CRR/2434/2022 of MANISH KAKRANIA Vs M/S DRISHTI ADVISORIES PVT. LTD. AND ANR

IN THE HIGH COURT AT CALCUTTA CRIMINAL REVISIONAL JURISDICTION APPELLATE SIDE PRESENT: THE HON’BLE JUSTICE UDAY KUMAR CRR 2433 of 2022 Manish Kakrania -Vs- M/s. Earthlink Estate Pvt. Ltd. & Anr. With CRR 2434 of 2022 Manish Kakrania -Vs- M/s. Drishti Advisories Pvt. Ltd. & Anr. With CRR 2435 of 2022 Manish Kakrania -Vs- M/s. Parvati Infraventures & Anr. For the Petitioner : Mr. Arindam Sen Mr. Saurav Basu Mr. Sumik Biswas Ms. Payel Maji Mr. Nikhilesh Mittal For the Opposite Party No. 1 : Mr. Moyukh Mukherjee Ms. Sagnika Banerjee Ms. Sarmistha Basak 2 Hearing concluded on : 19.12.2025 Judgment on : 16.01.2026 UDAY KUMAR, J.: – 1. The petitioner has moved these revisional applications under Section 482 of the Code of Criminal Procedure, 1973, seeking the quashing of proceedings in Case Nos. CS/12713, 12715, and 12716 of 2020 pending bef ore the Learned Metropolitan Magistrate, 20th Court, Calcutta. The petit ioner stands arrayed as Accused No. 7 for the alleged commission of offences punishable u nder Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. 2. The genesis of the dispute lies in a commercial transaction origin ating in 2016, wherein the complainant entities (Opposite Party No. 2) extended financial assistance via Inter-Corporate Deposits (ICDs) to the a ccused company, M/s Citylife Retail Private Limited. To discharge th e existing liability, the company issued three cheques dated December 1, 2019, totalling Rs. 56,00,000/-. Upon presentation, the instruments were retur ned dishonoured on February 28, 2020, with the endorsement "Dr awer's signatures not as per mandate." 3. The complainants contend that the petitioner, by virtue of b eing a substantial shareholder (25.01%) and a "Responsible Officer," was a "cont rolling mind" of the company in charge of its day-to-day affairs. Statutor y notices were issued in March 2020, and upon non-payment, the impugned complaints were filed. 4. The crux of the matter revolves around Section 141 of the NI Act , which governs offences by companies. It stipulates: 3 i. "If the person committing an offence under section 138 is a company, every person who, at the time the offence was commi tted, was in charge of, and was responsible to the company for t he conduct of the business of the company... shall be deemed to be gu ilty of the offence..." 5. Mr. Arindam Sen, learned counsel for the petitioner, submits that there is a total absence of temporal nexus. He underscores that the petitioner resigned from the company on July 4, 2019—five months prior to the issuance of the cheques. This exit is substantiated by Form DIR-12, a statutor y public document. Relying on Harshendra Kumar D. v. Rebatilata Koley (2011) 3 SC C 351, he argues that the Court is duty-bound to take judicial notice of ROC records to prevent harassment. He further invokes the Principle of J udicial Parity, noting that this Court has already quashed identi cal proceedings against co-accused in CRR 1636, 1638, and 1639 of 2020. 6. Mr. Moyukh Mukherjee, learned counsel for the Opposite Party N o. 2, counters that the petitioner’s liability is a "triable issue of fact." He contends that since the petitioner was a "controlling mind" when the I CDs were originally negotiated in 2016, a continuing responsibilit y exists. He submits that the petitioner's role must be tested through the fire of cr oss-examination and that the Court should not conduct a "mini-trial" by evaluating defensive documents at this preliminary stage. 7. Vicarious liability under Section 141 of the NI Act is not a matter of course; it is a legal fiction that must be strictly construed. The statut e stipulates that a person is deemed guilty only if they were in charge of the com pany "at the time the offence was committed." The offence under Section 138 is a 4 composite one, but for the purpose of fastening criminal culpa bility, the critical threshold is the date of issuance and subsequent dishonour. 