Delhi High Court
Manoj Rungta vs State & Anr on 28 June, 2025
Author: Neena Bansal Krishna
Bench: Neena Bansal Krishna
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 16th April, 2025
Pronounced on: 28th June, 2025
+ CRL.M.C. 1403/2018
MANOJ RUNGTA
S/o. Sh. Gauri Shankar Rungata,
R/o-Diamond City North,
Block-16, IInd Floor,
68 Jessore Road,
Kolkatta-700055 .....Petitioner
Through: Mr. Ranjan Kumar and Mr. Ankit
Kumar, Advocates.
versus
1. STATE
Through Govt. Of Nct Of Delhi
Ch-437, Lawyers Chamber Block
Delhi High Court,
New Delhi
2. M/S OM SHIV GARMENTS
Through Authorised Representative
Mr. Subhash Sethia
Office At: Ix/6269, Mukherjee Gali
Hari Gali, Gandhi Nagar,
Delhi-110031
.....Respondents
Through: Mr. Shoaib Haider, APP for the State.
+ CRL.M.C. 1405/2018
MANOJ RUNGTA
S/o. Sh. Gauri Shankar Rungata,
R/o-Diamond City North,
Block-16, IInd Floor,
68 Jessore Road,
Kolkatta-700055 .....Petitioner
Through: Mr. Ranjan Kumar and Mr. Ankit
Signature Not Verified
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SHARMA
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Kumar, Advocates.
versus
1. STATE
Through Govt. Of Nct Of Delhi
Ch-437. Lawyers Chamber Block
Delhi High Court,
New Delhi
2. M/S RICHA FASHION
Through Authorised Representative
Mr. Subhash Sethia
Office At: Ix/6434, Sardari Lal Market
Mukherjee Gali, Gandhi Nagar,
Delhi-110031
.....Respondents
Through: Mr. Shoaib Haider, APP for the State.
+ CRL.M.C. 1406/2018
MANOJ RUNGTA
S/o. Sh. Gauri Shankar Rungata,
R/o-Diamond City North,
Block-16, IInd Floor,
68 Jessore Road,
Kolkatta-700055 .....Petitioner
Through: Mr. Ranjan Kumar and Mr. Ankit
Kumar, Advocates.
versus
1. STATE
Through Govt. of NCT of Delhi
Ch-437, Lawyers Chamber Block
Delhi High Court,
New Delhi
2. M/S G.P. COLLECTION
Through Authorised Representative
Mr. Subhash Sethia
Office At: 6782, Shyam Gali
Gandhi Nagar
Signature Not Verified
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SHARMA
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Delhi-110031
.....Respondents
Through: Mr. Shoaib Haider, APP for the State.
+ CRL.M.C. 1407/2018
MANOJ RUNGTA
S/o. Sh. Gauri Shankar Rungata,
R/o-Diamond City North,
Block-16, IInd Floor,
68 Jessore Road,
Kolkatta-700055 .....Petitioner
Through: Mr. Ranjan Kumar and Mr. Ankit
Kumar, Advocates.
versus
1. STATE
Through Govt. of NCT of Delhi
Ch-437, Lawyers Chamber Block
Delhi High Court,
New Delhi
2. M/S FINE CREATIONS
Through Authorised Representative
Mr. Subhash Sethia
Office At: 6782, Shyam Gali
Gandhi Nagar
Delhi-110031
.....Respondents
Through: Mr. Shoaib Haider, APP for the State.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
J U D G M E N T
NEENA BANSAL KRISHNA, J.
1. Petitions under Article 227 of the Constitution of India read with
Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred
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to as Cr.P.C.) has been filed by the Petitioner, Sh. Manoj Rungta to
challenge the Order dated 13.07.2017 wherein the Ld. MM has dismissed
his Application made under Section 239 Cr.P.C. seeking discharge in
Complaint Cases under Section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred to as “NI Act“).
