S.482,Cr.P.C = & 141of the Negotiable Instruments Act,1881= cheques for Rs.25,00,000/ each and one cheque for Rs.30,00,000/ were drawn on different dates by the authorised signatory, i.e. , M.D. of M/s Dhruti Infra Projects Limited, which were returned dishonored, on presentation by the appellant, with the remark Payment stopped by Drawer .
Thereafter, the appellant issued a legal notice on 04.08.2016
to (i) M/s Dhruti Infra Projects Limited (accused no.1);(ii) M.D.of M/s Dhruti Infra Projects Limited (accused no. 2); (iii) Respondent No.1 and Respondent No.2(asDirectors).
Apex court held that
we are of the considered opinion that the High Court was not justified in allowing the quashing petitions by invoking its power under S.482 Cr.P.C.In a case pertaining to an
offence under S. 138 and S. 141 of the Act, the law requires that
the complaint must contain a specific averment that the Director
was in charge of, and responsible for, the conduct of the company's business at the time when the offence was committed = A perusal of the record in the present case indicates that the appellant has specifically averred in his complaint that the respondent nos. 1 and 2 were actively participating in the day to day affairs of the accused no.1 company. Further, the accused nos. 2 to 4 (including the respondent nos. 1 and 2 herein) are alleged to be from the same family and running the accused no.1 company together. The complaint also specificies that all the accused, in active connivance, mischievously and intentionally issued the cheques in favor of the appellant and later issued instructions to the Bank to Stop Payment .No evidence of unimpeachable quality has been brought on record by the respondent nos.1 and 2 to indicate that allowing the proceedings to continue would be an abuse of process of the court.
1
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL Nos.403,405 OF 2019
(Arising out of SLP(Crl.) Nos.9626 28 of 2017)
A.R. RADHA KRISHNA APPELLANT
V ERSUS
DASARI DEEPTHI & ORS. RESPONDENTS
ORDER
1. Leave granted.
2. These appeals, by special leave, are directed against the order
dated 22.09.2017 passed by the High Court of Judicature at
Hyderabad for the State of Telangana and the State of Andhra
Pradesh in Criminal Petition Nos. 6508, 6530 & 6531 of 2017,
whereby the High Court allowed the Criminal Petitions filed by
respondent nos.1and2 and set aside the cognizance order passed
by the trial court.
3. The case of the prosecution in brief is that the appellant had
entered into an investment agreement with M/s Dhruti Infra
Projects Limited (accused no.1) on 01.12.2013 on the basis of
representation of respondent nos. 1 and 2 herein, who were the
Directors of the said Company. The appellant invested a total
2
amount of Rs.2,11,50,000/ in the said project. According to the
appellant, as on 31.03.2016, a total amount of Rs.1,81,50,000/
was left to be repaid to him along with applicable interest on it.
Thereafter, upon several representations by the appellant, M/s
DhrutiInf ra Projects Limited agreed to repay the amount via issue
of seven cheques in favour of the appellant. Six cheques for
Rs.25,00,000/ each and one cheque for Rs.30,00,000/ were
drawn on different dates by the authorised signatory, i.e. , M.D. of
M/s Dhruti Infra Projects Limited, which were returned dishonored,
on presentation by the appellant, with the remark Payment
stopped by Drawer .
4. Thereafter, the appellant issued a legal notice on 04.08.2016
to (i) M/s Dhruti Infra Projects Limited (accused no.1);(ii) M.D.of
M/s Dhruti Infra Projects Limited (accused no. 2); (iii) Respondent
No.1 and Respondent No.2(asDirectors).
5. Consequently, proceedings were initiated by the appellant
under Sections138 & 141of the Negotiable Instruments Act,1881
(hereinafter � referred � to � as � `the � Act�). � � During � the � pendency � of � the
said � complaint, � the � respondent � nos. � 1 � and � 2 � made � an � application
before�the�High�Court�for�the�quashing�of�the�proceedings�initiated
against � them. � The � High � Court, � as � mentioned � above, � allowed � the
3
Criminal � Petitions � filed � by � respondent � nos. � 1 � and � 2 � and � quashed
the � proceedings � against � them. � Being � aggrieved, � the � appellant � has
approached�this�Court�through�the�instant�appeals.
