1. This revisional application has been preferred under section 482 of the Cr. PC praying for quashing of the proceeding of Case No. C/7143 of 2003, as pending in the Court of the learned 3rd Metropolitan Magistrate, Calcutta, so far as the petitioner Saroj Kumar Jhunjhunwala is concerned.
2. Case of the petitioner is that on the basis of the complaint filed by the opposite party No. 2, case No. C/7143 of 2003 was started against the accused prisons. It was alleged therein that Victory Casting Ltd. and its directors including the present petitioner committed an offence under section 138 of the Negotiable Instruments Act (hereinafter referred to as the N.I Act). It is the specific case of the complainant that on 5.11.2003, the opposite party No. 2.company presented two Account Payee Cheques bearing Nos. 477440 and 477441 respectively, dated 26.5.2003 amounting to a sum of Rs. 4 lakhs drawn on Canara Bank, for encashment through its banker. Those cheques were issued on behalf of Victory Casting Ltd. But on presentation, those cheques were dishonoured due to insufficiency of fund. According to the complainant, Victory Casting Ltd. issued those cheques for discharging of its existing liability towards the opposite party No. 2.
3. After the cheques were dishonoured, the opposite party No. 2 issued a Demand Notice to the accused persons on 17.11.2003 and it was received on behalf of Victory Casting Ltd. (hereinafter referred to as the said company) on 18.11.2003 Despite receipt of the said notice the said company or its directors, who are the accused persons of the case, did not make any payment and as such, they all are liable to be punished under section 138/141 of the N.I Act.
4. Learned Chief Metropolitan Magistrate, Calcutta, took cognizance of the offence and transferred the case to the file of the learned 3 Metropolitan Magistrate, Calcutta, for disposal, who after examining the representative of the opposite party No. 2.company issued process under section 138/141 of the N.I Act against all the accused persons. During pendency of the case the accused persons appeared before the Court.
5. The petitioner claimed that he is no way connected with the commission of the alleged offence and has been falsely implicated in the instant case. According to the accused/petitioner, he was impleaded as an accused being the director of the said accused company. But the petitioner claims that when the cheques were issued on 26.5.2003 and when those were placed for encashment and same were dishonoured, at that time the petitioner was not the director of the accused company. It is the specific case of the accused/petitioner that he resigned from the Board of Directors of the accused No. 1.company with effect from 22.5.2003 and said resignation was duly accepted by the said company who, in turn, submitted Form No. 32 to the Registrar of Companies as per the provisions of the Companies Act, 1956. So the criminal case, as filed against the petitioner, is not at all maintainable. Stating all these facts, the petitioner filed an application before the learned Magistrate praying for his discharge. However, the learned Magistrate was pleased to reject such prayer of the petitioner on the ground that since cognizance was taken by the Chief Metropolitan Magistrate and since process was issued on perusal of the evidence, so he had no jurisdiction to entertain such prayer and as such, the learned Magistrate was pleased to reject the said petition. According to the petitioner, said order of the learned Magistrate has caused failure of justice and in view of the fact that the accused/petitioner at the relevant time was not the director of the accused company, so the learned Magistrate was not at all justified in rejecting the prayer of the petitioner. It has further been claimed by the accused/petitioner that under such circumstances, further continuation of the proceeding in question against him, will be sheer wastage of time and abuse of the process of the Court and so said proceeding should be quashed.
6. The opposite party No. 2.complainant contested this application. According to the learned Advocates for the opposite party No. 2 the order, as passed by the learned Magistrate, is perfectly justified and as such, it should not be interfered with by this Court. According to him, the Trial Court cannot look into the documents in support of the claim of the petitioner that he resigned from the directorship of the company prior to the issuance of the cheques. The documents in question can only be considered after recording of the evidence and thereby the Court can only come to a conclusion regarding the claim of the accused/petitioner. In effect the learned Advocate for the complainant submitted that the question, as raised by the accused/petitioner, cannot be considered unless the evidences of the parties are recorded. As such, he has prayed for dismissal of the revisional application.
