Punjab-Haryana High Court
Shailja Khanna And Anr. vs Lakra Industries Ltd. on 14 July, 2026
Author: Jasjit Singh Bedi
Bench: Jasjit Singh Bedi
CRM-M-8093-2023
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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
(121) CRM-M-8093-2023 (O & M)
Reserved on: 10.07.2026
Date of Pronouncement:14.07.2026
Date of Uploading :15.07.2026
Ms. Shailja Khanna and anr. ...... Petitioner(s)
V/s
Lakra Industries Limited ...Respondent(s)
CORAM: HON'BLE MR. JUSTICE JASJIT SINGH BEDI
Present: Mr. Shubham Bhalla, Advocate, (Thr. VC)
with Mr. Gurkamal S. Kandhola, Advocate,
for the petitioner(s).
Mr. Vikas Bali, Advocate,
for the respondent.
****
JASJIT SINGH BEDI, J. (Oral)
The prayer in the present petition under Section 482 Cr.P.C. is
for quashing of the complaint No.30175 dated 16.11.2019 titled as ‘Lakra
Industries Ltd. vs. Knightrider Apparels Private Ltd.‘ under Section 138
read with Section 142 of the Negotiable Instruments Act, 1881, summoning
order dated 18.11.2019 and all consequential proceedings arising therefrom.
2. The brief facts of the case as emanating from the pleadings are
that the respondent-complainant (hereinafter to be known as ‘the
respondent’) was running the business of manufacturing and sale of hosiery
goods under the name and style of ‘Lakra Industries Limited’. The
petitioners alongwith other accused are stated to have purchased goods on
credit and in order to discharge their legal liability, accused No.4-Atul
SUKHPREET KAUR
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Moudgil and being the authorised signatory of the accused No.1-Knightrider
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Apparels Private Limited in consultation with other accused, issued cheques
including cheque No.144541 dated 28.06.2019 for a sum of Rs.4,30,686/-,
cheque No.144542 dated 30.06.2019 for a sum of Rs.4,54,389/- and cheque
No.144543 dated 29.06.2019 for a sum of Rs.3,12,098/- all drawn on PNB
Bank, Udyog Vihar, Phase-I, Gurgaon, Haryana, in favour of the
complainant with the assurance that the said cheques would be honoured on
presentation. However, they were dishonoured, leading to the sending of a
legal notice.
3. Despite the legal notice, when no payment was made, the
respondent was constrained to file a complaint under Section 138 of the
Negotiable Instruments Act, 1881 against the accused persons (including the
petitioners). A copy of the said complaint is annexed as Annexure P-1 to the
petition. The relevant extract of the said complaint is as under:-
3. That the accused no.1 is Private Limited company and the
accused no.2 and 3 are its directors and the accused no.4 and 5
are its authorized signatory and the accused have been looking
after day to day affairs of the accused no.1 and thus the
accused are liable and responsible for all acts and omissions
done in the name of the accused no.1.
4. That the accused purchased goods from the complainant on
credit and as per books of account maintained by the
complainant in ordinary course of business huge amount is due
towards the accused qua the goods supplied by the
complainant.
5. That in order to discharge the legal liability, the accused no.4
being authorized signatory of accused no.1 and in consultation
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with. the other accused, issued cheques including cheque
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no.144541 dated 28.06.2019 Rs.4.30,686/-, cheque no.144542
dated 30.06.2019 for amount of Rs.4,54,389/- and cheque no.
144543 dated 29.06.2019 for amount of Rs.3,12,098/- all drawn
on PNB Bank, Udyog Vihar, Phase-1, Gurgaon, Haryana in
favour of the complainant with the assurances that the said
cheques will be honoured on presentation and it is good for
payment. It was upon express and assurance made by the
accused, the complainant received the cheques.
4. Based on the complaint and the preliminary evidence, the
petitioners and their co-accused came to be summoned under Section 138 of
the Negotiable Instruments Act vide order dated 18.11.2019. A copy of the
summoning order is annexed as Annexure P-6 to the petition.
5. The aforementioned complaint (Annexure P-1) and the
summoning order (Annexure P-6) are under challenge in the present petition.
6. The learned counsel for the petitioners as raised two
contentions. He, firstly, contends that the averments made in the complaint
(Annexure P-1) qua the role of the petitioners are not sufficient so as to
entail summoning of the petitioners under the provisions of the Act.
Secondly, the cheques in question are dated 28.06.2019, 29.06.2019 and
30.06.2019. The petitioners had resigned as directors on 26.06.2019 i.e.
before the issuance of the said cheques and therefore, as they are also not
signatories to the cheques, the proceedings qua them are liable to be
quashed. Reliance is placed upon a judgment in ‘Siby Thomas versus
Somany Ceramics Limited (2024) 1 Supreme Court Cases 348′.
