# Jatinder Pal Singh v. M/S STATCON POWER CONTROLS LTD. & Dehli & Ors. Opp. Parties

- **Citation:** (2022) 4 ILRA 683
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-03-08
- **Case number:** Appl. U/S 482 No. 10245 of 2021
- **Bench:** Syed Aftab Husain Rizvi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/jatinder-pal-singh-v-m-s-statcon-power-controls-ltd-dehli-ors-opp-parties-48291
- **Pages:** 7

## Headnote

A. Criminal Law - Code of Criminal
Procedure, 1973-Section 482 - Negotiable
Instrument Act, 1881-Sections 138 & 142quashing of summoning order-applicant is
the Director of company-Two cheques
have been issued by the company in
favour of opposite party-both the cheques
have
dishonoured-Legal
notices
were
issued to the applicant but they not
complied with it, then a complaint was
filed-the opposite party has not made any
specific averment against the applicant as
to the part played by him in the whole
transaction-merely being a director in a
company it is not sufficient to make the
applicant liable u/s 141 of the NI Actapplicant was a nominee Director and who
resigned-no specific averment that the
applicant is involved in day-to-day affairs
of the company-liability is cast on persons
who may have something to do with the
transaction complained of-the summoning
order is illegal and cannot be sustained.
(Para 1 to 12)

The application is allowed. (E-6)

List of Cases cited:

## Text

4 All. Jatinder Pal Singh Vs. M/S STATCON POWER CONTROLS LTD. & Delhi & Ors.
683
concerned. The order directing issuance of
warrant of arrest is patently illegal and not
warranted by law. Order dated 30.11.2021
is hereby set aside. Let the Principal Judge
pass a fresh order in the aforesaid execution
cases filed by opposite party no.2 in light of
the observations made herein above.

13. Subject to the observations made
above, the present petition is allowed.`
----------
(2022)04ILR A683
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 08.03.2022

BEFORE

THE HON'BLE SYED AFTAB HUSAIN RIZVI, J.

Appl. U/S 482 No. 10245 of 2021

Jatinder Pal Singh ...Applicant
Versus
M/S STATCON POWER CONTROLS LTD. &
Dehli & Ors. ...Opp. Parties

Counsel for the Applicant:
Sri Varun Singh, Sri Divendu Tripathi, Sri Talha
Abdul Rahman, Sri Santosh Kumar Tripathi

Counsel for the Respondents:
A.G.A., Sri S.K. Mishra

A. Criminal Law - Code of Criminal
Procedure, 1973-Section 482 - Negotiable
Instrument Act, 1881-Sections 138 & 142quashing of summoning order-applicant is
the Director of company-Two cheques
have been issued by the company in
favour of opposite party-both the cheques
have
dishonoured-Legal
notices
were
issued to the applicant but they not
complied with it, then a complaint was
filed-the opposite party has not made any
specific averment against the applicant as
to the part played by him in the whole
transaction-merely being a director in a
company it is not sufficient to make the
applicant liable u/s 141 of the NI Actapplicant was a nominee Director and who
resigned-no specific averment that the
applicant is involved in day-to-day affairs
of the company-liability is cast on persons
who may have something to do with the
transaction complained of-the summoning
order is illegal and cannot be sustained.
(Para 1 to 12)

The application is allowed. (E-6)

List of Cases cited:
1. K. Srikanth Singh Vs North East Securities
Ltd. (2007) 12 SCC 788

2. DMC Financial Services Ltd. Vs J. N . Sareen
(2008) 8 SCC 1

3. Chintalapati Srinivasa Raju Vs SEBI (2018) 7
SCC 443

4. Pooja Ravinder Devidasani Vs St. of Mah. &
anr .(2014) 16 SCC 1

5. SMS Pharmaceuticals Ltd. Vs Neta Bhalla &
anr. (2005) 8 SCC 89

6. Srikanth Singh Vs North East Securities Ltd.
(2007) 12 SCC 788

(Delivered by Hon'ble Syed Aftab Husain
Rizvi, J.)

1. Heard Sri Varun Singh, learned
counsel for the applicant, Sri S.K. Mishra,
learned counsel for the O.P. No. 2 as well
as learned A.G.A. for the State and perused
the record.

2. This application U/s 482 Cr.P.C.
has been filed for quashing the judgment
and order dated 2.1.2021 passed by the
Special Judge SC/ST (Prevention of
Atrocities) Act, Gautam Budh Nagar in
Criminal Revision No. 72 of 2019 and
further to quash the summoning order dated
7.1.2014 passed by the learned A.C.J.M.
IIIrd, Gautam Budh Nagar in Complaint
684 INDIAN LAW REPORTS ALLAHABAD SERIES
Case No. 1927 of 2013 (M/s Statcon Power
Controls Ltd. Vs. M/s G.E.T. Power Ltd. &
others) pending before the Court of Judicial
Magistrate Additional Court No. 3, Gautam
Budh Nagar, under section 138 r/w 142 of
the N.I. Act.

