High Court
Legal Reasoning
917-*Cri-WP-810,395,396,398-24.odtIN THE HIGH COURT OF JUDICATURE OF BOMBAYBENCH AT AURANGABADCRIMINAL WRIT PETITION NO. 810 OF 2024Sou. Kanchan Ankush PalveAge: 37 Years, Occu: Business,R/o. Shriram, Plot No.91, Aishwarya Nagari,Pipeline Road, Shriram Chowk, SavediAhmednagar… PETITIONER(Ori. Accused No.1)VERSUS1.Nitin Arjun ShindeAge: 46 Years, Occu: Business,R/o. Plot No.2, Behind Parijat Apartment,Sahakarnagar, Savedi, AhmednagarDistrict : Ahmednagar2.Shri Gautam Swami Hospital & ResearchCentre Private Ltd.,Sr. No.86, A1, Plot No.91, Aishwarya Nagari,Savedi, Ahmednagar Present Address: At Present: T.P. No.4 Plot No.47-1,2,3,4Crystal Hospital, Savedi Road,Ahmednagar 3.Shri Gautam Swami Hospital & ResearchCentre Private Ltd. Through its directors. (i) Shri Ganesh Sarjerao FasaleAge: 34 Years, Occ: Business,R/o. Flat No.204, Om Residency,Opp. Gaikwad Hospital, Tapovan Road,Savedi, Ahmednagar 1 of 16
Legal Reasoning
(( 2 ))917-*Cri-WP-810,395,396,398-24 (ii) Dr. Dnyaneshwar Narayan DaradeAge: 45 Years, Occ: Doctor,R/o. Shikshak Colony,Malibabhulgaon, Pathardi,Ahmednagar At present: Devnath Clinic, KharbandaKasar, Tal Pathardi, District Ahmednagar (iii)Dr. Jitendra Chaganrao DhavaleAge: 43 Years, Occ: Doctor,R/o: Katorewadi, Kamargaon,Tal: Nagar, Dist: Ahmednagar (iv)Laxmikant Vinayak PargaonkarAge: 46 Years, Occ: Service,R/o: Gauri, House No.13/B, AnandbanColony, Pipeline Road, Near BajarangHigh School, Savedi, Ahmednagar… RESPONDENTS(Res. No.1 is Ori. Complainant,Res. Nos.2 to 3(i to iv) are OriAccused Nos. 2 to5)WITHCRIMINAL WRIT PETITION NO. 395 OF 2024Sou. Kanchan Ankush PalveAge: 37 Years, Occu: Business,R/o. Shriram, Plot No.91, Aishwarya Nagari,Pipeline Road, Shriram Chowk, Savedi,Ahmednagar … PETITIONER(Ori. Accused No.1)VERSUS1.Bhaskar Chandrabhan KadamAge: 46 Years, Occ: Business,R/o: House No.80, Khadoba Road,Umbracha Mala, Majarsumba,Tal: Nagar, District: Ahmednagar 2 of 16 (( 3 ))917-*Cri-WP-810,395,396,398-242.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., Through its Director,Shri. Ganesh Sarjerao FasaleAge: 34 Years, Occ: Business,R/o: Flat No.204, Om Residency,Opp. Gaikwad Hospital, Tapovan Road,Savedi, Ahmednagar 3.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Dr. Dnyaneshwar Narayan DaradeAge: 45 Years, Occ: Doctor,R/o: Shikshak Colony,Malibabhulgaon, Pathardi, AhmednagarAt present: Devnath Clinic, KharbandaKasar, Tal Pathardi, District Ahmednagar4.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Dr. Jitendra Chaganrao DhavaleAge: 43 Years, Occ: Doctor,R/o: Katorewadi, Kamargaon,Tal: Nagar, Dist: Ahmednagar5.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Laxmikant Vinayak PargaonkarAge: 46 Years, Occu. Servicr,R/o: Gauri, House No.13/B, Anandban Colony, Pipeline Road, Near BajarangHigh School, Savedi, Ahmednagar … RESPONDENTS (Res. No.1 is Ori. Complainant.Res. Nos. 2 to 5 are Ori.AccusedNos. 2 to 5) 3 of 16 (( 4 ))917-*Cri-WP-810,395,396,398-24WITHCRIMINAL WRIT PETITION NO. 396 OF 2024Sou. Kanchan Ankush PalveAge: 37 Years, Occu: Business,R/o. Shriram, Plot No.91, Aishwarya Nagari,Pipeline Road, Shriram Chowk, Savedi,Ahmednagar … PETITIONER(Ori. Accused No.1)VERSUS1.Rupali Manoj JagtapAge: 46 Years, Occ. Business,R/o. Gopal Smruti, Bhutkarwadi, Savedi,AhmednagarDistrict : Ahmednagar2.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Shri Ganesh Sarjerao FasaleAge: 34 Years, Occ: Business,R/o: Flat No.204, Om Residency,Opp. Gaikwad Hospital, Tapovan Road,Savedi, Ahmednagar3.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Dr. Dnyaneshwar Narayan DaradeAge: 45 Years, Occ: Doctor,R/o: Shikshak Colony,Malibabhulgaon, Pathardi, AhmednagarAt present: Devnath Clinic, KharbandaKasar, Tal Pathardi, District Ahmednagar4.