6. Learned � counsel � for � the � appellant, � Mr. � Y. � Rajagopala � Rao
vehemently � contended � that � the � High � Court � was � not � justified � in
allowing�the�quashing�petitions�by�invoking�its�power�under�Section
482 � Cr.P.C. � despite � the � fact � that � a � prima � facie � case � was � made � out
against � respondent � nos. � 1 � and � 2 � in � the � complaint � filed � by � the
appellant. � He � contended � that � the � trial � court, � on � the � basis � of � the
material�on�record,�took�cognizance�of�the�case�against�respondent
nos. � 1 � and � 2 � under � Sections � 138 � and � 141 � of � the � Act. � Learned
counsel�for�the�appellant�further�submitted�that�all�the�accused,�in
active � connivance, � mischievously � and � intentionally � issued � the
cheques � in � favor � of � the � appellant � and � later � issued � instructions � to
the�Bank�to�� Stop�Payment �.
7. On � the � other � hand, � learned � counsel � for � the � respondents, � Mr.
Kaushal�Yadav�submitted�that�the�answering�respondents�are�only
non�executory�Directors�of�the�company,�neither�playing�any�role�in
the � conduct � of � day�to�day � business � of � the � company � nor � being � in
charge � of � the � affairs � of � the � company. � Further, � he � also � contended
that�merely�by�virtue�of�being�a�Director�in�a�company,�one�cannot
4
be�deemed�to�be�in�charge�of,�or�responsible�to,�the�company�for�the
conduct�of�its�business.��
8. In � any � case, � the � learned � counsel � for � the � respondents � further
submitted � that � his � clients � are � ready � to � pay � the � balance � amount � of
Rs.70,00,000/� � to � the � appellant � within � a � period � of � six � months.
However, � learned � counsel � for � the � appellant � did � not � agree � to � the
same.
9. Having � heard � learned � counsel � for � the � parties � and � carefully
scrutinizing � the � record, �we � are � of � the � considered � opinion � that � the
High � Court � was � not � justified � in � allowing � the � quashing � petitions � by
invoking �its�power �under �S.482,�Cr.P.C.�In�a�case�pertaining �to �an
offence � under � S. � 138 � and � S. � 141 � of � the � Act, � the � law � requires � that
the � complaint � must � contain � a � specific � averment � that � the � Director
was�in�charge�of,�and�responsible�for,�the�conduct�of�the�company�s
business � at � the � time � when � the � offence � was � committed. � The � High
Court,�in�deciding�a�quashing�petition�under�S.�482,�Cr.P.C.,�must
consider �whether �the �averment� made�in �the �complaint� is� sufficient
or � if � some � unimpeachable � evidence � has � been � brought � on � record
which � leads � to � the � conclusion � that � the � Director � could � never � have
been�in�charge�of�and�responsible�for�the�conduct�of�the�business�of
the�company�at�the�relevant�time.�While�the�role�of�a�Director�in�a
5
company�is�ultimately�a�question�of�fact,�and�no�fixed�formula�can
be�fixed�for�the�same,�the�High�Court�must�exercise�its�power�under
S. � 482, � Cr.P.C. � when � it � is � convinced, � from � the � material � on � record,
that � allowing � the � proceedings � to � continue � would � be � an � abuse � of
process � of � the � Court. � [ See � Gunamala � Sales � Private � Limited � v.
Anu�Mehta�and�Ors.,� (2015)�1�SCC�103 ]
10. A perusal of the record in the present case indicates that the
appellant has specifically averred in his complaint that the
respondent nos. 1 and 2 were actively participating in the day to
day affairs of the accused no.1 company. Further, the accused
nos. 2 to 4 (including the respondent nos. 1 and 2 herein) are
alleged to be from the same family and running the accused no.1
company together. The complaint also specificies that all the
accused, in active connivance, mischievously and intentionally
issued the cheques in favor of the appellant and later issued
instructions to the Bank to Stop Payment .No evidence of
unimpeachable quality has been brought on record by the
respondent nos.1 and 2 to indicate that allowing the proceedings to
continue would be an abuse of process of the court.
11. In � the � above � view � of � the � matter, � the � instant � appeals � are
allowed � and � the � impugned � order � dated � 22.09.2017, � passed � by � the
6
High � Court � of � Judicature � at � Hyderabad � for � the � State � of � Telangana
and � the � State � of � Andhra � Pradesh � in � Criminal � Petition � Nos.6508,
6530 � & � 6531 � of � 2017, � is � set � aside � and � that � of � the � trial � court � is restored.
