Calcutta High Court (Appellete Side)
Pravin Kumar Agarwal & Ors vs Ddev Plastiks Industries Limited on 8 May, 2026
IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
APPELLATE SIDE
PRESENT:
THE HON'BLE JUSTICE UDAY KUMAR
CRR 2301 OF 2024
PRAVIN KUMAR AGARWAL & ORS.
-VS-
DDEV PLASTIKS INDUSTRIES LIMITED
For the Petitioners : Mr. Anirban Dutta
Mr. Shivam Bhimsaria
For the Opposite Party : Mr. Francis Samson Correa
Mr. Sunny Nandy
Ms. Sneha Singh
Ms. Yamini Tiwari
Mr. Manmohan Singh Rooproy
Hearing concluded on : 22.04.2026
Judgment on : 08.05.2026
UDAY KUMAR, J.: -
INTRODUCTION
1.
The inherent jurisdiction of this Court under Section 401, 397
read with Section 482 of Code of Criminal Procedure, 1973, is
invoked to assuage a perceived miscarriage of justice. The
petitioners, arrayed as Accused Nos. 2, 4, and 5, seek the
quashing of proceedings in Case No. CS-26711 of 2024, currently
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pending before the Learned Metropolitan Magistrate, 18th Court,
Calcutta.
2. At the heart of this revisional challenge is the Order dated April 6,
2024, whereby the Learned Magistrate took cognizance and
issued process for offences punishable under Sections 138/141
of the Negotiable Instruments Act, 1881. The petitioners being
non-signatories to the cheques in question, contended that their
arraignment is a by-product of “template pleading.” They argue
that the complaint is devoid of a transactional nexus, relying on a
bald statutory reproduction to impute vicarious liability without
disclosing any specific overt acts attributable to them.
FACTUAL MATRIX
3. The genesis of the dispute lies in a commercial engagement
between the complainant, Ddev Plastiks Industries Limited, and
the accused company. It is alleged that between July 2022 and
February 2023, the complainant supplied polymer and PVC
compounds against eighteen distinct invoices, culminating in an
outstanding liability of ₹2,86,78,374.00.
4. In purported part-discharge of this liquidated debt, the accused
company issued four cheques (Nos. 000838, 000839, 000840,
and 000841) totalling ₹36,00,000.00, drawn on the Bank of
Baroda, Bhubaneswar. Upon presentation for encashment, these
instruments were returned unpaid with the remark “Funds
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Insufficient,” as evidenced by the return memos dated January
25, 2024.
5. Consequent to the dishonour, a statutory demand notice was
served on February 7, 2024. The failure of the accused to
liquidate the debt within the mandatory fifteen-day window
prompted the filing of the present complaint. Given that the
accused reside beyond the territorial limits of the Trial Court, the
Learned Magistrate conducted an inquiry under Section 202 of
the Code of Criminal Procedure (now Section 225 of the BNSS)
prior to the issuance of the impugned summons.
6. The petitioners move this Court on the foundational premise that
holding the office of Director does not, per se, attract the
“deeming fiction” of Section 141. They maintain that the
complaint is facially deficient, as it fails to specify their individual
roles in the day-to-day management of the company or the
issuance of the specific cheques, thereby rendering the
prosecution an abuse of the process of law.
QUESTIONS FOR DETERMINATION
7. A holistic perusal of the petition and the underlying record
suggests that the controversy transcends a mere commercial
default. It strikes at the legitimacy of invoking the criminal
machinery against individuals whose “transactional nexus” with
the alleged offence remains obscured. To resolve whether the
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continuation of these proceedings serves the ends of justice, the
following questions emerge for determination:
I. Whether a “bald statement” in a complaint, which merely
replicates the statutory vocabulary of Section 141 of the
Negotiable Instruments Act, is sufficient to sustain a
prosecution against non-signatory directors in the
absence of specific overt acts?
II. Whether the Learned Magistrate, while conducting the
mandatory inquiry under Section 202 of the Code of
Criminal Procedure, failed to apply his judicial mind to
distinguish between the liability of the corporate entity
and the individual culpability of its non-signatory officers?
III. Whether a Director, who is neither the Managing Director
nor the signatory to the cheques, can be held vicariously
liable under the “legal fiction” of Section 141 without clear
pleadings establishing their role in the day-to-day
management at the material time?