2. Briefly stated, four Complaints bearing CC No. 59196/2016, CC No.
59195/2016, CC No. 59193/2016 & CC No. 59194/2016 under Section 138
of the NI Act, were filed by the Respondents, M/s Om Shiv Garments, M/s
Richa Fashion, M/s GP Collection and M/s Fine Creations through common
AR Sh. Subhash Sethia against M/s. Shyam Retails (India) Pvt. Ltd and total
13 Directors including Sh. Manoj Rungta, Petitioner, on the averments that
six cheques dated 11.03.2016 were issued in favour of the Complainant
Company, M/s Shyam Retails (India) Pvt. Ltd. on presentation, got
dishonored on account of “Funds Insufficient” vide respective Return
Memo. The Complainants had issued separate Legal Notice dated
08.06.2016, 10.06.2016 and 13.06.2016, leading to filing of the aforesaid
four Complaints under Section 138 NI Act. The details of the dishonored
cheques are as follows:
Cheque Dated Amount Payee Date of
No. Dishonor
650181 11.03.2016 Rs. 101,563/- M/s. Om Shiv 30.05.2016
Garments
650180 11.03.2016 Rs. 95634/- M/s. Om Shiv 30.05.2016
Garments
039177 11.03.2016 Rs. 55,757/- M/s Richa 27.05.2016
Fashion
047708 11.03.2016 Rs. 66, 855/- M/s G.P. 04.06.2016
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Collection
047707 11.03.2016 Rs. 79,546/- M/s Fine 26.05.2016
Creation
047706 11.03.2016 Rs. 83, 308/- M/s Fine 26.05.2016
Creation
3. The summons were issued against the accused persons including the
Petitioner, Sh. Manoj Rungta.
4. The Petitioner, Sh. Manoj Rungta has sought his discharge under
Section 239 Cr.P.C. on the ground that he had resigned as Director of M/s
Shyam Retail India Pvt. Ltd./Accused on 18.12.2015 before the date of issue
of Cheques on 11.03.2016. His resignation was accepted by the Registrar of
Companies (ROC) at Kolkata on 19.12.2015 and confirmed that the
Petitioner, Sh. Manoj Rungta is not associated with the Accused Company,
M/s Shyam Retails (India) Pvt. Ltd. with effect from 19.12.2015. To
support his assertions, he has relied on Form No.32 submitted to the ROC. It
was asserted that he cannot be held responsible for the acts of Company,
after his resignation and therefore, sought discharge.
5. Ld. MM vide Order dated 13.07.2017 dismissed the Application for
discharge made on behalf of the Petitioner by observing that the documents
including Form No.32, could not be considered at the stage of
Notice/Charge, as held by the Apex Court in the case of State of Orissa v.
Debendra Nath Padhi, (2005) 1 SCC 568. Ld. MM further observed that the
defense of the Petitioner, Sh. Manoj Rungta that he was not responsible for
the affairs of the Company, M/s Shyam Retails (India) Pvt. Ltd can be
considered only at the stage of evidence.
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6. Aggrieved by the said Order dated 13.07.2017 of the Ld. MM, present
Petitions has been filed on behalf of the Petitioner.
7. The grounds of challenge on behalf of the Petitioner, Sh. Manoj
Rungta are that the Ld. MM has failed to appreciate that the cheques in
question were issued on behalf of the Company, M/s Shyam Retails (India)
Pvt. Ltd. and bears the signature of Director Sh. Jitender Aggarwal. The
Petitioner had already resigned from the Directorship of the Company, M/s
Shyam Retails (India) Pvt. Ltd on 19.12.2015 and the same was intimated to
the ROC at Kolkata. In support of his assertions, the Petitioner has relied
upon Form 32 submitted to the ROC.
8. The Cheques in question were handed over to the Complainant by the
Company in the Month of March, 2016 which is much after the Petitioner
had ceased to be the Director of the Accused Company. Since after his
resignation, the Petitioner ceased to have any control over the affairs of the
Company, he could not have ensured the encashment of the cheques in
question. After his resignation in December, 2015, he cannot be held
vicariously liable for the alleged offence committed by the Company, M/s
Shyam Retails (India) Pvt. Ltd.
9. Therefore, the Impugned Order dated 13.07.2017 is liable to be set
aside and he be discharged.
10. The Respondent No.2 was duly served with the summons of the
Petition but did not choose to appear despite multiple opportunities.
11. Submissions heard and record perused.
12. The Complainant Companies filed the aforesaid four Complaints
under Section 138 of the NI Act against M/s Shyam Retails (India) Pvt. Ltd.
and its Directors, of which Petitioner was one of the Director.
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13. The first ground on which discharge is sought is that there are no
specific averments specifying the role of the Petitioner, Sh. Manoj Rungta
in the accused Company, in the entire Complaint. Only an omnibus
averment is made that the accused Company was working through its
Directors. The Cheques in question were issued on 11.03.2016 and returned
vide various memos for the reason “Funds Insufficient”. The Petitioner, Sh.
Manoj Rungta had resigned on 18.12.2015 and was neither the signatory to
the cheques nor is the whole-time Director of the Company, at the time
when the said cheques in question were issued.
14. S.141(1) NI Act provides that every person who at the time the
offence was committed was in charge of and was responsible to the
Company for the conduct of business of the Company as well as the
Company, shall be deemed to be guilty of the offence under Section 138 of
the NI Act. This Section is an exception to the normal rule that there cannot
be any vicarious liability when it comes to a penal provision. The vicarious
liability is attracted when the ingredients of sub-section (1) of Section 141
are satisfied. The Complainant is required to aver that the accused at the
time of the commission of the offence, was in charge of and were
responsible for the conduct of the business of the Company.
