# Prashant Tyagi & Ors v. State of U.P. & Anr

- **Citation:** (2023) 5 ILRA 50
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-04-03
- **Case number:** Application U/S 482 No. 11753 of 2018
- **Bench:** Mrs. Sadhna Rani (Thakur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/prashant-tyagi-ors-v-state-of-u-p-anr-50226
- **Pages:** 7

## Headnote

(A) Criminal Law - The Code of Criminal
Procedure, 1973 - Section 482 - Inherent
power - The Negotiable instruments Act,
1981 - Section 138 - Dishonour of cheque
for insufficiency, etc., of funds in the
accounts - If on the face of the documents
which are beyond suspicion or doubt -
placed by the accused, the accusations
against him cannot stand, it would be
travesty of justice if accused is relegated to
trial and he is asked to prove his defence
before the trial court -To promote justice or
to prevent injustice or abuse of process the
Court may examine significant materials at
the prima facie stage.(Para - 21)

Applicant no.1 resigned from Company before
issuance of cheque - cheque did not bear their
signatures - applicants were mere shareholders
- no active participation in Company's day-today business - Complaint does not specify
applicants' responsibility or in-charge for the
accused company's business conduct. (Para -
23)

HELD:-Record
shows
that
applicants'
participation in the company's daily functioning
is absent. Therefore, it would be travesty of
justice to drag persons to face prosecution who
are not connected to the issuance of the cheque
or its dishonor. Applicants summoned for trial
under Section 138 of Negotiable Instruments
Act violate Apex Court mandate. Summoning
order quashed.(Para - 23,24,25)

Application u/s 482 Cr.P.C. allowed. (E-7)

List of Cases cited:

## Text

50 INDIAN LAW REPORTS ALLAHABAD SERIES
beyond suspicion or doubt - placed by the
accused, the accusations against him cannot
stand, it would be travesty of justice if
accused is relegated to trial and he is asked
to prove his defence before the trial court.
In such a matter, for promotion of justice or
to prevent injustice or abuse of process, the
Court may look into the materials which
have significant bearing on the matter at
prima facie stage.

22. If we go through the judgment in
Smt. B Devi (Basanti Devi) Versus State of
U.P. (supra) placed by the learned counsel
for opposite party no.2, the facts of that
case are different from the facts of the
present case, wherein as per facts of that
case the cheques were issued in the
presence of the petitioner and other
Directors, while in the present case cheques
were never issued in the presence of the
complainant rather till then applicant no.1 had
resigned from the Company. While as per facts
of the case of Smt. B Devi (Basanti Devi)
Versus State of U.P. (supra) the resignation and
the documents with regard to the resignation
were alleged to be the forged documents, but in
the case in hand resignation of applicant no.1
has not been challenged, hence, the counsel for
the opposite party no.2 cannot take benefit of
the judgment of this Court, in the presence of
various Apex Court judgments placed above by
the counsel for the applicants.

23. Thus on the basis of the discussion
and the judgments placed above, it is found
that applicant no.1 had resigned from the
Company much prior to the issuance of the
cheque in question. Admittedly, the cheque
did not bear the signatures of any of the
applicants. On the date of issuance of the
cheque the applicants were mere the
shareholders of the Company. There was no
active participation of the applicants in the
day to day business and transactions of the
Company and in the complaint itself, it is not
mentioned that as to how and in what manner the
applicants were in-charge or were responsible to
the accused Company for the conduct of its
business. Thus, in the opinion of the Court, as on
the face of the record, participation of the
applicants is not found in the day to day
functioning of the Company, hence, on the basis
of the version that the defence would be seen at
the time of evidence, it would be travesty of
justice to drag the persons to face the prosecution
who are no way connected with the issuance of
the cheque or its being dishonour thereof.

24. On the basis of above discussion, the
summoning of the applicants to face trial under
Section 138 of Negotiable Instruments Act is
found to be against the mandate of law laid down
by the Apex Court in above mentioned
judgments.

