Standard Chartered Bank vs State of Maharashtra and Ors

8/18/2019 Standard Chartered Bank vs State of Maharashtra and Ors

1/30

1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS.271-273 OF 2016(Arising out of S.L.P.(Crl.) Nos.!"!# of $%)

St'n'r C'rt*r* +'n, -A*ll'nt

/*rsus

St't* of M''r'str' 'n Ot*rs Et0. -R*son*nts

J U D G M E N T

Dipak Mi!a" J.

L*'1* gr'nt*.

$. T* r*s*nt '*'ls2 34 s*0i'l l*'1*2 'r* ir*0t*

'g'inst t* or*r 't* &5t O0to3*r2 $%&62 'ss* 34 t* Hig

Court of Jui0'tur* 't +o73'4 in Cri7in'l 8rit P*tition Nos.

&!$"&! of $%&6 9*r*34 t* l*'rn* singl* Jug* 34 t*

0o77on i7ugn* or*r 's :u's* t* or*rs of issu'n0*

W W W . L I V E L A W . I N


2/30

2

of su77ons 'g'inst t* r*son*nt Nos. $ 'n 5 *r*in

(origin'l '00us* Nos. 6 'n ) 34 t* M*troolit'n M'gistr't*2

$5r Court 't Esl'n'*2 Mu73'i2 un*r S*0tion &5! of t*

N*goti'3l* Instru7*nts A0t2 &!!& (for sort2 ;t* A0t Si4'r Lt.

is ' 0o7'n4 r*gist*r* un*r t* Co7'ni*s A0t2 &?6#. On

3*ing 'ro'0* 34 t* 'utoriti*s of t* 0o7'n42 ' sort

t*r7 lo'n f'0ilit4 for ' su7 of Rs. $%% 0ror*s 9's gr'nt* 34

t* '*ll'nt"3'n, to t* 0o7'n4 on $!.%.$%&$. As '1*rr*

in t* 0o7l'int2 t* 0o7'n4 *@*0ut* 'n in*7nit4 in

f'1our of t* '*ll'nt"3'n, 'n 'gr** to r*'4 t* '7ount

in tr** inst'l7*nts on* on &6.&$.$%&$2 t* s*0on on

&6.%&.$%&5 'n t* l'st on &6.%$.$%&5. T* 0o7'n4 issu*

tr** 0*:u*s2 on* 't* &6.&$.$%&$ for Rs.##2#B2%%2%%%="2

'n t* t9o ot*rs 't* &6.%&.$%&5 'n &6.%$.$%&5 for



3/30

3

Rs.##2#B2%%2%%%=" 'n Rs.##2##2%%2%%%=" r*s*0ti1*l4

to9'rs t* r*'47*nt of t* li'3ilit4. As *r t* 't*s

7*ntion* in t* 0*:u*s2 t*4 9*r* r*s*nt* 3*for* t*

3'n, 3ut u* to insuffi0i*nt funs 'n '00ount 3lo0,* t*

0*:u*s 9*r* isonour*. T* '*ll'nt"3'n, issu*

r*:uisit* st'tutor4 noti0* for *'0 0*:u*. As no r*sons* 9's

gi1*n 34 t* r*son*nts2 t* '*ll'nt fil* tr** 0o7l'ints2

3*ing C.C. No. 6&=SS of $%&52 C.C. No. !5=SS of $%&5 'n

C.C. No. &&6=SS of $%&5 un*r S*0tion &5! of t* A0t 3*for*

t* M*troolit'n M'gistr't*2 $5r Court 't Esl'n'*2 Mu73'i

9o too, 0ogni'n0* 'n issu* su77ons 'g'inst 'll t*

'00us* *rsons.

