Mr. Mukesh P. Patel S/O Late P.R. Patel Vs. Vijay Mukesh Chits (P) Ltd. Rep. by Its Managing Director Sri Mukesh S. Goklaney - Court Judgment

Excerpt:
- examination: [b.s. patil,j] puc ii year exam - option to reject result - petitioner no.1 passed by scoring 30 marks in mathematics, 45 in chemistry and 41 biology-chose to reject results in chemistry and biology - reappeared and scored 63 marks in chemistry and 70 marks in biology petitioner no. 2 passed by scoring 34 in biology, 30 in mathematics and 52 in chemistry and 36 in physics - chose to reject results only in mathematics - reappeared and scored 44 marks in mathematics - examination board declared them failed as they did not appear in mathematics (in case of petitioner no. 1) and biology (in case of petitioner no.2) as they had only scored 30 marks in the subject not rejected - held: the respondent-authorities have not rejected the applications submitted by the petitioners choosing to reject the results of the subjects of their choice for not choosing to reject results wherein they had scored marks between 30 to 34. having accepted their application and having permitted them to appear for the examination in the subjects which they had chosen to reject, now, while issuing the marks card the petitioner-students are being shown to have failed in the examination in the subject mathematics in respect of petitioner no. 1 for which he had not rejected, and for biology in respect of petitionerno.2. this approach adopted by the respondent authorities, in the absence of any express regulations in this regard governing the field, cannot be sustained. the contention on behalf of the government that once the results of some of the subjects are rejected, exemption available for a student to get declared as passed, though he had scored less than 35 marks in some subjects cannot be accepted, as long as the candidate secures 35 marks in some subjects cannot be accepted as long as the candidate secured 35marks in some subject cannot be accepted as long as the candidate secured 35 marks in aggregate. in the absence of any rule governing the field, the stand off the government cannot be accepted. more so, because the petitioner-students have been permitted to reject only those two subjects and are permitted to take up the examination for rejected subject. even after the declaration of results of the examinations now held, their aggregated marks will be more than 35. hence, the impugned communications cannot be sustained in law. in view of the above, writ petitions are allowed and impugned communication were set aside. the respondent-authorities were directed to issue fresh marks card to petitioners showing the marks obtained by them in different subjects.ordersubhash b.adi, j.1. petitioner has sought for quashing of the proceedings in c.c. no. 26510/2005 pending on the file of the xii a.c.m.m.. bangalore city.2. respondent has filed a private complaint under section 200 of cr.p.c. for an offence punishable under sections 138 and 142 of the negotiable instruments act before the xii a.cm.ml. bangalore. same is registered as p.c.r. no. 16371/2007.3. the learned magistrate based on the complaint, sworn statement and the material produced by the complainant was pleased to order for registration of the case and also issue of summons. at this stage, petitioner who is arrayed as accused no. 3 has filed this petition under section 482 of cr.p.c. seeking quashing of the proceedings insofar as he is concerned.4. learned counsel appearing for the petitioner submits that, complaint is misconceived insofar as petitioner is concerned, as the petitioner has resigned as a director of the first accused company on 31.3.2007 and according to the complaint itself, cheque is issued on 22.7.2007. he is neither signatory nor he was a director as on the date of issue of the cheque. as such, the offence punishable under section 138 of the negotiable instruments act is not attracted as against this petitioner. he further submitted that, though he was a director, at the time of transaction, however, he has resigned from the post of director even before the cheque is issued, hence, he cannot be prosecuted for the offence committed by the company, he also submitted that, the offence alleged is against the company and not against individual directors, directors are made parties because the company did not make the payment and it attracts the provisions of section 141 of the negotiable instruments act and submitted that, in case of offence committed by the company, every person who, at the time the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. it is only such persons who am be prosecuted and punished for the offence punishable under section 138 of the negotiable instruments act and not others.5. he further submitted that, persons responsible and incharge of the business of the company as on the date of commission of the offence are alone could be prosecuted. the commission of offence will be only, when cheque issued to the complainant has been dishonoured and despite making demand for payment of the amount involved in the cheque within the stipulated period, it is only on failure of payment of such amount within the stipulated period, the offence said to have been committed. petitioner neither is a parly to the issue of cheque, nor he was a director when the cheque was issued nor he had any connection with the affairs of the company on the date of the commission of the offence and as such he could not have been made party to the proceedings. in this regard, he relied on the judgment of the apex court reported in : 2007(3) scc 693 in the matter of saroj kumar poddar v. state and anr.6. learned counsel appearing for the respondent complainant submitted that, as on the date of the transaction, petitioner was a director and in this regard, cheque was issued and when the cheque was dishooured, a legal notice was issued to both the directors i.e. accused nos. 2 and 3 and on behalf of accused nos. 2 and 3, a joint reply was given and in the reply there is no statement as regard to resignation nor there is any statement that he is not director, as such, the petitioner is liable to be prosecuted.7. learned counsel also relied on a judgment of the apex court reported in (2007) 137 comp. cas 198(sc) in the matter of n. rangachari v. bharat sanchar nigam limited and submitted that, petitioner being a director at the time of transaction, whether he is responsible or not. is a matter which is within the personal knowledge of the petitioner and such matter could be adduced only by way of evidence and not by way of seeking quashing of the proceedings. in this regard, he relied on paragraphs 28 and 29 of the judgment.28. in the case on hand, reading the complaint as a whole, it is clear that, the allegations in the complaint are that at the time at which the two dishonoured cheques were issued by the company, the appellant and another were the directors of the company and were incharge of the affairs of the company, it is not proper to split hairs in reading the complaint so as to come to a conclusion that the allegations as a whole are not sufficient to show that, at the relevant point of time, the appellant and the other are not alleged to be persons incharge of the affairs of the company. obviously, the complaint refers to the point of time when the two cheques were issued their presentment, dishonour and failure to pay in spite of notice of dishonour. we have no hesitation in overruling the argument in that behalf by the learned senior counsel for the appellant.29. we think that, in the circumstances, the high court has rightly came to the conclusion that it is not a fit case for exercise of jurisdiction under section 482 of the code of criminal procedure for quashing the complaint. in fact, an advertence to sections 138 and 141 of the negotiable instruments act shows that, on the other elements of an offence under section 138 being satisfied, the burden is on the board of directors or the officers incharge of the affairs of the company to show that they are not liable to be convicted. any restriction on their power or existence of any special circumstance that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish at the trial such a restriction or to show that at the relevant time they were not incharge of the affairs of the company. reading the complaint as a whole, we are satisfied that it is a case where the contentions sought to be raised by the appellant can only be dealt with after the conclusion of the trial.8. insofar as resignation of the petitioner as a director of the first accused company with effect from 31.3.2007 is not disputed by the learned counsel for the complainant and is evident from the endorsement issued by the registrar of companies.9. in is not in dispute that, the cheque is issued on 22.7.2008, and as on that date, petitioner was not director, he had no relation to the affairs of the company. unless the complainant shows that, as on the date of commission of offence petitioner was director, it cannot, be held that, prima facie petitioner is also guilty of the offence alleged.10. section 141 of the negotiable instruments act specifically requires that, the person incharge and responsible for the business of the company as on the date of commission of the offence. may be on the date of transaction, petitioner might be a director, it cannot be held that, he is guilty of the offence. as on the date of transaction parties might not have airy intention, however, on dishonour of cheque and making payment despite demand, it shows that, accused had an intention not to pay the amount. even issue of cheque may also be in good faith, but failure to pay the amount on demand would constitute an offence.11. to support this view the supreme court in the matter of saroj kumar poddar has held that, the person who is not director as on the date of commission of the offence, he could not be held responsible. in this case it is not disputed that, as on the date of issue of cheque, petitioner was not a director of the accused no. 1 company.12. considering the same, i find that, the petitioner was not a director as on the date of issue of cheque and the complaint cannot be filed against him for the offence alleged to have been committed by the company.13. the decision relied by the learned counsel for the respondent in the matter of bharat sanchar nigam limited also, the supreme court has taken notice that, as on the date of issue of tile cheque, the petitioner therein was a director and it is under these circumstances, the apex court has held that, he can be prosecuted.14. in the light of the above, in my opinion, the proceedings against the petitioner requires to be quashed.15. accordingly, petition is allowed. the proceedings in c.c. no. 26510/2007 insofar as the petitioner is concerned, stands quashed. however, as against the others, the proceedings to go on.

