KIRAN MODI Vs. NEOFIC INDUSTRIES
HIGH COURT OF DELHI
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(1.) The respondent herein has filed a complaint under Section 138 of the
Negotiable Instruments Act, 1881, being Complaint No. 41/1/2003 dated 16.4.2003,
impleading four accused persons. Accused No.1 is the company on behalf of which
cheques in question were issued, which were dishonoured and became the basis of
filing of the complaint. Accused No.2 is the Director of the accused No.1
(hereinafter referred to as 'the company'), who had signed the cheques. Accused
Nos. 3 and 4 (who are the petitioners herein) are the other two directors of the
company. It is alleged in the complaint by the respondent (hereinafter referred
to as 'the complainant') that five cheques were issued on behalf of the company
for a total sum of Rs.91,627/-, which were dishonoured.
(2.) After the pre-summoning stage, evidence was recorded. The learned trial court
took cognizance and issue summons to the accused persons vide order dated
28.8.2003. The two petitioners challenged that order by filing Crl.M.C. No.
615/2004 in this Court. The same was, however, disposed of vide order dated
8.3.2004 with a direction to raise all the pleadings before the trial court in
view of the judgment of the Supreme Court in the case of K. M. Mathew v. State of
Kerala, (1992) 1 SCC 217. However, in view of the subsequent judgment in the
case of Adalat Prasad v. Rooplal Jindal, (2004) 7 SCC 338, over-ruling K.M.
Mathew (supra) insofar as powers of the trial court are concerned and holding
that the trial court has no power to review its order once summons are issued,
the present petition is filed. The plea taken is that the petitioners are not
in control of the affairs of the company and nothing is stated in the complaint
assigning any such role.
(3.) I have examined this aspect in detail in the judgment rendered by me on
20.12.2006 in the case of J. N. Bhatia (Col.) and Ors. v. State and Anr., and
connected matters, which judgment is reported as 2007 III AD (Delhi) 142. After
taking note of various judgments of the Supreme Court, this Court and other High
Courts, including the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and
Anr., (2005) 8 SCC 89, the legal position is summarised in the following words
"21. Thus, what follows is that mere bald allegation that a particular
person (or a Director) was responsible for the conduct of the business of the
company would not be sufficient. That would be reproduction of the language of
Sub-section (1) of Section 141 and would be without any consequence and it is
also necessary for the complainant to satisfy how the petitioner was so
responsible and on what basis such an allegation is made in the complaint.
xx xx xx
27. I may add here that it is also the principle laid down in some of the
aforesaid judgments that while examining the matter from this angle, the
Magistrate can take into consideration material on record suggesting that the
accused was in overall control of business of the company. Purpose would
suffice taking note of the following observations of the Andhra Pradesh High
Court in Neeta Bhalla v. SMS Pharmaceuticals (supra):-
"35. However, the learned counsel for the respondent-complainant contends
that not only the complaint, but material made available along with the
complaint also may have to be taken into consideration to find out as to whether
any specific accusations such as is made against the persons arrayed as accused
in the complaint. There is absolutely no difficulty whatsoever to agree with
the said submission made by the learned counsel for the respondent-complainant.
But, is there any material available on record, revealing the role, if any,
played by the petitioner herein. Is there any document made available by the
respondent-complainant to make out a prima facie case against the petitioner
also for the offence, if any, committed by A1 company. Is there any thing on
record suggesting that the petitioner was in over all control of the business of
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