. T* r*son*nt nos. $ to *r*in2 3*ing gri*1* 34 t*

or*rs issuing su77ons2 r*f*rr* tr** r*1ision *titions2

t't is2 R*1ision Ali0'tion Nos. &&$5 to &&$6 of $%& 3*for*

t* Cit4 Ci1il S*ssions Court2 Mu73'i2 'n t* r*1ision'l

0ourt 'ft*r u* *li3*r'tion i not *r0*i1* 'n4 7*rit in t*

s'i 0'll*ng* 'n is7iss* t* r*1ision *titions.



4/30

4

6. T* is7iss'l or*r 0onstr'in* t* r*son*nts to

r*f*r 0ri7in'l 9rit *titions2 3*'ring Cri7in'l 8rit P*tition

Nos. &!$ to &! of $%&62 3*for* t* Hig Court of

Jui0'tur* 't +o73'4 'n t* l*'rn* singl* Jug* 34 t*

or*r i7ugn* 'llo9* t* 9rit *titions r*f*rr* 34

'00us* nos. 'n 6 oling t't t* 0o7l'in'nt '

'1*rr* t* s'i r*son*nt to 3* r*sonsi3l* 9itout 7',ing

'n4 s*0ifi0 'ss*rtion in t* 0o7l'int '3out t*ir rol*. As

7*ntion* *'rli*r2 t* Hig Court is7iss* t* 9rit *tition

r*f*rr* 34 t* r*son*nt no..

#. On ' *rus'l of t* i7ugn* or*r2 it tr'nsir*s t't

t* l*'rn* Singl* Jug* of t* Hig Court 's :u's* t*

su77ons singul'rl4 on t* groun t't t*r* 'r* no

'll*g'tions 'g'inst t* su00*ssful 9rit *tition*rs 0onn*0ting

t*7 9it t* 'ff'irs of t* Co7'n4.

B. Criti0iing t* 'for*s'i or*r 'ss* 34 t* Hig Court2

it is su37itt* 34 Mr. Di1'n2 l*'rn* s*nior 0ouns*l '*'ring

for t* '*ll'nt"3'n, t't t* Hig Court 's f'il* to

ro*rl4 s0rutini* t* 'ss*rtions 7'* in t* 0o7l'int2 for



5/30

5

t* 0o7l'int 's 0l*'rl4 st't* '3out t* rol* of t* '00us*

*rsons in t* 0o7l'int. L*'rn* 0ouns*l 9oul su37it t't

it is ' 0's* 9*r* t* r*son*nts ' '1'il* lo'n of Rs.$%%

0ror*s 'n t* 0*:u*s t't ' 3**n issu* 9*r*

isonour* on u* r*s*nt'tion2 t* Hig Court soul not

'1* *@*r0is* t* in*r*nt Gurisi0tion un*r S*0tion !$

CrPC to s*t 'si* t* or*r issuing su77ons 'g'inst t*

E@*0uti1* Dir*0tor 'n t* 9ol*"ti7* Dir*0tor 9o 'r* r*'ll4

t* *rsons r*sonsi3l* 'n in 0'rg* of '4 to '4 'ff'irs of

t* 0o7'n4.

!. R*sisting t* 'for*s'i su37issions ut fort 34 Mr.

Di1'n2 Ms. Inu M'lotr'2 l*'rn* s*nior 0ouns*l '*'ring

for t* r*son*nts 9oul 0ont*n t't t* l*'rn* M'gistr't*

' t',*n 0ogni'n0* in ' 7*0'ni0'l 7'nn*r 9itout

*rusing t* '1*r7*nts 7'* in t* 0o7l'int *tition 'n2

t*r*for*2 t* *@*r0is* of Gurisi0tion 34 t* Hig Court in

s*tting 'si* t* or*r issuing su77ons 0'nnot 3* f'ult*.

S* 's 0o77*n* us to t* *0isions in S.M.S.