Judgment:
ORDER

Subhash B.Adi, J.

1. Petitioner has sought for quashing of the proceedings in C.C. No. 26510/2005 pending on the file of the XII A.C.M.M.. Bangalore City.

2. Respondent has filed a private complaint under Section 200 of Cr.P.C. for an offence punishable under Sections 138 and 142 of the Negotiable Instruments Act before the XII A.CM.ML. Bangalore. Same is registered as P.C.R. No. 16371/2007.

3. The learned Magistrate based on the complaint, sworn statement and the material produced by the complainant was pleased to order for registration of the case and also issue of summons. At this stage, petitioner who is arrayed as accused No. 3 has filed this petition under Section 482 of Cr.P.C. seeking quashing of the proceedings insofar as he is concerned.

4. Learned Counsel appearing for the petitioner submits that, complaint is misconceived insofar as petitioner is concerned, as the petitioner has resigned as a Director of the first accused Company on 31.3.2007 and according to the complaint itself, cheque is issued on 22.7.2007. He is neither signatory nor he was a director as on the date of issue of the cheque. As such, the offence punishable under Section 138 of the Negotiable Instruments Act is not attracted as against this petitioner. He further submitted that, though he was a Director, at the time of transaction, however, he has resigned from the post of Director even before the cheque is issued, Hence, he cannot be prosecuted for the offence committed by the Company, He also submitted that, the offence alleged is against the Company and not against individual Directors, Directors are made parties because the Company did not make the payment and it attracts the provisions of Section 141 of the Negotiable Instruments Act and submitted that, in case of offence committed by the Company, every person who, at the time the offence was committed, was in charge of and was responsible to the Company for the conduct of the business of the Company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. It is only such persons who am be prosecuted and punished for the offence punishable under Section 138 of the Negotiable Instruments Act and not others.