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Dr. Jitendra Chaganrao DhavaleAge: 43 Years, Occ: Doctor,R/o: Katorewadi, Kamargaon,Tal: Nagar, Dist: Ahmednagar 4 of 16 (( 5 ))917-*Cri-WP-810,395,396,398-245.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Laxmikant Vinayak PargaonkarAge: 46 Years, Occu. Servicr,R/o: Gauri, House No.13/B, Anandban Colony, Pipeline Road, Near BajarangHigh School, Savedi, Ahmednagar … RESPONDENTS (Res. No.1 is Ori. Complainant.Res. Nos. 2 to 5 are Ori.AccusedNos. 2 to 5)WITHCRIMINAL WRIT PETITION NO. 398 OF 2024Sou. Kanchan Ankush PalveAge: 37 Years, Occu: Business,R/o. Shriram, Plot No.91, Aishwarya Nagari,Pipeline Road, Shriram Chowk, Savedi,Ahmednagar … PETITIONER(Ori. Accused No.1)VERSUS1.Vikram Sukhadev AthareAge: 68 Years, Occ: Nil,Through his constituted attorneyYogesh V. AthareAge: 42 years, Occ: Business,Both residing at Parewadi,Post Mandve, Tal: Pathardi,District: Ahmednagar2.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Shri Ganesh Sarjerao FasaleAge: 34 Years, Occ: Business,R/o: Flat No.204, Om Residency,Opp. Gaikwad Hospital, Tapovan Road,Savedi, Ahmednagar 5 of 16 (( 6 ))917-*Cri-WP-810,395,396,398-243.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Dr. Dnyaneshwar Narayan DaradeAge: 45 Years, Occ: Doctor,R/o: Shikshak Colony,Malibabhulgaon, Pathardi, AhmednagarAt present: Devnath Clinic, KharbandaKasar, Tal Pathardi, District Ahmednagar4.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Dr. Jitendra Chaganrao DhavaleAge: 43 Years, Occ: Doctor,R/o: Katorewadi, Kamargaon,Tal: Nagar, Dist: Ahmednagar5.Shri Gautam Swami Hospital & ResearchCentre Private Ltd., through its Director,Laxmikant Vinayak PargaonkarAge: 46 Years, Occu. Servicr,R/o: Gauri, House No.13/B, Anandban Colony, Pipeline Road, Near BajarangHigh School, Savedi, Ahmednagar … RESPONDENTS (Res. No.1 is Ori. Complainant.Res. Nos. 2 to 5 are Ori.AccusedNos. 2 to 5) .…Mr. Pratik P. Kothari, Advocate for Petitioner in all Writ PetitionsMr. A. S. Gandhi, Advocate for Respondent No.1 in all Writ Petitions .…CORAM: Y. G. KHOBRAGADE, J.DATE:18.02.2025ORAL JUDGMENT :- 1.Rule. Rule made returnable forthwith. Heard finally withthe consent of both the sides at the stage of admission. 6 of 16 (( 7 ))917-*Cri-WP-810,395,396,398-242.By the present Petitions under Article 226 and 227 of theConstitution of India read with Section 482 of the Code of CriminalProcedure, the Petitioner in all these Petitions are prayed forquashment of criminal proceeding pending on the file of the learnedAdditional Chief Judicial Magistrate, Ahmednagar, for the offencespunishable under Sections 138 of the Negotiable Instruments Act, asunder:-Sr.No.CriminalW.P. No.CriminalComplaint NumberChequeNumberand DateChequeamount(Rs.)1.810 of 2024SCC No.3130 of 2023Addl. CJM, Ahmednagar(Court No.19)00001106.02.202315,00,000/-2.395 of 2024SCC No.3084 of 2023Addl. CJM, Ahmednagar(Court No.16)00001206.02.202315,00,000/-3.396 of 2024SCC No.3128 of 2023Addl. CJM, Ahmednagar(Court No.17)00001306.02.202315,00,000/-4.398 of 2024SCC No.3129 of 2023Addl. CJM, Ahmednagar(Court No.18)00001406.02.202315,00,000/-3.In above complaints, all the Petitioners are Accused andthe Respondent No.1 is the original complainant. For the sake ofbrevity, I would like to refer the parties to the present Petition in theiroriginal capacity. 