IV. Whether the instruments in question were issued in
discharge of a “legally enforceable debt” or were “blank
security cheques” issued to safeguard a fluctuating credit
line, thereby precluding a cause of action under Section
138?
V. Whether the continuation of criminal proceedings against
the petitioners, in the face of a facially deficient
complaint, constitutes an abuse of the process of law and
5
CRR 2301 OF 2024a manifest violation of the right to personal liberty under
Article 21 of the Constitution of India?
SUBMISSIONS OF THE PETITIONERS
8. Mr. Anirban Dutta, learned counsel appearing for the petitioners,
strenuously contended that the complaint serves as a classic
illustration of “facially deficient” pleading. He submitted that the
complainant has merely “parroted” the statutory nomenclature of
Section 141 of the Negotiable Instruments Act, asserting that the
petitioners were “in charge of and responsible for the conduct of
the business” without providing any factual substantiation.
9. Relying on the seminal authority in S.M.S. Pharmaceuticals Ltd. v.
Neeta Bhalla (2005) 8 SCC 89, Mr. Dutta argued that such bald
assertions are insufficient to satisfy the jurisdictional requirement
for impleading non-signatory directors. He emphasized that in the
absence of specific overt acts linking the petitioners to the
underlying transaction, the summons remains legally
unsustainable.
10. It was further urged by Mr. Dutta that vicarious liability in
criminal law is an exception to the general rule of strictissimi juris
and arises solely out of a “legal fiction.” Drawing from the dictum
in Ashok Shewakramani v. State of Andhra Pradesh (2023) 8 SCC
473, he emphasized that the phrase “in charge of and responsible
to the company” must be read conjunctively. He argued that the
petitioners, being neither signatories to the cheques nor the
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Managing Directors of the accused company, cannot be deemed
liable by the mere dint of holding the office of “Director.” Mr.
Dutta maintained that the “total silence” in the complaint
regarding the petitioners’ specific roles in the supply chain or the
issuance of the cheques effectively severs the chain of vicarious
liability.
11. A primary grievance was directed toward the mechanical issuance
of process by the Learned Trial Court. Mr. Dutta contended that
since the petitioners reside beyond the territorial jurisdiction of
the Learned Magistrate, a mandatory inquiry under Section 202
of the Code of Criminal Procedure (now mirrored in the BNSS)
was a non-negotiable jurisdictional prerequisite. Relying on the
ratio in Masud Tarif v. The State of West Bengal (2026), he argued
that this inquiry is not a perfunctory ritual but a vital safeguard
against the “weaponization” of the criminal process. The Learned
Magistrate, it is submitted, failed to apply his judicial mind to
distinguish between corporate default and individual culpability.
12. The petitioners further contended that the instruments in
question were “blank security cheques” issued to safeguard a
fluctuating credit line and were never intended for encashment in
the manner alleged. Mr. Dutta submitted that compelling
documented strangers to the signing of the cheques to endure the
rigors of a criminal trial in a distant forum constitutes a “travesty
of justice.”
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13. He concluded by asserting that continuing a prosecution
predicated on a complaint devoid of factual particulars is a
manifest abuse of the process of law and an affront to the
fundamental right to personal liberty guaranteed under Article 21
of the Constitution of India.
SUBMISSIONS OF THE OPPOSITE PARTY
14. Per contra, Mr. Francis Samson Correa, learned counsel
appearing for the Opposite Party No. 2, defended the summoning
order and asserted that the complaint is not “facially deficient” as
alleged. He contended that the petitioners are not merely dormant
directors but are Whole-Time Directors and Key Managerial
Personnel of the accused company. Relying on the ratio in K.K.
Ahuja v. V.K. Vora (2009) 10 SCC 48, Mr. Correa argued that
while an ordinary “Director” might require specific pleading, a
“Whole-Time Director” is, by the very nomenclature of the office,
inherently in charge of and responsible for the company’s affairs.
Consequently, he submitted that the averments in Paragraph 3
are not “bald statements” but a factual reflection of the
petitioners’ executive status.
15. It was further urged by Mr. Correa that the issuance of the
cheques was not an isolated act of the signatory but the
culmination of a collective financial decision made by the Board.
He argued that in a corporate hierarchy, the signatory acts as an
agent of the Board; thus, directors holding executive positions
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cannot disclaim vicarious liability at the threshold. Mr. Correa
emphasized that whether the petitioners were specifically involved
in this transaction is a “matter of trial” involving evidentiary
appreciation and cannot be summarily adjudicated in a quashing
petition under Section 482 of the Cr.P.C.