25.
The
summoning
order
dated
25.11.2016 passed by the Upper Nyayalaya
Pratham, Ghaziabad and the judgment dated
22.02.2018 passed by the Additional Session
Judge, Court No.15, Ghaziabad in criminal
revision are quashed.

26.The application under Section 482
Cr.P.C. is, hereby, allowed.
----------
(2023) 5 ILRA 50
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 03.04.2023

BEFORE

THE HON'BLE MRS. SADHNA RANI
(THAKUR), J.

Application U/S 482 No. 11753 of 2018

Prashant Tyagi & Ors. ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties
5 All. Prashant Tyagi & Ors.Vs. State of U.P. & Anr.
51
Counsel for the Applicants:
Sri Amrendra Nath Rai, Sri Sanjay Singh

Counsel for the Opposite Parties:
G.A., Sri Abhinav Gaur, Sri Anoop Trivedi,
Sri Vibhu Rai

(A) Criminal Law - The Code of Criminal
Procedure, 1973 - Section 482 - Inherent
power - The Negotiable instruments Act,
1981 - Section 138 - Dishonour of cheque
for insufficiency, etc., of funds in the
accounts - If on the face of the documents
which are beyond suspicion or doubt -
placed by the accused, the accusations
against him cannot stand, it would be
travesty of justice if accused is relegated to
trial and he is asked to prove his defence
before the trial court -To promote justice or
to prevent injustice or abuse of process the
Court may examine significant materials at
the prima facie stage.(Para - 21)

Applicant no.1 resigned from Company before
issuance of cheque - cheque did not bear their
signatures - applicants were mere shareholders
- no active participation in Company's day-today business - Complaint does not specify
applicants' responsibility or in-charge for the
accused company's business conduct. (Para -
23)

HELD:-Record
shows
that
applicants'
participation in the company's daily functioning
is absent. Therefore, it would be travesty of
justice to drag persons to face prosecution who
are not connected to the issuance of the cheque
or its dishonor. Applicants summoned for trial
under Section 138 of Negotiable Instruments
Act violate Apex Court mandate. Summoning
order quashed.(Para - 23,24,25)

Application u/s 482 Cr.P.C. allowed. (E-7)

List of Cases cited:

1. Smt. B Devi (Basanti Devi) Vs St. of U.P.,
2016 (94) ACC 90

2. Sunita Palita & ors. Vs M/S Panchami Stone
Qaurry, Criminal Appeal No. of 2022 [Arising out
of SLP (Crl.) No.10396 of 2019]
3. S.M.S. Pharmaceuticals Ltd. Vs Neeta Bhalla,
(2005) 8 SCC 89,

4. Harshendra Kumar D. Vs Rebatilata Koley &
ors., (2011) 3 SCC 351

5. Pooja Ravinder Devidasani Vs St. of Maha. &
anr., (2014) 16 SCC 1

(Delivered by Hon'ble Mrs. Sadhna Rani
(Thakur), J.)

1. Heard learned counsel for the
applicants, learned counsel for opposite
party no.2 and perused the record.

2. By moving this application under
Section 482 Cr.P.C., the prayer is made to
quash summoning order dated 25.11.2016
passed by the Upper Nyayalaya Pratham,
Ghaziabad in C.C. No.69/2016 under
Section 138 Negotiable Instruments Act
and also to set aside order dated 22.02.2018
passed by the Additional Session Judge,
Court No.15, Ghaziabad in Criminal
Revision No.17 of 2017.

3. As per facts of the case, a complaint
was filed by opposite party no.2 on
13.10.2016 against the applicants and six
other persons with the version that opposite
party no.2 was a limited Company
registered under Companies Act and Vijay
Kumar son of late Sri Satpal was
authorized to filed complaint on behalf of
the Company. The opposite party no.2 was
indulged in the business of purchasing,
selling and the construction of properties.
Opposite party no.1 (in the complaint) M/S
C.S.K. Infrastructure Pvt. Ltd. was a
registered Company. Opposite parties no.2
to 6 were its Directors and officers and
opposite parties no.7 to 9 were the
Company's
authorized
representatives.
Opposite party nos.2 to 9 were responsible
for all the day to day business and
52 INDIAN LAW REPORTS ALLAHABAD SERIES
transactions of opposite party no.1, M/S
C.S.K. Infrastructure Pvt. Ltd.