7 of 16 (( 8 ))917-*Cri-WP-810,395,396,398-244.Having regard to the submissions canvassed on behalf ofboth the sides, I have gone through the record. It is a matter ofrecord that the above referred cheques in the tabular form wereissued on 06.02.2023 in favour of the complainant by the accusedShri Ganesh Sarjerao Fasale from his Saving AccountNo.002002100023953 for discharging legal liabilities. However, allabove cheques are dishonoured on account of "funds insufficient".The complainant issued the mandatory notice u/s 138 of NI Act to theaccused persons i.e. (1) Gautam Swami Hospital and Research Centreand it’s Directors i.e. 2(1) Kanchan Ankush Palve, 2(2) GaneshSarjerao Fasale, 2(3) Dr. Dnyaneshwar Narayan Darade, 2(4) JitendraChhaganrao Dhawale, 2(5) Dr. Laxmikant Vinayak Pargaonkar.5.Even after service of notice, the Respondents/accusedallegedly not complied with the mandatory notice, therefore, thecomplainant filed separate complaints under Section 138 of theNegotiable Instruments Act and prayed for appropriate punishment.6.The learned counsel for the accused No.2(1) canvassed invehemence that, all above cheques which are the subject matter of theabove complaints are issued by Shri Ganesh Sarjerao Fasale [accused 8 of 16 (( 9 ))917-*Cri-WP-810,395,396,398-24No.2(2)] from his personal saving account and all above cheques arenot issued from the account of accused No.1 Firm. So also, thosecheques were not issued for discharging legal liabilities of the accusedNo.1 firm. Therefore, the Accused No. 1 firm and it’s directors arenot personally responsible for dishonour of all these cheques of thecomplaints. Therefore the complaint as against the presentPetitioner/original accused No.2(1) is not maintainable.7.It is further canvassed that, on 23.08.2021, a partnershipfirm was executed between the complainant and accused No.2(2)Shri Ganesh Sarjerao Fasale being Chairman of the accused No.1 firm.The present Petitioner/original accused No.2(1)] was alreadyresigned from the Directorship of accused No.1 firm with effect from21.08.2021 prior to issuance of cheques and resignation of theAccused No. 2(1) accepted by the Board of Directors of the accusedNo.1 firm. Therefore, on the day of issuance of cheques i.e.06.02.2023, the Petitioner/accused No.2(1) was not Director of theaccused No.1 firm. Therefore, the Petitioner/accused No.2(1) is notresponsible for dishonour of the cheques in question, hence, prayedfor quashment of all four complaints. 9 of 16 (( 10 ))917-*Cri-WP-810,395,396,398-248.To buttress these submissions, the learned counsel for thePetitioner placed reliance on Mainuddin Abdul Sattar Shaikh Vs. VijayD. Salvi, MANU/SC/0720/2015 : AIR 2015 SC 2579, wherein it isheld that, as per Section 138 of the N.I. Act, the drawer of the chequefrom whose account cheques are issued for discharge of any debt orother liability and cheques are dishonoured.9.It further relied on Judgment dated 06.01.2015 passed bythis Court in Criminal Writ Petition No.1271 of 2023 (Sou. KanchanAnkush Palve Vs Athare Patil Memorial Hospital & Research CentrePvt. Ltd., and others), wherein it is held that, on the day of issuanceof the cheque, the accused was resigned from the post of Directorshipand said resignation was accepted by the Board of Directors of theCompany. So also, entry was effected with the Registrar under theCompanies Act prior to issuance of instrument involved in thecomplaint. Therefore, the accused was not responsible for thetransaction. 