w w w . L a w y e r S e r v i c e s . i n



Kalidas, Director Kaveri Engineering Industries Limited Trichy v/s Industrial Reconstruction Bank of India (IRBI) by authorised Official G.Venkatakrishnan Southern Zonal Office, Spencer Plaza Chennai


Company & Directors' Information:- INDUSTRIAL RECONSTRUCTION CORPN OF INDIA LTD [Strike Off] CIN = U45208WB1971PLC027964

Company & Directors' Information:- SPENCER AND COMPANY LIMITED [Active] CIN = U74999TN1918PLC002341

Company & Directors' Information:- KAVERI INDUSTRIES PRIVATE LIMITED [Active] CIN = U25206AP2012PTC084624

Company & Directors' Information:- SPENCER INDUSTRIES PVT LTD [Active] CIN = U00000DL1999PTC100030

Company & Directors' Information:- KAVERI (INDIA) LIMITED [Amalgamated] CIN = U51909TG1984PLC031391

Company & Directors' Information:- P C INDIA LIMITED [Strike Off] CIN = U33111TN1986PLC013401

Company & Directors' Information:- KAVERI (INDIA) LTD. [Not available for efiling] CIN = L51909AS1984PLC002239

Company & Directors' Information:- D P ENGINEERING INDUSTRIES LIMITED [Active] CIN = U27310DL2008PLC176856

Company & Directors' Information:- A R PLAZA PRIVATE LIMITED [Active] CIN = U45201DL2002PTC113870

Company & Directors' Information:- PLAZA INDUSTRIES PRIVATE LIMITED [Amalgamated] CIN = U74899DL1994PTC060765

Company & Directors' Information:- A. S. PLAZA PRIVATE LIMITED. [Active] CIN = U70100WB2008PTC122079

Company & Directors' Information:- A K ENGINEERING INDUSTRIES (INDIA) PRIVATE LIMITED [Active] CIN = U25206DL1997PTC085204

Company & Directors' Information:- S & K PLAZA PRIVATE LIMITED [Strike Off] CIN = U45201WB1997PTC085621

Company & Directors' Information:- G L ENGINEERING INDUSTRIES PRIVATE LIMITED [Active] CIN = U28920MH1981PTC023662

Company & Directors' Information:- THE ENGINEERING AND INDUSTRIAL CORPORATION PVT LTD [Active] CIN = U29199DL1952PTC002088

Company & Directors' Information:- R S PLAZA PRIVATE LIMITED [Active] CIN = U70109WB1998PTC086927

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- SOUTHERN INDUSTRIAL CORPN LIMITED [Active] CIN = L99999TN2000PLC002432

Company & Directors' Information:- B V M ENGINEERING INDUSTRIES LIMITED [Active] CIN = U28111DL1972PLC005983

Company & Directors' Information:- S J PLAZA PRIVATE LIMITED [Active] CIN = U70109WB1997PTC083153

Company & Directors' Information:- K V M PLAZA PRIVATE LIMITED [Active] CIN = U70101KL1986PTC004612

Company & Directors' Information:- S V PLAZA PVT LTD [Active] CIN = U45201WB1993PTC060261

Company & Directors' Information:- R R R ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1993PTC055069

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- A. V. ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999DL1974PTC007360

Company & Directors' Information:- G N PLAZA PRIVATE LIMITED [Active] CIN = U45201WB1999PTC090867

Company & Directors' Information:- G D R ENGINEERING INDUSTRIES PVT LTD [Strike Off] CIN = U27109UP1971PTC003388

Company & Directors' Information:- L S ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74899DL1977PTC008484

Company & Directors' Information:- I B I ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U45202PB1974PTC003422

Company & Directors' Information:- A H B ENGINEERING INDUSTRIES PVT LTD [Strike Off] CIN = U35999WB1988PTC044786

Company & Directors' Information:- SOUTHERN BANK LTD [Strike Off] CIN = U65923WB1934PLC008104

Company & Directors' Information:- O K ENGINEERING INDUSTRIES PRIVATE LTD [Active] CIN = U74899DL1987PTC027660

Company & Directors' Information:- PLAZA INDIA PRIVATE LIMITED [Strike Off] CIN = U74899DL1993PTC055773

Company & Directors' Information:- P S PLAZA PRIVATE LIMITED [Active] CIN = U45200WB2007PTC113368

Company & Directors' Information:- N K PLAZA PRIVATE LIMITED [Active] CIN = U45203WB2006PTC108313

Company & Directors' Information:- SOUTHERN INDUSTRIES PVT LTD [Strike Off] CIN = U51909WB1947PTC015335

Company & Directors' Information:- SOUTHERN PLAZA PVT LTD [Strike Off] CIN = U70101WB1996PTC079644

Company & Directors' Information:- K G ENGINEERING INDUSTRIES PVT LTD [Strike Off] CIN = U28910KL1980PTC003156

Company & Directors' Information:- R P ENGINEERING INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999DL1973PTC006781

Company & Directors' Information:- P G PLAZA PRIVATE LIMITED [Active] CIN = U45201DL2003PTC119689

