Case Note & Summary
The appeal arose from a complaint filed under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881, against the appellant, who was a Director of M/s. ETI Projects Ltd. The complainant alleged that the appellant issued cheques dated 15.02.2001 and 28.02.2001, which were dishonoured. The appellant contended that he had resigned from the company on 20.01.2001, prior to the issuance of the cheques, and therefore was not liable. He filed an application under Section 482 CrPC for quashing the summons, which was dismissed on 18.09.2007 on the ground that the cheques were issued under his signature. Subsequently, the appellant filed a fresh application under Section 482 CrPC, relying on Form 32 issued by the Registrar of Companies under the Companies Act, 1956, as proof of his resignation. The High Court initially issued notice but later dismissed the application, holding that the second application was not maintainable in view of the dismissal of the earlier one. The Supreme Court considered the maintainability of a successive application under Section 482 CrPC and the liability of a director who had resigned before the issuance of cheques. The Court held that a successive application under Section 482 CrPC is maintainable if there are changed circumstances, such as the emergence of new evidence not considered earlier. In this case, Form 32 was not brought on record in the earlier application, and the High Court had not considered the effect of the resignation. The Court distinguished the case of Atul Shukla vs. State of Madhya Pradesh, which involved a recall of an earlier order barred under Section 362 CrPC. On merits, the Court held that since the appellant had resigned prior to the issuance of the cheques, as evidenced by Form 32, he could not be held liable under Section 138 NI Act. The Court allowed the appeal, set aside the impugned order, and quashed the proceedings against the appellant alone, noting that the company remained a party respondent in the complaint.
Headnote
A) Criminal Procedure Code - Successive Application under Section 482 - Maintainability - Changed Circumstances - The High Court dismissed the second application under Section 482 CrPC as not maintainable because the earlier application for the same relief was dismissed. The Supreme Court held that a successive application under Section 482 CrPC is maintainable if there are changed circumstances, such as the emergence of new evidence (Form 32) not considered earlier. Reliance placed on Superintendent and Remembrancer of Legal Affairs, West Bengal vs. Mohan Singh and Ors., AIR 1975 SC 1002. (Paras 7-8) B) Negotiable Instruments Act, 1881 - Section 138 - Liability of Director - Resignation Prior to Cheque Issuance - The appellant resigned as director on 20.01.2001, and the cheques were issued on 15.02.2001 and 28.02.2001. The Supreme Court held that since the resignation was prior to the issuance of cheques and was supported by Form 32, the appellant cannot be held liable under Section 138 NI Act. Reliance placed on Harshendra Kumar D. vs. Rebatilata Koley Etc., 2011 Crl.L.J. 1626. (Paras 7, 9) C) Criminal Procedure Code, 1973 - Section 362 - Bar on Review - Distinction from Successive Application - The case of Atul Shukla vs. State of Madhya Pradesh (2019) was distinguished as it involved recall of an earlier order, which is barred under Section 362 CrPC, whereas the present case involved a fresh application based on new evidence. (Para 10)
Issue of Consideration
Whether a second application under Section 482 CrPC for quashing of summons is maintainable when the earlier application for the same relief was dismissed, and whether the appellant can be held liable under Section 138 NI Act after resigning as director prior to cheque issuance.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned order of the High Court, and quashed the proceedings against the appellant alone. The complaint against the company and other respondents remains unaffected.
Law Points
- Successive application under Section 482 CrPC maintainable if based on changed circumstances
- Resignation prior to cheque issuance absolves director of liability under Section 138 NI Act
- Form 32 under Companies Act is valid proof of resignation