12. Before parting with the matter, we make it clear that we have
not expressed any opinion on the merits of the case pending before
the trial court. Needless to say, the trial court will adjudicate the
matter on its own merits uninfluenced by any of the observations
made herein.
13. However,keeping in view the nature of the case, we direct the
trial court to expedite the trial and dispose of the same in
accordance with law.
� .........................J.
(N.V.RAMANA)
������
� ........................J.
�(MOHAN�M.SHANTANAGOUDAR)
�........................J.
�����(INDIRA�BANERJEE )
N EW �D ELHI ;
F EBRUARY �28,�2019.
7
ITEM NO.1 COURT NO.4 SECTION II
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s).9626-9628/2017
(Arising out of impugned final judgment and order dated 22-09-2017
in CRLP No.6508, 6530 & 6531 of 2017 passed by the High Court of
Judicature at Hyderabad for the State of Telangana and the State of
Andhra Pradesh)
A.R. RADHA KRISHNA Petitioner(s)
VERSUS
DASARI DEEPTHI & ORS. Respondent(s)
Date : 28-02-2019 These petitions were called on for hearing today.
CORAM :
HON'BLE MR.JUSTICE N.V. RAMANA
HON'BLE MR.JUSTICE MOHAN M. SHANTANAGOUDAR
HON'BLE MS.JUSTICE INDIRA BANERJEE
For Petitioner(s) Mr.Y.Raja Gopala Rao, AOR
Mr.B.Mohan, Adv.
Ms.Y.Vismai Rao, Adv.
Mr.K.Sharat Kumar, Adv.
For Respondent(s) Mr.Kaushal Yadav, AOR
Ms.Sunita Yadav, Adv.
Mr.Nand Lal Kumar Mishra, Adv.
Ms.Ankita Aggarwal, Adv.
Ms.Shweta Yadav, Adv.
Mr.S.Udaya Kumar Sagar, AOR
Ms.Bina Madhavan, Adv.
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.
The appeals are allowed in terms of the signed order.
K eeping in view the nature of the case, we direct the
trial court to expedite the trial and dispose of the same in
accordance with law.
(SATISH KUMAR YADAV) (RAJ RANI NEGI)
AR-CUM-PS ASSISTANT REGISTRAR
(Signed order is placed on the file)
8
Thereafter, the appellant issued a legal notice on 04.08.2016
to (i) M/s Dhruti Infra Projects Limited (accused no.1);(ii) M.D.of M/s Dhruti Infra Projects Limited (accused no. 2); (iii) Respondent No.1 and Respondent No.2(asDirectors).
Apex court held that
we are of the considered opinion that the High Court was not justified in allowing the quashing petitions by invoking its power under S.482 Cr.P.C.In a case pertaining to an
offence under S. 138 and S. 141 of the Act, the law requires that
the complaint must contain a specific averment that the Director
was in charge of, and responsible for, the conduct of the company's business at the time when the offence was committed = A perusal of the record in the present case indicates that the appellant has specifically averred in his complaint that the respondent nos. 1 and 2 were actively participating in the day to day affairs of the accused no.1 company. Further, the accused nos. 2 to 4 (including the respondent nos. 1 and 2 herein) are alleged to be from the same family and running the accused no.1 company together. The complaint also specificies that all the accused, in active connivance, mischievously and intentionally issued the cheques in favor of the appellant and later issued instructions to the Bank to Stop Payment .No evidence of unimpeachable quality has been brought on record by the respondent nos.1 and 2 to indicate that allowing the proceedings to continue would be an abuse of process of the court.
1
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL Nos.403,405 OF 2019
(Arising out of SLP(Crl.) Nos.9626 28 of 2017)
A.R. RADHA KRISHNA APPELLANT
V ERSUS
DASARI DEEPTHI & ORS. RESPONDENTS
ORDER
1. Leave granted.
2. These appeals, by special leave, are directed against the order
dated 22.09.2017 passed by the High Court of Judicature at
Hyderabad for the State of Telangana and the State of Andhra
Pradesh in Criminal Petition Nos. 6508, 6530 & 6531 of 2017,
whereby the High Court allowed the Criminal Petitions filed by
respondent nos.1and2 and set aside the cognizance order passed
by the trial court.
