Criminal Petition No. 582 of 2027 · The High Court · 2025

Order

This criminal pctition is filcd ttnder Seci,t r-r '182 of ,1r-r:r sh tl'r e Crin-rinzrl Procedure Code (for short 'Cr.[).C')

1.o proceedings in C.C No.2330 of 2O2O, pending on l'](' lite of XII AclcLitional Metropolitan Magistrate at l(ukatpallv, herein after referred as "the trial Cor-rrt") agair-rst the petitio ri-rf i:.ccLlscd ur-rder Scctior-r 138 read u,ith Section l'1 1 of tht. h\ergotiable Instruments Act, 1881 (for short "thc NI Act")

2. Hcard Sri Pradyumr-ra l(ttmar Redd-r', Leli:rted senior counsel represer-rting Sri T. Anirr-tdh Redd-v, learner: t:ottrrsel lor the pctitioner, Sri liatvanarayana Vemula. learned r:otLn sel for respondent No.1 ancl Sri Vivekanancla Reddr', leartt'rcl Assistant Public Prosecutor zrppearing for the respondent N l 2 Stzrte Perused the record

3. The briel facts of the case are thart thc accuser -rnd issued a clreque be aring 11o.385034, dated O8-01 .2O2O i,.,t' a sum of Rs.2,OO,00,OOO/ , clrawn on Andhra Bank, Kotl.rasrCa Branch and r,,.hen the said cheque was deposite cl in SU I. Kothaguda Branch on 13.01.2020 by ths De-[acto complainart thc same- 2 EIlI',J (:RL.P.No.58) oJ )A2l was dishonored due to "lnsufficient Fund S, accordingly, a complaint was filed under Section 200 Cr.P.C on the file of the XII Additional Metropolitan Magistrare at I(ukatpally vide CC No.2330 of 2O2O for the offorce s under Sections 138 rcad u'ith Scction I 41 of the NI Act for ciishonour of the chcque bearing No.385034, dated 08.01.2020 stated to have bcen issued in discharge of legally cnforccablc rlebt. It is also avcrred that after issuing notice to the accused thereir-r, the said complaint has been filed

4. Learned counsel for the petitioner r,vould submit that the petitioner is arrayed as accused No.3. He u.ould submit that on receipt of notice datcd 29.01 .)O2O bv the counsel for the de-facto complainant, the petitioner replied to thc said notice on lO.O2.2O2O through Lhe learncd counsel for the petitioner Accordingly the petitioner gave a preliminary reply rcquesting to seek a copy of the cheque to understand and give appropriate reply.

5. It is further submitted tirat despitc receipt of said reply notice, there u,as no response from the de-fctcto complainant to the petitioner accused No.3 herein. Learned counsel while drawing attention of this court rvould submit that the cheque -a- ! i I i .L t 1 t: l.'t".1 ( li i' \o.5A) ol )t)? 1 in qr-restion bearinll No.237911 100001811, d:Llecl C8.0 t 2020 q,hich \\ as drau'n on Andhra Bank, l(othagrr,irr lrranch, Hr.de ral;acl 1ir r ar itlnount of Rs.2,00,O0,000/ \!':11 issr.red by Accusecl Nos.4 arrci Accused No.3/petitioner has rror ssr-led.tllv che qr-re in comrliance to the liabilitv as allc'r c11 bv t1-re complainant- He l,-ru1d further submit that admiLtt:dlt , there dispr-rtcs betu e:n the complainarrt and the :Llcuserl No-4 pertaininq to a piec e of property stated to have be :tt execulcd betr,r,ce n the company by name M/ s. Domr utr-rde r- Tave rn ar-id Food and Beveragcrs Private Limited, representcrl bv trrat-rch lrranager Smt. P. Vasantl-ra and the de-facto coml)rtrtnallt vide registerecl document No.779 1 of 2Ol7 . The compatLr inr,encling to conslruct a strLtcture to suit their business rcclt ti L'erncnts of thc cornpan,v to \\'hich the petitioner is Director :ti.l. since tl-re company cor:lcl no1 obtain the necessary business licensc, settlement affidavit has been executed between 'l e d e'fa.cto complainant and the petitloner herein along rvith A,:r:ust:d No.'1 and in accordance witl'r the settlement aflirl:.vit dated

05. I L2019, tn,o guauantce cheques have been iss r,:d bearing Nos.00OO99 and 00O1O0 rvere drawn on Andl-rra baLrk from the account No.23791 1 I 0000i81 1 and alter having thal settlement afficlavit executed, no action has been taken bv cither side I I i I .1 EVI'..1 CRL.P.No 5E2 ol2al I Thereafter, the said cheques u'ere not dcposited by the de'facto complainant pursuanL Lo the settlement affidavit filcd by the petitioner along u,ith Accusccl No.4