4. The opposite parties (in the
complaint)
had
assured
the
complainant/opposite party no.2 herein that
they would make available a land to the
complainant/opposite party no.2 at a
reasonable price. Having faith in the
opposite parties the complainant/ opposite
party
no.2
on
16.08.2014 paid
Rs.
5,00,00,000/- to the opposite parties, which
were received by the opposite parties.
When as per their assurance the opposite
parties could not arrange the land for the
complainant/opposite party no.2 and the
complainant gave them a threat of lodging
FIR, then opposite parties promised to pay
Rs. 7,00,00,000/- in pursuance of the
principal amount of Rs. 5,00,00,000/- with
interest. Opposite parties issued a cheque of
Rs.1,00,00,000/-
in
favour
of
the
complainant/ opposite party no.2. This
Cheque
No.000282
valued
Rs.1,00,00,000/- dated 15.06.2016 got
dishonoured despite of the assurance of
opposite parties that it would get encashed.
The information of which was received by
the complainant/opposite party no.2 on
29.08.2016 and after due procedure, a
complaint under Section 420 I.P.C. was
filed by the complainant/opposite party
no.2 against the nine accused persons
including the Company itself.

5.
After
the
statements
under
Sections 200 Cr.P.C. and 202 Cr.P.C., the
trial court vide order dated 25.11.2016
summoned all the nine accused persons to
face trial under Section 138 of Negotiable
Instruments Act 1881. Against this order
dated 25.11.2016, three of the opposite
parties/
present
applicants
named
Prashant Tyagi, Smt. Neeta Tyagi and
Smt. Shweta Tyagi, filed a revision
before the Sessions Court, which was
rejected vide order dated 22.02.2018.

6.
Feeling
aggrieved
by
the
summoning order dated 25.11.2016 and
revisional court's order dated 22.02.2018,
the present application has been moved
by the applicants Prashant Tyagi, Smt.
Neeta Tyagi and Smt. Shweta Tyagi only
with the version that the applicant no.1,
who was earlier the Director of M/S
C.S.K.
Infrastructure
Pvt.
Ltd.
had
resigned from his post on 26.09.2014,
much prior to the issuance of the cheque
no.000282 dated 15.06.2016 to the
opposite party no.2. He has filed a
certified copy of the form DIR-12 (earlier
known as Form 32) to this effect. He had
neither signed the cheque nor the amount
was received in his bank account, thus,
applicant no.1 is the ex-director in the
accused Company. Applicant nos.2 and 3
are the mother and sister of the applicant
no.1. They had no relation with the
functioning of the accused company in
any manner. They could not be the incharge and responsible for the conduct
and the business of the Company.
Without any specific averment that what
role they have played in the functioning
and the business of the accused Company
they can not be implicated for the offence
under
Section
138
N.I.
Act.
The
summoning
order
has
been
passed
without considering section 141 of N.I.
Act,
hence,
the
prayer
is
made
accordingly.

7. Counter affidavit has been filed on
behalf of the opposite party no.2, wherein it
has been mentioned that all the applicants
alongwith co-accused persons are the
shareholders of the Company and belong to
the one and the same family. The present
applicant Prashant Tyagi is the son of Ram
5 All. Prashant Tyagi & Ors.Vs. State of U.P. & Anr.
53
Sevak Tyagi, applicant no.2 Smt. Neeta
Tyagi is the wife of Ram Sevak Tyagi and
applicant no.3 Smt. Shweta Tyagi, is the
wife of Gaurav/ daughter of Ram Sevak
Tyagi and Ram Sevak, is the person who is
the authorized representative of the accused
company and had issued the cheque in
favour of the complainant/ opposite party
no.2 on 15.06.2016. When an annual
general meeting was called on 30.08.2013
the shares of all the shareholders in the
disputed Company were as under:-

8. Ram Sewak Tyagi was having
20000 shares, Prashant Tyagi applicant
no.1 was having 25000, Smt. Neeta Tyagi
was having 20000 and Smt. Shweta Tyagi
was having 10000 and Ram Kishan is said
to have 5000 shares, thus, all the applicants
here are the shareholders of the accused
Company.

