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Sri Bhagirath Arya vs State Of U.P. And Ors. on 29 March, 2008

Allahabad High Court
Sri Bhagirath Arya vs State Of U.P. And Ors. on 29 March, 2008
Author: A Roopanwal
Bench: A Roopanwal


JUDGMENT

A.K. Roopanwal, J.

1. This application under Section 482, Cr.P.C. has been moved for quashing the entire criminal proceedings of complaint case No. 4699/06, under Section 138 read with Sections 141 and 142, N.I. Act, pending in the court of the Ist Additional Chief Judicial Magistrate, Ghaziabad.

2. It appears from the facts of the case that a complaint was filed by the complainant Mrs. Shashi Jain against (1) M/s. Elfotec Electro Chemicals Ltd.; (2) Mr. Kanak Surana; (3) Mr. Omprakash Sairaf and (4) Mr. Bhagirah Arya (applicant). It was the case of the complainant in the complaint that she is the director of M/s. B.K. Carbide having its head office at Ghaziabad. Accused No. 1, M/s. Elfotec Electro Chemicals Ltd. has its head office at Pondichhery, accused No. 2, Mr. Kanak Surana and accused No. 3, Mr. Omprakash Sairaf are the directors while accused No. 4, Mr. Bhagirath Arya (applicant) is the promotor and controller of this company. They all are managing day to day affairs of the company and are responsible for each and every work of the company. The complainant company gave a loan of Rs.9,00,000/- to accused No. 1 in the year 2005 on different dates either by cheque or by draft. In order to repay this loan accused Nos. 1 to 4 issued a cheque No. 038981 of UTI Bank, Pondichhery for Rs.9,00,000/- to the complainant company. When the complainant presented this cheque at Bank of India, Ghaziabad, it was dishonoured. The information in this regard was given to the complainant by her banker Bank of India on 2.2.06. The complainant, then, sent a notice through registered post to all the accused persons on 18.2.06 and demanded the amount of the cheque. The accused persons did not comply with the notice, hence, the complainant filed the complaint in the court of the Additional Chief Judicial Magistrate, Ghaziabad which was registered as complaint No. 5272/06. On this complaint the statement of the complainant was recorded under Section 200, Cr.P.C. The complainant also filed the original cheque memo of the bank and copy of the notice.

3. The Additional Chief Judicial Magistrate, Court No. 1, Ghaziabad after perusal of the statement and the documents summoned the accused persons under Sections 138 and 141, N.I. Act vide his order dated 19.9.06. Feeling aggrieved by this order the applicant has filed the present petition.

4. I have heard Mr. P.P. Srivastava, learned senior counsel assisted by Tulika Prakash and Shishir Prakash, learned Counsel for the applicant, learned AGA for the State, Mr. V.P. Srivastava, learned senior counsel assisted by Mr. Nitin Gupta for the complainant and perused the record.

5. Learned Counsel for the applicant argued that in the present case requirements of Section 141, N.I. Act were not satisfied and therefore, the ACJM concerned was not justified in summoning the applicant. The whole proceedings based on the summoning order are bad and are liable to be quashed. In support of the argument reliance has been placed on , S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Anr. and , Saroj Kumar Poddar v. State (NCT of Delhi) and Anr. In , S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Anr. it was held by the apex court that in a complaint case where the cheque issued by or on behalf of the company was dishonoured it is necessary for the complainant to aver that at the time when the cheque was issued the present accused was incharge of, and responsible for the conduct of business of the company. Without this averment being made in the complaint, the requirement of Section 141, N.I. Act cannot be said to be satisfied.

6. In , Saroj Kumar Poddar v. State (NCT of Delhi) and Anr. it was held that in a complaint where the cheque issued by or on behalf of the company was dishonoured the complainant must aver in the complaint petition as to how and in what manner the appellant was responsible for the conduct of the business of the company.