10.Per contra, the learned counsel appearing for theRespondent/original complainant canvass that, the Petitioner is oneof the Director of Accused no. 1 Shri Gautam Swami Hospital and 10 of 16 (( 11 ))917-*Cri-WP-810,395,396,398-24Research Centre Private Limited and responsible for day to daybusiness of accused No.1 firm. The Petitioner accused and otherDirectors of the accused No.1 firm were authorized the accusedNo.2(2) Shri Ganesh Sarjerao Fasale to enter into an agreement onbehalf of the accused No.1 firm. Therefore, the accused No.2(2)issued independent cheques in question in favour of the complainantfor discharging legal liabilities. However, all cheques for sum ofRs.15,00,000/- are dishonoured. Therefore, merely the Petitioner/original accused No.2(1) tendered resignation, it does not epso-factorelieved her from legal liability of the Respondent No.1 firm.Therefore, prayed for dismissal of the Petitions.11. In support of these submissions the learned counsel forthe complainant relied on Suhas Bhand Vs. State of Maharashtra andanother, 2009(3) Bom.C.R. (Cri) 784 : 2009 All.M.R.(Cri) 2614,wherein the Division Bench of this Court held in para No.33 asunder:-“33.A reading of these judgments makes for the following legalpropositions with regard to the resignation of a Director of aregistered Company:(i) If the accused in a criminal prosecution under Section138 of the Negotiable Instruments Act produces a certifiedcopy of Form No.32 certified by the ROC and there is nodispute of the factum of his resignation, the accused isentitled to be discharged from the prosecution. 11 of 16 (( 12 ))917-*Cri-WP-810,395,396,398-24(ii) If his resignation is not accepted or admitted by thecomplainant upon production of the certified copy of FormNo.32, the accused would have to prove the truth of thecontents of the said certified copy i.e. the factum of hisresignation. Such accused cannot be discharged simplicitorupon production of a certified copy of Form No.32.(iii) If the complainant produces any evidence showing thecontinuance of the accused as Director of the Companyafter the date of the resignation claimed by him as per thecertified copy of Form No.32 produced by him, suchaccused cannot be discharged simplicitor upon productionof such certified copy of Form No.32. He would have to leadevidence to prove the factum of his resignation. Similarlythe complainant would be entitled to prove the factum ofhis continuing as Director. The trial under Section 138 readwith Section 141 of the Negotiable Instruments Act would,therefore, proceed.”12.Needless to say that, the Respondent complainant in allthese Petitions have filed criminal complaint SCC Nos. 3130 of 2023,3084 of 2023, 3128 of 2023 and 3129 of 2023 for dishnour of chequenumbers 000011, 000012, 000013 and 000014 issued on 06.02.2023for an amount of Rs.15,00,000/- each. However, all these chequesare dishonoured due to insufficient fund in account of the AccusedNo.2(2) Shri Ganesh Sarjerao Fasale.13.I have gone through the record. It is matter of record that,all the cheques subject matters of all the complaints are issued fromSaving Account of the accused No.2(2) who is one of the Director ofaccused No.1 Hospital and Research firm. The complainant has not 12 of 16 (( 13 ))917-*Cri-WP-810,395,396,398-24disputed fact that all these cheques are are are issued from thepersonal saving account of accused No.2(2). The complainant has notmade averment that, subject matter of cheques are issued fromaccount of the respondent No.1 firm. Therefore, it is abundant clearthat, when cheques are issued from Saving Account of the accusedNo.2(2) and those cheques are dishnoured in such circumstances allthe Directors of the accused No.1 firm cannot held to be liable forprosecution for dishonour of the cheques.14.Moreover, the Petitioner/accused No.2(1) alreadyresigned from the post of Director of the accused No.1 Hospital andResearch firm on 21.08.2021 prior to issuance of subject matter