7. It is the admitted position that a case under section 138/141 of the N.I Act was started at the instance of the opposite party No. 2 alleging therein that two cheques were issued by the accused company on 26.5.2003 in favour of the said complainant and those cheques were dishonoured due to insufficiency of fund and in spite of demand the accused persons did not pay the said amount to the complainant. Due to this, the complainant filed the case not only against the company but also against its directors. There cannot be any doubt that as per provisions of section 141 of the N.I Act, a case can be instituted against the company and in that event, the company in question, should be represented by its directors who are in charge of the affairs of the company and in respect of its day-to-day business.
8. Learned Advocate for the petitioner first of all argued that admittedly the cheques were issued on 26.5.2003 But before that the present petitioner resigned form the directorship of the accused company on 22.5.2003 As such, he claimed that no criminal liability can be attached to the present petitioner and he should immediately be discharged. In support of his claim, learned Advocate for the petitioner cited decisions reported in JT 2007 (2) SCC (Saroj Kumar Poddar v. State), 2003 SCC (Cri) 151 (Katta Sujatha v. Fertilizers & Chemicals Travancore Ltd.), 2004 C Cr. LR (SC) 1007 (Monaben Ketanbhai Shah v. State of Gujarat), JT 2006 (12) SC 20 (Sabitha Rammurthy v. R.B.S Channabasavaradhya), 2002 SCC (Cri) 1038 (K.P.G Nair v. Jindal Menthol India Ltd..) and 2005 (2) C Cr. LR (SC) 457 (S.M.S Pharmaceuticals Ltd. v. Neeta Bhalla). As against this learned Advocate for the opposite party No. 2.complainant submitted that the question as to whether the accused/petitioner resigned from the directorship of the accused company cannot be decided without recording the evidence by the learned Trial Court. In support of his contention, he has cited decision reported in 2000 Cr. LJ 1213 (K.P.G Nair v. Jindal Menthol India Ltd..) and 1999 Cr. LJ 3803 (Bharat Kumar Modi v. Pennar Peterson Securities Ltd.).
9. The second part of the argument of the learned Advocate for the petitioner is that since there was no averment in the petition of complaint alleging that the accused/petitioner was responsible for the day-to-day business of the accused company and as such, he cannot be impleaded as accused in this case, learned Advocate for the opposite party/complainant argued that there are sufficient averments in the petition of complaint stating therein that if was the accused/petitioner who was also responsible for the day-to-day business of the accused No. 1.company along with other directors. As such, according to the learned Advocate for the opposite party/complainant, this argument, an advanced on behalf of the abused/petitioner should not be considered at all.
10. Be that as it may, it appears that in this case two points have mainly been raised on behalf of the accused/petitioner viz. that before the date of, issuance of the cheques, the accused/petitioner resigned from the directorship of the accused company and as such, he could not be held responsible for the dishonourment of the cheques in question and secondly since there is no averment in the petition of complaint to the effect that the petitioner was responsible for the conduct of the business of the accused company, so on that ground also the case was not maintainable against the petitioner.
11. Let us now take into consideration the first point, I have already pointed out that the cheques in question were issued on 26.5.2003 The accused/petitioner has claimed that he resigned from the directorship of the said company on 22.5.2003 and as such, be cannot be held responsible for the dishonourment of those cheques. Undoubtedly there is force in the argument, as advanced on behalf of the accused/petitioner. If before the issuance of the cheques, the accused/petitioner already resigned from the directorship, then he cannot be held responsible for this offence. Now in order to establish this claim the accused/petitioner has filed the certified copy of the Form 32 under the Companies Act which shows that the accused/petitioner resigned from the Board of Directors with effect from 22.5.2003 Said certified copy shows that while the day the accused/petitioner resigned from the Board of Directors on 22.5.2003 and on that very day another person was appointed as a director of the accused company. This form No. 32 clearly supports the case of the accused/petitioner. I have already pointed out that this certified copy of the Form No. 32 which was filed in connection with this hearing. There is nothing to disbelieve, the statements, as made in the said Form No. 32. But the learned Advocate for the opposite party/complainant argued that the Court cannot look into this document unless this claim is decided during trial, in support of this contention, learned Advocate for the opposite party relied upon the decision reported in 1999 Cr. LJ 3803 (supra) and 2000 Cr. LJ 1213 (supra), wherein learned Single Judges of the Andhra Pradesh High Court and Delhi High Court