HARSHENDRA KUMAR D. versus REBATILATA KOLEY ETC.

Citation: [2011] 2 S.C.R. 670 · Decided: 08-02-2011 · Supreme Court of India · Bench: AFTAB ALAM · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
8 
[2011] 2 S.C.R. 670 
HARSHENDRA KUMAR D. 
v. 
REBATILATA KOLEY ETC. 
(Criminal Appeal Nos. 360-377 of 2011) 
FEBRUARY 8, 2011 
[AFTAB ALAM AND R.M. LODHA, JJ.] 
NEGOTIABLE INSTRUMENTS ACT, 1881: 
C 
ss. 138 and 141(1) -Vicarious liability of Director of a 
company -Complaints against a Company for dishonour of 
cheques -Metropolitan Magistrate directing summons to 
issue to accused -Revision petitions by one of the Directors 
contending that he had resigned as Director of the Company 
0 before issuance of the cheques l:Jy it-Held :The words "every 
person who, at the time of the offence was committedn, 
occurring in s.141 ·are not without significance, and indicate 
that criminal liability of a Director must be determined on the 
date the offence is alleged to have been committed -A 
Director whose resignation has been accepted and notified 
E to Registrar of Companies, cannot be made accountab{e for 
the acts of the company committed after his resignation -
Complaints ·against Director concerned quashed -
Companies Act, 1956 -s.303 -Code of Criminal Procedure, 
1973-ss.397, 401 rlw s. 402. 
F 
CODE OF CRIMINAL PROCEDURE, 1973: 
Section 397 rlw ss. 401 and 482 -Revisional jurisdiction 
of High Court -Complaints filed against a company and its 
officers for dishonour of cheques issued by the company -
G Metropolitan Magistrate directing summons to issue -
Revision petitions filed by one of the Directors of the company 
seeking to quash the proceedings against him as he had 
resigned before the cheques were issued by the company -
H. 
670 
-
HARSHENDRA KUMAR D. v. REBATILATA KOLEY 
671 
ETC. 
Dismissed by High Court -Held : High Court fell into grave A 
error in not taking into consideration tho uncontroverted 
documents relating to resignation of the Director concerned 
-On the date the offence was committed by the Company the 
revision-petitioner was not the Director and he had nothing to 
do with the affairs of the Company -Therefore, if the criminal B 
proceedings are allowed to proceed against him, it would 
result in gross-injustice to him and would be tantamount to 
abuse of process of the court -Judgment of the High Court 
and the order of the Magistrate directing summons to issue 
to Director concerned are set aside and complaints gainst c 
him quashed -Negotiable Instruments Act, 1881 -ss. 138 and 
141(1) -Administration of Criminal Justice. 
Eighteen complaints for offences punishable uls 138 
read with s. 141 of the Negotiable Instruments Act, 1881 
_were filed against the appellant and others. The case of D 
the complainants was that they placed orders with the 
Company, of which the appellant was one of the 
Directors, for the sale of certain products, and issued 
demand drafts in favour of the Company; but the 
Company did not deliver the products and when they E 
asked the Company for return of their money, the 
Company, on 30-4-2004, issued 18 cheques in their 
favour ; that the said 18 cheques, on presentation were 
dishonoured by the Bank/s. The Metropolitan Magistrate 
, directed to issue summons to all the accused. 
F 
The appellant challenged the proceedings by filing 
18 revision applications uls 397 read with s. 401 of the 
Code of Criminal Procedure 1973, before the High Court, 
primarily on the ground that the cheques were issued on G 
behalf of the Company to the complainants after he had 
resigned from the post of Director of the Company and, 
thus, at the time when the cheques were issued, the 
appellant had no concern or connection with the 
Company. The High Court, however, held that resignation H 
672 
SUPREME COURT REPORTS 
[2011) 2 S.C.R. 
A by the appellant as Director of the Company was a 
defence for consideration at the trial on the basis of 
evidence which could not be decided by the High Court 
in revisional jurisdiction. 
B 
Allowing the appeals, the Court 
HELD: 1.1. By virtue of the provisions of s.303 of the 
Companies Act, 1956, there is statutory requirement of 
informing the Registrar of Companies about change 
among Directors of the company. In this view of the 
C matter, a Director -whose resignation has been accepted 
by the company and that has been duly notified to the 
Registrar of Companies -cannot be made accountable 
and fastened with liability for anything done by the 
company after the acceptance of his resignation. The 
D words 'every person who, at the time the offence was 
committed', occurring in s. 141 (1) of the NI Act are not 
without significance a

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