Dr. N. Pavithran v. Ponnamma; K.C. Ramachandran; State of Kerala

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: S.S. Satheesachandran
Judgment Date: 2012-11-14
Court Decision / Holding: Criminal proceedings against the petitioner in S.T. Nos.2143 and 2144 of 2007 are quashed under Section 482 CrPC.
Final Disposition: Quashed

Parties to the Case

Appellants / Petitioners

Dr. N. Pavithran

Respondents

Ponnamma
K.C. Ramachandran
State of Kerala

Legal Representation & Advocates

Counsels for Petitioners

• Sri Grashious Kuriakoose

Counsels for Respondents

• Public Prosecutor R. Rema

Case Synopsis & Summary

This is a Kerala High Court Criminal Miscellaneous Case (Crl.M.C. Nos. 2742 and 2812 of 2008) heard by Single Judge S.S. Satheesachandran on 14 November 2012. The petitioner, Dr. N. Pavithran, is accused as the 3rd accused in two cheque-bouncing cases (S.T. Nos. 2143 and 2144 of 2007) filed by a common complainant who is the 1st respondent. Pavithran belonged to a Federation (the 1st accused) and had resigned as a Director before the dishonour of cheques; he contends that mere holding a director’s post does not establish liability under Section 141 NI Act. The cheque payments, signed by the Federation’s Managing Director (the 2nd accused) and issued on the Federation’s account, were dishonoured; notices were issued but payment was not made. Pavithran argues that the complaint does not assert that he was in charge or jointly in charge of the Federation at the time; he relies on Paresh P. Rajda v. State of Maharashtra (AIR 2008 SC 2357) to limit liability under Section 141 to those in charge or signatories. The respondents claim that the allegations of connivance against all accused could attract liability under Section 141. The court, however, agrees with Pavithran that mere director status is insufficient to prove in-charge liability; the recordings show the complaint lacks specific assertion of his in-charge role. Consequently, the court quashes the proceedings under Section 482 CrPC in both cases.

Provisions of Law Cited

Negotiable Instruments Act, Section 141Negotiable Instruments Act, Section 138CrPC, Section 482

Legal Doctrines & Maxims

In-charge liability under Section 141 NI Act; mere director status does not automatically render a person liable.
Signatory liability under NI Act for instrument

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that he ceased to be a director before the dishonour of the cheques and that the complaint does not allege he was in charge or jointly in charge of the Federation during the relevant period. He relies on the Supreme Court’s decision in Paresh P. Rajda to argue that liability under Section 141 NI Act attaches only to persons in charge or signatories, and not to directors per se who are not shown to have been in charge.