SUKHPREET KAUR
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7. The learned counsel for the respondent, on the other hand,
contends that Paras 3 and 5 of the complaint contain sufficient averments
qua their role to prima facie establish the liability of the petitioners. As
regards resignation of the petitioners, he contends that the petitioners have
played a fraud upon the Court. In fact, the Form No. DIR-12 shows the
petitioners to have resigned on 26.06.2019 but the said Form was actually
uploaded to the portal on 21.10.2020 i.e. after the issuance of the cheques. It
is the date of uploading of the said Form which is relevant. Further, in case,
the petitioners did not have a role to place in the affairs of the company and
had ceased to be directors as on June, 2019, they ought to have filed a reply
to the legal notice setting up their defence at the very outset. He further
contends that two other identical petitions raising the same arguments as
raised in the present petition have been argued at length and subsequently,
withdrawn by the petitioners vide order dated 17.11.2023 (Annexure A-1)
passed in CRM-M-914-2022 titled as ‘Shailja Khanna and another versus
Lakra Industries Ltd.’ and order dated 17.11.2023 (Annexure A-2) passed in
CRM-M-911-2022 titled as ‘Shailja Khanna and another versus Lakra
Industries Ltd.’. Reliance is placed upon the judgments in ‘S.P. Mani and
Mohan Dairy versus Dr. Snehalatha Elangovan 2022(4) RCR(Criminal)
743, HDFC Bank Limited versus State of Maharashtra and another
2025(3) RCR(Criminal) 230 and Shivappa Reddy versus S. Srinivasan
2025(3) RCR(Criminal) 264′.
8. I have heard the learned counsel for the parties.
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9. The learned counsel for the petitioners has relied upon the
judgment of the Hon’ble Supreme Court in ‘Siby Thomas versus Somany
Ceramics Limited (2024) 1 Supreme Court Cases 348′ and the relevant
extract of the same is reproduced hereinbelow:-
3. Virtually, the appellant set up twin grounds to seek
quashment of the complaint against him; firstly, that he had
resigned from the partnership firm on 28.05.2013 whereas the
cheque in question was issued on 21.08.2015 and secondly, that
the complaint is devoid of mandatory averments required to be
made in terms of sub-Section 1 of section 141 of the NI Act, as
relates him. The High Court found that the contention in regard
to the maintainability of the complaint against the appellant,
owing to his retirement from the partnership firm prior to the
issuance of the cheque in question, is a matter of evidence and
ultimately, the appellant would have to lead evidence and prove
that fact. Consequently, it was held that the complaint could not
be rejected qua the appellant at the initial stage in exercise of
the powers under Section 482 Cr.PC.
XXXX XXXX XXXX
6. In view of the rival contentions as above it is apposite to
refer to the averments in paragraph 3 and 4 of the complaint,
which is annexed to the SLP. They read thus:
“3. That the accused No.1 is a partnership-firm with the
name and style of M/s Tile Store, having its office at 5-
654/B, Jyothis Complex, By-pass Road, Eranhipalam,
Calicut-673006 (Kerala), while accused No.2 to 6 are the
partners of the accused No.1. The accused No.2 to 6
being the partners are responsible for the day to day
conduct and business of the accused No. 1.
4. That the accused No.1 through its partners i.e. accused
No.2 to 6, on the basis of the authority vested in them
approached to the complainant for purchasing the
SUKHPREET KAUR
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I attest to the accuracy and
ceramic tiles, sanitary wares and bath fitting from the
integrity of this document
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complainant on credit basis. The request of the accused
No.1 was accepted by the complainant and the accused
agreed to pay the amount of the goods purchased by them
to the complainant within one month and it was also
agreed that if the accused failed to make the payment
within one month in that case they shall also be liable to
pay interest @ 24% per annum on the balance sale
consideration till its full realization.”
(emphasis supplied)
XXXX XXXX XXXX
12. Bearing in mind the afore-extracted recitals from the
decisions in Gunmala Sales Private Limited‘s case (supra) and
S.P. Mani‘s case (supra), we have carefully gone through the
complaint filed by the respondent. It is not averred anywhere in
the complaint that the appellant was in charge of the conduct of
the business of the company at the relevant time when the
offence was committed. What is stated in the complaint is only
that the accused Nos. 2 to 6 being the partners are responsible
for the day-to-day conduct and business of the company. It is
also relevant to note that an overall reading of the complaint
would not disclose any clear and specific role of the appellant.