15. This principle of vicarious liability was explained in the case of N.K.
Wahi v. Shekhar Singh, (2007) 9 SCC 481, wherein the Apex Court has
observed:
“8. To launch a prosecution, therefore, against the
alleged Directors there must be a specific allegation in
the complaint as to the part played by them in the
transaction. There should be clear and unambiguous
allegation as to how the Directors are in-charge andSignature Not Verified
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responsible for the conduct of the business of she
company. The description should be clear. It is true
that precise words from the provisions of the Act need
not be reproduced and the court can always come to a
conclusion in facts of each case. But still, in the
absence of any averment or specific evidence the net
result would be that complaint would not be
entertainable.”
16. Similar proposition of law was stated by Apex Court in Anita
Malhotra v. Apparel Export Promotion Council, (2012) 1 SCC 520, mere
reproduction of the statutory requirements in the Complaint without
specifying or elaborating the role of the appellant in the day-to-day affairs
of the Company, would not be sufficient to make the Director vicariously
liable.
17. Similarly, the Apex Court in National Small Industries Corpn. Ltd. v.
Harmeet Singh Paintal (2010) 3 SCC 330) has observed that the persons
who are sought to be made vicariously liable for a criminal offence under
Section 141 should be, at the time the offence was committed, was in charge
of, and was responsible to the company for the conduct of the business of
the company. Every person connected with the company shall not fall within
the ambit of the provision. It follows that if a Director of a Company who
was not in charge of and was not responsible for the conduct of the business
of the company at the relevant time, will not be liable for a criminal offence
under the provisions. The liability would not ipso facto arise merely on the
basis of merely holding a designation or office in a Company.
18. In recent judgement in Ashok Shewakramani v. State of A.P., (2023) 8
SCC 473, the allegation made in the Complaints were that the Appellants are
managing the Company and are busy with day-to-day affairs of the
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Company. It was further averred that they are also in charge of the Company
and are jointly and severally liable for the acts of Accused Company. The
Apex Court observed that only by saying that a person was in charge of the
Company at the time when the offence was committed is not sufficient to
attract sub-section (1) of Section 141 of the NI Act. The requirement of
sub-section (1) of Section 141 of the NI Act is something different and
higher. Every person who is sought to be roped in by virtue of sub-section
(1) of Section 141 of the NI Act, must be a person who at the time the
offence was committed, was in charge of and was responsible to the
company for the conduct of the business of the Company. Merely because
somebody is managing the affairs of the Company, per se, he does not
become in charge of the conduct of the business of the Company or the
person responsible for the Company for the conduct of the business of the
Company.
19. The Apex Court reiterated this proposition in the case of Ravi
Dhingra v. State (NCT of Delhi), 2024 SCC OnLine SC 3802 wherein while
endorsing the law enunciated in the decision in Ashok Shewakramani’s
case (supra), it was concluded that the position is now well settled and is
being followed with alacrity.
20. Likewise, in K.S. Mehta v. Morgan Securities & Credits (P) Ltd.,
2025 SCC OnLine SC 492, the Apex Court has quashed the NI Act
proceedings against the Director on the ground that “the complaint lacks
specific averments that establish a direct nexus between the Appellant(s)
and the financial transactions in question or demonstrate their involvement
in the company’s financial affairs.”
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21. From the perusal of the above judgments, it is the settled position of
law, that for initiating the proceedings under Section 138 N.I. Act, the
averment has to be provided against the Directors, who were the responsible
person for the conduct of the Company. The words `every person who, at the
time the offence was committed’, occurring in Section 141 (1) of the NI Act
are not without significance and these words indicate that criminal liability
of a Director must be determined on the date the offence is alleged to have
been committed.
22. In this context, reference be made to the Complaints wherein it is
stated that the Respondent No.1/Accused No.1 was a Company operating
through Accused No. 2 to 14 who are the authorized signatories/directors of
its Company to whom the goods had been supplied by the Complainant. It is
further stated that the impugned cheques were issued which on presentation,
were dishonored. The impugned cheques dated 11.03.2016 are signed by Sh.
Jitendra Aggarwal, Director. M/s Shyam Retails (India) Pvt. Ltd and not by
the Petitioner, Sh. Manoj Rungta.
23. In the Legal Notices, similar averments were made. Aside from stating
that the accused Company was operating through its Directors, there was
no specific role assigned to any of the Directors. On this ground itself, the
Petitioner is entitled to be discharged.