9. All the applicants are the blood
relatives of Ram Sevak Tyagi and Ram
Kishan, is the brother-in-law of Ram Sevak,
who is the master mind of the aforesaid fraud.
Ram Sevak was handling the financial as well
as accounts affairs of the Company alongwith
other Directors and the shareholders of the
Company and was acting as authorized
signatory of the Company on behalf of the
Directors, authorized representatives as well as
other shareholders of the Company. All the
applicants are the over all incharge of the day
to day business of the Company. A revision of
the applicants was also rejected by the trial
court. Applicant no.1 is a Joint Director of the
Company and still a Director of the Company
and for a very short time he was not there on
the Board of Directors. All the applicants
looking after the day to day business/
functions of the Company and being the
authorized representatives of the Company are
liable for the offence, hence, cognizance has
been rightly taken by the court.

10. The applicants filed a rejoinder
affidavit wherein the version of the counter
affidavit was denied and the version of the
complaint was reiterated.

11. Learned counsel for the applicants
has argued that the trial court has not gone
through the Section 141 of N.I. Act, which
deals with the offences by the companies.
Without going through this section the
impugned order cannot be said to be a
complete and affective order.

12. It is further submitted that the
applicant no.1 had resigned on 26.09.2014,
while impugned cheque is said to have been
issued
on
15.06.2016.
Regarding
his
resignation Form DIR-12 has been filed,
which is a public document. Applicant nos.2
and 3 are the mere shareholders in the
Company
and
are
the
ladies.
Their
participation cannot be said to be active in the
Company and in the complaint there is bald
averment that the accused nos.2 to 6 being the
Directors and shareholders of the Company
are responsible for the day to day business of
the accused Company. Accused No.7 to 9
including applicant no.2 and 3 are the
authorized representatives of the Company
and thus all the accused persons including all
the three applicants are responsible for all the
transactions and overall business of the
Company. But no particulars or the specific
role of the persons, which must be explained
in the complaint, has been explained.
Admittedly the cheque was not issued by any
of the applicants. The applicant no.2, the
mother of the applicant no.1 is a senior citizen.
Hence, the prayer is made accordingly.

13. While, learned counsel for the
opposite party no.2 opposed the version of
the learned counsel for the applicants and
submitted that the applicants are the
shareholders in the Company and family
54 INDIAN LAW REPORTS ALLAHABAD SERIES
members of Ram Sevak, who is said to
have issued the impugned cheque and
being the wife, son and daughter of the
person issuing cheque all the applicants
must have knowledge of the works done by
Ram Sevak Tyagi, accused no.7 in the
complaint. As the whole fraud/ cheating has
been done with the consent and connivance
of the applicants, so with the help of
section 141 of the N.I. Act all the
applicants would be liable for the acts done
by the Company. The defence of the
applicants cannot be adjucated at this stage
of summoning. Liability of the applicants
can only be decided after the evidence,
because as per sub-section 2 of Section 141
of the Act if the offence is found to be
proved committed with the consent or
connivance of the applicants they shall also
be liable for the same and punished
accordingly. Thus for proving the offence
of the applicants evidence of the parties is
to be adduced and at this nascent stage the
liability of the applicants cannot be fixed.