XXXX XXXX XXXX
18. Thus, in the light of the dictum laid down in Ashok
Shewakramani’s case (supra), it is evident that a vicarious
liability would be attracted only when the ingredients of section
141(1) of the NI Act, are satisfied. It would also reveal that
merely because somebody is managing the affairs of the
company, per se, he would not become in charge of the conduct
of the business of the company or the person responsible to the
company for the conduct of the business of the company. A bare
perusal of section 141(1) of the NI Act, would reveal that only
that person who, at the time the offence was committed, was in
SUKHPREET KAUR
2026.07.15 11:36 charge of and was responsible to the company for the conduct
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of the business of the company, as well as the company alone
shall be deemed to be guilty of the offence and shall be liable to
be proceeded against and punished.
19. In such circumstances, paragraph 24 in Ashok
Shewakramani’s case (supra) is also relevant. After referring to
the section 141(1) of NI Act, in paragraph 24 it was further
held thus:(SCC p.480)“24 On a plain reading, it is apparent that the words “was
in charge of” and “was responsible to the company for
the conduct of the business of the company” cannot be
read disjunctively and the same ought be read
conjunctively in view of use of the word “and” in
between.”
20. The upshot of the aforesaid discussion is that the averments
in the complaint filed by the respondent are not sufficient to
satisfy the mandatory requirements under section 141(1) of the
NI Act. Since the averments in the complaint are insufficient to
attract the provisions under section 141(1) of the NI Act, to
create vicarious liability upon the appellant, he is entitled to
succeed in this appeal. We are satisfied that the appellant has
made out a case for quashing the criminal complaint in relation
to him, in exercise of the jurisdiction under Section 482 of
Cr.PC. In the result the impugned order is set aside and the
subject Criminal Complaint filed by the respondent and
pending before Ld. CJ (JD) JMIC, Bahadurgarh, in the matter
titled as M/s. Somany Ceramics v. M/s. Tile Store etc. vide
COMA- 321-2015 (CNRNO: HRJRA1004637-2015), stand
quashed only in so far as the appellant, who is accused No. 4, is
concerned. Appeal stands allowed as above. There will be no
order as to costs.
10. The learned counsel for the respondent has relied upon three
SUKHPREET KAUR
2026.07.15 11:36 judgments of the Hon’ble Supreme Court in ‘S.P. Mani and Mohan Dairy
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versus Dr. Snehalatha Elangovan 2022(4) RCR(Criminal) 743, HDFC
Bank Limited versus State of Maharashtra and another 2025(3)
RCR(Criminal) 230 and Shivappa Reddy versus S. Srinivasan 2025(3)
RCR(Criminal) 264′ and the relevant extract of the same are reproduced
hereinbelow:-
In S.P. Mani (Supra), the Hon’ble Supreme Court held as
under:-
18. The complaint filed under section 138 of the NI Act reads
thus:-
“The complainant is a Partnership Firm registered under
the Partnership act and carrying on business in the above
said address. The Partners of the said firm resolved that
D. Gokulnath, S/o. M. Dhanapal the Manager of the said
complainant who knows personally about each and every
transaction of this case to be and he is authorized to
represent the firm in this case. A copy of power of
attorney is produced herewith.
The accused No.1 is a Partnership Firm., the accused
No.2 and 3 are Partners and in-chame and responsible for
the dau-to-dau affairs of the accused No.1, the accused
No.2 and 3 are regularly looking after and actively taking
part in the day-to-day business of the accused No.1.
The complainant is doing business in Milk and Milk
Products. The accused used to purchase Milk and Milk
Products from the complainant on credit basis. The
complainant is maintaining true and correct accounts. As
per accounts maintained by the complainant, the accused
have to pay a balance of Rs.10,71,434.60 to the
complainant. In order to discharge the part of the said
balance amount and liability the accused No.2 on behalf
of the accused No. 1 and with the knowledge and consent
of the accused No.3 ssued the following cheque which is
drawn on TamilNadu Mercantile Bank Ltd.,
Thiruvanmwur Branch, Chennai-41.
S.No. Cheque Date Cheque No. Cheque Amount
1. 05.05.2017 411618 Rs. 10,00,000/-
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On the request of the accused the complainant presented
the above said cheque for collection on 13.06.2017
through HDFC Bank Ltd., Sathy Road Branch, Erode and
the same was returned as “Funds Insufficient” on
14.06.2017. Again, on the request of the accused the
complainant presented the above said cheque for
collection on 20.07.2017 through HDFC Bank Ltd., Sathy
Road Branch, Erode and the same was returned as “Funds
Insufficient” on 21.07.2017. Without sufficient funds in
their account accused have issued the above said cheque.