8. It is a matter of record that the petitioner severed all ties with the company on July 4, 2019, whereas the impugned cheques were issued on December 1, 2019. Logically and legally, a director who has been functus officio for five months prior to the issuance of the cheque cannot be said to possess a "controlling mind" over the company’s decision-making process at the material time. 9. The complainant’s attempt to attach perpetual liability ba sed on the 2016 loan negotiation is legally tenuous. Liability under Sectio n 141 is functional and time-specific, not status-based or retrospective. As observed in Pooja Ravinder Devidasani v. State of Maharashtra (2014) 16 SCC 1 , the law does not contemplate a "history-based" liability where a person is held responsible for future defaults long after their exit. 10. Furthermore, this Court emphasizes the Sanctity of Public Recor ds. The petitioner’s resignation is substantiated by Form DIR-12, an unimpeachable public document. As established in Anita Malhotra v. Apparel Export Promotion Council (2012) 1 SCC 520 , the Court must exercise its inherent power to prevent manifest injustice when documents beyond suspicion indicate a resignation prior to the offence. Consistency is the h allmark of judicial discipline; as this Court has already quashed proceedin gs against co- accused on identical grounds, denying the same relief to the peti tioner would be discriminatory. 11. The legal pillars supporting the quashing of these proceedings a re founded upon a strict interpretation of vicarious liability in corporate criminal law. 5 i. Firstly, the Doctrine of Contemporaneous Linkage dictates that culpability under Section 141 of the Negotiable Instruments A ct is not a status-based or perpetual burden. It necessitates a precise temporal nexus between the individual's executive role and the company’s conduct at the material time of the offence. Crimina l liability is an intensely personal obligation; it cannot b e fastened upon a person who had become functus officio nearly five months prior to the issuance and dishonour of the instruments. A resignation that effectively predates the creation of the cheque severs the "controlling mind" from the corporate act, rendering any subsequent prosecution against such an individual legally and logically untenable. ii. Secondly, this Court must uphold the Sanctity of Unimpeacha ble Public Records. Statutory filings, particularly Form DIR-12 submitted to the Registrar of Companies, are not merely administrative en tries but constitute "unimpeachable public documents" of which a Court is entitled—and indeed duty-bound—to take judicial notice. When su ch a record establishes an irreversible chronological gap between the director’s resignation and the statutory default, the High C ourt’s inherent power under Section 482 of the Code must be invoked t o prevent a manifest abuse of process. To compel a person to undergo the "fire of trial" when their innocence is documented by the St ate’s own public records would be a travesty of justice and an exercise i n judicial futility. 6 iii. Finally, the principle of Judicial Parity and Consistency r emains the hallmark of legal discipline. Since this Court has already e valuated the identical factual matrix in related proceedings involving co- accused and found the prosecution to be unsustainable, a differen t yardstick cannot be applied to the present petitioner. Where the foundational facts are identical and the evidence of resignation is beyond suspicion, the continuation of the criminal proceeding against the petitioner is an unwarranted harassment that the law cannot countenance. 12. In view of the aforesaid findings, this Court is of the op inion that the continuation of the proceedings in Case Nos. CS/12713, 12715, and 12716 of 2020 against the petitioner constitutes a gross abuse of the process of law. 13. Accordingly, it is ordered: i. C.R.R. Nos. 2433, 2434, and 2435 of 2022 are allowed. ii. The proceedings in Case Nos. CS/12713/2020, CS/12715/2020, and CS/12716/2020 are hereby quashed and set aside insofar as they relate to the petitioner, Sri Manish Kakrania. iii. The petitioner is discharged from his bail bonds. iv. The Learned Trial Court shall proceed against the remaining a ccused persons with utmost dispatch, in accordance with law, uninflu enced by any observations made herein. v. There shall be no order as to costs. vi. Interim order, if any, shall stand vacated. vii. All connected applications stand disposed of, and interim order s, if any, stand vacated. 7 14. Urgent photostat certified copy of this judgment, if appli ed for, be given to the parties upon compliance of all necessary formalities. (Uday Kumar, J.)