2004 ALL MR (Cri) 2072
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

D.B. BHOSALE, J.

D. B. Mehta & Ors. Vs. Ramesh Rikhavdas Shah & Anr.

Criminal Writ Petition No.1024 of 2003

13th February, 2004

Petitioner Counsel: Mrs. MANJULA RAO, MANISHA DHABADE
Respondent Counsel: Ms. SHARMILA KAUSHIK, Mr. J. V. MISTRY, M/s. Motafom & Co., Mr. K. V. SASTE

Negotiable Instruments Act (1881) Ss.138 r/w.141 - Companies Act (1956), S.303(2) - Offences by companies - Dishonour of cheque - Entry in Form No.32 - Factum of resignation of a director accepted on basis of an entry in Form No.32 and discharged by the Court from proceedings under S.138 of Negotiable Instruments Act - Held, all the directors whose names appear in the same Form No.32 are entitled to be discharged on ground of their resignation before issuance of the cheque in question.

In the instant case, the resignation of the petitioners along with Vijaysingh Bhatia on 31-10-1998 is a question of fact. That question of fact stood determined by the revisional court when it allowed the application for discharge of Vijaysingh Bhatia. Once that finding had been recorded, the revisional court ought to have applied the same analogy and allowed the revision of the petitioners. The complainant cannot be allowed to pick and choose a director from amongst the directors, whose name appears in Form No.32 showing that he has resigned on a particular date. If the factum of resignation of a particular director is accepted by the Court on the basis of an entry in a Form No.32, it should accept it in case of all the directors whose names appear in the same Form No.32. In other words a Court after recording a finding that a particular director had resigned on a particular day pursuant to the entry in Form No.32 and discharges him by recalling the process, the other directors claiming discharge on the basis of the entry in the very Form No.32 are entitled for discharge inasmuch as the question of fact stands determined not only in respect of a particular director but in respect of all the directors named in the Form No.32. In view thereof the impugned order rejecting the petitioners' application for discharge, cannot be sustained and is liable to be quashed and set aside. [Para 8]

Cases Cited:
Suresh Prabhakar Prabhu Vs. Mira Wilma Pimenta, Cri. Appeal No.879/2002 arising out of SLP (Cri) No.509/2001, Dt.-29/8/2002 [Para 9]


JUDGMENT

JUDGMENT :- Heard Ms. Rao, learned counsel for the petitioners, Ms. Kaushik, learned counsel for respondent no.1 and Mr. Saste, learned A.P.P. for respondent no.2.

2. Rule. Returnable forthwith. Learned counsel for respondent nos.1 and 2 waive service. Heard finally, by consent of the learned counsel for the parties.

3. By this petition, the petitioners have impugned an order dated 3-3-2003 rendered by the learned Addl. Sessions Judge, Gr. Bombay, in Criminal Revision Application No.574 of 2002, by which the revision has been partly allowed. In so far as the Petitioners are concerned, the order dated 26-7-2002 passed by the learned Magistrate, in Case No.171/S/2002 rejecting their application seeking recalling of the process and discharge has been affirmed. The revision was preferred by the petitioners and one Vijaysingh Bhatia. By the impugned judgment, Vijaysingh Bhatia has, however, been discharged.

4. The petitioners and Vijaysingh Bhatia were shown as accused nos.2, 9, 11 and 12 in Case No.171/S of 2002 filed under section 138 r/w.141 of the Negotiable Instrument Act (for short, "the Act"). The petitioners were shown as the directors of accused no.1 M/s. Vitara Chemicals Ltd. According to the respondent-complainant, the cheques concerned were dated 21-4-1999. They were dishonoured on 7-5-1999. The demand notice was sent on 17-5-1999 and since the amount involved was not paid, the complaint under section 138 r/w.141 of the Act has been filed by the complainant-Ramesh Rikhavdas Shah.

5. The application for recalling of the process and discharge was filed by the petitioners and one Vijaysingh Bhatia contending that they have ceased to be the directors of accused no.1-company inasmuch as they had resigned as its directors on 31-10-1998. The reliance was placed on Form No.32 to show that the petitioners and Vijaysingh Bhatia had resigned as the directors of accused no.1-company on 31-10-1998.

6. It appears that one another complaint was filed against Vijaysingh Bhatia under section 138 r/w.141 of the Act, showing him as the director of M/s. Vitara Chemicals Ltd. and in that complaint also he had filed an application for recalling of the process and discharge. Feeling aggrieved by the order passed in the application for discharge in the said complaint a revision was filed bearing Revision No.56 of 2002. The said revision came to be allowed accepting his contention that he had resigned as a director of the said company long before the relevant date. The company involved in the said revision and in the instant writ petition, is admittedly one and the same. The learned Addl. Sessions Judge, in the instant case, has made reference to the order passed in Revision No.56 of 2002 in paragraph 5 of the impugned judgment and in view thereof has given benefit only to Vijaysingh Bhatia and allowed his application for discharge. The petitioners' application has been rejected holding that the respondent-complainant has disputed Form No.32 in so far as the petitioners are concerned.