The accused issued the above said cheque assuring
payment on presentation of the same. At the time of
issuing the said cheque, the accused represented that they
are having an account in which they will have sufficient
amount in their account. But the accused purposely
allowed the same to be dishonoured with an intention to
cheat and defraud the complainant. Therefore, the
accused have committed an offence punishable u/s 138 of
the Negotiable Instruments Act.
Thereupon the complainant issued a lawyer notice on
14.08.2017 to the accused calling upon them to pay the
above said sum of Rs.10,00,000/- due under the said
cheque dated 05.05.2017 within 15 days from the date of
receipt of this notice. The accused received the above said
notice on 16.08.2017. But they failed to pay the above
said cheque amount within 15 days. Hence the accused
has committed an offence punishable u/s 138 r/w. 142 of
Negotiable Instruments Act 1881 as amended by Act 55
of 2002.
The complainant submits that he had produced the
relevant documents relating to this offence.
He further submits that he has filed this complaint within
one month from the date of expiry of 15 days grace time
given in the notice for the payment of above said cheque’s
amount. The above said cheque was presented for
collection through HDFC Bank Ltd., Sathy Road Branch,
Erode which is situated in Erode Karungalpalayam Police
Station limit. Hence this Hon’ble court is having
jurisdiction to cognizance the offence.
A court fee of Rs.5,000/- is paid under Tamilnadu Court
Fee Act.
SUKHPREET KAUR
It is therefore, prayed that this Hon’ble Court may be
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accused, enquire the matter, punish the accused with
maximum sentence and direct the accused to pay
compensation to the complainant u/s 357 CPC and render
justice.” [Emphasis supplied]
XXXX XXXX XXXX
43. In the case on hand, we find clear and specific averments
not only in the complaint but also in the statutory notice issued
to the respondent. There are specific averments that the cheque
was issued with the consent of the respondent herein and within
her knowledge. In our view, this was sufficient to put the
respondent herein to trial for the alleged offence. We are saying
so because the case of the respondent that at the time of
issuance of the cheque or at the time of the commission of the
offence, she was in no manner concerned with the firm or she
was not in-charge or responsible for day-to-day affairs of the
firm cannot be on the basis of mere bald assertion in this
regard. The same is not sufficient. To make good her case, the
respondent herein is expected to lead unimpeachable and
incontrovertible evidence. Nothing of the sort was adduced by
the respondent before the High Court to get the proceedings
quashed. The High Court had practically no legal basis to say
that the averments made in the complaint are not sufficient to
fasten the vicarious liability upon the respondent by virtue of
section 141 of the NI Act.
44. We may also examine this appeal from a different angle. It
is not in dispute, as noted above, that no reply was given by the
respondent to the statutory notice served upon her by the
appellant. In the proceedings of the present type, it is essential
for the person to whom statutory notice is issued under section
138 of the NI Act to give an appropriate reply. The person
concerned is expected to clarify his or her stance. If the person
SUKHPREET KAUR concerned has some unimpeachable and incontrovertible
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material to establish that he or she has no role to play in the
affairs of the company/firm, then such material should be
highlighted in the reply to the notice as a foundation. If any
such foundation is laid, the picture would be more clear before
the eyes of the complainant. The complainant would come to
know as to why the person to whom he has issued notice says
that he is not responsible for the dishonour of the cheque. Had
the respondent herein given appropriate reply highlighting
whatever she has sought to highlight before us then probably
the complainant would have undertaken further enquiry and
would have tried to find out what was the legal status of the
firm on the date of the commission of the offence and what was
the status of the respondent in the firm. The object of notice
before the filing of the complaint is not just to give a chance to
the drawer of the cheque to rectify his omission to make his
stance clear so far as his liability under section 138 of the NI
Act is concerned.
45. Once the necessary averments are made in the statutory
notice issued by the complainant in regard to the vicarious
liability of the partners and upon receipt of such notice, if the
partner keeps quiet and does not say anything in reply to the
same, then the complainant has all the reasons to believe that
what he has stated in the notice has been accepted by the
noticee. In such circumstances what more is expected of the
complainant to say in the complaint.
46. When in view of the basic averment process is issued the
complaint must proceed against the Directors or partners as the
case may be. But, if any Director or Partner wants the process
to be quashed by filing a petition under Section 482 of the Code
on the ground that only a bald averment is made in the
SUKHPREET KAUR
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complaint and that he is really not concerned with the issuance
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of the cheque, he must in order to persuade the High Court to
quash the process either furnish some sterling incontrovertible
material or acceptable circumstances to substantiate his
contention. He must make out a case that making him stand the
trial would be an abuse of process of court. He cannot get the
complaint quashed merely on the ground that apart from the
basic averment no particulars are given in the complaint about
his role, because ordinarily the basic averment would be
sufficient to send him to trial and it could be argued that his
further role could be brought out in the trial. Quashing of a
complaint is a serious matter. Complaint cannot be quashed for
the asking. For quashing of a complaint, it must be shown that
no offence is made out at all against the Director or Partner.
