The High Court · 2025

Petition under Section 482 of Cr.P.C praying that in the circurnstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to stay of all further proceedings in Complaint with STC. Nl. No. 4238 of 2023, on the file of Vlll Additional Metropolitan Magistrate, Hyderabad, at Manoranjan Complex including the appearance of the Petitioners pending disposal of the Criminal Petition in the interest of justice. This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri K PRADEEP REDDY, Advocate for the Petitioner and Sri Jithender Rao Veeramalla, the Additional Public Prosecutor on behalf of the Respondent No.1 and Sri Rohit Pogula, Advocate for the Respondent No.2. The Court made the following: ORDER T THE HONOURABLE SRIJUSTICE N.TUKA] AMJI CRIMINAL PETITION No.7192 OF 2o',1 ORDER This Criminal Petition is filed under Section ,l i2 of Code of Criminal Procedure, 1973 (for short 'CrPC') seeking quashment of STC Nl No.4238 of 2023 on the file of the I lll Additional Metropolitan [Magistrate, Hyderabad at Manoranjan Cr mplex against the petitio n e r/a cc u sed No.3

2. I have heard Mr, K. Pradeep Reddy, learned : tunsel for the petitioner, Mr.Jithender Rao Veeramalla, learned A,i litional Public Prosecutor, representing the respondent No.1 -State

3. The essential facts, in brief, are that the respc r dent No.2/the complainant initiated a private complaint under Sec:r >n '1 38 of the Negotiable lnstruments Act, 1881 (for short'the Nl Ar i') against the petitioner/Accused No.3/Director,Accused No.'l /Com r tny/Managing Director, and Accused No.2/another Director of the c(,r rpany According to the complainant, an agreement vas executed with Accused No. 1/Company for the engineering procurement, construction (EPC), operation, and maintenance of ten grid- connected solar photovoltaic (PV) rooftop plants with a total 2 .VTR,J Crlp 1 192 2024 capacity of 4,020 KW, to be established at various locations within the State of Uttarakhand. Under the terms of the contract, accused No.1 undertook to complete the project on a turn-key basis, inclusive of O&M (Operations and Maintenance) and a Defects Liability Period (DLP), within a period of two years, with a stipulated deadline ot 28.08.2021. Pursuant to the contract, accused No.1 was obligated to furnish post-dated cheques amounting to 10% of the total balance system price as a performance guarantee. [t was mutually agreed that, in the event of non-fulfillment of contractual obligations by accused No.1, the complainant would be entitled to invoke legal remedies by presenting the post-dated cheques for encash ment. Following the alleged failure of accused No.1 to discharge its contractual obligations, the complainant presented the aforementioned post-dated cheque for encashment. However, the cheque was dishonoured by the bank with the endorsement 'funds insufficient.' Despite issuance of a statutory notice under Section 138(b) of the Nl Act, no reply or payment was forthcoming from the accused. Consequently, the complainant instituted the present criminal proceedings. -) N]R.,] (\ lp 7192 2021

4. Learned counsel for the petitioner/Accused I o.3 submitted that while the petitioner holds the designation of Dire r tor in accused No.l Company, her role was purely nominal an( j she was not involved in the day-to-day affairs or management.of t re company. lt was further contended that the petitioner was neither a signatory to the cheque in question nor a party to the underl5,i rg contractual agreement pursuant to which the disputed cheque vr rs issued. lt is emphasized that, as a settled proposition of law, m_" 'e designation as a Director is insufficient to attract liability under Sec ion 138 of the Nl Act, in the absence of any material evidence derr onstrating the individual's active involvement in the conduct of t re company's business or in the transaction giving rise to the offencr ln support of this contention, learned counsel I on the judgment of the Hon'ble Supreme Cor aced reliance rt in Suse/a Padmavathy Amma v Bhafti Airtel Limited,2024 S- C Online SC 31'1 , wherein the Hon'ble Supreme Court reiterated I lat a Director held vicariouSly liable under Section 138 r ""nnoibe allegations establishing the role in the issuance of the nless specific :heque or the commission of the offence. I 4 NTRJ ( rlp.7192-202-1

5. Despite service of due notice, there was no appearance on behalf of respondent No 2/the complainant 6 I have perused the materials on record

7. A perusal of the contract referred to in the complatnt reveals that it was executed by Accused No.2 in his capacity as Director of Accused No.1/the Company. ln accordance with the terms of the said contract, the disputed cheque was also issued and signed by Accused No.2.