6/30

6

Pharmaceuticals Ltd. v. Neeta Bhalla and another 1

(hereinafter referred to as ‘SMS Pharma I’ )2 Gunmala

Sales Pvt. Ltd. v. Anu Mehta and Ors. 2 National Small

Industries !or"n. Ltd. v. #armeet Sin$h Paintal % Anr.& 2

'amil Nadu Ne(s Print % Pa"ers Ltd. v. ). *aruna+ar %

Ors., 2 A.*. Sin$hania v. Gu-arat State ertili/er !om"an0

Ltd. % Anr. .

?. To 'r*0i't* t* 0ontro1*rs4 in ro*r *rs*0ti1*2 it is

'rori't* to r*f*r to S*0tions &5! 'n && of t* A0t.

S*0tion &5! r*'s 's follo9s""

13#. )ishonour of che2ue for insufficienc03etc.3 of funds in the account .8*r* 'n4

0*:u* r'9n 34 ' *rson on 'n '00ount7'int'in* 34 i7 9it ' 3'n,*r for '47*nt of 'n4 '7ount of 7on*4 to 'not*r *rson fro7 outof t't '00ount for t* is0'rg*2 in 9ol* or in'rt2 of 'n4 *3t or ot*r li'3ilit42 is r*turn* 34 t* 3'n, un'i2 *it*r 3*0'us* of t* '7ount of 7on*4 st'ning to t* 0r*it of t't '00ount isinsuffi0i*nt to onour t* 0*:u* or t't it*@0**s t* '7ount 'rr'ng* to 3* 'i fro7

1 (2005) 8 SCC 89

2 (2015) 1 SCC 103

3 (2010) 3 SCC 330

4 (2015) 8 SCALE 733

5 (2013) 16 SCC 630



7/30

7

t't '00ount 34 'n 'gr**7*nt 7'* 9it t't3'n,2 su0 *rson s'll 3* **7* to '1*0o77itt* 'n off*n0* 'n s'll2 9itoutr*Gui0* to 'n4 ot*r ro1ision of tis A0t2 3*unis* 9it i7rison7*nt for ' t*r7 9i07'4 3* *@t*n* to t9o 4*'rs2 or 9it fin* 9i07'4 *@t*n to t9i0* t* '7ount of t* 0*:u*2 or9it 3ot

Pro1i* t't noting 0ont'in* in tis s*0tions'll 'l4 unl*ss

(a ) t* 0*:u* 's 3**n r*s*nt* to t* 3'n,9itin ' *rio of si@ 7onts fro7 t* 't* on9i0 it is r'9n or 9itin t* *rio of its1'liit42 9i0*1*r is *'rli*r

(b ) t* '4** or t* ol*r in u* 0ours* of t*0*:u*2 's t* 0's* 7'4 3*2 7',*s ' *7'n fort* '47*nt of t* s'i '7ount of 7on*4 34 gi1ing ' noti0* in 9riting2 to t* r'9*r of t*

0*:u*2 9itin tirt4 '4s of t* r*0*it of infor7'tion 34 i7 fro7 t* 3'n, r*g'ring t*r*turn of t* 0*:u* 's un'i 'n

(c ) t* r'9*r of su0 0*:u* f'ils to 7',* t*'47*nt of t* s'i '7ount of 7on*4 to t*'4** or 's t* 0's* 7'4 3*2 to t* ol*r in u*0ours* of t* 0*:u*2 9itin fift**n '4s of t*r*0*it of t* s'i noti0*.

Explanation .For t* uros*s of tis s*0tion2;*3t or ot*r li'3ilit4< 7*'ns ' l*g'll4 *nfor0*'3l* *3t or ot*r li'3ilit4.