ofcheques. Therefore, considering the law laid down in case of PoojaRavinder Devidasani Vs. State of Maharashtra, AIR 2015 SC 675, andRajesh Viren Shah Vs. Radington (India) Ltd., 2024 AIR (SCW) 1047;2024 (3) Mh.L.J. 650, when the cheque was issued after acceptanceof the Director and no allegations are levelled against the Director,therefore, merely being a Director of the company, he cannot beprosecuted for the offence under Section 138/141 of the NegotiableInstruments Act. 13 of 16 (( 14 ))917-*Cri-WP-810,395,396,398-2415. In Sunita Palita and Others Vs. Panchami Stone Quarry,AIR 2022 SC 3548; 2022 (10) SCC 152, it is held that, the Director ofa company, who was not In-charge or responsible for conduct of thebusiness of the company at the relevant time, would not be liable forprosecution. As per the decision in case of SMS PharmaceuticalsLimited cited (supra), the liability under section 138/141 of the N.I.Act arises from being In-charge of and responsible for conduct of thebusiness of the company at the relevant time, when the offence wascommitted and not on the basis of merely holding a designation oroffice in a company. It would be a travesty of justice to dragDirectors, who may not be even be connected with the issuance of acheque or dishonour thereof, such as Director, (Personnel), Director(Human Resources Development) etc., into criminal proceedingsunder the N.I. Act, only because of their designation.16. In Ajay Rampal Sarda Vs. Pankaj Ravilal Shah andanother, 2021 All M.R. (Cri) 284: 2021 (3) Mh.L.J.(Cri) 50, it is heldthat, in absence of averments in the complaint under Section 138 thatat the time of commission of an offence, the person accused was in-charge of the conduct of business of the firm and responsible for 14 of 16 (( 15 ))917-*Cri-WP-810,395,396,398-24issuance of cheque. Merely because, the applicant was the partner inthe partnership firm is not sufficient to make him liable for offenceunder N.I. Act, particularly, when no specific role is attributed to theapplicant in the complaint. The applicant cannot be deemed to be in-charge of and responsible for the conduct of the day to day affairs ofthe business. The requirement is that the person sought to be liable,should be in charge of and responsible for the conduct of the businessof the firm at the relevant time.17.Reverting back to the present case, the cheques subjectmatter of different complaints as described above, are not issued fromthe account of the accused No.1 Hospital and Research firm, but allthese cheques are issued from saving account of accused No.2(2).Therefore, to my judicious conscious for dishonour of the cheques inall these Petitions, the present Petitioner who was not Director ofaccused No.1 firm cannot be prosecuted. Therefore, continuation ofthe criminal proceedings as against the present Petitioner wouldcertainly amount to abuse of process of law, hence, all abovecomplaints instituted u/s 138 of N.I. Act against the present Petitionerare liable to be quash and set aside. 15 of 16
Decision
(( 16 ))917-*Cri-WP-810,395,396,398-2418.In view of the above, I am inclined to grant thesePetitions and proceed to pass the following order:- :: O R D E R ::(i)All the Writ Petitions are allowed. (ii)Criminal Complaint Nos. (i) SCC Nos.3130 of 2023, (ii)3084 of 2023, (ii) 3128 of 2023 and (iv) 3129 of 2023pending on the file of the learned Chief JudicialMagistrate, Court Nos.16, 17, 18 and 19, Ahmednagar,are hereby quashed and set aside to the extent of thepresent Petitioner/original accused No.2(1).(iii)No order as to costs. (iv)Accordingly, the Rule is made absolute. [ Y. G. KHOBRAGADE, J. ] SMS 16 of 16