14. Placing reliance over the judgment
of this Court in Smt. B Devi (Basanti Devi)
Versus State of U.P., 2016 (94) ACC 90, it
is argued by the learned counsel for
opposite party no.2 that at the stage of
summoning, defence of the accused which
they may adduce subsequently cannot be
seen since there was no occasion to look
into such probable defence, which may
come when the accused would appear and
place their case before the magistrate. At
the stage of issuing summons Court has to
see whether a prima facie commission of
offence has been shown and appropriate
material has come justifying summoning of
the
accused
persons
against
whom
complaint has been made. The role
assigned to the applicants in clear and
specific words is referred in paragraph 4 of
the complaint, that all the accused persons
are responsible for the day to day business
and functioning of the Company.

15. On the basis of this judgment, it is
further argued that all the officers of the
Company are responsible for the acts done
in the name of Company and are sought to
be made personally liable for the acts
which resulted in criminal action being
taken against the Company. Thus, it is
claimed that all the applicants are liable to
face trial under the aforesaid sections.

16. Learned counsel for the applicants
drew the attention of the Court towards the
judgment in Sunita Palita & Others Versus
M/S Panchami Stone Qaurry, Criminal
Appeal No. of 2022 [Arising out of SLP
(Crl.) No.10396 of 2019], decided on
01.08.2022 and the judgment in S.M.S.
Pharmaceuticals Ltd. v. Neeta Bhalla,
(2005) 8 SCC 89, mentioned therein
wherein para-10 the Apex Court held that-

"every person connected with the
company shall not fall within the ambit of
the provision. It is only those persons who
were in charge of and responsible for
conduct of business of the company at the
time of commission of an offence, who will
be liable for criminal action. It follows
from this that if a director of a Company
who was not in charge of and was not
responsible for the conduct of the business
of the company at the relevant time, will
not be liable under the provision. The
liability arises from being in charge of and
responsible for the conduct of business of
the company at the relevant time when the
offence was committed and not on the basis
of merely holding a designation or office in
a company. Conversely, a person not
holding any office or designation in a
Company may be liable if he satisfies the
main requirement of being in charge of and
5 All. Prashant Tyagi & Ors.Vs. State of U.P. & Anr.
55
responsible for conduct of business of a
Company at the relevant time. Liability
depends on the role one plays in the affairs
of a Company and not on designation or
status."

17. The attention of the Court is
further
drawn
towards
judgment
in
Harshendra Kumar D. Versus Rebatilata
Koley & Others, (2011) 3 Supreme Court
Cases 351 wherein it was held by the Apex
Court that as dishonour of the cheques
through the complainant banker was
subsequent to his resignation so the
applicant no.1 could not be said to have any
concern with the Company at that time.

18. It is further argued by the learned
counsel for the applicants that mere bald
averment in the complaint that the
"applicants are looking after the day to day
business of the Company, hence, they are
liable for the offence committed" is not
enough to prove the offence. This averment
is devoid of any particulars.

19. In judgment Pooja Ravinder
Devidasani Versus State of Maharashtra
& Anr., (2014) 16 SCC 1, the Apex Court
held that to fasten vicarious liability under
Section 141 of the Act on a person, at the
material time that person shall have been at
the helm of affairs of the Company, one
who actively looks after the day-to-day
activities of the Company and particularly
responsible for the conduct of its business.
Simply because a person is a Director of a
Company.....Every person connected with
the Company will not fall into the ambit of
the provision.

20. Thus, it is argued that the applicant
no.1 was not a Director of the Company on
the date when the cheque was issued and
regarding his resignation Form DIR-12 has
been placed on record. Applicant nos.2 and
3 are admittedly mere shareholders in the
Company. They cannot be said to actively
participate in the working of the Company.

21. So far as the argument of the
learned counsel for the opposite party no.2
that a defence of the applicants shall be
seen at the time of arguments is concerned
in this regard, the Apex Court opined in
judgment Harshendra Kumar D. Versus
Rebatilata Koley & Others (supra) that if
on the face of the documents which are
beyond suspicion or doubt - placed by the
accused, the accusations against him cannot
stand, it would be travesty of justice if
accused is relegated to trial and he is asked
to prove his defence before the trial court.
In such a matter, for promotion of justice or
to prevent injustice or abuse of process, the
Court may look into the materials which
have significant bearing on the matter at
prima facie stage.

