Bafina v. Upper India Steel Manufacturing and Engineering ComPa,ry Limitedl' Arrakuntal V'

G.KUMAR, S/o Sri Gurumurthy Aged 53 years, Occ Business, #36, S.D.Road, Secunderabad-03. ...Petitioners/Accused No.8 AND

1. THE STATE OF A.P., rep. by Public Prosecutor, High Court of A.P., Hyderabad. ..Respondent

2. The Karur Vysya Bank Ltd.,, A Scheduled Bank incorporated under The Provisions of lndia Companies Act, 1913, Having its Head Offlce at Erode, Karur, One of its Branches at Rashtrapathi Road, Secunderabad, Rep. By its Authorized Signatory / Senior Manager, Chandaluri Krishna, S/o Venkata Pandu Ranga Rao, Senior Manager, Aged 44 years, R. P. Road, Secunderabad. (within the station limits of Mahankali p.s) ...RespondenUComplainant Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to quash the proceedings in CC.No.402 of 2013 on the file of the lX Special Magistrate, Erramanzil, Hydrabad. l.A. NO: 1OF 2014(CRLPMP. NO: 3904 OF 20141 Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to stay all further proceedings including appearance of the petitioner in CC.No.402 of 2013 on the file of the lX Special Magistrate, Erramanzil, Hydrabad. ': This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri A CHANDRA SHAKER, Advocate for the Petitioner and the Public Prosecutor (TG) on behalf of the Respondent No. 1 and Smt. SAV.RATNAM for the Respondent No. 2. The Court made the following: ORDER THE HONOURABLE SMT. JUSTICE K. SU.IIINA CRIMINAI PETITION No.4241 of 2O\4 ORDER: This criminal petition is hled by the petitioner/A.8 seeking to quash the proceedings in C.C.No'402 of 2013 on the hle of IX Special Magistrate, Erramanzil, Hyderabad. The offence alleged against the petitioner is under Section 138 and t 4 1 of Negotiable Instruments Act, 188 1 . 2, The case of the complainant is that the accused approached the complainant on 10.O1.2O12 fot grant of Rs.5O Crores towards short term loan for the general corporate purpose which is repayaLrle with interest @ l.5O% over and above the base rate of the Bank as applicable from time to time, with floating rate linked to basc rate compounding on monthly basis. That the Chairman T.Venkatram Reddy-A.3, T.Vinayak Ravi Reddy, Vice Chairman-A.2 and P.K.lyer, Vice Chairman-A.4 stood as guarantors to the said loan and A.2 on behalf of A. 1 acknowledged the terms and conditions of sanction communication and executed all the necessary loan 2 documents and the other accused are mentioned as Board of Directors

3. Heard Sri A.Chandra Shaker, learned counscl for the petitioner and learned Additional public prosecutor lbr the 1st respondent-State. None appeared on behalf of the 2nd respondent, though notice is served.

4. The contention of learned counsel for thc petitioner is that petitioner is not the signatory of cheque ancl he is not the Director who entered into agreement with the complainant, that he is not aware of issuance of any cheque as he was only a nominated Director, his post is only a cercmonial post rvithout any responsibility or powers ald he rt:srgned much prior to the alleged issuance of cheque by A. I and in the complaint there are no averments to show that I his petit ioncr is responsible for the day_to_day affairs of the <:ompany. Petitioner has resigned from the post of nominatr:d Director on 27.06.2012. The alleged cheque was issued in the year 2O13 and it is also incorporated in the company web. Therefore, he is not the Director of Company on the date of issuance of cheque and there is no cause of action during the term of this petitioner and whatever allegations are made in the complaint -rrs? _ _ .: .:i| are not applicable to the petitioner as he is no way connected with the Company on the date of issuance of cheque' Learned counsel relied on the judgments in Ashoke Mal 5. Bafina Vs Upper India Steel Manufacturing and Engineering ComPa,ry Limitedl' Arrakuntal V' Ganeshan Vs M/s.Sai Rama Cotton Syndicate and another2 aad Saroj Kumar Poddar Vs State (NCT of Delhi) and another3' He further submitted that in Crl'P'No 5169 of 2o14' this Court quashed the proceedings against A 6 and A 9 in the same crime stating that as the petitioners therein were neither Managing Directors nor signatories of the cheque' and they have no role in issuance of cheque' As such' requested the Court to quash the proceedings against the petitioner herein' Though notice is served on the counsel on record for the

6. 2'd respondent, none appeared on its behalf' 7 . Hence, considering the submissions made by the learned counsel for the petitioner and the materia'l available on record, the petitioner herein is only a nominated Director andhehasalreadyresignedfromthesubjectcompanymuch I (2018) l4 SuPreme Court Case 202 ) ior3 et ALT {crl) 27s ( Pl I (2oo7i i Supreme court Cases 693 0 I 4 pnor to issuance of cheque and even after resigning from thc said company, petitioner herein was arrayed as accused stating that he is Director of company, whereas the documents filecl by the petitioner shows that he has resigned from the company on 26.07.2012 and the date of issuance o[ cheque is in the year 2013, as such he is no way connected to the crime. Hence, the proceedings against the petrtioner in C.C.No.4O2 of 2013 are liable to be quashed.

8. Accordingly, the Criminal petition is allow,ed and the proceedings in C.C.No.4O2 ot 2Ol3 on the file of IX Special Magistrate, Erramanzil, Hyderabad are quashed. Miscellaneous applications, if any pending, shall stand closed \ To, //TRUE COPY// Sd/. N. SRIHARI ASSISTA NT REGI STRAR a \.- i\\ \./ sEcrlo N OFFICER iff gffi;gfi #fr *i#iffi ,ltt*,ii*"t""r,""t'*":,".: ;"* SMikam tA- HIGH COURT DATED: 2010212025 ORDER CRLP.No.4241 ot 2014 /\ a) /r -: o 14 '(^ 0 5 tlAY 2W * ! (n f ,c> ALLOWING THE CRIMINAL PETITION YE JS )-5k