8. Although the petitioner/Accused No.3 admits the alleged position as a Director of the Company, her assertion that her role was merely nominal and that she had no involvement in the day-to- day affairs of the Company remains uncontroverted. Notably, the averments in the complaint refer to the petitioner solely by her designation as Director, without attributing to her any specific act, omission, or role in the transaction or the alleged offence

9. The Hon'ble Supreme Court, in Susela Padmavathy Amma v Bhafti Aiftel Limited,2024 SCC Online SC 31'l , while addressing an analogous factual situation, held in paragraphs 30, 31, and 32 as \ follows ,r: +r+"! ) \ tR.l ( rlt, I l')l l0ll --10. [t cirn lhus be seerr that the only allegation against tl]( rcscnt appellant is thal lhc l)rcscut apPellant and the accrrscd No.2 had no int!irt on t() plt\ thc dues llrat thcr ,rrrc t() tlrc conlplainaIt. It is stated that the ]rrrl .r crrseil antl lhe lrd acerrscd (rppclllrnt lrclcin) arc tltc I)irectors. pronloters ofI ) :l rrccrrrcrl treilg thc ('ortrpart_r Il is lunltcr a\crrc(l lltat the 2nd acctrsr.l is tlle autlLori,/cd srgraton. uho is iu-charge of arrd responsiblc for tl']c da\ t, rlal alirirs of thc Cornparrl. i.c.. thc Ist accused- lt can thus bc clearlr seen tltat lllcre is no avcnncnt tr tltc cll'ec( tlrat the presenl alp.lllnt is il-charge ofand responsible for the dar t ,-da1 lftarrs of the CornParrr lt is als.r not tltc casc ol thc respondent that tlre ir r cllanl is .-ithcr the \4anagirrr.l I)!rcctor or the.lrrint N,lanaqing Direcbr olthe C Lr I Itrr) r .il. It carr lhUs clcaIh be sccn 1l]at llrc ?rvennents rnadc rI not suftlctcut to rn\ ()kc llrr proYisiorrs 0l Scction l4i ol-the N.l. Actquathr r l rcllant "

10. ln the instant case, as the contract and disputr d cheque are issued by the accused No.1 , his position as Mana(l rg Director in specific are being made out. ln such position, in the : lsence of any material showing the active involvement of the peli oner/accused No.3 in the Company. the prosecution of the peti oner/accused No.3 by invoking Section 141 of the Nl Act is founrl unreasonable and not justified. 11 . For the aforesaid reasons, this criminal pe:i ion deserves positive consideration. Accordingly, this criminal petiti )n is allowed. The proceedings of STC Nl No.4238 of 2023 on th€ ite of the Vlll I t 1 6 N I'R,J Crlp 7 192 2024 Additional l\/etropolitan IVlagistrate, Hyderabad at [/lanoranjan Complex against the petitioner/accused No.3 are hereby quashed lvliscellaneous petitions, pending if any, shall stand closed. . SD/- M. NAGAMANI A SISTANT REGISTRAR //TRUE COPY// ECTION OFFICE R To \;

1. The Vlll Additional Metropolitan Magistrate, Hyderabad, at lVlanoranjan Complex, Hyderabad

2. One CC to SRI K PRADEEP REDDY Advocate tOpUCl 3 Two ccs to the Public Prosecutor, High court for the state of rerangana at Hyderabad [OUT]

4. One CC to Sri Rohit Pogula,Advocate.[OpUC] 5. Two CD Copies TPK/gh U rLI I I I I I I j i I I I I ! I I I i I I I I I I I t I I t I I i i I I I I I I I I I l i I l l l i , HIGH COURT DATED:2410712025 i l I I ORDER CRLP.N o.7192 of 2024 CRIMINAL PETITION IS ALLOWE D rA( t \) tq"\ 6\t''