3. The case of the prosecution in brief is that the appellant had
entered into an investment agreement with M/s Dhruti Infra
Projects Limited (accused no.1) on 01.12.2013 on the basis of
representation of respondent nos. 1 and 2 herein, who were the
Directors of the said Company. The appellant invested a total
2
amount of Rs.2,11,50,000/ in the said project. According to the
appellant, as on 31.03.2016, a total amount of Rs.1,81,50,000/
was left to be repaid to him along with applicable interest on it.
Thereafter, upon several representations by the appellant, M/s
DhrutiInf ra Projects Limited agreed to repay the amount via issue
of seven cheques in favour of the appellant. Six cheques for
Rs.25,00,000/ each and one cheque for Rs.30,00,000/ were
drawn on different dates by the authorised signatory, i.e. , M.D. of
M/s Dhruti Infra Projects Limited, which were returned dishonored,
on presentation by the appellant, with the remark Payment
stopped by Drawer .
4. Thereafter, the appellant issued a legal notice on 04.08.2016
to (i) M/s Dhruti Infra Projects Limited (accused no.1);(ii) M.D.of
M/s Dhruti Infra Projects Limited (accused no. 2); (iii) Respondent
No.1 and Respondent No.2(asDirectors).
5. Consequently, proceedings were initiated by the appellant
under Sections138 & 141of the Negotiable Instruments Act,1881
(hereinafter � referred � to � as � `the � Act�). � � During � the � pendency � of � the
said � complaint, � the � respondent � nos. � 1 � and � 2 � made � an � application
before�the�High�Court�for�the�quashing�of�the�proceedings�initiated
against � them. � The � High � Court, � as � mentioned � above, � allowed � the
3
Criminal � Petitions � filed � by � respondent � nos. � 1 � and � 2 � and � quashed
the � proceedings � against � them. � Being � aggrieved, � the � appellant � has
approached�this�Court�through�the�instant�appeals.
6. Learned � counsel � for � the � appellant, � Mr. � Y. � Rajagopala � Rao
vehemently � contended � that � the � High � Court � was � not � justified � in
allowing�the�quashing�petitions�by�invoking�its�power�under�Section
482 � Cr.P.C. � despite � the � fact � that � a � prima � facie � case � was � made � out
against � respondent � nos. � 1 � and � 2 � in � the � complaint � filed � by � the
appellant. � He � contended � that � the � trial � court, � on � the � basis � of � the
material�on�record,�took�cognizance�of�the�case�against�respondent
nos. � 1 � and � 2 � under � Sections � 138 � and � 141 � of � the � Act. � Learned
counsel�for�the�appellant�further�submitted�that�all�the�accused,�in
active � connivance, � mischievously � and � intentionally � issued � the
cheques � in � favor � of � the � appellant � and � later � issued � instructions � to
the�Bank�to�� Stop�Payment �.
7. On � the � other � hand, � learned � counsel � for � the � respondents, � Mr.
Kaushal�Yadav�submitted�that�the�answering�respondents�are�only
non�executory�Directors�of�the�company,�neither�playing�any�role�in
the � conduct � of � day�to�day � business � of � the � company � nor � being � in
charge � of � the � affairs � of � the � company. � Further, � he � also � contended
that�merely�by�virtue�of�being�a�Director�in�a�company,�one�cannot
4
be�deemed�to�be�in�charge�of,�or�responsible�to,�the�company�for�the
conduct�of�its�business.��
8. In � any � case, � the � learned � counsel � for � the � respondents � further
submitted � that � his � clients � are � ready � to � pay � the � balance � amount � of
Rs.70,00,000/� � to � the � appellant � within � a � period � of � six � months.
However, � learned � counsel � for � the � appellant � did � not � agree � to � the
same.