47. Our final conclusions may be summarised as under:-
a.) The primary responsibility of the complainant is to
make specific averments in the complaint so as to make
the accused vicariously liable. For fastening the criminal
liability, there is no legal requirement for the complainant
to show that the accused partner of the firm was aware
about each and every transaction. On the other hand, the
first proviso to sub-section (1) of Section 141 of the Act
clearly lays down that if the accused is able to prove to
the satisfaction of the Court that the offence was
committed without his/her knowledge or he/she had
exercised due diligence to prevent the commission of
such offence, he/she will not be liable of punishment.
b.) The complainant is supposed to know only generally
as to who were in charge of the affairs of the company or
firm, as the case may be. The other administrative matters
would be within the special knowledge of the company
or the firm and those who are in charge of it. In such
circumstances, the complainant is expected to allege that
the persons named in the complaint are in charge of the
affairs of the company/firm. It is only the Directors of the
company or the partners of the firm, as the case may be,
who have the special knowledge about the role they had
played in the company or the partners in a firm to show
SUKHPREET KAUR before the court that at the relevant point of time they
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were not in charge of the affairs of the company.
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Advertence to Sections 138 and Section 141 respectively
of the NI Act shows that on the other elements of an
offence under Section 138 being satisfied, the burden is
on the Board of Directors or the officers in charge of the
affairs of the company/partners of a firm to show that
they were not liable to be convicted. The existence of any
special circumstance that makes them not liable is
something that is peculiarly within their knowledge and it
is for them to establish at the trial to show that at the
relevant time they were not in charge of the affairs of the
company or the firm.
c.) Needless to say, the final judgement and order would
depend on the evidence adduced. Criminal liability is
attracted only on those, who at the time of commission of
the offence, were in charge of and were responsible for
the conduct of the business of the firm. But vicarious
criminal liability can be inferred against the partners of a
firm when it is specifically averred in the complaint
about the status of the partners `qua? the firm. This would
make them liable to face the prosecution but it does not
lead to automatic conviction. Hence, they are not
adversely prejudiced if they are eventually found to be
not guilty, as a necessary consequence thereof would be
acquittal.
d.) If any Director wants the process to be quashed by
filing a petition under Section 482 of the Code on the
ground that only a bald averment is made in the
complaint and that he/she is really not concerned with the
issuance of the cheque, he/she must in order to persuade
the High Court to quash the process either furnish some
sterling incontrovertible material or acceptable
circumstances to substantiate his/her contention. He/she
must make out a case that making him/her stand the trial
would be an abuse of process of Court.
In HDFC Bank Limited (supra), the Hon’ble Supreme Court
held as under:-
4. Since the complaint has been quashed on the ground of lack
of adequate averments, it will be necessary to extract the
crucial averments that are made in the complaint:-
SUKHPREET KAUR
2026.07.15 11:36 “2. That, Accused No 1 is a Company registered and
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incorporated under the provisions of Indian Companies
CRM-M-8093-2023::14::
Act, 2013 [existing within the purview of Companies
Act, 1956] and having it registered and corporate office
at the address mentioned aforesaid and engaged in the
business of sale of cars and spare parts manufactured by
Hyundai Motors (I) Ltd Accused Nos 2 to 4 are the
Directors of Accused No 1 Company and is responsible
for its day to day affairs, management and working of the
Accused No 1 Company furthermore the Accused No 3 is
the signatory of the dishonored cheque.
3. That, Accused No 1, through Accused Nos 2 to 4, had
approached the complainant above named for grant of
credit facility in the form of Revolving Loan Facility as
Inventory Funding for the working capital requirements
That after due deliberation and negotiations with Accused
Nos 2 to 4 the complainant granted the Revolving Loan
facility initially to the extent of Rs 5,00,00,000/ (Rupees
Five Crores only) [Inventory funding Rs 3.00 Crores +
Inventory Funding Adhoc: Rs 2.00 Crores vide sanction
letter dated 09.08.2014 Hereto annexed and marked as
Exhibit B is the copy of said Sanction letter dated 09.
08.2014 for Revolving Loan Facility granted to Accused
No. 1.