16. Regarding the challenge to the summoning order, Mr. Correa
submitted that the Learned Magistrate strictly complied with the
procedural mandates of the Code. Relying on the judicial trend in
Prakash Chimanlal Seth v. Jagruti Keyur Rajpopat (2025) SCC
Online SC 1151, he contended that the inquiry under Section 202
does not necessitate a “mini-trial.” Since the Magistrate perused
the Affidavit-in-Chief under Section 145 of the NI Act, the return
memos, and the statutory notice, Mr. Correa argued that the
requirement of judicial satisfaction was duly met in the order
dated April 6, 2024.
17. The “security cheque” theory was vehemently denied by Mr.
Correa as a premature factual plea. He referred to the statutory
presumption under Section 139 of the NI Act, which mandates
that the Court shall presume, unless the contrary is proved, that
the holder of a cheque received it for the discharge of a debt or
liability. Mr. Correa submitted that the Negotiable Instruments
Act was enacted to enhance the credibility of banking operations,
and he concluded that quashing the proceedings at this stage
would frustrate the object of the statute and result in a
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“miscarriage of justice.” Opposite Party No. 2, therefore, prays for
the dismissal of the revisional application.
DETERMINATION ON QUESTION NO. I
18. The primary pivot of this revisional challenge is whether the
Complainant has discharged the “burden of pleading” necessary
to bridge the gap between corporate default and individual
criminal liability. It is a fundamental postulate of criminal
jurisprudence that vicarious liability is an exception to the rule of
strictissimi juris.
19. In the context of the Negotiable Instruments Act, this principle is
codified under Section 141, which stipulates as follows:
141. Offences by companies. — (1) If the person committing an
offence under section 138 is a company, every person who, at the
time the offence was committed, was in charge of, and was
responsible to the company for the conduct of the business of the
company, as well as the company, shall be deemed to be guilty of
the offence…”
20. The individuals who are not the actual drawers of the cheque are
“deemed” guilty only upon the satisfaction of a specific condition:
i. they must be “in charge of” and
ii. “Responsible to” the company for the conduct of its
business at the material time.
21. A perusal of the complaint reveals that Paragraph 3 merely
replicates this statutory vocabulary. Mr. Dutta correctly
characterizes this as a “bald statement” devoid of a transactional
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nexus. The seminal decision in S.M.S. Pharmaceuticals Ltd. v.
Neeta Bhalla (2005) 8 SCC 89 established that specific averments
are indispensable to substantiate how a director was responsible
for the conduct of business. The “legal fiction” of Section 141 is
not an automatic consequence of holding a directorship; it is a
conditional liability that must be factually anchored within the
four corners of the complaint.
22. While the Complainant relies on the petitioners’ status as “Whole-
Time Directors” to imply responsibility, the guidance in Ashok
Shewakramani (2023) 8 SCC 473 mandates that the phrases “in
charge of” and “responsible to” be read conjunctively. Even an
executive designation does not dispense with the requirement to
disclose a director’s specific role in the transaction. In the instant
case, the complaint is conspicuously silent on whether the
petitioners participated in the board meetings authorizing the
procurement or had any role in the issuance of the four cheques.
23. Recent jurisprudence, including Siby Thomas v. Somany
Ceramics Ltd. (2024) 1 SCC 348, reinforces that “template
pleadings” are insufficient to activate the deeming provision.
There must be a clear statement of fact describing the manner in
which the accused was in charge. The Complainant’s argument,
that “role is a matter for trial,” cannot serve as a shield for a
facially deficient complaint. As observed in Masud Tarif (2026),
dragging individuals through a protracted trial without a prima
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facie case is an affront to the constitutional guarantee of personal
liberty under Article 21.
24. Consequently, this Court finds that the complaint fails to meet
the threshold of specific pleading. The “bald statement” in
Paragraph 3 is insufficient to bridge the gap between corporate
identity and personal culpability. To allow such a prosecution to
proceed would be to permit a “template” to override the
requirements of substantive criminal law.