Company & Directors' Information:- SOUTHERN INDUSTRIAL AND ENGINEERING COMPANY PRIVATE LIMITED [Strike Off] CIN = U27209TN1986PTC013475

Company & Directors' Information:- S V ENGINEERING INDUSTRIES PVT LTD [Under Liquidation] CIN = U74210TG1981PTC003174

Company & Directors' Information:- KALIDAS LIMITED [Dissolved] CIN = U99999MH1951PLC008490

    Crl.OP.No.22175 of 2002 & Cr.Mp.No.9131 of 2002

    Decided On, 14 August 2009

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MRS. JUSTICE ARUNA JAGADEESAN

    For the Petitioner: M. Arvind Subramanian, Advocate. For the Respondent: V. Murali, Legal Aid Counsel.



Judgment Text

(Prayer:- This Criminal Original Petition is filed to call for the records and quash the proceedings as against the Petitioner now pending in CC.NO.7733/1996 on the file of the XIV Metropolitan Magistrate, Egmore, Chennai.)


The Petitioner, who is arrayed as A2, seeks to quash the proceedings in CC.NO.7733/1996 on the file of the XIV Metropolitan Magistrate, Egmore, Chennai.


2. The facts, which are essential for the disposal of this Criminal Original Petition, are as follows:-


The Cheque No.141124 dated 15.8.1996 for a sum of Rs.9,25,000/- issued by the Company by name M/s.Kaveri Engineering Industries Limited (herein after referred to as the Company) was dishonoured on presentation. Despite the statutory notice issued by the defacto complainant, the accused failed to pay the amount covered by the cheque. Hence, the complainant has filed the private complaint against A1 Company and the Petitioner, who is arrayed as A2 and two other Directors of A1 Company.


3. Mr.M.Aravind Subramanian, the learned counsel for the Petitioner submits that the Petitioner is not the signatory of the cheque in question and there is no allegation in the complaint that the Petitioner was responsible for the conduct of the affairs of the Company and was in charge of and responsible for the day-to-day affairs of the Company. He would contend that no specific role was attributed to the Petitioner and mere allegation that the Petitioner as the Director was responsible for failure to make payment of the cheque amount is not sufficient for proving the offence under Section 138 of the Negotiable Instruments Act.


4. The learned counsel for the Petitioner relied on the decision rendered by the Honourable Supreme Court in the case of Ramrajsingh Vs. State of MP and another [2009-AIR-SCW-3836], wherein it is held that only such person would be held liable, if at the time when offence was committed, who was held to be in charge of and responsible to the Company for the conduct of the business of the Company and merely being a Director of the Company in the absence of above factors will not make him liable. The relevant portion is extracted below:-


"8. To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. There should be clear and unambiguous allegation as to how the Directors are in charge and responsible for the conduct of the business of the Company. The description should be clear. It is true that precise words from the provisions of the Act need not be reproduced and the court can always come to a conclusion in facts of each case. But still in the absence of any averment or specific evidence the net result wold be that complaint would not be entertainable."


5. In the case of SMS.Pharmaceuticals Limited Vs. Neeta Bhalla and another [2007-4-SCC-70], the Honourable Supreme Court has inter alia held thus:-


"18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person connected with a Company, the principal accused being the Company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That the Respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a Director in a Company is not sufficient to satisfy the requirement of Section 141. Even a non Director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the cast at the trial."


6. In yet another decision rendered by the Honourable Supreme Court rendered in the case of Katta Sujatha Vs. Fertilizers & Chemicals Travancore Limited and another [2003-1-CTC-127], it is held that "a person in charge of" means that such a person should be in overall control of the day-to-day business of the Company or firm and the person may be a party to a policy being followed by the Company and yet not be in charge of business of the Company or may be in charge of but not in overall charge or may be in charge of only some part of the business of the Company. To the same effect is the decisions of the Honourable Supreme Court in the cases of KPG Nair Vs. Jindal Menthol India Limited [2001-10-SCC-218] and Anil Hada Vs. Indian Acrylic Limited [2001-1-CTC-94].


7. In the instant case, in the complaint it is merely stated that the Petitioner was taking part actively in the day-to-day business of the Company, but there is no averment or material to indicate that the Petitioner could be held vicariously liable for the commission of the offence by the Company, as admittedly, the Petitioner was not the signatory to the cheque in question. Further in paragraph 8 of the complaint, it is stated that the complainant has reserved his right to implead such other person or other officers in charge of, who had been responsible for issuing the cheque, indicating that the complainant was

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not sure as to who was actually in charge of and responsible for the conduct of the business of the day-to-day affairs of the Company. In such view of the matter, when the present case is considered in the light of the principles enunciated in the decisions cited supra, the inevitable conclusion that could be arrived at is that the Petitioner cannot be made vicariously liable for the offence committed by the Company. 8. In view of the above said reasons, the impugned complaint is quashed, in so far as the Petitioner is concerned. This Criminal Original Petition is allowed accordingly. Consequently, the connected MP is closed.
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