3. The O.P. No. 2 filed a complaint
alleging therein that complainant is engaged
in business of manufacturing and trading in
signaling equipments, industrial batteries
and other equipments. The accused no. 1 is
also a public limited company incorporated
under the Companies Act, 1956 having its
registered address at "Techpro Towers" Plot
No. 11-A 17, 5th Cross Road, SIPCOT IT
Park, Siruseri, Chennai-603103, Tamil Nadu
and
the
other
accused
are
the
Directors/Executive
Directors
of
the
company/accused no. 1 and are responsible
for
the
acts
and
deeds
of
the
company/accused no. 1. The accused no. 1
has placed a purchase order bearing no.
GET/11-009/12-13/362 dated 4th July, 2012
on the complainant at Administrative Office
of the complainant at A-34, Sector-59,
Gautam Budh Nagar, Noida-201301 Uttar
Pradesh for the supply of two sets of Battery
Bank, Charger along with accessories and
the total amount of the abovementioned
purchase order including taxes and duties
was Rs. 4,58,42,880.00 (Rupees Four Crores
Fifty Eight Lakhs Forty Two Thousand
Eight
Hundred
Eighty
only).
The
complainant supplied one set of battery bank
along with its relevant accessories to the
accused at their site on 25.4.2013 as per
Purchase Order. The accused issued cheques
bearing nos. 404847 and 404848 both dated
16.5.2013 for Rs. 1,00,00,000 each (Rupees
One Crore each) drawn on Axis Bank
Limited,
Chennai
in
favour
of
the
complainant towards the payment for goods
supplied at their site. The complainant
presented the said cheques with its Banker
State Bank of India, Noida for realization of
the amount of the said cheques. On 15th
July, 2013 the cheque no. 404847 dated 16th
May, 2013 for Rs. One Crore drawn on Axis
Bank Ltd. Chennai has been deposited in
bank by the complainant and the same has
been presented on the banker of accused no.
1 through the complainant's banker namely
State Bank of India, Noida and on
presentation for payment the same has been
dishonored on 16th July, 2013 with the
remarks "Exceeds Arrangement". On 15th
July, 2013 another cheque bearing no.
404848 dated 16th May, 2013 for Rs. One
Crore drawn on Axis Bank Ltd. Chennai has
been deposited in bank by the complainant
and the same has been presented on banker
of accused no. 1 through the complainant's
banker namely State Bank of India, Noida
and on presentation for payment the same
has been dishonored on 16th July, 2013 with
the remarks "Exceeds Arrangement". The
complainant issued legal notice dated
24.7.2013
by
Registered
A.D.
post
demanding payment of the amount due
under the said two cheques. The notices
have been served on all the accused on
29.7.2013. Despite receipt of the legal notice
they failed to pay the amount of the
dishonored cheques within the stipulated
time of 15 days. On the aforesaid complaint
the learned Magistrate by the impugned
order dated 7.1.2014 has summoned the
applicant and other accused named in the
complaint to face trial for the offence under
section 138 N.I. Act. Aggrieved with the
aforesaid summoning order the applicant
filed a criminal revision no. 72 of 2019
which has been dismissed by Special Judge
SC/ST Act vide judgment and order dated
2.1.2021.

4. The contentions of the learned
counsel for the applicant are that the
impugned order of summoning is a non
4 All. Jatinder Pal Singh Vs. M/S STATCON POWER CONTROLS LTD. & Delhi & Ors.
685
speaking order. The learned Magistrate has
not taken notice of the fact that there was
no specific averment in the complaint
against the applicant. He also contended
that applicant was only a nominee Director
appointed on 24.4.2012 and the applicant
resigned from the Board of Directors of
O.P. No. 2 on 19.1.2014. The applicant is
not involved in day to day affairs of the
company, so he can not be held reliable for
dishonour of any cheque issued by other
Managing Directors. The applicant has not
signed the dishonoured cheques on behalf
of company nor he is authorized signatoree
of the company. The O.P. No. 1 has merely
implicated the applicant without assigning
any specific role to the applicant in the
execution of dishonour of the cheques with
intention of harassing the applicant. The
O.P. No. 1 has not made any specific
averment against the applicant as to the part
played by him in the whole transaction. It is
further contended that merely being a
Director in a company it is not sufficient to
make the applicant liable under section 141
of the N.I. Act. For imputing liability on
the applicant the O.P. No. 1 ought to have
brought incontrovertible material on record
to show that the applicant is incharge of
and responsible for the conduct of affairs of
the company. In the absence of such
material and in the light of general
averments the applicant can not be
prosecuted.
Learned
counsel
placed
reliance on the following rulings on the
aforesaid points:

1. K. Srikanth Singh V. North East
Securities Limited (2007) 12 SCC 788

2. DMC Financial Services Limited V.
J.N. Sareen reported as (2008) 8 SCC 1.

5. Learned counsel also submitted that
proceedings under section 138 N.I. Act can
not be proceeded against non Executive
Directors. On this point he relied the
following citations:

1. Chintalapati Srinivasa Raju V.
Securities and Exchange Board of India,
reported as (2018) 7 SCC 443.

2. Pooja Ravinder Devidasani Vs.
State of Maharashtra & Anr., reported as
(2014) 16 SCC 1.

6. Per contra; learned counsel for the
O.P. No. 2 opposed the application and
submitted that applilcant is a Director of
company. Two cheques have been issued
by the company in favour of O.P. No. 1.
Both the cheques have dishonoured. Legal
notices were issued to the applicant and
other accused persons but they not
complied with it, then a complaint was
filed. Learned Magistrate being satisfied
with the material on record has taken
cognizance
of
the
offence
and
has
summoned the applicant and other accused.
There is no illegality in the summoning
order. The revision preferred by the
applicant has also been dismissed on
merits. The learned revisional court did not
find any merit in it. Learned counsel also
contended that the complaint was filed in
the year 2014 and is lingering before the
trial court since then. Only the applicant
has put his appearance before the trial
court. None of the remaining accused has
appeared. He submitted that a direction be
issued to the trial court to ensure the
presence of the other accused persons and
decide the case expeditiously.

7. It transpires from the material on
record that applicant has been arrayed as an
accused in the complaint being a Director
of the company. In para no. 4 of the
complaint there are general allegations that
the accused no. 1 is also public limited
company
incorporated
under
the
686 INDIAN LAW REPORTS ALLAHABAD SERIES
Companies Act having its registered
address at "Techpro Towers" Plot No. 11-A
17, 5th Cross Road, SIPCOT IT Park,
Siruseri, Chennai and other accused are
Directors/Executive
Directors
of
the
company/accused no. 1 and are responsible
for
the
acts
and
deeds
of
the
company/accused no. 1.

8. In S.M.S. Pharmaceuticals Ltd.
Vs. Neta Bhalla and another (2005) 8
Supreme Court Cases 89 the reference
was made by a two judges bench for
determination of the following questions by
a larger bench.

"(a) ( a) whether for purposes of
Section 141 of the Negotiable Instruments
Act, 1881, it is sufficient if the substance of
the allegation read as a whole fulfil the
requirements of the said section and it is
not necessary to specifically state in the
complaint that the person accused was in
charge of, or responsible for, the conduct
of the business of the company.

(b) whether a director of a company
would be deemed to be in charge of, and
responsible to, the company for conduct of
the business of the company and, therefore,
deemed to be guilty of the offence unless
he proves to the contrary.

( c ) even if it is held that specific
averments are necessary, whether in the
absence of such averments the signatory of
the cheque and or the Managing Directors
of Joint Managing Director who admittedly
would be in charge of the company and
responsible to the company for conduct of
its business could be proceeded against. "

9. The Hon'ble Supreme Court in para
4 and 8 made the following observations:

"(4) In the present case, we are
concerned
with
criminal
liability
on
account of dishonour of cheque. It
primarily falls on the drawer company and
is extended to officers of the Company. The
normal rule in the cases involving criminal
liability is against vicarious liability, that
is, no one is to be held criminally liable for
an act of another. This normal rule is,
however, subject to exception on account of
specific provision being made in statutes
extending liability to others. Section 141 of
the Act is an instance of specific provision
which in case an offence under Section 138
is committed by a Company, extends
criminal liability for dishonour of cheque
to officers of the Company. Section 141
contains conditions which have to be
satisfied before the liability can be
extended to officers of a company. Since
the provision creates criminal liability, the
conditions have to be strictly complied
with. The conditions are intended to ensure
that a person who is sought to be made
vicariously liable for an offence of which
the principal accused is the Company, had
a role to play in relation to the
incriminating act and further that such a
person should know what is attributed to
him to make him liable. In other words,
persons who had nothing to do with the
matter need not be roped in. A company
being a juristic person, all its deeds and
functions are result of acts of others.
Therefore, officers of a Company who are
responsible for acts done in the name of the
Company are sought to be made personally
liable for acts which result in criminal
action being taken against the Company. It
makes every person who, at the time the
offence was committed, was in charge of,
and was responsible to the Company for
the conduct of business of the Company, as
well as the Company, liable for the offence.
The proviso to the sub-section contains an
escape route for persons who are able to
prove that the offence was committed
4 All. Jatinder Pal Singh Vs. M/S STATCON POWER CONTROLS LTD. & Delhi & Ors.
687
without their knowledge or that they had
exercised all due diligence to prevent
commission of the offence.