DETERMINATION ON QUESTION NO. II
25. The second limb of the petitioners’ challenge rests upon a
procedural safeguard that has, through judicial evolution,
assumed the status of a jurisdictional prerequisite. The second
limb of the petitioners’ challenge rests upon a procedural
safeguard that has, through judicial evolution, assumed the
status of a jurisdictional prerequisite. Section 202 of the Code of
Criminal Procedure (now Section 225 of the BNSS) mandates a
cautious approach when the accused resides beyond the court’s
territorial limits. The provision acts as a judicial sieve, designed
to filter out vexatious or oppressive litigations against distant
residents by requiring the Magistrate to “postpone the issue of
process” and conduct a substantive inquiry to determine whether
there exists a “sufficient ground for proceeding.” The provision
stipulates:
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“202. Postponement of issue of process. — (1) Any
Magistrate… shall, in a case where the accused is residing
at a place beyond the area in which he exercises his
jurisdiction, postpone the issue of process against the
accused, and either inquire into the case himself or direct
an investigation… for the purpose of deciding whether or
not there is sufficient ground for proceeding.”
26. The use of the word “shall” in the statute underscores its
mandatory character. In the present case, the petitioners reside
in Bhubaneswar and Salt Lake, locations indisputably outside
the local limits of the Metropolitan Magistrate, 18th Court,
Calcutta. While the Order dated April 6, 2024, records a
perfunctory perusal of the Affidavit-in-Chief, this Court must
determine whether such an exercise constitutes a meaningful
application of a “discerning judicial mind” or merely an instance
of hollow paper compliance.
27. The Hon’ble Supreme Court in Vijay Dhanuka v. Najima Mamtaj
(2014) 14 SCC 638, and subsequently in the Suo Motu Writ
Petition (2021) regarding the expeditious trial of Section 138
cases, has emphasized that the inquiry under Section 202 is not
a perfunctory ritual. In the specific context of vicarious liability,
the Magistrate’s satisfaction must extend beyond the mere fact of
cheque dishonour; it must meticulously identify the specific basis
of liability for each individual arrayed as an accused.
28. A perusal of the impugned order reveals a striking failure to
distinguish between the Accused Company (Petitioner No. 1), the
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Signatory (Petitioner No. 3), and the Non-Signatory Directors
(Nos. 2, 4, and 5). By issuing a common, composite summoning
order against all, the Learned Magistrate ignored the bedrock
principle that criminal liability is individual and not collective. As
observed in Masud Tarif (2026), the issuance of process against
outstation directors without identifying a specific factual nexus
constitutes a failure of judicial application of mind.
29. The Opposite Party relies on Prakash Chimanlal Seth (supra) to
argue that since the Section 145 affidavit was present, the
Magistrate’s inquiry was complete. However, this Court must
distinguish between a general inquiry into the offence and a
specific inquiry into vicarious liability. In the ordinary course, if
the accused is the signatory, the mere dishonour memo and
notice might suffice for a prima facie case. In the present case,
where the complaint itself is silent on the petitioners’ specific
roles, a “proper inquiry” under Section 202 would have required
the Magistrate to ask: “What material on record links Accused Nos.
2, 4, and 5 to the transaction at hand?”
30. The Opposite Party’s reliance on Prakash Chimanlal Seth (2025),
to argue that the presence of a Section 145 affidavit concludes
the inquiry is misplaced here. While an affidavit may suffice to
establish the prima facie commission of an offence by the drawer,
it cannot spontaneously generate a “transactional link” for non-
signatory directors where the complaint itself is silent. A
Magistrate cannot be a mere “post-office” to the complainant; he
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must act as a gatekeeper of personal liberty. In this instance, the
mandatory nature of Section 202 was satisfied in form but
profoundly violated in substance.
31. Therefore, the impugned order of summoning, insofar as it
pertains to the petitioners, suffers from a lack of judicial
application of mind and a failure to conduct the substantive
inquiry envisioned by the law.
DETERMINATION ON QUESTION NO. III
32. This question invites a delineation of the boundaries of “deemed
liability” within the corporate criminal landscape. Since the
Indian Penal Code (and now the BNS) does not recognize
vicarious liability unless specifically provided by statute, Section
141 of the Negotiable Instruments Act stands as an exceptional
“legal fiction.” It extends the net of criminality to individuals who
did not personally draw the instrument; consequently, it must be
interpreted with strict adherence to its statutory conditions.
33. The complainant’s proposition, that the petitioners, as “Whole-
Time Directors,” are ipso facto responsible, is legally overbroad. In
the landmark ruling of S.M.S. Pharmaceuticals Ltd. v. Neeta
Bhalla (2005) 8 SCC 89, the Hon’ble Supreme Court categorized
corporate officers into three distinct tiers:
Tier I (The Signatory): Invariably liable as the direct
performer of the incriminating act.
