IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 8514 of 2005(L)
1. NELLIKUNNAN ABDUL AZEEZ, S/O.NELLIKUNNAN
... Petitioner
2. NELLIKUNNAN ASHRAF, NELLIKUNNAN MUHAMMED
Vs
1. S.I.CAPITAL AND FINANCIAL SERVICES LTD,.
... Respondent
2. STATE OF KERALA, REPRESENTED BY THE
For Petitioner :SRI.K.SHRIHARI RAO
For Respondent :PUBLIC PROSECUTOR
The Hon'ble MR. Justice R.BASANT
Dated :09/03/2007
O R D E R
R.BASANT, J
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W.P(C).No.8514 of 2005
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Dated this the 9th day of March, 2007
JUDGMENT
The petitioners are accused 3 and 4 in a prosecution under
Section 138 of the N.I Act. Altogether there were 4 accused persons.
1st accused is a company. 2nd accused is the Managing Director, who
had signed on behalf of the company in the cheque. Accused 3 and 4
are alleged to be the director of the company. It is alleged in para.2
and later in para.4 of the complaint that accused 3 and 4 are
responsible for all action, omissions etc. done by the 1st accused
company and that they are taking active part in the running of the
business of the company. The complaint was filed as early as in 2001.
Cognizance was taken by the learned Magistrate. The petitioners
have not appeared before the learned Magistrate so far. They have
come to this Court with this petition under Article 227 of the
Constitution of India to quash the proceedings initiated against them.
2. The crux of the contentions is that they have ceased to be
directors of the company w.e.f 20.11.1995 and in as much as they are
not directors of the company on 20.11.1995, they cannot be made
liable for the cheque which bears the date 16.03.2001 and its
subsequent dishonour etc.
W.P(C).No.8514 of 2005 2
3. In support of this plea, the petitioners have produced
Ext.P1 to show that they have ceased to be the directors w.e.f
20.11.1995. In these circumstances, it is contended that the
petitioners can never be subjected to the trauma of facing this
criminal prosecution under Section 138 read with 141 of the N.I Act.
Ext.P1 is a search report issued by the Registrar of Companies in
which it is mentioned that the petitioners have ceased to be the
directors w.e.f 20.11.1995 and another person was appointed as the
director with effect from that date.
4. The learned counsel for the respondent/complainant
submits that Ext.P1 is of no worthy on which it is written as it is
evident from a close scrutiny of Ext.P1 itself that this theory that the
petitioners have ceased to be the directors was advanced only in a
Form 32 report filed on 15.03.2004. Admittedly as seen from Ext.P1,
no Audited Balance Sheet or Annual Returns were filed by the
company for the period 31.03.1994 to 31.03.2004. The cheque is
dated 16.03.2001 and the complaint was filed on 01.10.2001. In these
circumstances, the self serving statement in Form 32 statement filed
on 15.03.2004 that the petitioners have retired from the company
w.e.f 20.11.1995 cannot, at any rate, persuade this Court to invoke its
extraordinary inherent jurisdiction under Article 227 of the
Constitution. At any rate, that is the plea which the petitioners must
W.P(C).No.8514 of 2005 3
be left to plead and establish in the trial which was held. The decision
in S.M.S Pharmaceuticals Ltd. v. Neeta Bhalla [(2005) 8 SCC 89]
cannot obviously has any explanation in the light of the specific
averments which are seen in paragraphs 2 and 4 of the complaint.
The learned counsel for the respondent/complainant alertly points out
that the petitioners are only trying to camouflage the issue and
mislead the Court by attempting to place reliance on Ext.P1. I find
merit in this objection raised by the learned counsel for the
respondent. Ext.P1 document cannot obviously deliver any advantage
to the petitioners at this stage of the proceedings or entitle them to
claim quashing of proceedings.
5. It is true that this Court in the order dated 07.03.2007 in
W.P(C) No.35281 of 2005 has, accepting the original of Ext.P2
produced in this case, directed the quashing of proceedings under
Article 227 of the Constitution. It was not brought to the notice of this
Court and this Court committed the error of not appreciating the
significance of the relevant entries in Ext.P1 that such Form 32 report
was filed only on 15.03.2004. That obvious error committed by this
Court in W.P(C) No.35281 of 2005, cannot deliver any advantage to
the petitioners in this case.
6. This Crl.M.C is, in these circumstances, dismissed. It is
reported that the petitioners have not appeared before the learned
W.P(C).No.8514 of 2005 4
Magistrate so far. They shall forthwith appear before the learned
Magistrate. The learned Magistrate must take expeditious steps to
secure the presence of the petitioners and ensure that the complaint
is disposed of as expeditiously as possible – at any rate, within a
period of 45 days from the date on which the petitioners appear
before the learned Magistrate.
(R.BASANT, JUDGE)
rtr/-