(8)
The officers
responsible
for
conducting affairs of companies are
generally
referred
to
as
Directors,
Managers,
Secretaries,
Managing
Directors etc. What is required to be
considered is: is it sufficient to simply state
in a complaint that a particular person was
a director of the Company at the time the
offence was committed and nothing more is
required to be said? For this, it may be
worthwhile to notice the role of a director
in a company. The word 'director' is
defined in Section 2 (13) of the Companies
Act, 1956 as under:

"director"
includes
any
person
occupying the position of director, by
whatever name called" ;

There is a whole chapter in the
Companies Act on directors, which is
Chapter II. Sections 291 to 293 refer to
powers of Board of Directors. A perusal of
these provisions shows that what a Board
of Directors is empowered to do in relation
to a particular company depends upon the
role and functions assigned to Directors as
per the Memorandum and Articles of
Association of the company. There is
nothing which suggests that simply by
being a director in a Company, one is
supposed to discharge particular functions
on behalf of a company. It happens that a
person may be a director in a company but
he may not know anything about day-today functioning of the company. As a
director he may be attending meetings of
the Board of Directors of the Company
where usually they decide policy matters
and guide the course of business of a
company. It may be that a Board of
Directors may appoint sub-committees
consisting of one or two directors out of the
Board of the Company who may be made
responsible for day-to- day functions of the
Company. These are matters which form
part of resolutions of Board of Directors of
a Company. Nothing is oral. What emerges
from this is that the role of a director in a
company is a question of fact depending on
the peculiar facts in each case. There is no
universal rule that a director of a company
is in charge of its everyday affairs. We have
discussed about the position of a Director
in a company in order to illustrate the point
that there is no magic as such in a
particular word, be it Director, Manager
or Secretary. It all depends upon respective
roles assigned to the officers in a company.
A company may have Managers or
Secretaries
for
different
departments,
which means, it may have more than one
Manager or Secretary. These officers may
also be authorised to issue cheques under
their signatures with respect to affairs of
their respective departments. Will it be
possible to prosecute a Secretary of
Department-B regarding a cheque issued
by the Secretary of Department-A which is
dishonoured?
The
Secretary
of
Department-B
may
not
be
knowing
anything about issuance of the cheque in
question. Therefore, mere use of a
particular designation of an officer without
more, may not be enough by way of an
averment in a complaint. When the
requirement in Section 141, which extends
the liability to officers of a company, is that
such a person should be in charge of and
responsible to the company for conduct of
business of the company, how can a person
be subjected to liability of criminal
prosecution without it being averred in the
complaint
that
he
satisfies
those
requirements ? Not every person connected
with a Company is made liable under
Section 141. Liability is cast on persons
who may have something to do with the
transaction complained of. A person who is
688 INDIAN LAW REPORTS ALLAHABAD SERIES
in charge of and responsible for conduct of
business of a Company would naturally
know why the cheque in question was
issued and why it got dishonoured."

10. Thereafter the Hon'ble Apex
Court answered the questions in para 19
which is reproduced as below:

"In view of the above discussion, our
answers to the questions posed in the
Reference are as under:

(a) It is necessary to specifically aver
in a complaint under Section 141 that at
the time the offence was committed, the
person accused was in charge of, and
responsible for the conduct of business of
the company. This averment is an essential
requirement of Section 141 and has to be
made in a complaint. Without this averment
being
made
in
a
complaint,
the
requirements of Section 141 cannot be said
to be satisfied.

(b) The answer to question posed in
sub-para (b) has to be in negative. Merely
being a director of a company is not
sufficient to make the person liable under
Section 141 of the Act. A director in a
company cannot be deemed to be in charge
of and responsible to the company for
conduct of its business. The requirement of
Section 141 is that the person sought to be
made liable should be in charge of and
responsible for the conduct of the business
of the company at the relevant time. This
has to be averred as a fact as there is no
deemed liability of a director in such cases.

