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If statutory compliance of Section 141 of the NI Act has been made, it may not open for the High Court to interfere under Section 482 CrPC as upheld by the Hon’ble Supreme Court through the learned bench lead by Justice Rastogi in the case of Ashutosh Ashok Parasrampuriya & Anr. V. M/S. Gharrkul Industries Pvt. Ltd. & Ors [CRIMINAL APPEAL NO(S). 1207 OF 2021] (Arising out of SLP(Criminal) No(s). 9520 of 2014).

The brief facts of the case are that the appellant nos. 1, 2, 3 and 4 are the Directors of the appellant no. 1(Ameya Paper Mills Pvt. Ltd.). It is the case of respondent no. 1­complainant that it is a Private Limited Company dealing in the business of production and selling spices under the name of M/s. Gharkul Industries Private Ltd. and the appellants being well acquainted with respondent no.1­ and being in need of financial assistance for their business approached respondent no.1 with a request to provide them financial assistance. Respondent no. 1­ complainant provided financial assistance and on negotiations, Memorandum of Understanding was executed which was signed by appellant no. 2­ Dilip Shrikrishna Andhare with consent of all the appellants in the presence of two attesting witnesses.

Appellant No. 1 issued a cheque in favour of respondent no. 1 towards part payment of the amount, which was deposited by respondent no. 1 for encashment. However, the same was dishonoured due to “funds insufficient”. After dishonour of cheque, notice was issued to the appellants demanding the said amount of cheque, which was refused to be accepted by the appellants.

Respondent no. 1 filed a complaint against the appellants under Section 138 of NI Act in which all the appellants agreed that the amount provided by respondent no. 1 would be refunded within one or two years. In the light of all the averments in the complaint and documents filed on record, and so also the specific averment made in paragraph 5 and 7 of the complaint that all the appellants are equally responsible for the offence committed by them and they have issued the said cheque to discharge their legal liability towards respondent no. 1­complainant.

The learned trial Court issued summons to the appellants herein directing them to appear before the Court and the appellants were granted bail on furnishing security of Rs.2,000/­. The order came to be challenged in two separate criminal petitions filed under Section 482 CrPC Both the petitions were tagged together and came to be dismissed by the High Court.

Ms. Arundhati Katju, learned counsel for the appellants submitted that there is no specific averment made and merely because the appellants are the Directors of the Company, they are not to be held vicariously liable and cannot be made accused in the proceedings. No notice relating to dishonour of cheque has been received by them. Mr. Sidhartha Dave, learned senior counsel for the appellants relying on the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Another and Pooja Ravinder Devidasani v. State of Maharashtra and Another further submits that they are the non­executive Directors of the Company and were not responsible for the conduct of the business of the Company which is the mandatory requirement for initiation of the proceedings under Section 138 of NI Act and submits that the precondition as referred to under Section 141 of NI Act not being complied with, the order passed by the learned trial Judge in summoning the present appellants is nothing but a clear abuse of process of law and the finding which has been recorded by the High Court in the impugned judgment is not legally sustainable in law.

Mr. Pallav Shishodia, learned senior counsel for the respondents, while supporting the order passed by the High Court in the impugned proceedings, submitted that the appellants claimed themselves to be a non­executive Directors but the record indicates that they are the Directors of the Company and responsible to the Company for the conduct of business actively involved in the business of the Company and responsible for the affairs of the Company and there is nothing to indicate that they were appointed as non­executive Directors. Apart from dishonour of cheque in the instant matters, there are other cheques issued by the appellants which were also dishonoured and separate complaints have been filed by the respondent(s) but because of the pendency of the present appeals before this Court, no action has been taken by the trial Judge.

After hearing the learned counsel for the respective parties at length, the Hon’ble Court held, “The complaint specifically refers to the point of time when the cheques were issued, their presentment, dishonour and failure to pay in spite of notice of dishonour. In the given circumstances, we have no hesitation in overruling the argument made by the learned counsel for the appellants. The High Court has rightly not interfered in exercise of its jurisdiction under Section 482 CrPC for quashing of the complaint. Consequently, the appeals fail and are accordingly dismissed.”

Click here to read the Judgment

Judgment reviewed by Vandana Ragwani