24. The second aspect of significance is that the Petitioner, Sh. Manoj
Rungta has resigned from the position of Director of the Accused Company
on 19.12.2015 and had duly informed the ROC vide Form DIR-12 on
25.12.2015 which is well within the period of 30 days. The Resignation of
the Petitioner, Sh. Manoj Rungta was duly accepted by the ROC at Kolkata
with effect from 19.12.2015.
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25. The contention of the Petitioner, Sh. Manoj Rungta, that he had
resigned from the position as the Director of the Accused Company, M/s
Shyam Retails (India) Pvt. Ltd, is supported by DIR-12/Form 32, which is a
public document, the authenticity of which is not questioned by the
Respondents. Petitioner had resigned from the Company in December, 2015.
26. However, the question which arises is whether this Form 32 which
the petitioner has relied can be considered at this stage of framing of
Notice or it is the defense which can be considered only during the
evidence.
27. Every Company is required to maintain at its registered office a
register of its Directors, Managing Director, Manager and Secretary
containing the particulars with respect to each of them as set out in clauses
(a) to (e) of sub-section (1) of Section 303 of the Companies Act, 1956. Sub-
section (2) of Section 303 mandates every Company to send to the Registrar
a return in duplicate containing the particulars specified in the Register. Any
change in its Directors, Managing Directors, Managers or Secretaries, such
information specifying the date of change is required to be furnished to the
Registrar of Companies in the prescribed Form within 30 days of such
change, in Form 32.
28. This aspect of consideration of documents relied by the accused to
seek discharge, was considered by the Apex Court in the case of Mohd.
Akram Siddiqui v. State of Bihar (2019) 13 SCC 350 wherein Apex Court
made a reference to the case of Yin Cheng Hsiung v. Essem Chemical
Industries 2011(15) SCC 207 and State of Haryana v. Bhajan Lal 1992
Supp (1) SCC 335, AND observed that ordinarily and in the normal course,
the High Court when approached for quashing of a criminal proceeding, will
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not appreciate the defence of the accused; neither would it consider the
veracity of the document(s) on which the accused relies. However, in an
appropriate case where the document relied upon is a public document or
where veracity thereof is not disputed by the complainant, an exception has
been carved out and the same can be considered.
29. In the case of Harshendra Kumar D. v. Rebatilata Koley AIR 2011
SC 1090, similar facts as in hand came up for consideration. Therein as well,
in a Complaint under S.138 NI Act, the Petitioner took the plea of having
resigned from the Directorship prior to the presentation of the Cheque and
sought a discharge. It was observed that while it is fairly settled now that
while exercising inherent jurisdiction under Section 482 or Revisional
Jurisdiction under Section 397 of the CrPC in a case where complaint is
sought to be quashed, it is not proper for the High Court to consider the
defence of the accused or embark upon an enquiry in respect of merits of the
accusations. However, it was held that the materials relied upon by the
accused which are in the nature of public documents or the materials which
are beyond suspicion or doubt, in no circumstance, can be looked into by the
High Court in exercise of its jurisdiction under Section 482 or for that
matter in exercise of revisional jurisdiction under Section 397 of the Code.
Further, in an appropriate case, if on the face of the documents placed by
accused, which are beyond suspicion or doubt, the accusations against him
cannot stand, it would be travesty of justice if accused is relegated to trial
and he is asked to prove his defence before the trial court. In such a matter,
for promotion of justice or to prevent injustice or abuse of process, the High
Court may look into the materials which have significant bearing on the
matter at prima facie stage.
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30. The facts in this case are para materia with Harshendra Kumar D
(supra), wherein the resignation documents from the Company were
considered and Petitioner was discharged under S.138 NI. Act.
31. It is not disputed that the said cheques in question were issued on
11.03.2016, much after the resignation of the Petitioner, Sh. Manoj Rungta.
Therefore, it is beyond the power of the Petitioner to get the same honoured,
since he had ceased to be the Director of the Accused Company at the time
of issuance of the Legal Notice.
32. In this view of the matter, it must be held that a Director whose
resignation has been accepted by the Company and that has been duly
notified to the Registrar of Companies, cannot be made accountable and
fastened with liability for anything done by the Company after the
acceptance of his resignation. The Petitioner, is entitled to be discharged,
on this ground as well.
Conclusion:
33. In view of the aforesaid, it is held that no prima facie case was
disclosed against the Petitioner, Sh. Manoj Rungta who had resigned from
the Company even prior to the date of issue of cheque. The impugned Order
against the Petitioner is therefore, set aside and he is discharged for the
offence under Section 138 NI Act.
34. The Petition is accordingly, allowed. The pending Applications are
disposed of, accordingly.
(NEENA BANSAL KRISHNA)
JUDGE
JUNE 28, 2025/pp
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