@JUDGMENTTAG-ORDER
G.S. Sistani, J.@mdashThe present petition bearing Crl.M.C. No. 485/2005 filed u/s 482 of the Code of Criminal Procedure (Cr.P.C.) seeking quashing of the order dated 27.4.2005 passed by learned Additional Sessions Judge, New Delhi in Crl. Rev. No. 637/2004 as well as for quashing of proceedings in C.C. No. 5427/1. Accompanying the present petition are applications bearing Crl.M.A. Nos. 808/2006 and 809/2006 seeking stay and exemption respectively.
2. Brief facts of the case are that one M/s. Premier Vinyl Flooring Ltd. had taken on lease certain equipments from the respondent. Consequent thereto lease agreements dated 16.8.1993 and 30.8.1993 were signed. At the time of the execution of the lease agreement certain post-dated cheques were handed over to the respondent. However, the said cheques were returned with the remarks "Account Freezed/Account Attached". This was followed by a legal notice, dated 13.7.1998 and, thereafter a complaint-bearing C.C. No. 5427/1 alleging offences punishable under Sections 138, 141 and 142 of the Negotiable Instruments Act, 1881 read with Sections 420/34 of the Indian Penal Code (IPC). The petitioner being the Managing Director of M/s. Premier Vinyl Flooring Ltd. was also impleaded as one of the accused in the complaint. In pursuance of the complaint, the learned Metropolitan Magistrate (MM), Delhi, summoned the petitioner to stand trial for the said offences. The petitioner thereafter moved an application dated 4.4.2003 for recalling of the summoning order and for dropping of proceedings on the ground that the Bank accounts of the accused company were frozen by an order of CBI wherein no operations were allowed and that the Debts Recovery Tribunal (DRT) of Delhi vide order dated 15.6.1998 had already restrained the alienation of all movable and immovable assets of the petitioner and the accused company. After perusal of the application, the learned MM vide order dated 18.8.2004 discharged the petitioner. Against the order of discharge, respondent filed Revision Petition bearing No. 74/04, which was allowed by the trial Court vide order dated 27.4.2005. Aggrieved, the petitioner has filed the present petition.
3. It is contended by Mr. Sidharth Luthra, learned Senior Counsel for the petitioner, that the impugned order dated 27.4.2005 passed by the learned trial Court is bad in law as it has failed to take into consideration the important facts. The preliminary ground taken by Counsel for the petitioner for assailing the order dated 27.4.2005 is that the petitioner could not have made the payment on the ground that the account of the petitioner was freezed by the CBI. In support of this plea, Counsel for the petitioner has drawn the attention of the Court to a communication dated 25.5.1999 by virtue of which Senior Manager, Canara Bank had informed the petitioner that the operation in the OCC Account No. 11147 has been stopped with immediate effect as per the order of the CBI, dated 2.2.1998, u/s 102, Cr.P.C. and the said order continues till date. The factum of this communication has not been denied.
4. Counsel for the petitioner relies upon the
The question that remains to be considered is whether Section 22A of SICA affects a criminal case for an offence u/s 138, NI Act. In the said Section provision is made enabling the Board to make an order in writing to direct the sick industrial company not to dispose of, except with the consent of the Board, any of its assets- (a) during the period of preparation of consideration of the scheme u/s 18; and (b) daring the period beginning with the recording of opinion by the Board for winding up of the company under Section-section (1) of Section 20 and upto commencement of the proceedings relating to the winding up before the High Court concerned. This exercise of the power by the Board is conditioned by the prescription that the Board is of the opinion that such a direction is necessary in the interest of the sick industrial company or its creditors or shareholders or in the public interest. In a case in which BIFR has submitted its report declaring a company "sick" and has also issued a direction u/s 22A restraining the company of its directors not to dispose of any of it assets, except with consent of the Board, then the contention raised on behalf of the appellants that a criminal case for the alleged offence u/s 138, NI act cannot be instituted during the period in which the restraint order passed by BIFR remains operative cannot be rejected outright. Whether the contention can be accepted or not will depend on the facts and circumstances of the case. Take, for instance, before the date on which the cheque was drawn or before expiry of the statutory period of 15 days after notice, a restrain order of BIFR u/s 22A was passed against the company then it cannot be said that the offence u/s 138, NI Act was completed. In such a case it may reasonably be said that the dishonouring of the cheque by the Bank and failure to make payment of the amount by the Company and/or its Directors is for reasons beyond the control of the accused. It may also be contended that the amount claimed by the complainant is not recoverable from the assets of the company in view of the ban order passed by BIFR. In such circumstances it would be unjust and unfair and against the intent and purpose of the statute to hold that the Directors should he compelled to face trial in a criminal case.
5. Per contra, the preliminary objection raised by the respondent is that the present petition is neither signed by the petitioner nor supported by the affidavit of the petitioner.
6. It may be stated that on the last date of hearing, Counsel for petitioner sought time to place on record the affidavit of the petitioner. The affidavit of the petitioner, namely, Sh. Onkar Nath Goenka, has been filed. The affidavit is taken on record.
7. I have heard learned Counsel from both sides and perused the documents on record.
8. The penultimate issue in the instant matter is whether or not the petitioner on the date on which the cheque was dishonoured and the date on which the payment in compliance of legal notice dated 13.7.1998 should have been made, was incapable of making the payment on account of the orders of CBI. The case of the petitioner before this Court is that he could not make payment, in view of the fact that CBI had freezed the account of petitioner. This fact is also evident from the return memo of the Bank, copy of which has been filed at page 28 of the paper book, which shows the endorsement "account frozen". Counsel for the petitioner further submits that the company has also gone into liquidation. The petitioner has also filed on record the order dated 15.6.1998 whereby the DRT of Delhi restrained M/s. Premier Vinyl Flooring Ltd., of which the petitioner was the Managing Director, from disposing of or alienating or parting with the possession of its assets. The existence of the order dated 15.6.1998 is not denied by the respondent. Most importantly, the order dated 15.6.1998 predates the event of dishonour of cheques. It thus becomes explicit that inasmuch as the petitioner was also restrained by the order dated 15.6.1998 from alienating, selling, disposing of or parting with the possession of the assets of his company M/s. Premier Vinyl Flooring Ltd., the petitioner as such could not have touched any of its properties, movable or immovable.
9. Further, from the facts of the case and documents on record, it is explicit that the petitioner, by virtue of the order dated 15.6.1998 of the DRT of Delhi and the order of CBI by virtue of which the account of the petitioner was freezed, was debarred from complying with the legal notice dated 13.7.1998 which led to the dishonor of the cheques. Even otherwise, the petitioner is protected by the law in Kusum Ingots (supra) whereby the Apex Court has unequivocally opined that where dishonour of cheque takes place for reasons beyond the control of the directors of a company, it would be unjust and unfair and against the intent and purpose of the Legislature to compel the Directors to face trial in a criminal case. The impugned complaint bearing C.C. No. 5427/1, arraigning the petitioner for the offence u/s 138 of the Negotiable Instruments Act, 1881 is bad in law and, therefore, hereby stands quashed.
10. For the reasons aforesaid, the order dated 27.4.2005 passed by the learned ASJ, whereby the order dated 18.8.2004 of the Metropolitan Magistrate was set aside is, erroneous and hereby stands quashed.
11. In view thereof, nothing remains to be decided in the applications bearing Crl.M. No. 808/2006 and Crl.M.A. No. 809/2006 for stay and exemption respectively.
12. Accordingly, the present petition as well as the application stand disposed of.