9. Having � heard � learned � counsel � for � the � parties � and � carefully
scrutinizing � the � record, �we � are � of � the � considered � opinion � that � the
High � Court � was � not � justified � in � allowing � the � quashing � petitions � by
invoking �its�power �under �S.482,�Cr.P.C.�In�a�case�pertaining �to �an
offence � under � S. � 138 � and � S. � 141 � of � the � Act, � the � law � requires � that
the � complaint � must � contain � a � specific � averment � that � the � Director
was�in�charge�of,�and�responsible�for,�the�conduct�of�the�company�s
business � at � the � time � when � the � offence � was � committed. � The � High
Court,�in�deciding�a�quashing�petition�under�S.�482,�Cr.P.C.,�must
consider �whether �the �averment� made�in �the �complaint� is� sufficient
or � if � some � unimpeachable � evidence � has � been � brought � on � record
which � leads � to � the � conclusion � that � the � Director � could � never � have
been�in�charge�of�and�responsible�for�the�conduct�of�the�business�of
the�company�at�the�relevant�time.�While�the�role�of�a�Director�in�a
5
company�is�ultimately�a�question�of�fact,�and�no�fixed�formula�can
be�fixed�for�the�same,�the�High�Court�must�exercise�its�power�under
S. � 482, � Cr.P.C. � when � it � is � convinced, � from � the � material � on � record,
that � allowing � the � proceedings � to � continue � would � be � an � abuse � of
process � of � the � Court. � [ See � Gunamala � Sales � Private � Limited � v.
Anu�Mehta�and�Ors.,� (2015)�1�SCC�103 ]
10. A perusal of the record in the present case indicates that the
appellant has specifically averred in his complaint that the
respondent nos. 1 and 2 were actively participating in the day to
day affairs of the accused no.1 company. Further, the accused
nos. 2 to 4 (including the respondent nos. 1 and 2 herein) are
alleged to be from the same family and running the accused no.1
company together. The complaint also specificies that all the
accused, in active connivance, mischievously and intentionally
issued the cheques in favor of the appellant and later issued
instructions to the Bank to Stop Payment .No evidence of
unimpeachable quality has been brought on record by the
respondent nos.1 and 2 to indicate that allowing the proceedings to
continue would be an abuse of process of the court.
11. In � the � above � view � of � the � matter, � the � instant � appeals � are
allowed � and � the � impugned � order � dated � 22.09.2017, � passed � by � the
6
High � Court � of � Judicature � at � Hyderabad � for � the � State � of � Telangana
and � the � State � of � Andhra � Pradesh � in � Criminal � Petition � Nos.6508,
6530 � & � 6531 � of � 2017, � is � set � aside � and � that � of � the � trial � court � is restored.
12. Before parting with the matter, we make it clear that we have
not expressed any opinion on the merits of the case pending before
the trial court. Needless to say, the trial court will adjudicate the
matter on its own merits uninfluenced by any of the observations
made herein.
13. However,keeping in view the nature of the case, we direct the
trial court to expedite the trial and dispose of the same in
accordance with law.
� .........................J.
(N.V.RAMANA)
������
� ........................J.
�(MOHAN�M.SHANTANAGOUDAR)
�........................J.
�����(INDIRA�BANERJEE )
N EW �D ELHI ;
F EBRUARY �28,�2019.
7
ITEM NO.1 COURT NO.4 SECTION II
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s).9626-9628/2017
(Arising out of impugned final judgment and order dated 22-09-2017
in CRLP No.6508, 6530 & 6531 of 2017 passed by the High Court of
Judicature at Hyderabad for the State of Telangana and the State of
Andhra Pradesh)
A.R. RADHA KRISHNA Petitioner(s)
VERSUS
DASARI DEEPTHI & ORS. Respondent(s)
Date : 28-02-2019 These petitions were called on for hearing today.
CORAM :
HON'BLE MR.JUSTICE N.V. RAMANA
HON'BLE MR.JUSTICE MOHAN M. SHANTANAGOUDAR
HON'BLE MS.JUSTICE INDIRA BANERJEE
For Petitioner(s) Mr.Y.Raja Gopala Rao, AOR
Mr.B.Mohan, Adv.
Ms.Y.Vismai Rao, Adv.
Mr.K.Sharat Kumar, Adv.
For Respondent(s) Mr.Kaushal Yadav, AOR
Ms.Sunita Yadav, Adv.
Mr.Nand Lal Kumar Mishra, Adv.
Ms.Ankita Aggarwal, Adv.
Ms.Shweta Yadav, Adv.
Mr.S.Udaya Kumar Sagar, AOR
Ms.Bina Madhavan, Adv.
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.
The appeals are allowed in terms of the signed order.
K eeping in view the nature of the case, we direct the
trial court to expedite the trial and dispose of the same in
accordance with law.
(SATISH KUMAR YADAV) (RAJ RANI NEGI)
AR-CUM-PS ASSISTANT REGISTRAR
(Signed order is placed on the file)
8
