Case Note & Summary
The petitioner, M.M. Pangarkar, filed a criminal writ petition under Articles 226 and 227 of the Constitution of India seeking quashing of complaint S.C.C. No. 6238/2011 pending before the Judicial Magistrate (F.C.), Aurangabad. The complaint was filed by Rajendra Modani, proprietor of Nath Electricals, alleging dishonour of a cheque issued by Asian Electronics Ltd. for Rs. 2,00,000/- towards part payment of outstanding dues. The petitioner contended that he was a Technical Advisor of the company until 1st February 2009, having resigned on 13th January 2009, and thereafter served as a Consultant/Advisor for a specific project (GFSS Project) from 1st February 2009 to 31st May 2009. He asserted that he was neither a director nor in charge of the day-to-day affairs of the company. The cheque in question was issued on 23rd September 2011, long after the petitioner's association with the company had ended. The court examined the provisions of Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, which impose vicarious liability on directors or persons in charge of the company's business at the time of the offence. Since the petitioner had resigned and was not involved in the company's management when the cheque was issued, the court held that no case was made out against him. The petition was allowed, and the complaint against the petitioner was quashed.
Headnote
A) Criminal Law - Negotiable Instruments Act - Quashing of Complaint - Section 138 read with Section 141 - Vicarious Liability - The petitioner, a former Technical Advisor who resigned before the cheque was issued, cannot be held vicariously liable for the company's cheque dishonour as he was not a director or in charge of business affairs at the relevant time. The complaint was quashed. (Paras 5-9) B) Criminal Procedure - Quashing of Criminal Proceedings - Articles 226 and 227 of Constitution of India - Inherent Powers - The High Court can quash a criminal complaint if the allegations do not disclose any offence against the petitioner, especially when the petitioner had no role in the company's management at the time of the alleged offence. (Paras 4, 9)
Issue of Consideration
Whether a person who was not a director or in charge of the day-to-day affairs of a company at the time of issuance of a cheque can be prosecuted under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.
Final Decision
Petition allowed. The complaint in S.C.C. No. 6238/2011 pending before learned Judicial Magistrate (F.C.), Aurangabad, against the petitioner is quashed and set aside.
Law Points
- Quashing of criminal complaint
- vicarious liability of company officers
- Section 138 NI Act
- Section 141 NI Act
- director or person in charge of affairs
- resignation prior to cheque issuance
