Cherukupalli Sitaram vs. Babulal Rajpurohith

Heard Sri S. Ramachandra Prasad, learned counsel representing M/s.Sivalenka Associates, learned counsel on record for the petitioner and Sri Divyank Jaiswal, learned counsel for the respondent No.1 .

The case of the complainant-respondent No.1 is that i accused Nos.2 to 5, representing the accused No.1 Company, had i-rl Crl.P. No.546 of 2023 taken a Self Loaciing Mobile Concrete Mixture, Model ARGO4000 on hire/contract basis from flre complainant, subject to several conditions. They have used the said machine from 13.03 3018 to 20.03.2019 on payment of Rs.2,40,000/_ towarrJs hire/rent and GST of Rs.43,200/- per month. Out of total transaction, an amount of Rs.34,Z1,S2Ot_ is payable torvards hire charges for the said machine and the accused have paid Rs.5,07,034^, thus leaving an outstanding amount of Rs.2g,64,432/_. ln furtherance of the same, the accused have issued 4 cheques vlde (i) Chequ e No.12ZZ2O dated 14.08.2019 for an amount of Rs.8,35,200/_; (ii) Cheuqe No.122721 dated 31.08.2019 for an amount of Rs.4,5g,832t (iii) Cheque bearing No.122722 dated 16 09 2019 for an amount of Rs,g,35,g3 2l_ and (iv) Cheque bearing No.122723 dated 30.09.2019 for an amount of Rs.8,35,200/- draw on Axis Bank Ltd., Tirumalgherry Branch After issuance of the said cheques, the accused requested the complainant not to present cheuqe Nos.,l22l20 and 122221 stating that they are arranging payments from the other banks. Considering their request, the complainant had not presented the said tu,o cheques and on failure of the accused to honour their promise and commitment, the complainant requested the accused to pay and clear the said due amount and the accused have promised and requested him to hord the cheques as a last chance/for the last time on 21.09.2019. As the accused failed to clear the said due amount of Rs.2g,64,432t-, lhe complainant presented the cheques given by the accused. But, the said cheques were dishonoured on 04.11.20219 for the reason 'insufficient funds'. Thereafter, the complainant got issued a legal notice dated 13.1 1.2019 to the accused through Registered post and the said legal notice was received by them on 15.11.20'19 and inspite of receipt of the notice, they failed to comply by paying the amount under the cheques. Hence, the complainant filed a complaint under Section 138 of the Nl Act, which is pending vide CC No.1303 of 2021 .

Learned counsel for the petitioner has submitted that the petitioner is not liable to pay any amounts to the complainant and that the CC itself is not maintainable against the petitioner, who is arrayed as accused No.5 and he is nothing to do with the day to day affairs of the accused No.1 Company. He further submitted that the petitioner was an independent Director of accused No.1 Company and more over he ceased to be a Director of the Company since 09.09.2020 and that the letter of his resignation was also accepted and communicated to the Ministry of Corporate Affairs. Learned counsel fu(her has submitted that the petitioner is not a signatory to the cheques, which are alleged to have been issued by accused No.l Company, and that he had no role in the said transaction. He further has submitted that there is no averment in the complaint or any \\ 3 \

Learned counsel for the respondent No.1 has submitted that the accused No.1 is a public Limited Company, representec, by its Board of Directors of which the petitioner herein is arso a Director. He further has submitted that the petitioner, who is accused No.5, was an Executive Director of accused No. 1 company M/s. Birwa rnfrastructure Limited at the relevant time and that he was the incharge and responsible to accused No.1 Company in the co,tduct of its business. He further submitted that accused No.S was adrnittedry appointed as an Executive Director on27.O1 .2O1gand the Form No.DlR_12, which is a public document, was filed before the Registrar of Companies, Ministry of corporate Affairs, for such appointment of the petitioner in the accused No.1 Company. The said documeni categorically proves and estabrishes the appointment of the petitioner as an Executive Director of the accused No.1 Company. He further submitted that Form No.DlR-12 is a public document through which the Company 4 Ctl.P. No.515 of 2023 has communicated the change of Director, to the Registrar of Companies and therefore, the same cannot be ignored by the petitioner herein

He further submitted that the 'Executive Director' is defined in Rule 2(k) of the Companies (Specification of Definitions details) Rules, 2014, which means 'Executive Director' a whole-time Director as defined in Clause (94) of Section 2 of the Companies Act, 2013. He further submitted that an 'lndependent Director' means, 'a person other than the Managing Director or a Whole{ime Director or a Nominee Director.' He further has submitted that as per Section 149(4) of the Companies Act, every listed public company shall have at least 1/3'd of the total number of Directors as lndependent Directors and admittedly, accused No.1 Company is not a listed public company as such, Section 149(4) of the Companies Act is not applicable. He further has submitted that accused No.S was an Executive Director as disclosed From No.DlR-1Z and that he was incharge and responsible for conduct of day to day business of the accused No.1 Company.

Learned counsel for the respondent No.1 has further submitted that earlier, similarly situated cases referred to by the ( respondent No.1 involving one NIMIR Prefabs Rep. (M. Siva Reddy)

Perused the record

The allegation of the complainant is that accused No.1 Company is due to pay an amount of Rs.:29.64,432l_ and the accused, who are the Directors of the accusecl No.1 Company are liable to pay the same. The contention of the petitioner is that he is not involved in the day to day affairs of the Company and hence, he is not liable to be prosecuted. A perusal of the Form No.DlR_12 submitted by the complainant discloses that the petitioner herein is shown to be the Executive Director of the accr:sed No.1 Company. Thus, there are rival contentions as to the involvement of the Crl,P. No,546 ol 2023 petitioner in the affairs of the accused No.1 Company. This Court cannot venture into evaluating the documents and cannot express any opinion as to the validity of the documents. However, the contents of the complaint point oul a prima facie case against the petitioner under Section 138 of the Nl Act. The contentions raised by the petitioner are triable issues. Therefore, it is opined that it is not proper to quash the proceedings against the petitioner at this stage. However, it is deemed appropriate to dispense with the attendance of the petitioner before the trial court.

Accordingly, the Criminal Petition is disposed of dispensing with the attendance of the petitioner-accused No.5 before the trial court provided he is represented by a counsel before the trial court on every date of hearing and shall appear before the trial court as and when his presence is required. Miscellaneous Petitions pending, if any, shall stand closed Sol_ tt.culttoRA sEKHAR DEPUW REGISTRAR //rRUE COPYtt G SECTION OFFICER 1 To,

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