observed that unless this claim is proved during trial no reliance can be placed on the Form No. 32. With due respect to the learned Judges, I am unable to concur with the views taken by them. In the decision reported in 1999 Cr. LJ 3803 (supra), learned Single Judge observed that the Form No. 32 was admissible in evidence. But I fail to understand as to how then it could be observed that the said document could not be looked into by the Court while exercising the jurisdiction under section 182 of the Cr. PC. In the decision reported in JT 2007 (2) SC 233 (supra) the Hon'ble Supreme Court while accepting the claim of the accused to that effect also considered the documents produced on behalf of the accused in support of his claim that he already resigned from the directorship of the accused company before the issuance of the cheques. As such, it necessarily follows that High Court, in exercise of its power under section 482 of the Cr. PC, can look into any document provided it is admissible and reliable. I have already pointed out that the petitioner has filed the certified copy of the Form No. 32 wherefrom it will appear that the Assistant Registrar of Companies clearly noted the fact that present petitioner resigned from the directorship of the company prior to issuance of the cheques. It also appears from the certified copy that it has been unmistakenly proved that the petitioner, at the relevant tune, when cheques were issued, was not the Director of the accused company. As such, he cannot be held responsible for the dishonourment of those cheques.
12. That apart, my attention was drawn in respect, of a certified copy of the order passed in connection with another proceeding involving the present petitioner and the de facto complainant where the de facto complainant clearly admitted that the accused/petitioner resigned from the directorship of the company on 22.5.2003 This fact certainly supports the claim of the accused/petitioner so far as this case is concerned. Learned Advocate for the opposite party/complainant argued that the said order of another proceeding was passed on consent of the complainant. According to him, when a consent order is passed, that cannot be binding on a Judge who is deciding another proceeding. In this respect he has cited a decision reported in AIR 1989 SC 38 (Municipal Corporation of Delhi v. Gautam Kaur). There cannot be dispute in respect of the legal position as enunciated in the said decision. But nowhere in the said decision it has been stated that the consent which was given by the complainant in another proceeding on the self-same issue, cannot be taken into consideration by way of corroboration. I have already pointed out that it has been established beyond doubt, by the accused/petitioner, that he resigned from the directorship of the company on 22.5.2003 i.e prior to the issuance of the cheques in question. This fact finds corroboration from the consent, which was given by the complainant in connection with another proceeding. As such, I think that the said consent, as given in another proceeding, can also be taken into consideration by this Court while disposing of this application. Due to all these things, I have got no hesitation to hold that the accused/petitioner has been able to prove beyond any shadow of doubt that he resigned from the directorship of the accused company on 22.5.2003 i.e much before issuance of the impugned cheques. As such, it must be held that this accused/petitioner cannot be held responsible for the dishonourment of the cheques in question. So the proceeding against him in the Court below, in my opinion, is not at all maintainable and further continuation of the same will be an abuse of the process of the Court and consequently same is liable to be quashed.
13. As I have already come to a conclusion that the complaint case, as pending in the Court below against the petitioner is not at all maintainable against him on the ground that he was not a director at the relevant time, so I do not think it necessary to consider the other part of the argument of the learned Advocate for the petitioner that the accused/petitioner cannot be held responsible for the dishonourment of the impugned cheques on the ground that there was no averment in the petition of complaint that he was also responsible for the day-to-day conduct of the business of the accused company. Said point should be treated as not decided by this Court.
14. Therefore, from my above discussion, I am of opinion that it is a fit case where the proceeding, as pending in the Court below, against the accused/petitioner should immediately be quashed and the accused should be discharged at once.
15. In the result, the revisional application is allowed on contest. The criminal proceeding being Complaint Case No. C/7143 of 2003, as pending in the Court of the learned 3 Metropolitan Magistrate, Calcutta, against the petitioner Saroj Kurnar Jhunjhunwala, stands quashed. He be discharged at once.
16. Send a copy of this order to the learned Court below at once for information and necessary action.
Sadhan Kumar Gupta, J.:
Revisional application allowed on contest.
B.D