5. He further submitted that, persons responsible and incharge of the business of the Company as on the date of commission of the offence are alone could be prosecuted. The commission of offence will be only, when cheque issued to the complainant has been dishonoured and despite making demand for payment of the amount involved in the cheque within the stipulated period, it is only on failure of payment of such amount within the stipulated period, the offence said to have been committed. Petitioner neither is a parly to the issue of cheque, nor he was a Director when the cheque was issued nor he had any connection with the affairs of the Company on the date of the commission of the offence and as such he could not have been made party to the proceedings. In this regard, he relied on the judgment of the Apex Court reported in : 2007(3) SCC 693 in the matter of Saroj Kumar Poddar v. State And Anr.

6. Learned Counsel appearing for the respondent complainant submitted that, as on the date of the transaction, petitioner was a Director and in this regard, cheque was issued and when the cheque was dishooured, a legal notice was issued to both the Directors i.e. accused Nos. 2 and 3 and on behalf of accused Nos. 2 and 3, a joint reply was given and in the reply there is no statement as regard to resignation nor there is any statement that he is not Director, as such, the petitioner is liable to be prosecuted.

7. Learned Counsel also relied on a judgment of the Apex Court reported in (2007) 137 Comp. Cas 198(SC) in the matter of N. Rangachari v. Bharat Sanchar Nigam Limited and submitted that, petitioner being a Director at the time of transaction, whether he is responsible or not. is a matter which is within the personal knowledge of the petitioner and such matter could be adduced only by way of evidence and not by way of seeking quashing of the proceedings. In this regard, he relied on paragraphs 28 and 29 of the judgment.

28. In the case on hand, reading the complaint as a whole, it is clear that, the allegations in the complaint are that at the time at which the two dishonoured cheques were issued by the company, the appellant and another were the directors of the company and were incharge of the affairs of the company, It is not proper to split hairs in reading the complaint so as to come to a conclusion that the allegations as a whole are not sufficient to show that, at the relevant point of time, the appellant and the other are not alleged to be persons incharge of the affairs of the company. Obviously, the complaint refers to the point of time when the two cheques were issued their presentment, dishonour and failure to pay in spite of notice of dishonour. We have no hesitation in overruling the argument in that behalf by the learned senior counsel for the appellant.

29. We think that, in the circumstances, the High Court has rightly came to the conclusion that it is not a fit case for exercise of Jurisdiction under Section 482 of the Code of Criminal Procedure for quashing the complaint. In fact, an advertence to Sections 138 and 141 of the Negotiable Instruments Act shows that, on the other elements of an offence under Section 138 being satisfied, the burden is on the board of directors or the officers incharge of the affairs of the company to show that they are not liable to be convicted. Any restriction on their power or existence of any special circumstance that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish at the trial such a restriction or to show that at the relevant time they were not incharge of the affairs of the Company. Reading the complaint as a whole, we are satisfied that it is a case where the contentions sought to be raised by the appellant can only be dealt with after the conclusion of the trial.

8. Insofar as resignation of the petitioner as a Director of the first accused Company with effect from 31.3.2007 is not disputed by the learned Counsel for the complainant and is evident from the endorsement issued by the Registrar of Companies.

9. In is not in dispute that, the cheque is issued on 22.7.2008, and as on that date, petitioner was not Director, He had no relation to the affairs of the Company. Unless the complainant shows that, as on the date of commission of offence petitioner was Director, it cannot, be held that, prima facie petitioner is also guilty of the offence alleged.

10. Section 141 of the Negotiable Instruments Act specifically requires that, the person incharge and responsible for the business of the company as on the date of commission of the offence. May be on the date of transaction, petitioner might be a Director, it cannot be held that, he is guilty of the offence. As on the date of transaction parties might not have airy intention, however, on dishonour of cheque and making payment despite demand, it shows that, accused had an intention not to pay the amount. Even issue of cheque may also be in good faith, but failure to pay the amount on demand would constitute an offence.

11. To support this view the Supreme Court in the matter of Saroj Kumar Poddar has held that, the person who is not Director as on the date of commission of the offence, he could not be held responsible. In this case it is not disputed that, as on the date of issue of cheque, petitioner was not a Director of the accused No. 1 Company.

12. Considering the same, I find that, the petitioner was not a Director as on the date of issue of cheque and the complaint cannot be filed against him for the offence alleged to have been committed by the Company.

13. The decision relied by the learned Counsel for the respondent in the matter of Bharat Sanchar Nigam Limited also, the Supreme Court has taken notice that, as on the date of issue of tile cheque, the petitioner therein was a Director and it is under these circumstances, the Apex Court has held that, he can be prosecuted.

14. In the light of the above, in my opinion, the proceedings against the petitioner requires to be quashed.

15. Accordingly, petition is allowed. The proceedings in C.C. No. 26510/2007 insofar as the petitioner is concerned, stands quashed. However, as against the others, the proceedings to go on.