEMENT

(1.) This common order of mine shall dispose of the above-mentioned petitions as they arise out of the same factual matrix and common question of law is involved. For the sake of brevity, the facts are taken from CRM-M-18840-2020.

(2.) The petitioners have approached this Court by filing present petition under Sec. 482 of the Code of Criminal Procedure(hereinafter 'Cr.P.C.') seeking quashing of summoning order dtd. 25/11/2019 (Annexure P-4) passed by learned Judicial Magistrate Ist Class, Ludhiana along with the complaint bearing no. COMA/30705 dtd. 23/11/2019 titled as 'Vivek Gupta v. M/s Housing Development Infrastructure Limited and others' filed under Sec. 138 of the Negotiable Instruments Act, 1881 (hereinafter 'NI Act') FACTUAL BACKGROUND 2. The complainant- respondent Vivek Gupta booked Flat No. 1807, D Wing, 18th floor in Majestic Towers, Mumbai vide agreement to sell dtd. 14/5/2014 with the accused company-M/s Housing Development and Infrastructure Limited (hereinafter 'HDIL'). However, HDIL failed to give possession of the said flat and a settlement was arrived at on 24/7/2019 whereby, the accused agreed to return the principal amount of Rs.75,43,773.00along with an interest of Rs.58,13,185..00 To discharge the said liability five cheques for Rs.22,25,826.00and one cheque of Rs.16,44,510.00(after deducting TDS) were issued to the complainant by the company, duly signed by Managing Director Sarang Ramesh Wadhwan. The first cheque was dtd. 10/10/2019 and the others were staggered by one month gaps. In the instant case, cheque no. 151385 dtd. 10/10/2019 for Rs.22,25,826.00was dishonoured on presentation vide memo dtd. 11/10/2010 with the remarks-'payment stopped by the drawer.' Subsequently, legal notice dtd. 22/10/2019 was served on the accused. However, the accused failed to make the requisite payment and the instant criminal complaint under Sec. 138 of the NI Act was filed against HDIL, Co-Managing Directors-Rakesh Kumar Kuldip Singh Wadhwan and Sarang Rakesh Wadhwan, Company Secretary-Darshan Dhrupad Majumdar and Non-Executive Independent Directors, petitioners in the instant case-Lalit Mohan Mehta, Raj Kumar Aggarwal, Hazari Lal and Sandhya Baliga. Similar complaints were filed corresponding to the other five cheques issued by the accused company being dishonoured, as tabulated below:

(3.) Learned counsel for the petitioner submits that the learned trial Court has fallen into error by passing summoning order dtd. 25/11/2019 (Annexure P-4) against petitioner no. 1, 3 and 4 as they are Non-Executive Independent Directors of the HDIL and as such, did not participate in everyday business of the accused company. He places reliance on the judgment of the Hon'ble Supreme Court in SMS Pharmaceuticals Ltd v. Neeta Bhalla (2005) 8 SCC 89 to argue that in order to hold a person vicariously liable, it is necessary to show that he was in-charge and responsible for conduct of business. He further places reliance on the judgment of the Hon'ble Supreme Court in Girdhari Lal Gupta v. D.H. Mehta and another (1973) 3 SCC 189 to argue that person in-charge would mean such a person is overall in day to day business of the company. Further, reliance was placed on Chintalapati Srinivasa Raju v. SEBI (2018) 7 SCC 443 to argue that Non-Executive Directors who are not involved in day to day affairs are not responsible for conduct of business of the company. None of the petitioners had signed the disputed cheque, in fact they had resigned before the cheques were presented for encashment.