4. That, upon further request made by Accused No. 1,
complainant had enhanced the said facility from Rs 5.00
Crore to Rs. 6.00 Crores vide sanction letter dated
27.10.2015 The said facilities were further enhanced
from Ra 6.00 Crores to Rs 6.50 Crores vide sanction
letter dated 22.02.2016 and lastly the said facility was
enhanced from Rs 6.50 Crores to Rs 8.00 Crores vide
sanction letter dated 12.09.2016. Hereto annexed and
marked as Exhibit C-1 to Exhibit C-3 are the copies of
sanction letter dated 27.10.2015, 22.02.2016 and
12.09.2016 respectively
5. The Loan account of Accused No. 1 maintained by
complainant was numbered as loan account No
02400450029354. That in consideration of grant of the
said facilities, accused(s) had executed various loan and
security documents in favor of Complainant from time-to
time inter alia accepting the terms and conditions of
respective documents It is submitted that the Accused
No. 1 lastly, amongst other, entered into Loan agreement
with Complainant on 17.09.2016 and executed Demand
Promissory Note for a sum of Rs. 8,00,00,000/- on
20.09.2016 Hereto annexed and marked as Exhibit ‘D-1
SUKHPREET KAUR IS the copy of Supplemental and Amendatory Loan
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Agreement dated 17.09.2016 and Exhibit’ D 2″ is the
Demand Promissory Note dated 20 09 2016.
6. Be that as it may, the Complainant states that the
sanctioned/renewed credit facilities were duly availed
and utilized by the Accused without any demur. The
Complainant further states that after availing the
aforementioned credit facilities, Accused No. 1 failed to
maintain the account with Complainant Bank in the
manner agreed to and defaulted in making timely
repayments.
7. Thus, owing to the failure on the part of Accused(s) to
repay the outstanding dues on time, thereby willfully
defaulting in the same, Complainant was constrained to
classify the account of the Accused No. 1 as a Non-
Performing Asset on 27.03.2018 in accordance with the
guidelines issued by the Reserve Bank of India from time
to time.
8. That, complainant states that despite various oral and
written requests, the Accused failed to regularize and
maintain the account. It is submitted that Accused
Company did not pay any heed to the requests and
reminders of the Complainant and willfully neglected
discharging their obligations thereby depriving the
Complainant its legitimate dues.”
(Emphasis supplied)
XXXX XXXX XXXX
34. What is important to note is that the repetition of the exact
words of the Section in the same order, like a mantra or a magic
incantation is not the mandate of the law. What is mandated is
that the complaint should spell out that the accused sought to
be arrayed falls within the parameters of section 141(1) of the
NI Act. Only then could vicarious liability be inferred against
the said accused, so as to proceed to trial. Substance will
prevail over form.
35. Strong reliance is placed on Siby Thomas (supra) by
learned counsel for the respondent No.2 to contend that in the
absence of the words “was in charge of”, the present case
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countenance the said submission. This Court, in Siby Thomas
(supra), on facts, found that on an overall reading of the
complaint it did not disclose any clear and specific role to the
appellant-accused therein. It was further held that what was
averred was only that the accused being partners are
responsible for the day-to-day conduct of business of the
company. This is vastly different from the averments in the
present case as discussed herein-above. In this case, it is clearly
averred that the respondent No.2 along with the accused Nos. 3
and 4 being directors were responsible for its day-to-day
affairs, management and working of accused No.1 – Company.
Hence, the judgment in Siby Thomas (supra) can be of no help
to the respondent No.2 as the case turned on its own facts.
36. The other aspect of the matter canvassed by the learned
counsel for the respondent No.2 is that not only are the basic
averments as enshrined in Section141 to be mandatorily
incorporated but also the specific role be attributed to the
persons who are mere directors or employees of the company.
We are unable to agree with the submission of the learned
counsel.
37. Recently, this Court in S.P. Mani and Mohan Dairy v. Dr.
Snehalatha Elangovan, (2023) 10 SCC 685, after reiterating the
principle that it was not necessary to reproduce the language of
Section 141 verbatim in the complaint further reiterated the
holding in K.K.Ahuja v. V.K. Vora and Another, (2009) 10 SCC
48. In K.K. Ahuja (supra), it was held that insofar as the
director was concerned, an averment in the complaint that he
was in charge of, and was responsible to the company, for the
conduct of the business of the company was enough and no
further averment was necessary though some particulars will
be desirable. Thereafter, this Court in S.P. Mani (supra), in
para 58.2 of the judgment concluded as under:-
“58.2. The complainant is supposed to know only
generally as to who were in charge of the affairs of the
company or firm, as the case may be. The other
administrative matters would be within the special
knowledge of the company or the firm and those who are
in charge of it. In such circumstances, the complainant is
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complaint are in charge of the affairs of the
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company/firm. It is only the Directors of the company or
the partners of the firm, as the case may be, who have the
special knowledge about the role they had played in the
company or the partners in a firm to show before the
Court that at the relevant point of time they were not in
charge of the affairs of the company. Advertence to
Sections 138 and Section 141, respectively, of the NI Act
shows that on the other elements of an offence under
Section 138 being satisfied, the burden is on the Board of
Directors or the officers in charge of the affairs of the
company/partners of a firm to show that they were not
liable to be convicted. The existence of any special
circumstance that makes them not liable is something that
is peculiarly within their knowledge and it is for them to
establish at the trial to show that at the relevant time they
were not in charge of the affairs of the company or the
firm.”
