Radha Garg Shakti & Anr v. State of Goyt NCT of Delhi & Ors

O R D E R %

19.11.2024

¶1No reply has been filed by respondent No. 2 as yet.

¶2It is thus undisputed that the petitioners were non-executive independent directors. They cannot be held responsible for day to day functioning of the accused company and cannot be held vicariously liable for the dishonor of cheque issued by the accused company.

¶3The Hon'ble Apex Court in the case of Sunita Palita v. Panchami Stone Quarry, (2022) 10 SCC 152 held as under:

¶35The High Court rightly held that when a complaint was filed against the Director of a company, a specific This is a digitally signed order. averment that such person was in charge of and responsible for the conduct of business of the company was an essential requirement of Section 141 of the NI Act. The High Court also rightly held that merely being a Director of the company is not sufficient to make the person liable under Section 141 of the NI Act. The requirement of Section 141 of the NI Act was that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company. This has to be averred as a fact. xxx xxx xxx

¶42Liability depends on the role one plays in the affairs of a company and not on designation or status alone as held by this Court in S.M.S. Pharmaceuticals [S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 : 2005 SCC (Cri) 1975] . The materials on record clearly show that these appellants were independent, non-executive Directors of the company. As held by this Court in Pooja Ravinder Devidasani v. State of Maharashtra [Pooja Ravinder Devidasani v. State of Maharashtra,

(2014) 16 SCC 1 : (2015) 3 SCC (Civ) 384 : (2015) 3 SCC

(Cri) 378] a non-executive Director is not involved in the day-to-day affairs of the company or in the running of its business. Such Director is in no way responsible for the day-to-day running of the accused Company. Moreover, when a complaint is filed against a Director of the company, who is not the signatory of the dishonoured cheque, specific averments have to be made in the pleadings to substantiate the contention in the complaint, that such Director was in charge of and responsible for conduct of the business of the Company or the Company, unless such Director is the designated Managing Director or Joint Managing Director who would obviously be responsible for the company and/or its business and affairs. (emphasis supplied)

¶4In view of the above, the present petitions are allowed.

¶5Petitioners are discharged in complaint bearing C.C. No. (N.I. Act) 3930/2022.

¶6It is made clear that this Court has not impeded the learned Trial Court from proceeding against the other accused persons.

¶7A copy of the order be placed in both the matters. AMIT MAHAJAN, J NOVEMBER 19, 2024/'Aman' This is a digitally signed order.

* IN THE HIGH COURT OF DELHI AT NEW DELHI + CRL.M.C. 6785/2022 & CRL.M.A. 26345/2022 RADHA GARG SHAKTI & ANR. .......Petitioners Through: Mr. Krish Kalra, Advocate (Through V.C.). versus STATE OF GOYT NCT OF DELHI & ORS .......Respondents Through: Mr. Utkarsh, APP for the State. Mr. Suryansh Vashisth, Advocate for Private Respondents. + CRL.M.C. 6811/2022 & CRL.M.A. 26422/2022 RADHA GARG SHAKTI & ANR. .....Petitioners Through: Mr. Krish Kalra, Advocate (Through V.C.). versus STATE OF GOVT NCT OF DELHI & ORS. .....Respondents Through: Mr. Utkarsh, APP for the State. Mr. Suryansh Vashisth, Advocate for Private Respondents. CORAM: HON'BLE MR. JUSTICE AMIT MAHAJAN