Criminal Procedure Code, 1973
Section 482—Inherent powers of High Court—Exercise of—Petition for quashing of order taking cognizance of offence—Dishonour of cheque—Power of quashing criminal proceedings while exercising power under Section 482 of the Cr.P.C., should be exercised very sparingly and with circumspection—Court, at this stage is not to embark upon an inquiry as to the reliability or genuineness of the allegations made in the complaint—Court is also not to go into the merits of the complaint to reach a conclusion that there was any existing debt or liability—Burden of proving that there was no existing debt or liability is on the accused which is required to be discharged at the time of trial unless some evidence of unimpeachable and uncontroverted in nature is produced before the court to take a different view—Presumption envisaged under Section 139 of the NI Act is a rebuttable presumption at the time of trial.
[Para 23 to 25]
Negotiable Instruments Act, 1881
Sections 138 & 141—Dishonour of cheque—Petition to quash order taking cognizance of offence—Liability of Executive Director of accused company—If an Executive Director wants the process to be quashed, on the ground that only a bald averment has been made, the onus of providing unimpeachable and incontrovertible evidence, or acceptable circumstances to substantiate the contentions lies on him/her—Petitioner/Executive Directors has failed to provide any evidence of sterling quality which may point to her innocence at this stage—Petition dismissed.
[Para 34]
Sections 138 & 141—Dishonour of cheque—Petition for quashing of order taking cognizance of offence—Payment in question towards rental of machinery deployed at site of accused company—Plea of security cheques—Cheques in question issued by accused company and petitioners are arrayed as accused being directors of the accused company—In terms of Section 141 of the NI Act, every director of the company does not automatically become vicariously liable for commission of an offence by the company—It is required that sufficient averments are made to show that the person who is alleged to be made vicariously liable, was in-charge and was also responsible to the company for conduct of its business—While considering the complaint, the courts ought not to adopt a hyper-technical approach—Courts have to keep in mind the laudable object behind the NI Act, that is, sustaining the credibility of commercial transactions—Petitioners are Managing Directors, Non-Executive Director(s), Executive Director(s) and Additional Directors of the accused company—Role of a director is well-defined in the Companies Act—First and third petitioners are Managing Directors and fourth petitioner is an Executive Director of the accused company— In so far as the Managing Directors are concerned, they cannot contend to be not responsible for the day-to-day functioning of the company and no specific role is required to be assigned qua them in the complaint—Failure of fourth petitioner to provide any evidence of sterling quality which may point to her innocence at this stage—Non-executive Director and Additional directors have no role in the day to day operation of the accused company—Powers of quashing should be used sparingly, and where the factual matrix in a complaint is laid down clearly and not in a routine manner where bald and unspecified averments are made against the accused persons, the complaint ought not to be quashed—However, where ingredients of an offence are lacking against an accused, it is the duty of the Court to discharge such accused—Holding a Trial against the non-executive director and independent additional directors under Section 138 read with Section 141 of the NI Act would be an abuse of the process of law—Impugned order in so far it relates to non-executive director and independent additional directors are set aside and proceedings qua them are quashed—Petition allowed in part.
[Paras 28 to 38]