Contentions of Respondents

The respondents contend that the cheques were issued with the consent and connivance of all accused, and that liability under Section 141 NI Act can extend to those in charge; the complaint, however, does not sufficiently allege Pavithran’s in-charge role as director.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Paresh P. Rajda v. State of Maharashtra and Anr.	AIR 2008 SC 2357	Distinguished	The apex court held that Managing Director and Joint Director can be covered under Section 141 NI Act by virtue of their office, and a signatory can be covered, but it also clarified that no Director, merely by being a Director, can be presumed to be in charge; the current court uses this to differentiate between in-charge liability and mere directorship.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE S.S.SATHEESACHANDRAN** ## **WEDNESDAY, THE 14TH DAY OF NOVEMBER 2012/23RD KARTHIKA 1934** ## **Crl.MC.No. 2742 of 2008 ( )** **--------------------------ST.2143/2007 OF JUDICIAL FIRST CLASS MAGISTRATE COURT, KUTHUPARAMBA ---------------------** ## **PETITIONER/ACCUSED NO.3 :** **--------------------------------------------** **DR.N. PAVITHRAN, S/O.K.T.KUNHIRAMAN, KANAKALAYAM, K.T.C NAMBIAR ROAD, THALASSERY.P.O KANNUR.** **BY ADV. SRI.GRASHIOUS KURIAKOSE** ## **RESPONDENTS/COMPLAINANT, ACCUSED NO.2 & STATE :** **-------------------------------------------------------------------------------------** **1. PONNAMMA, W/O. KELU ACHARI, MARIYAMKANDIYIL HOUSE, KOTTIYOOR P.O., THALASSERY TALUK, KANNUR DISTRICT.** **2. K.C. RAMACHANDRAN, S/O.ANANDAN NAIR,** **(MANAGING DIRECTOR CUM PRESIDENT, PRIYADARSINI AGRICULTURAL MARKETING FEDERATION, THALASSERY), OCI PURAM, P.O. CHIRAKKARA, THIRUVANGAD THALASSERY, KANNUR.** **3. STATE OF KERALA, REP. BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA ERNAKULAM.** **R3 BY PUBLIC PROSECUTOR SMT. R. REMA** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 14-11-2012, ALONG WITH CRMC NO. 2812/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **Mn** **...2/-** ## **Crl.MC.No. 2742 of 2008 ( )** ## **APPENDIX** ## **PETITIONER'S ANNEXURES :** **ANNEXURE A : COPY OF THE COMPLAINT DATED 26.11.07 IN STC NO. 2144/2007 FILED BY THE 1ST RESPONDENT BEFORE THE JUDICIAL IST CLASS MAGISTRATE COURT, KUTHUPARAMBA.** **ANNEXURE B : COPY OF THE RESIGNATION LETTER DATED 30.11.2005 SENT BY THE PETITIONER TO THE 2ND ACCUSED.** **ANNEXURE C : COPY OF THE ACKNOWLEDGE DATED 17.1.2006 SENT BY 2ND ACCUSED TO THE PETITIONER.** ## **RESPONDENT'S EXHIBITS : NIL** **//TRUE COPY//** **P.S. TO JUDGE** **Mn** ## **S.S.SATHEESACHANDRAN, J.** **-----------------------------------------------** Crl.M.C.Nos.2742 & 2812 of 2008 **----------------------------------------------Dated this the 14[th] day of November, 2012** ## **O R D E R** Petitioner is one among the accused in two cheque cases, both filed by the common complainant, who is shown as the 1[st] respondent in both the petitions. Petitioner is arrayed as the 3[rd] accused in the complaint as one among the Directors of a Federation, which is the 1[st] accused. The 2[nd] accused is the Managing Director of that Federation. Cheques issued by the 1[st] accused over transactions with the complainant, with such instruments signed by the Managing Director (2[nd] accused) on presentation in due course, were returned dishonoured due to insufficiency of funds in the account of ## Crl.M.C.Nos.2742 & 2812 of 2008 **:: 2 ::** Federation (A1). Statutory notices issued to all the accused persons, the Federation, its Managing Director and other Directors intimating dishonour and demand for the sum were not responded with payment, is the case of the complainant. Cognizance taken of the offence in the respective complaint, the magistrate has ordered process to all the accused persons. Petitioner/3[rd] accused has filed the above petition to quash the criminal proceedings against him contending that for the sole reason he happened to be one among the Directors of the Federation at a distant point of time in the past, he is not liable to be prosecuted for the offence relating to the dishonour of the cheque issued by the 1[st] accused. Much before the dishonour of the cheques he ceased to be a Director, tendering his resignation from the Federation, and that was ## Crl.M.C.Nos.2742 & 2812 of 2008 **:: 3 ::** also accepted, is his case. More than that, it is also contended that the complaint do not contain any specific assertion that the petitioner as a Director was in charge or jointly in charge with any other Directors of the Federation, to make him culpable for the offence over the dishonour of the cheques. 2. Though notices were issued to the 1[st] respondent/complainant, after service, he has elected to remain absent. 3. I heard learned Senior Counsel, who appeared for the petitioner. 4. Placing reliance on Paresh P. Rajda v. State of Maharashtra and Anr. {AIR 2008 SC 2357} and inviting my attention to the averments made in the complaint, learned senior counsel contended that in both complaints other than stating that the cheques have been issued with ## Crl.M.C.Nos.2742 & 2812 of 2008 **:: 4 ::** connivance of the petitioner, there is nothing more to show as a Director he was in charge or jointly in charge with the other Directors. When that be the case, it is submitted, the mandatory requirement covered by Section 141 of the Negotiable Instruments Act {for short “the NI Act”} i.e., satisfaction as to the person proceeded as a Director in charge of the entity (Federation), petitioner is not liable to be prosecuted for the sole reason that he happened to be a director for the offence under Section 138 of the NI Act. 5. Going through the complaint, both of which are similar in all respects, it is seen, other than stating that the petitioner is one among the Directors of the 1[st] accused Federation, the only imputation made is that the cheques were issued with the consent and Crl.M.C.Nos.2742 & 2812 of 2008 **:: 5 ::** connivance of all the accused. Such averments, that alone, are not sufficient to show that the petitioner as a Director was in charge of the 1[st] accused Federation at the time when the offence was committed. The Apex Court, in the decision referred to above has heldthat Managing Director and the Joint Director of a company or concern would be covered under Section 141 of the NI Act by virtue of their office. A signatory of the instrument will also be covered by that Section. However, it has been clarified, that no Director, for the reason that he happens to be a Director can be deemed to be in charge of the company. When that be so, in the nature of the allegations/averments made in the complaint, which is totally insufficient to show that the petitioner was in charge of the Federation (first accused) when the offence was committed, Crl.M.C.Nos.2742 & 2812 of 2008 **:: 6 ::** proceedings against him in the two cases cannot be sustained. 6. Criminal proceedings against the petitioner in S.T.Nos.2143 and 2144 of 2007 on the file of the Judicial Magistrate of the First Class, Kuthuparamba, are quashed under Section 482 of the Code of Criminal Procedure. Petitions are disposed of as above. Sd/- **(S.S.SATHEESACHANDRAN) JUDGE** **sk/-** **//true copy//**