7. On the basis of the above rulings it was argued by the learned Counsel for the applicant that the complaint in the present case is not maintainable as the complainant had not averred in the complaint as to how and in what manner the applicant was responsible for the conduct of the business of the company. According to the learned Counsel, the applicant was shown to be only the promotor and controller of the company but it has not been averred in the complaint as to how and in what manner he was responsible for the conduct of the business of the company or otherwise responsible to it in regard to its functioning and therefore, the requirements of Section 141, N.I. Act were not satisfied and by overlooking this aspect of the matter the trial court summoned the applicant which cannot be said to be justified. He further argued that the applicant had resigned from the position of controller and promotor of M/s Elfotec Electro Chemicals Ltd. on 15.12.88 and therefore, he could not be said to be responsible for any act of the company on the date when the disputed cheque was issued and could also not be held to have committed any offence punishable under Section 138, N.I. Act.

8. To the above argument it was replied by Mr. V.P. Srivastava that whatever has been argued by the learned Counsel for the applicant that is only a defence version which cannot be considered in the application under Section 482, Cr.P.C. and therefore, the present application is liable to be dismissed. In support of the argument reliance has been placed on , S.V. Mazumdar and Ors. v. Gujarat State Fertilizer Co. Ltd. and Anr. 2007 Crl.J. 2448, N. Rangachari v. Bharat Sanchar Nigam Limited , State of Orissa v. Debendra Nath Padhi and , State of Haryana and Ors. v. Ch. Bhajan Lal and Ors.

9. From the citations relied upon by the learned Counsel for the complainant it appears that this defence of the applicant cannot be scrutinised in the proceedings under Section 482, Cr.P.C. that he was not responsible for the conduct of the business of the company or otherwise responsible to it in regard to its functioning, however, this position of law remains intact that the order of the Magistrate summoning the accused must reflect that he had applied his mind to the facts of the case and the law applicable to it. He can summon the accused in a case where cheque was issued for or on behalf of the company only when the averments as contemplated by Section 141, N.I. Act were made in the complaint and those averments were liable to be believed in view of the material available on the record and from this material prima facie an offence under Section 138, N.I. Act was made out.

10. In Everest Advertising Pvt. Ltd. v. State Govt. of NCT of Delhi and Ors. it was held that where the jurisdiction is exercised on a complaint petition filed in terms of Section 156(3) or 200, Cr.P.C. the Magistrate is required to apply his mind. The same view was expressed by the apex court in Pepsi Foods Ltd. and Anr. v. Special Judicial Magistrate and Ors. (1998) 5 SCC 749. It was held in this ruling that “Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.”

11. From the above citation also, it is very much clear that before summoning the accused in a case where the cheque was issued on behalf of the company the Magistrate has to be satisfied that the averments as per provisions of Section 141, N.I. Act are made in the complaint and those averments do find support from the evidence led by the complainant. The Magistrate should also be satisfied that from the evidence led by the complainant a prima facie case under Section 138, N.I. Act is made out against the accused. In the light of the above legal proposition if we go through the summoning order in the present case, we would find that this summoning order does not satisfy the requirements of law.

12. From the averments made in the complaint only this much was appearing that the applicant is the promotor and controller of the company. It was not averred that being promotor and controller of the company how and in what manner he was responsible for the conduct of the business of the company or otherwise responsible to it in regard to its functioning. Admittedly, he had not issued cheque in question to the complainant. It was also not averred in the complaint as to how he was responsible for dishonour of the cheque. Therefore, the averments made in the complaint, in my opinion, were not sufficient to satisfy the requirements of Section 141, N.I. Act as these were not backed by any evidence on the record. Moreover, these averments even if taken to be correct in their entirety did not disclose any offence against the applicant. The summoning order is thus, an order which is not based on the proper application of mind by the Magistrate and cannot be said to be a proper order. It is liable to be quashed and all the proceedings based on such order are also liable to be quashed.

13. Consequently, the application is allowed. Proceedings of complaint case No. 4699/06, under Section 138 read with Sections 141 and 142, N.I. Act, pending in the court of the Ist Additional Chief Judicial Magistrate, Ghaziabad are quashed.

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