6. Lcarned Scnior Counsel further submit that the earlier cheque bearing No.2379 i 1 10000181 I issued by the accused No.4 to the de-facto complainant dated 0B.O 1.2O2O for a sum of Rs.2,00,00,000/- which has been deposited by thc de facto complainant. The said cheque ."t'as returned uide return cheque memo dated 17 .Ol .2020. Learned Scnior Counscl r,r'ould further submit that subsequent to lhe cheque issued by accused No.4 on O8.OL.2O2O, a settlement agreement was drawn on O5. 1l.2O2O and neu'cheques have been issued vide cheque bearing No.000099 for a sum ol Rs. l,00,00,000/- and another cheque bearing No.000 1OO for a sum of Rs. 1,00,OO,000/ , r'vhere the petitioner is also signatorl' to the said settlement affidavit, r.l,hich tvas however not deposited by' the de-facto complainant for the reasons besl knor,r'n to him Thereafter, a personal cheque rvas issued by accuscd No-4, the same \,vas deposited and subsequently', it got bounced and no cheque was issued to fasten the liability AS agalnst accused / petitioner No.3 herein ::.@ryE:-:=r. i ' 1 :'r --t- ./ 5 ETL',J (\t, t'\o.i'\) oi )l)) l

7. I{aving 1-rearcl both the learned counsels eit rcr side, the point for consiclt--ri. tion arises before this Court is r'.'he ther thc point shall also altracls to fasten liabilitl' against a i:usecl No-3 On carelul perl-ls.rl of' the record, it is an aclmircd ilct that pllrsLlilnt to the settlement affidavit dated 05.I 1.2O20. the cl-requc rvhich u'as lssued, u,hich u,as deposited. lJou,evcr, a chcque 1br a surn ol Rs.2,00,O0,000/ was isslred at the inrtial stagc uide cheque bearing No.237911 10000 l8l 1, datecl

08.01 .2020 b1, a..,,""O No.zl r.r,as deposited. Ttrercf rr-c, urraving thc petitioncr as accusecl No.3 for bouncing of the c:hcque r,r,zrs not met the :-equirements of Section 138 ot Negotiable Instrllments Act Section 139 ol tl-re Nl Act is extracted herein Presumptio;t in favour of holder-It sh a tl be presr-rmed, r- nlcss the contrary is proved, that the holder of a chequc received the cheque 11' the nature rel'en'ed to in sectionl38 for the discharge, in ri'hole or ir part, of any debt or other liabilitv'. B Learned Senior Counsel rvould submit that petitiolter, u,ho arrayed S accused No.3, is not in charge ol Cay to day affairs of the company and he is only a nomirr:rl clirector Learned senior c:our-rse1 r,r,ould rely on the judgmer t passed by the Hon'ble Suprerne Court ol India in the matter of Sasela 6 CRLP No 5 '?'rlii,"* Padmaaathg Amma a M/s Bharti Airtel Limited in Special Leave Petition(Criminal) No.12390 1239L o1 2022, where in the Hon'ble High Court had he ld as undcr:

19. lt can thtts [:e ser tlt.at the onlq ctLLeclaticuts aqarnst the present appellart i.s thQt the presetfi ctppellattt and the accused No.2 hacl no itltentiotl Lo parl the dues thctt th.ey oute to the contplainan.L. h is stcled that the 2"d accusecl. ant] the 3,,trtccused (appelLart herein) are the Di.rectors, prontoters oJ' the I't accused being the contpanu. lt Ls furlher auerred. tlutt the 2,"1 rtccused ls tLrc authorized siqrvttory, tuho is itt.<:lrurgc d' and. responsible for tLrc dag to dug a.ffcti's of tl.te ('.ottry)on1t, L.t'., the 1't accused.

9. Hence would submit that continuation of Lhe proceedings against the petitioner in the light of thc abovc circumsL.urces is unwarranted and hence seeks to a11ou, this criminal petition