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Tier II (Managing Director): Liable by virtue of the office,
as the law presumes, they are in charge of the company’s
business.
Tier III (Directors): Not automatically liable. For this
category, the complaint must disclose a factual basis for
their specific involvement.
34. The petitioners, being neither Managing Directors nor
Signatories, fall squarely within the third tier. Even the
designation of “Whole-Time Director” does not activate an
automatic presumption of guilt. As clarified in K.K. Ahuja v. V.K.
Vora (2009) 10 SCC 48, while a Managing Director is deemed
responsible by the nature of their duties, for any other Director,
regardless of executive nomenclature, the complainant must
plead the specific role played by them in the conduct of the
business related to the offence.
35. To prosecute a Director for a financial default without pleading
their involvement in the procurement or payment process would
be a travesty of justice. As emphasized in Ashok Shewakramani
(2023) 8 SCC 473, the liability is not “vicarious” in the sense of a
common-law master-servant relationship; it is a “deemed” liability
that requires the individual to have a direct hand in the
management of the affairs relating to the specific default.
36. In the present case, the “legal fiction” of Section 141 remains
dormant. The complaint is conspicuously silent on whether these
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specific directors were involved in the purchase orders of 2022 or
the subsequent issuance of cheques in 2024. As noted in Susela
Padmavathy Amma v. Bharti Airtel Limited [(2024) SCC OnLine SC
311], the mere fact of being a director is insufficient to attract
liability. In the absence of a Transactional Link, the prosecution
fails at the threshold.
37. In the present case, the “legal fiction” of Section 141 remains
dormant. The complaint is conspicuously silent on whether these
specific directors were involved in the purchase orders of 2022 or
the subsequent issuance of cheques in 2024. As noted in Susela
Padmavathy Amma v. Bharti Airtel Limited [2024 SCC OnLine SC
311], the mere status of “Director” is an insufficient hook for
liability. In the absence of a Transactional Link, the prosecution
fails at the threshold.
38. Furthermore, the recent trend in Siby Thomas (supra) reinforces
that the “Transactional Link” is the heartbeat of Section 141. If
the complaint does not state that the petitioners were part of the
decision-making process that led to the issuance of the
dishonoured cheques, the “legal fiction” never takes flight.
39. This Court finds that the complainant has failed to distinguish
between “holding an executive office” and “committing a criminal
offence.” The petitioners cannot be held vicariously liable solely
because the complainant chooses to label them “responsible” in a
template paragraph.
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40. A Director who is neither the Managing Director nor the signatory
cannot be held vicariously liable in the absence of clear, specific
pleadings establishing their day-to-day responsibility regarding
the transaction in question.
DETERMINATION ON QUESTION NO. IV
41. This question necessitates an examination of the “foundational
debt” required to sustain a prosecution under Section 138 of the
Negotiable Instruments Act. The statute explicitly mandates that
the instrument must be issued for the discharge, in whole or in
part, of a “legally enforceable debt or other liability.” The
petitioners contend that the instruments were “blank security
cheques” issued to facilitate a credit line and were never intended
to be liquidated against the eighteen invoices mentioned in the
complaint.
42. The jurisprudence regarding “security cheques” has undergone
significant evolution. While Indus Airways Pvt. Ltd. and others v.
Magnum Aviation Pvt. Ltd. and another (2014) 12 SCC 539 held
that the dishonour of a security cheque would not attract Section
138 if no subsisting liability existed on the date of drawing, the
position was refined in Sampelly Satyanarayana Rao vs. Indian
Renewable Energy Development Agency Limited (2016) 10 SCC
458. The Apex Court clarified that if a debt has become “payable”
by the time the cheque is presented, the “security” nomenclature
of the instrument does not bar prosecution.
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43. However, this debate takes on a distinct jurisdictional character
when applied to non-signatory directors. The Complainant relies
heavily on the presumption under Section 139 of the NI Act,
asserting that once signatures are admitted, the debt is
presumed. Yet, the petitioners–directors who were not involved
in the negotiation of the security arrangement–cannot be held
criminally liable for the “unilateral conversion” of a security
instrument into a demand instrument without specific pleadings
to that effect.
