Plea to Reject Complaint for Cheque Bounce Dismissed as Petitioner-director Couldn’t Prove Her Resignation From Co. | HC

Case Details: Suman Arora v. B. C. Gupta Huf - [2024] 161 taxmann.com 15 (HC - Delhi)

Judiciary and Counsel Details

• Manoj Kumar Ohri, J.
• Rajat Nair, Manan Popli, Ms Paruni Sharma, Gaurav Jain, Karuna Sharma & Ms Akshita Goyal, Advs. for the Petitioner.

Facts of the Case

In the instant case, the accused company approached the respondent to enter into a business transaction seeking investment in the nature of the term loan. Accordingly, the parties entered into a Memorandum of Understanding, wherein it was specifically stated that the investment would partake in the character of a term loan.

It was further agreed that the loan would carry a fixed interest, which would be disbursed as committed returns by the accused company. Based on the said understanding, the complainant invested an amount of Rs.30 lacs. However, the accused company committed a default in the payment of the interest component.

In the said background, a cheque was issued towards the discharge of the liability. However, upon presentation, the cheque was dishonoured due to “insufficient funds”. Consequently, a complaint under section 138 of the Negotiable Instruments Act, 1881 was filed against the accused company and its directors including the petitioner.

It was noted that by way of an instant petition filed under section 482 of CrPC, the petitioner sought the quashing of the complaint case filed against her on the ground that she had resigned from the directorship of the company with effect from 06.03.2020.

Further, reference in this regard was made to an internal communication to the Board of Directors, although no material had been placed on record showing that the same was communicated to the Registrar of Companies.

High Court Held

The High Court held that if any director seeks the quashing of a complaint under Section 138 of the Act or any process issued therein, then he would have to show that the complaint lacks appropriate pleadings/averments which would bring him into the fold of rigour of Section 141 of the Act. In this regard, he would have to bring on record certain sterling and incontrovertible evidence showing that he is not involved in the issuance of the cheque

However, even otherwise, this would have no consequence as admittedly, on the date of the dishonour of the cheque i.e. on 15.04.2019, the petitioner was a director of the accused company. Therefore, there was no merit in the instant petition and thus, the same was to be dismissed.