MALWA COTTON & SPINNING MILLS LTD. versus VIRSA SINGH SIDHU & ORS.

Citation: [2008] 12 S.C.R. 68 · Decided: 13-08-2008 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2008] 12 S.C.R. 68 
j_ 
A 
MALWA COTTON & SPINNING MILLS LTD. 
v. 
VIRSA SINGH SIDHU & ORS. 
(Criminal Appeal No. 1265 of 2008) 
B 
AUGUST 13, 2008 
(OR. ARIJIT PASAYAT AND DR. MUKUNDAKAM 
,...._ 
SHARMA, JJ.) 
Code of Criminal Procedure, 1973; s. 482/Negotiable 
c Instruments Act, 1881; Ss.138 & 141: 
Dishonour of cheques - Accused director allegedly re-
signed before Cheques were issued - Quashing of proceed-
ing against director by High Court in exercise of power under 
s. 482 Cr.PC. - Correctness of - Held: Factual disputes in~ 
D valved -Acceptance of resignation of the director by the com-
pany and effect of delayed intimation about _such resignation 
to Registrars of Companies are matters in respect of which 
evidence has to be led - Under the circumstances, High Court 
was not justified in quashing the proceedings. 
E 
The question which arose for consideration in these 
appeals was as to whether the High Court was justified 
in quashing the proceedings against respondent No.1 
which was initiated against him under s.138 of the Nego-
F 
tiable Instruments Act for dishonour of Cheques allegedly 
issued by the company, in which respondent No.1 was 
¥-
working as director. Respondent No.1 allegedly resigned 
from directorship of the Company before issuance of the 
Cheques. 
G 
Appellant contended that respondent No.1 claims to 
have resigned before issuance of cheques. However, in-
timation in terms of Form No.32 to the Registrar of Com-
panies was filed much after the cheques were issued; and 
that claim of respondent No.1 whether factually correct 
H 
68 
MALWA COTTON & SPINNING MILLS LTD. v. VIRSA 
69 
SINGH SIDHU & ORS. 
or not would have been established in trial and the High A 
Court could not have passed the impugned judgment 
while dealing with the application under Section 482 of 
the Code of Criminal Procedure, 1973. 
Respondent No.1 submitted that the High Court was 
justified in its view that respondent No.1 had intimated 
8 
the company about his desire to resign. If the company 
delayed in submitting the requisite form before the Reg-
istrar of Companies, he cannot be made to suffer. 
Allowing the appeals, the Court 
c 
HELD: Factual disputes are involved. What was the 
effect of delayed presentation before the Registrar of 
Companies is essentially a matter of trial. Whether respon-
dent No.1 had intimated the company and whether there 
was any resolution accepting his resignation are matters D 
y 
. in respect of which evidence has to be led. Therefore, the 
High Court was not justified Jn its view. So far as allega-
tions against the Directors are concerned about their 
position in the company the complaint specifically con-
tained the averments regarding the position of the ac-
E 
cused Directors in the company. Therefore, the High 
Court was not justified in quashing the proceedings 
against respondent No.1. (Paras - 6, 7 & 11) [71,E-F; 75,D] 
S. V Muzumdar v. Gujarat State Fertilizer Co. Ltd. and 
-./ 
Anr. (2005) 4 SCC 173 and N. Rangachari v. Bharat Sanchar F 
Nigam Ltd. (2007) 5 sec 108 - relied on. 
Case Law Reference 
(2005) 4 SCC 173 
Relied on 
Para - 9 
(2007) 5 SCC 108 
Relied on 
Para - 10 
CRIMINALAPPELLATE JURISDICTION: Criminal Appeal 
No. 1265 of 2008 
G 
From the final Order dated 10.2.2005 of the High Court of 
Punjab and Haryana at Chandigarh in Crl. Misc. No. 52153-M/2002 
H 
70 
SUPREME COURT REPORTS 
[2008] 12 S.C.R. 
1'-
A 
WITH 
CriminalAppeal Nos. 1266, 1267, 1268, 1269, 1270, 1271 
and 1272 of 2008 
San jay Kapur, Shubhra Kapur, Raj iv Kapu( and Arti Singh 
B 
for the Appellant. 
P.P. Singh for the Respondents. 
The Judgment of the Court was delivered by 
c 
Dr. ARIJIT PASAYAT, J. 
SLP (Crl.) 6049/2005 
1: Leave granted. 
2. Challenge in this appeal is to the order passed by a 
D· learned Single Judge of the Punjab and Haryana High Court 
accepting the prayer of respondent No.1 for quashing the pro-
:,,. 
ceedings pending before the Judicial Magistrate, First Class, 
Ludhiana. The proceedings related to the complaint filed by the 
appellant alleging commission of offence punishable under 
E 
Section 138 of the Negotiable Instruments Act, 1881 (in short 
the 'Act'). In all, 8 petitions were filed which were disposed of 
by the common.judgment. 
3. The present appeals relate to Criminal Miscellaneous 
No.52153 of 2002 and connected cases. The High Court 
F 
quashed the proceedings primarily on the ground that respon-
)<-. 
dent No.1-Virsa Singh Sidhu in the first case h
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