Alok Aradhe ORDER
Alok Aradhe, J.
1. In these petitions under Section 482 of the Code of Criminal Procedure, 1973 the petitioner who is the nominal Director of Avni Energy Solutions Private Limited seeks quashment of entire proceedings in C.C. No. 7122/2017 pending before XLII Additional Chief Metropolitan Magistrate, Bengaluru.
2. Facts giving rise to filing of the petitions briefly stated are that the petitioner is a employee of SIDBI Venture Capital Limited, which appointed the petitioner as a nominee Director of the Avni Energy Solutions Private Limited. As nominee Director, the petitioner has no role in day to day affairs of the company. The petitioner had also resigned from the Board of Directors on 09.09.2016 as Nominee Director and was appointed as Observer on the Board of Directors on the same day. The complainant is a company registered under the Companies Act, 1956. In the course of transaction, towards part payment of the dues, an invoice was issued along with a cheque dated 24.05.2016 for an amount of Rs. 1,97,174/-. The complainant submitted the cheque. However, the cheque was dishonored with the endorsement that 'the payment was stopped by the Drawer'. The complainant thereupon sent a legal notice dated 28.06.2016 and thereafter the complaint was filed. The Magistrate by an order dated 18.11.2016, has taken cognizance of the offence and directed issuance of summons to the petitioner. In the aforesaid factual background, the petitioner has approached this court.
3. Learned counsel for the petitioner submitted that Trial Court ought to have appreciated that the petitioner was merely an investor nominee Director and was not considered as an officer who is in default for any purpose either under Section 2(31) read with Section 5 of the Companies Act, 1956 or under Section 2(60) of the Companies Act, 2013. It is also pointed out that there is no specific averment made in the complaint made against the petitioner other than the general statement. In support of his submissions, learned counsel for the petitioner has placed reliance on the decision of the Supreme Court in 'S.M.S. PHARMACEUTICALS LTD. VS. NEETA BHALLA AND ANOTHER', MANU/SC/0622/2005 : (2005) 8 SCC 89. On the other hand, learned counsel for the respondent has supported the order and has submitted that once the requirement under Section 141 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act' for short) is satisfied, the Magistrate can issue process against such Director. It is further submitted that the complaint contains the basic averment, which is sufficient to make out a case against the Director.
4. I have considered the submissions made by learned counsel for the parties and have perused the record. A Liability under Section 141 of the Act is fastened vicariously on a person connected with the company. Therefore, the persons who are sought to be criminally made liable should be at the time of commission of offence, in charge of and responsible to the company for conduct of the company. It is well settled that every person connected with affairs of the company would not fall within the ambit of Section 141 of the Act and only those persons who were in charge of and responsible for the conduct of business of the compan........