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

- **Citation:** (2023) 5 ILRA 1920
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-04-03
- **Case number:** Application u/s 482 No. 11669 of 2018
- **Bench:** Mrs. Sadhna Rani (Thakur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/prashant-tyagi-ors-v-state-of-u-p-anr-opp-parties-50294
- **Pages:** 7

## Headnote

Criminal Law - Criminal Procedure Code,
1973 - Section 482 - Entire proceedings
under section 138 Negotiable Instruments
Act under challenge- Allegation- Opposite
parties
issued
cheque
in
favour
of
complainant-
cheque
dishonouredapplicants
had
resigned
from
the
directorship on the date the cheque was
issued- for promotion of justice or to
prevent injustice or abuse of process-
Court may look into the materials which
have significant bearing on the matter at
prima facie stage- applicant no.1 had
5 All. Prashant Tyagi & Ors. Vs. State of U.P. & Anr.
1921
resigned from the Company much prior to
the issuance of the cheque in question-
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- no
active participation of the applicants in
the day to day business and transactions
of the Company-complaint also silent
about the role of the applicants- travesty
of justice to drag the persons to face the
prosecution- no way connected with the
issuance of the cheque or its being
dishonour
thereof-summoning
order
quashed-Application allowed.

HELD:
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 incharge 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.

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.

Application allowed. (E-14)

List of Cases cited:

## Text

1920 INDIAN LAW REPORTS ALLAHABAD SERIES
cautiously to do real and substantial justice
for which the court alone exists. Hence the
chances of ultimate conviction is bleak and
no useful purpose is likely to be served by
allowing
criminal
proceedings
to
be
continue. In S.W. Palankattkar & others
Vs. State of Bihar, 2002 (44) ACC 168, it
has been held by the Hon'ble Apex Court
that quashing of the criminal proceedings is
an exception than a rule. The inherent
powers of the High Court under Section
482
Cr.P.C
itself
envisages
three
circumstances under which the inherent
jurisdiction may be exercised:-(i) to give
effect an order under the Code; (ii) to
prevent abuse of the process of the court;
(iii) to otherwise secure the ends of justice.

55. In absence of any of the grounds
recognized by the Apex Court which might
justify the quashing of summoning order
dated
17.10.2022
or
consequential
proceedings, the prayer for quashing the
same is refused, as I do not see any abuse
of the courts process either. The court
below has been vested with sufficient
powers to discharge the accused even
before the stage to frame the charges
comes, if for reasons to be recorded it
considers the charge to be groundless.

56. However, in view of the above
discussions and observations, it is directed
that the applicant shall appear before the
concerned court below, within a period of
three weeks from today and move an
application
claiming
discharge,
the
concerned court below shall after hearing
the counsel for the parties decide the
aforesaid discharge application on merits in
accordance with law within a period which
shall not exceed a period of three months
from
today
without
granting
any
unnecessary adjournment to either of the
parties,
unless
there
is
some
legal
impediment or unless there is any order
passed by the higher court staying the
proceedings of the case.

57. It is further directed that till the
disposal
of
the
aforesaid
discharge
application no coercive action shall be
taken against the applicant.

58. With the above observations and
directions, this application filed by the
applicant under Section 482 Cr.P.C. for the
relief claimed stands disposed of.
----------
(2023) 5 ILRA 1920
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 03.04.2023

BEFORE

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

Application u/s 482 No. 11669 of 2018

Prashant Tyagi & Ors. ...Applicants
Versus
State of U.P. & Anr. ...Opp. Parties

Counsel for the Applicants:
Sri Sanjay Singh, Sri Amrendra Nath Rai

Counsel for the Opp. Parties:
G.A., Sri Abhinav Gaurav, Sri Anoop Trivedi, Sri
Vibha Rai

Criminal Law - Criminal Procedure Code,
1973 - Section 482 - Entire proceedings
under section 138 Negotiable Instruments
Act under challenge- Allegation- Opposite
parties
issued
cheque
in
favour
of
complainant-
cheque
dishonouredapplicants
had
resigned
from
the
directorship on the date the cheque was
issued- for promotion of justice or to
prevent injustice or abuse of process-
Court may look into the materials which
have significant bearing on the matter at
prima facie stage- applicant no.1 had
5 All. Prashant Tyagi & Ors. Vs. State of U.P. & Anr.
1921
resigned from the Company much prior to
the issuance of the cheque in question-
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- no
active participation of the applicants in
the day to day business and transactions
of the Company-complaint also silent
about the role of the applicants- travesty
of justice to drag the persons to face the
prosecution- no way connected with the
issuance of the cheque or its being
dishonour
thereof-summoning
order
quashed-Application allowed.

HELD:
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 incharge 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.

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.

Application allowed. (E-14)

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], decided on
01.08.2022

3. S.M.S. Pharmaceuticals Ltd. Vs Neeta Bhalla,
(2005) 8 SCC 89

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

5.
Pooja
Ravinder
Devidasani
Vs
St.of
Maharashtra & 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.66/2016 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.18 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
1922 INDIAN LAW REPORTS ALLAHABAD SERIES
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
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.2,00,00,000/-
in
favour
of
the
complainant/ opposite party no.2. This
Cheque
No.243328
valued
Rs.2,00,00,000/- dated 12.07.2016 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.243328 dated
12.07.2016 to the opposite party no.2. He
has filed a certified copy of the form DIR12 (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 exdirector 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
5 All. Prashant Tyagi & Ors. Vs. State of U.P. & Anr.
1923
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
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 12.07.2016. 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 12.07.2016. 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
1924 INDIAN LAW REPORTS ALLAHABAD SERIES
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
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
5 All. Prashant Tyagi & Ors. Vs. State of U.P. & Anr.
1925
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
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
1926 INDIAN LAW REPORTS ALLAHABAD SERIES
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 1926
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 20.04.2023

BEFORE

THE HON'BLE VIVEK KUMAR SINGH, J.

Crl. Misc. Bail Application No. 21849 of 2021

Jai Bajpai @ Jay Kant Bajpai ...Applicant
Versus
State of U.P. ...Respondent

Counsel for the Applicant:
Sri Deepak Singh, Sri Shiva Kant Dixit, Sri N.I.
Jafari (Sr. Advocate)

Counsel for the Respondent:
G.A.

A. Criminal Law - Criminal Procedure
Code, 1973 - Section 439 CrPC- Indian
Penal Code,1860 - Sections 420, 467, 468,
471 & 120-B - applicant has virtual
possession of vehicles used in the offence
in
question
-
forged
gate
pass
of
Secretariat- St.ments in case diary revealapplicant helped gangster Vikas DubeySt.ment of dead man-legal effect under
Section 32(3) of the Indian Evidence
Act,1872-incident took place in the area
notified under Dacoity Act- Section 10 of
U.P. dacoity Affected Area Act-conspiracy
is integral part of organised crime-offence
is heinous in nature-trial expedited- Bail