7. Indubitably, the certified copy of Form No.32 showing the particulars of appointment of directors and changes among them maintained in pursuant of section 303(2) of the Companies Act is one and the same. It shows that the petitioners and Vijaysingh Bhatia ceased to be the directors on resignation with effect from 31-10-1998. A perusal of Form No.32, clearly shows that all the four directors had resigned on 31-10-1998 and that the Managing Director had furnished the particulars of their resignation to the Registrar of Companies in the prescribed Form No.32 on 30-11-998.

8. The resignation of the petitioners along with Vijaysingh Bhatia on 31-10-1998 is a question of fact. That question of fact stood determined by the revisional court when it allowed the application for discharge of Vijaysingh Bhatia. Once that finding had been recorded, the revisional court ought to have applied the same analogy and allowed the revision of the petitioners. The complainant cannot be allowed to pick and choose a director from amongst the directors, whose name appears in Form No.32 showing that he has resigned on a particular date. If the factum of resignation of a particular director is accepted by the Court on the basis of an entry in a Form No.32, it should accept it in case of all the directors whose names appear in the same Form No.32. In other words a Court after recording a finding that a particular director had resigned on a particular day pursuant to the entry in Form No.32 and discharges him by recalling the process, the other directors claiming discharge on the basis of the entry in the very Form No.32 are entitled for discharge inasmuch as the question of fact stands determined not only in respect of a particular director but in respect of all the directors named in the Form No.32. In view thereof the impugned order rejecting the petitioners' application for discharge, cannot be sustained and is liable to be quashed and set aside. It does not stand to reason. Form No.32 showing that the petitioners had also resigned on 31-10-1998 along with Vijaysingh Bhatia ought to have been accepted by the Courts below and discharged the petitioners. In other words, the court below was wrong in dismissing the petitioners' revision merely because Form No.32 has been disputed by the complainant when admittedly it had been accepted in case of Bhatia. It is very pertinent to note that the respondent-company has not challenged the part of the impugned judgment by which Vijaysingh Bhatia had been discharged.

9. In a similar situation, the Apex Court in an unreported judgment dated 29-8-2002 in Suresh Prabhakar Prabhu Vs. Mira Wilma Pimenta and Anr. in Criminal Appeal No.879 of 2002 arising out of SLP (Cri.) No.1509 of 2001 has taken the following view which, in my opinion, squarely covers the issue involved in the instant case.

The relevant observations read thus :-

"In our view, inasmuch as the finding of fact that had been recorded in 18 cases by the High Court as Suresh Prabhakar Prabhu had ceased to be a Director of the Company as on 6th May, 1996 has become final it was not proper for the High Court to permit in respect of the same company five other cases to proceed, merely because the respondent had disputed the correctness of the holding of elections etc. It does not stand to reason. Whether Suresh Prabhu was a Director of the Company in November/December, 1996 is a question of fact. That question of fact stood determined by the High Court when it allowed the 18 criminal revision applications by holding that he had resigned which resignation had become effective long before the issuance of the cheques in question. Once this finding had been recorded, the High Court ought to have applied the same while considering the other criminal revision applications, notwithstanding the non-acceptance of the factum election of the complainant. We need not go into the question as to whether the resignation of the Director becomes effective from the date he resigns as sought to be contended by Mr. Ashok Desai, because in the present case we are satisfied that the High Court having decided in 18 cases that the resignation had become effective as on 6th May, 1996, no other view with regard thereto was possible."

10. It is thus clear that the Sessions Court in the revision ought to have accepted Form No.32 showing the petitioners resignation to hold that they had resigned on 31-10-1998, i.e. much before the issuance of concerned cheques and the demand notice and allowed their application for discharge along with Vijaysingh Bhatia. The judgments relied upon by the Sessions Court while dismissing the revision against the petitioners, in my opinion, would not apply in view of the peculiar facts and circumstances of the present case. In the circumstances, this writ petition is allowed. The process issued against the petitioners is recalled and they stand discharged.

11. At this stage, Ms. Kaushik, learned counsel for the respondent-complainant, prays for expediting the disposal of the complaint bearing Case No.2785/S/2002. The trial Court is accordingly directed to expedite the hearing of the complaint, being Case No.2785/S/2002.

12. Rule is made absolute accordingly.

Parties to act on an ordinary copy of this order duly authenticated by the Personal Secretary of this Court.

Petition allowed.