Gravity Concrete Solutions Pvt. Ltd vs Pankaj Sharma and Shadi Lal

The above titled two petitions-CRM(M) No. 5/2022 and CRM(M) No. 6/2022, out of the clubbed files, have been preferred by Gravity Concrete Solutions Pvt. Ltd, as petitioner, in terms of Section 482 CrPC seeking quashing of cognizance order dated 07.11.2020, passed in two separate complaints titled ‘Pankaj Sharma Vs. Gravity Concrete Solutions Pvt Ltd’ and ‘Shadi Lal Vs. Gravity Concrete Solutions Pvt Ltd’ filed under section 138 of Negotiable Instruments Act pending before the court of learned Judicial Magistrate (Munsiff), Ramban.

It is proposed to decide both these petitions through this common order having regard to the same factual and legal issues involved therein.

It has been pleaded in both the petitions that the cheques, being subject of both the complaints, were stated to have been issued on 31.12.2019 and were dishonoured on being presented before the bank on 26.03.2020, as such, the legal notices were issued by the respondent-complainant on 07.08.2020, much after the period prescribed under the Act; that the petitioner was never served with the legal notice before filing of the complaint and that the trial court had taken cognizance vide impugned orders in cheque bounce cases on time barred legal notice; that the complaints have been filed by the respondents-complainants against one of the Directors-Pervaiz Ahmed Dar without incorporating company as an accused and the Director cannot be made liable for the liability of the whole company, as such, cognizance in both the cases is against the mandate of law and liable to be quashed, being an abuse of the process of law.

Pursuant to notice, respondents-Pankaj Sharma and Shadi Lal filed their reply/objections to the petitions separately, asserting therein that as per the judgment passed by the Apex Court on Covid protocol, legal notice served upon the petitioners were well within time; that the Director of a company was liable according to the Negotiable Instruments Act along with the company and that the company through its Managing Director Pervaiz Ahmed Dar has been impleaded as accused; that the delay caused in issuance of legal notices, is explainable in view of the Apex Court directions passed during covid epidemic and the company having been arrayed through its Managing Director, either of the grounds to challenge the impugned orders is not tenable and are liable to be rejected.

Heard learned counsel for the parties, perused the record and considered the matter.

Learned counsel for the petitioners, initially arguing on the issue of seeking cognizance on the basis of a time barred legal notice in view of the judgment passed by the Apex Court and referred and relied upon by the other side in a case in Re: Cognizance for Extension of Limitation whereby the Apex Court had suo motu extended/excluded the period of limitation and specifically extended the benefit to the periods prescribed under provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, conceded that the notice cannot be held to be ex-facie time barred merely on the ground that it was not issued within the prescribed period under Negotiable Instruments Act.

Learned counsel for the petitioners, however, vehemently argued that the petitioner has arrayed Managing Director as an accused without arraying the company/firm and that without impleading the company, one of its Directors cannot be prosecuted for the liability of whole of the company; that in view of this important factor, both the complaints are liable to be quashed as the company has not been impleaded as party. In support of his contention, he has relied upon the judgments of the Apex Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd. and Anil Gupta v. Star India Pvt. Ltd. & Anr. wherein the principles as to how complaint is to be lodged against the company and its Director have been laid down and finally prayed that both the complaints be quashed on this count.

Learned counsel for the respondent, ex adverso, argued that the complaints have been moved by the respondents against the petitioner-Gravity Concrete Solutions Pvt. Ltd, as an accused through its Managing Director Pervaiz Ahmad Dar, as such, the Managing Director, who is the sole Director of the company, has been impleaded and he cannot escape from his liability by taking a plea that the company has not been impleaded. In support of her contentions, she has relied upon the judgments of the Apex Court in M/S Bilakchand Gyanchand Co. v. A. Chinnaswami, (1999) 5 SCC 693 and Rajneesh Aggarwal v. Amit J. Bhalla, (2001) 1 SCC 631, to contend, that the complaints are maintainable against the Managing Director and that the matter need not to be construed in a narrow or hyper-technical manner, particularly when the notice was sufficient to bring the demand to the notice of the person responsible for the affairs of the company. She has finally prayed that both the petitions, being liable to be rejected, be dismissed.