38. As was rightly held therein, the administrative role of each
director would be within the special knowledge of the company
or the director of the firm and it is for them to establish that
they were not in charge of the affairs of the company. In view of
this, the contention of the learned counsel for the respondent
No.2 that the specific role attributed to the directors should be
set out in the complaint does not merit acceptance. Reliance
has been placed on National Small Industries Corporation
Limited v. Harmeet Singh Paintal and Another, (2010) 3 SCC
330 by the learned counsel for the respondent No.2 in support
of the proposition canvassed. We are unable to countenance the
said submission. If the learned counsel by the said submission
seeks to contend that the complainant in a Section 138
complaint is obliged to plead administrative matters which are
especially within the knowledge of the company and the
directors, then he is completely wrong in the understanding of
the ingredients of Section 141. As held in K.K. Ahuja (supra)
and reiterated in S.P. Mani (supra), the complainant is
supposed to know only generally as to who are in charge of the
affairs of the company. Harmeet Singh Paintal (supra) when it
holds in para 22 that:
“further, in order to fasten the vicarious liability in
accordance with Section 141, the averment as to the role
of the Directors concerned should be specific. The
description should be clear and there should be some
unambiguous allegations as how the Directors concerned
were alleged to be in charge of and were responsible for
the conduct of the affairs of the company”
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should be understood to only mean vis-a-vis the transaction
concerning the issue of the cheque, in question, which are
within the knowledge of the complainant. K.K. Ahuja (supra)
where it holds that:
“in the case of a Director, secretary or manager [as
defined in Section 2(24) of the Companies Act] or a
person referred to in clauses (e) and (f) of Section 5 of the
Companies Act, an averment in the complaint that he was
in charge of, and was responsible to the company, for the
conduct of the business of the company is necessary to
bring the case under Section 141(1) of the Act. No further
averment would be necessary in the complaint, though
some particulars will be desirable. They can also be made
liable under Section 141(2) by making necessary
averments relating to consent and connivance or
negligence, in the complaint, to bring the matter under
that sub-section”
sets out the correct legal position. A harmonious reading of the
judgments in K.K. Ahuja (supra), Harmeet Singh Paintal
(supra) and S.P. Mani (supra) brings out the position that there
is no obligation on the complainant to plead in the complaint as
to matters within the special knowledge of the company or the
directors or firm about the specific role attributed to them in the
company.
39. Applying the said legal position to the facts of the present
case, it is found that the averments in the complaint set out
herein above against the respondent No.2 – Mrs. Ranjana
Sharma fulfill the requirement of section 141(1) of the NI Act,
and this is not a case where trial against her can be aborted by
quashment of proceedings. The High Court was completely
unjustified in quashing the proceedings against her.
In Shivappa Reddy (supra), the Hon’ble Supreme Court held
as under:-
8. On considering the submissions made by the Counsel for the
parties. It is apparent that the plea of the Respondent, as has
been accepted by the High Court vide impugned order,
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regarding his claim of not being a partner of the Partnership
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Firm (Accused No.1), in whose name and on whose behalf the
cheques have been issued, signed by S. Yuvaraju (Accused
No.2), an authorized signatory, does not in any manner, foist
liability upon the Respondent herein needs to be tested on the
anvil of the pleadings and the Statutory requirements.
9. Since the Partnership Firm (Accused No.1) is a Firm
registered with the Registrars of Firms, the provisions of the
Partnership Act need to be referred to. A perusal of
section 72 of the Partnership Act would show that notice of
retirement must be given to the Registrar of Firms under
Section 63 and by publication in the Official Gazette, and in at
least one vernacular newspaper circulated in the district where
the Firm to which it relates has its place or principal place of
business, such notice needs to be published. This should relate
to the retirement of a partner, which includes admission,
expulsion, or resignation from the Firm in any manner that is
including or excluding a partner in a partnership Firm.
section 32 of the Partnership Act deals with the retirement of a
partner. In addition, section 62 of the Partnership Act deals
with the information to be submitted with regard to the change
in the names and addresses of the partners to the Registrar of
Firms. What, therefore, is mandated under the Statute is that if
any registered Firm intends to include or exclude by way of
resignation, expulsion or addition of any partner in the Firm,
an intimation to the said effect has to be forwarded and
conveyed to the Registrar of Firms. As per Section 63, the
Registrar shall make a record of the notice in the entry relating
to the Firm in the Register of Firms and shall file a notice along
with a statement relating to the Firm as provided for under
section 59 of the Partnership Act.