(c) The answer to question (c ) has to
be in affirmative. The question notes that
the Managing Director or Joint Managing
Director would be admittedly in charge of
the company and responsible to the
company for conduct of its business. When
that is so, holders of such positions in a
company become liable under Section 141
of the Act. By virtue of the office they hold
as Managing Director or Joint Managing
Director, these persons are in charge of
and responsible for the conduct of business
of the company. Therefore, they get
covered under Section 141. So far as
signatory of a cheque which is dishonoured
is concerned, he is clearly responsible for
the incriminating act and will be covered
under sub-section (2) of Section 141."

In case of Srikanth Singh Vs. North
East Securities Limited (2007) 12 SCC
788 the Hon'ble Apex Court has held that
for vicarious liability of Director of a
company it must be pleaded and shown that
the Director was responsible for the
conduct of the business of the company at
the time of commission of offence. Only
being a Director is not enough to cast a
criminal liability. Vicarious liability must
be pleaded and proved and can not be
merely inferred.

10. It is clear from the perusal of the
complaint that there is no specific averment
that applicant is involved in day-to-day
affairs of the company. There is only
general allegation that applicant is a
Director of the company. The documents
filed by the applicant establishes that the
applicant was a nominee Director and who
has now resigned.

11. Considering the aforesaid facts
and the law propounded on the point it is
clear that in absence of specific allegations
about the applicant he can not be
prosecuted for any offence under section
138 N.I. Act. The learned Magistrate has
failed to consider the matter properly. The
order of summoning regarding applicant is
unjust and illegal and can not be sustained.

12. Application U/s 482 Cr.P.C. is
allowed and the order dated 2.1.2021
4 All. Umesh Kumar & Anr. Vs. State of U.P. & Ors.
689
passed in Criminal Revision NO. 72 of
2019 and further the summoning order
dated
7.1.2014
passed
against
the
applicant-accused Jatinder Pal Singh are
quashed.
----------
(2022)04ILR A689
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 13.04.2022

BEFORE

THE HON'BLE SANJAY KUMAR SINGH, J.

Application u/s 482 No. 28762 of 2021

Umesh Kumar & Anr. ...Applicants
Versus
State of U.P. & Ors. ...Opp. Parties

Counsel for the Applicants:
Sri Jaysingh Yadav

Counsel for the Opp. Parties:
A.G.A., Sri A. Kumar Srivastava

A. Criminal Law - Code of Criminal
Procedure, 1973-Section 482 - Indian
Penal Code, 1860 - Section 406 - Dowry
prohibition Act, 1961-Section 6-quashing
of entire criminal proceedings-demand of
Rs. 5 lac before the date of marriage, and
did not return the amount already spent in
rituals, ring ceremony-applicant filed false
affidavit
that
the
matter
has
been
compromised and ready to return Rs. 2
lacs-applicant tried to misguide the Court,
in fact, no compromise arrived between
the parties-applicants have misused the
process of law by filing application u/s
482 on false facts that the matter has
been compromised-cost of Rs. 1 lac is
imposed upon the applicants.(Para 1 to
28)

B. Apex Court held that no litigant can
play "hide and seek" with the courts or
adopt "pick and choose". To hold a writ of
the court one should come with candid
facts and clean breast. Suppression or
concealment of material facts is forbidden
to a litigant or even as a technique of
advocacy. In such cases the Court is duty
bound to discharge rule nisi and such
applicant is required to be dealt with for
contempt of Court for abusing the process
of the court.(Para 14 to 26)

The application is dismissed. (E-6)

List of Cases cited:

1. Chandra Shashi Vs Anil Kumar Verma (1995)
1 SCC 21

2. Buddhi Kota Subbarai (Dr.) Vs K. Parasaran
(1996) 5 SCC 530

3. Arunima Baruah Vs U.O.I. (2007) 6 SCC 120

4. Prestige Lights Ltd. Vs S.B.I. (2007) 8 SCC
499

5. K.D Sharma Vs SAIL & ors. (2008) 12 SCC
481

6. Dalip Singh Vs St. of U.P. & ors. (2010) 2 SCC
114

7. Amar Singh Vs U.O.I. (2011) 7 SCC 69

8. Kishore Samrite Vs St. of U.P. & ors. (2012)
10 SCALE 330

(Delivered by Hon'ble Sanjay Kumar
Singh, J.)

1. Heard Shri Jay Singh Yadav,
learned counsel for the applicants, Shri
Rabindra Kumar Singh, learned Additional
Government Advocate representing the
State and Shri Anil Kumar Srivastava,
learned counsel appearing on behalf of
opposite party No. 2 and perused the record
of the case.

2. By means of this application under
Section 482 of the Code of Criminal
Procedure (herein after referred to as