44. In the present case, the fragmentation of a ₹2.86 Crore debt into
four identical cheques of ₹9 Lakhs each lends credence to the
petitioners’ argument. Such a structure suggests these were
fixed-amount instruments held as a “collateral safeguard” rather
than cheques issued after the crystallization of a specific invoice
amount. As observed in Dashrathbhai Trikambhai Patel v. Hitesh
Mahendrabhai Patel and another (2023) 1 SCC 578, if a cheque is
presented for an amount that does not represent the “legally
enforceable debt” at the time of encashment, the offence is not
made out.
45. The “Transactional Link” is again found wanting. The complaint
fails to state that the petitioners authorized the presentation of
these specific cheques for the specific discharge of the liabilities
alleged. While the status of a cheque as a “security instrument” is
generally a defence for trial, when challenged by non-signatory
directors, the Court must discern prima facie evidence that these
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individuals were party to the “acknowledgment of debt” that led to
the cheques’ presentation.
46. In the absence of any material linking the petitioners to the
conversion of these “security” instruments into “debt”
instruments, the continuation of criminal proceedings against
them is unsustainable. The presumption under Section 139
cannot be stretched to substitute the specific pleading required
under Section 141. This question is answered accordingly.
DETERMINATION ON QUESTION NO. V
47. The final question serves as the constitutional anchor of this
revision. It poses a fundamental query: does the continuation of a
criminal trial, predicated on a “facially deficient” complaint
against non-signatory directors, constitute an abuse of the
process of law? To answer this, the Court must look beyond the
Negotiable Instruments Act and exercise its inherent duty under
Section 482 Cr.P.C. (Section 528 of the BNSS) to prevent the
“engine of justice” from being utilized as a tool of oppression.
48. The petitioners contend they have been dragged into a criminal
forum in Kolkata, remote from their residences and the site of
corporate operations, not to answer for personal culpability, but
to endure “procedural pressure” aimed at settling a civil debt.
This Court cannot remain oblivious to the growing trend of “over-
implication” in commercial litigations, where individuals are
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indiscriminately arrayed as accused simply because their names
appear on a corporate letterhead.
49. In the locus classicus of State of Haryana v. Bhajan Lal (1992)
Supp (1) SCC 335, the Hon’ble Supreme Court held that where
the allegations in the complaint, even if taken at face value, do
not prima facie constitute an offence, the Court must exercise its
inherent power to quash. This principle is not a mere rule of
procedure; it is a sentinel on the qui vive for the protection of
Article 21 of the Constitution of India.
50. While the Opposite Party argues that the “ends of justice” require
the trial to reach its logical conclusion, this Court must
distinguish between a legitimate trial and procedural harassment.
A legitimate trial necessitates pleadings that disclose a
“Transactional Link” requiring evidentiary verification.
Harassment occurs when the complainant fails to meet the
threshold of pleading (as determined in Question I) and yet seeks
to compel the attendance of non-signatory directors in a distant
forum.
51. As observed in Pepsi Foods Ltd. And another v. Special Judicial
Magistrate and others (1998) 5 SCC 749, the summoning of an
accused is a serious matter with far-reaching consequences;
criminal law cannot be set into motion as a matter of course.
When a Magistrate issues process without the “judicial filtration”
mandated by Section 202 (as determined in Question II), the
resulting trial is transformed into an instrument of coercion.
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52. Furthermore, the recent guidance in Lalankumar Singh v. State of
Maharashtra [2022 SCC OnLine SC 1383], reaffirms the High
Court’s duty to intervene when the criminal process is utilized as
a “weapon of civil recovery.” In the present case, the
fragmentation of the debt coupled with the implication of
directors who had no documented role in the supply chain
suggests a strategic attempt to coerce a settlement rather than
punish a crime.
53. To force these petitioners to undergo the rigors of a criminal trial
on the basis of a complaint that is “factually silent” and
“procedurally flawed” would be a manifest travesty of justice. The
right to a fair trial includes the right not to be subjected to trial
when the law does not recognize a prima facie case. The “legal
fiction” of Section 141 cannot be used to bypass constitutional
safeguards.
54. Question No. V is thus answered in the Affirmative. The
continuation of proceedings against the petitioners (Accused Nos.
2, 4, and 5) constitutes an abuse of the process of law.