22. If we go through the judgment in
Smt. B Devi (Basanti Devi) Versus State of
U.P. (supra) placed by the learned counsel
for opposite party no.2, the facts of that
case are different from the facts of the
present case, wherein as per facts of that
case the cheques were issued in the
presence of the petitioner and other
Directors, while in the present case cheques
were never issued in the presence of the
complainant rather till then applicant no.1
had resigned from the Company. While as
per facts of the case of Smt. B Devi
(Basanti Devi) Versus State of U.P. (supra)
the resignation and the documents with
regard to the resignation were alleged to be
the forged documents, but in the case in
hand resignation of applicant no.1 has not
been challenged, hence, the counsel for the
opposite party no.2 cannot take benefit of
the judgment of this Court, in the presence
56 INDIAN LAW REPORTS ALLAHABAD SERIES
of various Apex Court judgments placed
above by the counsel for the applicants.

23. Thus on the basis of the discussion
and the judgments placed above, it is found
that applicant no.1 had resigned from the
Company much prior to the issuance of the
cheque in question. Admittedly, the cheque
did not bear the signatures of any of the
applicants. On the date of issuance of the
cheque the applicants were mere the
shareholders of the Company. There was no
active participation of the applicants in the
day to day business and transactions of the
Company and in the complaint itself, it is not
mentioned that as to how and in what manner
the applicants were in-charge or were
responsible to the accused Company for the
conduct of its business. Thus, in the opinion
of the Court, as on the face of the record,
participation of the applicants is not found in
the day to day functioning of the Company,
hence, on the basis of the version that the
defence would be seen at the time of
evidence, it would be travesty of justice to
drag the persons to face the prosecution who
are no way connected with the issuance of the
cheque or its being dishonour thereof.

24. On the basis of above discussion,
the summoning of the applicants to face
trial under Section 138 of Negotiable
Instruments Act is found to be against the
mandate of law laid down by the Apex
Court in above mentioned judgments.

25. The summoning order dated
25.11.2016 passed by the Upper Nyayalaya
Pratham, Ghaziabad and the judgment
dated 22.02.2018 passed by the Additional
Session Judge, Court No.15, Ghaziabad in
criminal revision are quashed.

26. The application under Section 482
Cr.P.C. is, hereby, allowed.
----------
(2023) 5 ILRA 56
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 02.05.2023

BEFORE

THE HON'BLE MANISH MATHUR, J.

Civil Revision No. 12 of 2023

Syed Mohammad Manzar ...Revisionist
Versus
U.P. Waqf Tribunal Jawahar Bhawan IIIrd
Floor Lucknow & Ors. ...Opposite Parties

Counsel for the Revisionist:
Sabir Ali, Mohd. Mansoor

Counsel for the Opposite Parties:
Syed Aftab Ahmad, Mohammad Ehtesham
Khan, SAA Rizvi

Civil Law - Civil Procedure Code, 1908 -
Order 43 - Rule 1, (5(1), - Waqf Act, 1995
- Sections 83 & 83(9): - Civil Revision -
Challenging the order - in a Waqf case -
whereby tribunal rejected the Application filed
by plaintiff-revisionist for grant of temporary
injunction - preliminary objection - regarding
maintainability of Revision u/s 83(9) of Act,
1995 by relying on various judgments - because
of, impugned order is interlocutory in nature as
no appeal or revision is maintainable - Court
observed that, considering the aspects and
importance of a provision to an enactment, it is
thus evident that the judgment rendered earlier
in the cases of Hafiz Abdullah & ors. and Shakil
Ahmad (relied upon by the opposite party) have
not considered the aspect of proviso in section
83(9) of the Act, cannot be said to be a binding
precedent on that aspect - since, it is evident
that, an application granting or rejecting
temporary injunction would have the trapping of
finality with regard to question determined by
Tribunal - held, a Revision under section 83(9)
of the Act, would therefore be maintainable
before this Court - order on its merit accordingly
- Revision is allowed.
 (Para - 10, 27, 38)