8/30

8

&%. On ' stui* s0rutin4 of t* 'for*s'i ro1ision2 it is

:uit* li7i t't to 0onstitut* t* 0ri7in'l li'3ilit4 t*

0o7l'in'nt is r*:uir* to so9 t't ' 0*:u* 9's issu*

t't it 9's r*s*nt* in t* 3'n, in :u*stion t't on u*

r*s*nt'tion2 it 9's isonour* t't2 's *nsrin* in t*

ro1ision2 r*:uisit* noti0* 9's s*r1* on t* *rson 9o 9's

sougt to 3* 7'* li'3l* for 0ri7in'l li'3ilit4 'n t't in sit*

of s*r1i0* of noti0*2 t* *rson 9o 's 3**n 'rr'ign* 's 'n

'00us* i not 0o7l4 9it t* noti0* 34 7',ing '47*nt or

fulfilling ot*r o3lig'tions 9itin t* r*s0ri3* *rio2 t't is2

&6 '4s fro7 t* 't* of r*0*it of noti0*.

&&. S*0tion && of t* A0t *'ls 9it off*n0*s 34 0o7'ni*s.

It r*'s 's follo9s"

1$1. Offences 40 com"anies .(&) If t* *rson0o77itting 'n off*n0* un*r S*0tion &5! is '0o7'n42 *1*r4 *rson 9o2 't t* ti7* t*off*n0* 9's 0o77itt*2 9's in 0'rg* of2 'n 9'sr*sonsi3l* to t* 0o7'n4 for t* 0onu0t of t*

3usin*ss of t* 0o7'n42 's 9*ll 's t*0o7'n42 s'll 3* **7* to 3* guilt4 of t*off*n0* 'n s'll 3* li'3l* to 3* ro0***'g'inst 'n unis* '00oringl4

Pro1i* t't noting 0ont'in* in tissu3"s*0tion s'll r*n*r 'n4 *rson li'3l* to



9/30

9

unis7*nt if * ro1*s t't t* off*n0* 9's0o77itt* 9itout is ,no9l*g*2 or t't * '*@*r0is* 'll u* ilig*n0* to r*1*nt t*0o77ission of su0 off*n0*

Pro1i* furt*r t't 9*r* ' *rson isno7in't* 's ' Dir*0tor of ' 0o7'n4 34 1irtu*of is oling 'n4 offi0* or *7lo47*nt in t*C*ntr'l >o1*rn7*nt or St't* >o1*rn7*nt or 'fin'n0i'l 0oror'tion o9n* or 0ontroll* 34 t*C*ntr'l >o1*rn7*nt or t* St't* >o1*rn7*nt2 'st* 0's* 7'4 3*2 * s'll not 3* li'3l* forros*0ution un*r tis C't*r.

($) Not9itst'ning 'n4ting 0ont'in* insu3"s*0tion (&)2 9*r* 'n4 off*n0* un*r tis A0t's 3**n 0o77itt* 34 ' 0o7'n4 'n it isro1* t't t* off*n0* 's 3**n 0o77itt* 9itt* 0ons*nt or 0onni1'n0* of2 or is 'ttri3ut'3l*to2 'n4 n*gl*0t on t* 'rt of2 'n4 Dir*0tor2M'n'g*r2 S*0r*t'r4 or ot*r offi0*r of t*0o7'n42 su0 Dir*0tor2 M'n'g*r2 S*0r*t'r4 orot*r offi0*r s'll 'lso 3* **7* to 3* guilt4 of t't off*n0* 'n s'll 3* li'3l* to 3* ro0***'g'inst 'n unis* '00oringl4.

Explanation .For t* uros*s of tis s*0tion

(a ) ; %&'pa()< 7*'ns 'n4 3o4 0oror't* 'nin0lu*s ' fir7 or ot*r 'sso0i'tion of ini1iu'ls 'n

(b ) ; *i!+%,&!


10/30

10

&$. On ' *rus'l of t* 'for*s'i ro1ision2 it is 0l*'r 's

0r4st'l t't if t* *rson 9o 0o77its 'n off*n0* un*r

S*0tion &5! of t* A0t is ' 0o7'n42 t* 0o7'n4 's 9*ll 's

ot*r *rson in 0'rg* of or r*sonsi3l* to t* 0o7'n4 for

t* 0onu0t of t* 3usin*ss of t* 0o7'n4 't t* ti7* of

0o77ission of t* off*n0* is **7* to 3* guilt4 of t* off*n0*.