CONCLUSIVE FINDINGS AND RATIO DECIDENDI
55. In view of the exhaustive deliberation on the various facets of law
and fact, this Court summarizes the findings and the resulting
ratio as follows:
i. This Court finds that the “burden of pleading” under
Section 141 of the Negotiable Instruments Act is not a
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CRR 2301 OF 2024mere procedural formality but a substantive jurisdictional
prerequisite. Criminal liability, particularly of a vicarious
nature, cannot be fastened upon a Director through the
artifice of “template pleading.”
ii. To bridge the gap between corporate default and
individual criminality, the complaint must disclose a
clear, factual description of the overt act or the specific
role played by the Director. Merely “parroting” the
statutory nomenclature, stating a Director is “in charge of
and responsible for the business” is insufficient where the
individual is not a signatory or a Managing Director.
iii. Where an accused resides beyond the territorial
jurisdiction of the Court, the inquiry under Section 202 of
the Cr.P.C. is a mandatory constitutional safeguard. This
inquiry must be substantive rather than perfunctory. The
Magistrate must specifically identify the basis of liability
for non-signatories before setting the criminal machinery
in motion.
iv. The judicial application of mind during this inquiry must
specifically address the basis of liability for non-
signatories. Any summoning order issued in a mechanical
fashion, which fails to distinguish between the “Company”
and its “Non-Signatory Directors,” constitutes a
jurisdictional error and a violation of the procedural due
process.
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v. The “deeming fiction” of Section 141 must be strictly
construed. In the absence of specific averments linking
the petitioners to the procurement or the issuance of the
instruments, a Director cannot be made to stand trial
solely because of their executive designation.
vi. While Section 139 of the Act creates a presumption in
favor of the holder, it does not exempt the complainant
from the requirement of pleading a specific “legally
enforceable debt.” When instruments appear to be
collateral security against a fluctuating credit line, and
the complaint fails to link the petitioners to the
crystallization of that debt, the penal provisions of Section
138 cannot be used to bypass the necessity of civil
adjudication.
vii. The continuation of criminal proceedings against non-
resident, non-signatory directors on a “facially silent”
complaint constitutes an egregious abuse of the process
of law. Such “weaponization” of criminal law for civil
recovery is a manifest violation of the fundamental right
to personal liberty under Article 21 of the Constitution of
India. The inherent power of this Court must be exercised
to prevent the “process from becoming the punishment.”
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CRR 2301 OF 2024
CONSEQUENTIAL ORDERS AND DIRECTIONS
56. Consequent upon the findings recorded above, this Court is of the
firm opinion that the prosecution of the petitioners is legally
unsustainable. To allow the trial to proceed would be to sanction
a miscarriage of justice.
57. Accordingly, the criminal proceedings in Case No. CS-26711 of
2024 (Ddev Plastiks Industries Limited v. Gupta Power
Infrastructure Limited & Ors.), presently pending before the
Learned Metropolitan Magistrate, 18th Court, Calcutta, including
the Order dated April 6, 2024, are hereby quashed and set aside,
strictly and exclusively in respect of the present Petitioners,
namely, Accused Nos. 2, 4, and 5.
58. The Petitioners stand discharged from their respective bail bonds,
if any.
59. All coercive steps, including warrants or look-out circulars, if any,
issued against them in connection with this matter shall stand
vacated forthwith.
60. The Learned Metropolitan Magistrate, 18th Court, Calcutta, is
directed to proceed with the trial with utmost expedition against
the remaining accused, namely Accused No. 1 (The Company)
and Accused No. 3 (The Signatory) with all deliberate speed and
in accordance with the law, without being influenced by any
observations made herein regarding the merits of the underlying
commercial dispute.
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CRR 2301 OF 2024
61. The quashing of proceedings against the non-signatory directors
shall not be construed as an expression of opinion on the merits
of the underlying commercial liability of the accused company.
62. The Complainant remains at liberty to pursue any other civil
remedy available under the law for the recovery of the alleged
outstanding dues. The observations made herein shall not
prejudice such civil proceedings.
63. The Criminal Revisional Application being CRR 2301 of 2024
stands allowed to the extent indicated above.
64. Interim order/orders, if any stand vacated.
65. There shall be no order as to costs.
66. The Trial Court Record (TCR), if any, shall be sent down to the
Trial Court, at once.
67. Case diary, if any, be returned forthwith.
68. Urgent photostat certified copy of this judgment, if applied for, be
supplied to the parties upon compliance with all requisite
formalities.
(Uday Kumar, J.)