10. On the other hand, learned collnsel appearing on bel-ralf of the respondent by filing a counter r,r'ould submit that earlier a cheque has been issued by accused No.3 as contcmplated under Negotiable Instruments Act and necessarl' notices along u,ith reply notices have also becn issued, accordingly a complaint has been filed by the de facto complainant and he would submit the whole case was against the point, u,hether the lease deed has been executed between the de facto complainant and the accused includir-rg tl-rat of the petitioner 7 EI,'L',J (,,4 r /,.\:r,;\) of )(.t21 herern alrd sincc tire_r- had demolished the valuabk, propert\. of the de-firc:to corirp..rillant, upon their request thi' setllement afficlavir lras bcer .rcccpted enclosing the chetlLtc be:rrir-rg No.0OOO9.I for ri sum of Rs.1,00,00,000/ and ancrrher checlue bearir-rg No.000 100, d rar,r,n from accoultt No.2379 1 1 10OOC) I t I 1 issued on behalf of the corn pan-v for a sum of Rs 1,0O,(X1,.-)00/ , r.r'here the petitioner is srqratorv and on their request. the cle facto complair-rant w,as mrrrle believed that ther ri,c urll discharge the liability ol pa_ving Rs.2,00,00,000/ ancl believing their version, the cLe facto complainant has a<:cepted the cheque issued by artc:used No.4 in discharging the liabilitv of the Directors, ,.vhich got subse qlr(,ntly bor,rn,:ed and hence thc complaint ur rcler Section i38 ol the N.l. Act has been liled before the learnerl trial Court under Scction 200 (ir. P. C. 1 1. The learnecl counsel lLrther had drawn atter tion of this Court ti-rat as to wl-ry thc handwritten affidavir has been executed br. accus:d Nos.3 and 4 admitting tl-re tiabilitv of Rs.2.25 crores as the,t, have tal<en the property in c oor No.B-2 293 lB2/Al 1B7A or-r rent fiom the owner who is t,. Sravanthi Ra.1u ulde registerei document No.779 1 of 2Ol7 ar-r 1 they have not p:rid rent and tlarmaged and dernolished the p -c,perty and 8 l': t/I'.J CRL.P No 58) of 2a2l hence came for the final settlement and cancellation of lease by paying Rs.2.25 crores vide cheqr'le Nos.706235 ar,d 706236, u,hich r'r,e re drar.r,n on account No.3820304;l 163 and other cheques urcre also drau,n vide cheque bcanng Nos.0000O97, 0000098 dranvn from main Account No. 2379 11I0000 1Bi1 in Kotak Mahindra Bank and has been signed b1' accuscd Nos-3 and 4 and basing on the series of these transactions, learned counsel rn ould demonstrate thal the entire transaction has been origir-rated from the lease deed executed betrn,een the de- facto complainant and the accused. Thc petitioner alor-rg rvith all other directors of the company and accused No.4 has also given a notice pursuant to the undertaking on 08.01 .2O2O and, issued the cheque in question for a sum of Rs.2,00,00,00O/ - and those aspects shall be examined b1, the trial court br' conducting thorough trial. It is also an admitted fact that the cancellation of lease deed has also been executed by none other than pctitioner, de facto complainant along r,vith accused No.4 and the said cancellation has already been registered on the file ol S.R.O., Banjarahills vide document No.233 of 2020. It is lurther submitted that the relationship between Lhe de-facto complainant and the petitioner cannot be takcn into consideration and hence would submit that trial Court shal1 : l t I i I 9 ETT,J C.Il . i'.,Vr., ;8) ol 2l)) I consicler all th cs,: .rspecrts by conducting thc tria1. The petitior-rel carf .11\\ i.l\rs lead his evicler-rce in the tlrrLl Court to provc his innocc nce as clerimed bv hirn in this pc it,ion, her-rce seeks Lo drsn'riss t}-r s Crin'rinal petition

12. Tl-ris conrt. har.ir-rg l-rear-d the learned senior <:ounsel for the petitioner ancl r-rpon examining lhe material plaLced before this Court, is seized ol the fact that a che(lLle bearing No.385O34 drau,n irom account No. 2379 1 1 I OO00 L 31 I . dated

08.01.2020, rvhrch s'as issued bt, accused No.,tr n far.our of N.D. Sravanlhi Ra.1r.r, urho stated to have been the lrlndladv and upon follo\^ring the procedure laid down under tl-r,: Negotiable Instruments Act a:td ',r'hen the said cheque got b,ounced, a complaint hars bccn filed r-rndcr Section 200 Cr.P.(1. for taking appropriate aclion -rnder- Section 138 read w,ith Se :tion 14i of NI Act. So far as thc- carher transactions betrveen tlier petitioner and thc cle facto cornplainant- Thel,cannot be exanri:red at this point of timc as this Criminal Petition has been liled only to seek indulgence of :his Court to quash the proceed ngs against accused No.3 statLng tl'rat r,vhether further proceedings as against accused No.3 before the trial Court shall sul.,sist or not. r0 E t.'t-,J CRL.P.No.53l of 2021 1 3. In the light of the judgment passed bv the Hon'ble Supreme Court of India in the matter of Susela Padmaaathg Anttna (cited supra) the cheque in question has been issued by accused No.4 ir-r his individual capacity. Admittedl],, accused Nos.3 and 4 are Directors of the company and accordingl-r' arraying the peLitioner as accused in thc criminal proceedings before the learned trial Court along rvith the other companl, dircctors, though the petitioner is not the sigr-ratorv to the cheque on behalf of the company. Learned counsel for respondent relied upon the judgment of the High Court ol Ar-rdhra Pradesh in Lhe rnatter of Balaji Trading Compang u Kejriutat Paper Limited dnd dnotherl, wherein thc High Court o[ Andhra Pradesh had held that:

23. Section I41 is specifi.ca g incorporoted to prosedtte tlL€l corrtpant[es for tle oJfence under Section 138 of the AcL 'l'he rnart<7ate of the section. clearlg indicates thot the compantl is liable for proseattion when a cheque is lssued on its beh.alf and. itounced on presentcltion of such cheque. The intendment of the -sectiorr. rs ttctt to giue scope Jor indiuiduals to escape by lssuin./ cheques in the names of the companies. ThereJbre, ruhen c:heques are tssued in the name of the conpany, the companll is irtuariabhl liabte for prosecutiott for the offence under Sectiort 138 oJ the Act. Regarding tle prosecution of the Directors of tLLe compen.A, the legctl posit[on rnakes it clear that the person uho is irt chctrge of and uas responsible to the compqng tn conduct o/- rls busine.s s at tlae materiol time is also tiable to be j ' t00_; tt)Jl D t, trtt Ir.: t I t 1i t i i El'l/ 1 ( i.r. l'. \'o jlj) ol 102 | pt osecut€:(l. B1.tt, lh. n.on prosccLltioil oJ' cLtTLt of the ,\i..:clors is no bar tc pr()se.J1Le lLrt: c'ornpctn,1. 'l'he reuisiort t/,.t,lioner 6 plecLdutq LL,ctt he. rs prcjLtdi.,ed on accotlnt of mentir.'tinr1 ctf his tto.nl.e. as tltc pcrscrr rcpre:;cntin.cl thc- contporul. The.,;t .secrttiLttr. neuer inten..lt\.1 to pro:;.!\ite ,Sri Rahul I{ejrlr,uctl in h/. I rCfuidual (:clpe(:Lttl. Tltc (:ottrls ltelcttr., ttlso ttttul<: it c:ler.Lr tha: s)i Rahul Ke jrlunl is /tol pcr.so/i.r Ll4 li.ct.bl<: fr.:r firosecution on l .:ourtt of lhe absence c.f sptc:iJit olle:qutions l/ral he i-s in sft,trlt' ol- the ctJfairs oJ lhe ,',ompanL1 nr ntanoclittl ifs n//i:rir-s. Tlta i.,dqn-tents placed on. ttehull'ctJ the: reuis[on. Stt:titiotLer are onlt1 t'cterdinq the ctsperl tuhetler rt l)irec:tor <tr Dir<,ctors ctrc L r t!., t,: be prosecutctl tultcn there ure no speci-fic alle(jatiotls thot lte ar thetl tuertz in c'harcle ol'(Lnd lLtere rt,sporL-sib/e [.o the c':tltltttrt1 in conduct of its lru.srrrc-s.>^. ltt tltL: liqlrt ol'l.he aboue ciru:tLi.i: letnr:es. I llnd suJJicie,nt lorc:e rn t,he clrottnL.Ls of ret.ision. Th<: r..'r,rl,orttl is hable J'or pros?cutLOn desDi.tet non. ltros.cution oJ Lht: D.rt,r:tor or Directors rtsponsible Jbr the ntancL,-1e nt.ent o.l'the cLJJ iirs of the compenll c'r'in ctht,rlle ol'its rtffr:irs.

14. Since it is clic:rtecl that the pclitiorrer rs not inr:tLarge oi the day to da_v alfairs of the managcmenl of the comi)urny and by placing reliance cn the judgments passed b-t, tl'rc Hon'ble Supreme Court, t.ais CotLrt is ol the opinion t(, fasten the criminal liability under the said Negotiable Instrur.runts Act as against the petitioner \\rou1d amount to abuse of pr ocess ol law and accordingly the proceeding against the petitioner deserves quashment and accordingh'the proceedings in C.C No.2330 OF 2O20 against the pctitioner pending on the file of the XII l). IrI/,.1 CRL P No.5li) ol 2021 Add itior.ral Metropolitan Magistrate at Kukatpally are hercby quashed. 15 Accordingi-r', this criminal petition is allowed. Miscellaneous petitions, pending if any, shall stand closcd SD/- C. DEEPIKA ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER 1 . The Xl Addl. Metropolitan t\4agistrate' Kukatpally 2 The Station House Officer, Gachibowli P.S , Cyberabad 3. One CC to SRl. T S ANIRUDH REDDY Advocate [OPUC] 4. One CC to Sri Satyanarayana Vemula, Advocate [OPUC] s. i*o Ccs to PUBLIi PROSECUTOR, High Court at Hyderabad (OUT) 6. Two CD Copies To, M SM/PSt HIGH COURT DATED:1 810712025 I ORDER CRLP.No.582 of 2021 1ri::i: n ( o o 15 rr\j 2il5 ''1'/--t'-\\..,.:/ a ./ ALLOWING THE CRIMINAL PETITION I Ar a ) rA