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10. None of these requirements as provided and mandated for
under the Statute, have been adhered to by Respondent No.1.
Merely putting forth a resignation or the partners entering into
an agreement or drafting a deed or/and accepting the
resignation of a partner of the Firm is insufficient for
discharging the liability of a partner of the Firm unless a
proper entry to the said effect after the publication has been
given effect to with the same, having been recorded in the
Register of Firms in the office of the Registrar of Firms as
provided for in section 63 of Partnership Act.
11. Further, simply because the cheques were signed by S.
Yuvaraju (Accused No.2), who was the authorized signatory of
the Partnership Firm (Accused No.1), does not discharge the
liability of the Respondent. This is especially so when in the
complaint filed under Section 200 of the CrPC by the Appellant,
a categorical averment is made that the Respondent along with
the other two partners of the Partnership Firm (Accused No.1)
is involved in day-to-day affairs of the said Firm. In the
complaint, it has clearly been pleaded that the Respondent-
Accused No.4 was present at the residence of Accused No.2
when the cheques were signed. Further allegations are there to
the effect that Accused No.3 and Respondent Accused No.4 had
stated that they would ensure that the money is repaid. These
facts collectively demonstrate that the requirements under
Section 141 of the NI Act have been satisfied. Therefore, the
Respondent cannot escape from the liability concerning the
cheques which were issued by the Respondent.
12. The findings, therefore, with regard to the Respondent being
no longer a partner of Partnership Firm (Accused No. 1) on the
date of the issuance of the cheques is unsustainable, as it is
contrary to the mandate of the Statute and prima facie the
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13. All these aspects are mixed questions of fact and law
touching on the anvil of disputed questions calling for proof by
way of evidence, which cannot be gone into and decided in a
proceeding under Section 482 CrPC. Such matters require the
parties to lead evidence as per their respective stands, and
hence, calling for no interference by the High Court. Without
further going into the details of the pleadings relatable to the
facts, we are of the view that High Court has erred in law by
exceeding its jurisdiction while exercising its powers under
Section 482 CrPC.
11. A perusal of the aforementioned judgments in S.P. Mani
(supra), HDFC Bank Limited (supra) and Shivappa Reddy (supra) would
establish beyond doubt that once necessary averments regarding the role of
the individuals of a company/partnership are made in the statutory notice
issued by the complainant and the same averments have been reiterated in
the complaint, then, the process must ordinarily be issued against the
directors or partners unless the concerned director/partner is able to establish
beyond doubt that either he had resigned from the company/partnership or
that he had absolutely no role to play in the affairs of the company. For the
said purpose, if any, statutory compliance is to be made under the
Partnership Act/Companies Act to establish date of
appointment/resignation/cessation, then, the same must be made.
12. Coming back to the facts of the present case, a perusal of
Paras 3 and 5 of the complaint would prima facie establish the culpability of
the petitioners as clear and categoric averments have been made against the
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petitioners as well. The judgment in Siby Thomas (supra) has been
discussed and distinguished in HDFC Bank Limited (supra)..
13. Further, the petitioners have attempted to mislead this Court by
arguing that they have resigned from the company on 26.06.2019. No
doubt, the date of cessation of directorship in Form No.DIR 12 is mentioned
as 26.06.2019. However, the said Form itself was uploaded on the portal
only on 21.10.2020 much after the cheques had been issued in June, 2019.
Meaning thereby that the statutory compliance of the cessation/resignation
in terms of Shivappa Reddy (supra) was made much after the issuance of the
cheques.
14. Further, the same very grounds raised in the present petition
have been raised in two earlier petitions i.e. CRM-M-914-2022 and CRM-
M-911-2022 which have been argued at length and withdrawn by the
petitioners vide separate orders dated 17.11.2023 (Annexures A-1 and A-2
respectively).
15. Keeping in view the facts and circumstances of the case, I find
no merit in the present petition and the same stands dismissed.
16. The pending application(s), if any, shall stand disposed of
accordingly.
July 14, 2026 ( JASJIT SINGH BEDI)
sukhpreet JUDGE
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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