The only issue to be decided, in view of the pleadings and the rival submissions of learned counsel for both the parties, is as to whether the complaints in the present form filed against the accused-petitioner company-Gravity Concrete Solutions Pvt. Ltd through its Managing Director is maintainable or not.

Since the petitioner company, itself has been arrayed as an accused through its Managing Director Parvaiz Ahmed Dar, it does not lie in the mouth of the petitioners to say that the company has not been impleaded and only the Managing Director has been impleaded. Respondents as complainants have filed both the impugned complaints against the petitioner company as an accused, without arraying any of its directors as an accused separately. The accused company, nevertheless, has been arrayed as sole accused, through its Managing Director. In fact, the respondents, as complainants, in the considered opinion of this Court, besides Gravity Concrete Solutions Pvt Ltd.-a company being impleaded as an accused should have impleaded its Managing Director as co-accused separately, as well.

The reliance of learned counsel for the petitioners on the judgment in Aneeta Hada v. Godfather Travels & Tours (P) Ltd. and Anil Gupta v. Star India Pvt. Ltd. & Anr (supra) is found to be misplaced in view of the fact that in both the instant cases, the company ‘Gravity Concrete Solutions Pvt. Ltd’ has been specifically arrayed as an accused, before the learned trial Magistrate, as such, the said judgments do not advance the cause of the petitioners and the objection raised on this point is devoid of any merit. From the titles of both the complaints, it is clear that only the company has been made as a party, though, through Managing Director but Managing Director has not been impleaded separately in addition to the company. The complainants, however, can move a motion in this behalf before the trial court for arraying the responsible officer as in the present case Managing Director also as a co-accused.

The Apex Court in the case titled M/S Bilakchand Gyanchand Co. v. A. Chinnaswami (supra), which is referred to and relied upon by the learned counsel for the respondents has held that where the proceedings are initiated against the Managing Director, who was the signatory of the dishonoured cheque, there was no infirmity in the notice issued to him and the High Court had rightly quashed the proceedings under Section 482 CrPC. Likewise in Rajneesh Aggarwal v. Amit J. Bhalla (supra), the Apex Court again reiterated that a notice issued to the Director, who had signed the cheque cannot be construed, in a narrow or hyper-technical manner, without examining the substance of the matter when the notice was sufficient to bring the demand to the notice of the person responsible, for the affairs of the company and the court declined to quash the criminal proceedings, on such a technical objective.

The inherent jurisdiction under Section 482 CrPC is intended to prevent abuse of the process of Court and to secure the ends of justice; it is not to be exercised to conduct a mini-trial. The allegations contained in the complaint, read as a whole, cannot at this stage be said to be so inherently improbable or legally incapable of constituting an offence as would warrant interference with the cognizance order.

The objections raised by the petitioner, including the precise role of its managing Director in the affairs of the company and the question of his liability under Section 141 of the Negotiable Instruments Act, are matters which can be, appropriately, examined by the learned Trial Court, on the basis of the complaint and evidence available before it.

In view of the foregoing discussion, no ground is made out for interference into the impugned cognizance orders drawn by the learned Magistrate. The impugned orders dated 07.11.2020 passed by the learned Judicial Magistrate (Munsiff), Ramban, are upheld. Both the petitions, thus, being misconceived are, accordingly, dismissed. Interim orders, if any, shall stand revoked.

Copy of this judgment be placed across files of both the cases and shall also be forwarded to the court below, for information and record.

Disposed of accordingly along with connected application(s).

With disposal of the CRM(M) No. 5/2022, the transfer application is disposed of, accordingly, with liberty to move afresh, in case cause survives.