High Court
Legal Reasoning
959-CRIWP-1325-181 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABADCRIMINAL WRIT PETITION NO. 1325 OF 2018Dr. Narendra Someshwar Bhatt… Petitioner VERSUSM/s Sandakan Investment Pvt. Ltd.Through its Officer Mr. Vilas Varaikar… Respondent......Mr. Lahirimanohar D. Vakil, Advocate for Petitioner...... [CORAM : NITIN B. SURYAWANSHI, J.] DATE : 08th MARCH, 2024 ORDER:1.By this petition, filed under articles 226 and 227 ofConstitution of India read with section 482 of the Code ofCriminal Procedure, petitioner seeks quashing of proceedingsin S.C.C. No.6704/2016, pending before learned JudicialMagistrate, First Class, Jalgaon.2.Respondent filed S.C.C. No.6704/2016 under section138 and 141 of Negotiable Instruments Act, against (1) AjantaCans and Containers Private Limited, Jalgaon, (2) N.S. Bhatt(petitioner), (3) Mahesh Kubal, (4) Nivrutti Daulat Bhandvalkarand (5) Mohan Ananda Koli, alleging that accused companyhad borrowed amount of Rs.98,000/- from complainant. Forrepayment of the same, cheque of Rs.98,000/- bearingS.P. Rane 1 of 6
Legal Reasoning
959-CRIWP-1325-182 no.041225 of Dena Bank, Jalgaon dated 22.06.2016 was givento complainant. When the said cheque was presented forencashment, it was returned to complainant on 09.08.2016with remark, “Bank has been Closed”. Complainant issuedlegal notice dated 23.08.2016 to accused. Accused nos.1, 4and 5 have not accepted the said notice. Accused nos.2 and 3received the said notice on 25.08.2016. In spite of receipt ofnotice, accused failed to pay the cheque amount within 15days. Learned Magistrate by order dated 09.05.2017, issuedprocess against accused under section 138 of the NegotiableInstruments Act.3.Heard learned advocate for petitioner. Thoughserved, none appeared for respondent. Perused the writpetition memo, annexures thereto, and impugned order. 4.It is the case of petitioner that he is not at allconcerned with accused no.1-company. He has replied thenotice of respondent stating that he is not concerned withaccused no.1-company and the cheque is not issued by him.Documents of complainant-company and accused no.1-company are placed on record in support of these contentions.Petitioner is Chairman of Sumeet Sadan Co-operative HousingSocieity Limited, Mahim (West) and Mr. Mahesh Kubal isS.P. Rane 2 of 6 959-CRIWP-1325-183 Secretary. Director of complainant-company had some disputewith the Co-operative Society and its office bearers, thesociety therefore complained against Ajay Agrawal to theCommissioner of Police on 15.07.2016 and only with a viewmala fide intention to give counter blast to the complaintslodged by petitioner, being chair of the said Co-operativeHousing Society, his name is implicated in the presentcomplaint. Further submission is that though petitioner andother accused persons named in the complaint are resident ofMumbai, learned Magistrate has failed to follow mandatoryprocedure under section 202 of the Code of CriminalProcedure. In support submissions, reliance is placed on K.K.Ahuja Vs. V.K. Vora and another, (2009) 10 SCC 48 andGanesh Sahakari Sakhar Karkhana Ltd & Ors. Vs. BharatTrading Company Through it’s Proprietor & Ors. 2014(2) Bom.C.R.(Cri.) 760.5.Perusal of documents in respect of complainant-company and accused no.1-company shows that petitioner isno way concerned with accused no.-1 company. Companymuster data of complainant-company shows that AjayRameshwar Agrawal and Nisha Ajay Agrawal are the DirectorsS.P. Rane 3 of 6 959-CRIWP-1325-184 of the said company and its registered address is C-702,Sumeet Sadan, B.K. Road, Near Paradise, Mahim (West),Mumbai 400016. Company muster data of accused no.1-companyshows that Nisha Ajay Agrawal and Vilas Balkrushna Varaikarare Directors of accused no.1-company and its registeredaddress is 201, Devki Apartments, E-27/28, Saket, Indore, MP452018. It is pertinent to note here that, directors ofcomplainant-company have authorized Vilas BalkrushnaVaraikar to file the complaint on behalf of complainant-company. In fact, he should have been arrayed as accused.Thus, there is merit in the contention of petitioner that hisname is malafidely implicated in the present complaint out ofpersonal grudge of the Director of complainant-company. Thepetitioner’s case is therefore squarely covered by clause no.7of paragraph 102 of State of Harayana & Ors. Vs. Bhajan Lal &Ors. 1992 Supp (1) SCC 335.6. Learned advocate for petitioner is right incontending that a vague statement is made in the complaintthat accused nos.2 to 5 looking after day-to-day business ofaccused no.1-company and they are jointly and personallyliable for business of accused no.1-company. There is nothingS.P. Rane 4 of 6 959-CRIWP-1325-185 on record to show that what position petitioner is holding inaccused no.1-company and how he is responsible for day-to-day business of accused no.1-company.7.In K.K. Ahuja Vs. V.K. Vora and another, (2009) 10SCC 48, wherein it is held: "19. This takes us to the next question undersub-section (1) of section 141, as to: (i) who are thepersons who are responsible to the company for theconduct of the business of the company, and (ii) whocould be said to be in charge and was responsible tothe company for the conduct of the business of thecompany. ...…. 20.…….21.A combined reading of Sections 5 and 291of Companies Act, 1956 with the definitions inclauses (24), (26), (30), (31), (45) of section 2 ofthat Act would show that the following persons areconsidered to be the persons who are responsible tothe company for the conduct of the business of thecompany : (a) the managing director(s);(b) the whole-time director(s);(c) the manager;(d) the secretary;(e) any person in accordance with whose directionsor instructions the Board of directors of thecompany is accustomed to act;(f) any person charged by the Board with theresponsibility of complying with that provision(and who has given his consent in that behalf tothe Board); and(g) where any company does not have any of theofficers specified in clauses (a) to (c), anydirector or directors who may be specified bythe Board in this behalf or where no director isso specified, all the directors. S.P. Rane 5 of 6 959-CRIWP-1325-186 It follows that other employees of the company,cannot be said to be persons who are responsible tothe company, for the conduct of the business of thecompany.” Aforesaid observations support the case ofpetitioner. 8.Petitioner is resident of Mumbai and complaint isfiled at Jalgaon, without following mandatory inquiry undersection 202 of the Code of Criminal Procedure, as is held inK.T. Joseph Vs. State of Kerala, 2009(15) S.C.C. 199, learnedMagistrate has issued process against petitioner. On thatground also the impugned order is unsustainable. 9.For the aforesaid reasons, writ petition succeeds.Hence, the following order:ORDER(i)Writ Petition is allowed.(ii)Complaint and further proceedings in S.C.C. No.6704of 2016, pending in the Court of learned JudicialMagistrate, First Class, Jalgaon, under sections 138and 141 of Negotiable Instruments Act, and section204 of the Code of Criminal Procedure, is herebyquashed and set aside to the extent of petitioner. [ NITIN B. SURYAWANSHI ] JUDGE S.P. Rane 6 of 6