Tus2 it 0r*'t*s ' 0onstru0ti1* li'3ilit4 on t* *rsons

r*sonsi3l* for t* 0onu0t of t* 3usin*ss of t* 0o7'n4.

&5. At on* oint of ti7*2 'n issu* ' 'ris*n 3*for* tis

Court2 9*t*r ' 0o7l'int 0oul 3* *l to 3* 7'int'in'3l*

9itout 7',ing t* 0o7'n4 ' 'rt4. T* s'i 0ontro1*rs4

's 3**n ut to r*st 34 ' tr**"Jug* +*n0 *0ision in

Aneeta #ada v. Godfather 'ravels and 'ours Private

Limited 5 9*r*in it 's 3**n *l t't 9*n t* 0o7'n4 0'n

3* ros*0ut*2 t*n onl4 t* *rsons 7*ntion* in t* ot*r

0't*gori*s 0oul 3* 1i0'riousl4 li'3l* for t* off*n0* su3G*0t to

t* '1*r7*nts in t* *tition 'n roof t*r*of. It 's 3**n

furt*r *l t*r*in t't t*r* 0'nnot 3* 'n4 1i0'rious li'3ilit4

6 (2012) 5 SCC 661



11/30

11

unl*ss t*r* is ' ros*0ution 'g'inst t* 0o7'n4. In t*

0's* 't 'n2 t* 0o7'n4 's 3**n 'rr'4* 's t* '00us*

No. & 'long 9it t* C'ir7'n 'n ot*r Dir*0tors.

&. No92 9* 7ust go 3'0, in ti7* to 'r*0i't* 9't 's

3**n st't* in S.M.S. Pharma I (sur')2 9*r*in '

tr**"Jug* +*n0 'ns9*r* ' r*f*r*n0* on tr** issu*s. T*

'ns9*rs on t9o issu*s 9i0 'r* r*l*1'nt for t* r*s*nt

uros* 'r* 's follo9s"

(') ---

(b ) 8*t*r ' ir*0tor of ' 0o7'n4 9oul 3***7* to 3* in 0'rg* of2 'n r*sonsi3l* to2 t*0o7'n4 for 0onu0t of t* 3usin*ss of t*0o7'n4 'n2 t*r*for*2 **7* to 3* guilt4 of

t* off*n0* unl*ss * ro1*s to t* 0ontr'r4.

(c ) E1*n if it is *l t't s*0ifi0 '1*r7*nts 'r*n*0*ss'r42 9*t*r in t* '3s*n0* of su0'1*r7*nts t* sign'tor4 of t* 0*:u* 'n or t*7'n'ging ir*0tors or Goint 7'n'ging ir*0tor9o '7itt*l4 9oul 3* in 0'rg* of t*0o7'n4 'n r*sonsi3l* to t* 0o7'n4 for0onu0t of its 3usin*ss 0oul 3* ro0***

'g'inst.

&6. T* tr**"Jug* +*n0 r*f*rr* to S*0tion &5! 'n &&

of t* A0t2 S*0tions $%5 'n $% of CrPC 'n o3s*r1* t't '



12/30

12

0o7l'int 7ust 0ont'in 7't*ri'l to *n'3l* t* M'gistr't* to

7',* u is 7in for issuing ro0*ss 'n if tis 9*r* not t*

r*:uir*7*nt2 0ons*:u*n0*s 9oul 3* f'r"r*'0ing. If '

M'gistr't* 's to issu* ro0*ss in *1*r4 0's*2 t* 3ur*n of

9or, 3*for* t* M'gistr't* 's 9*ll 's t* 'r'ss7*nt 0'us*

to t* r*son*nts to 9o7 ro0*ss 's to 3* issu* 9oul 3*

tr*7*nous. It 's 3**n o3s*r1* t*r*in t't S*0tion $% of

t* CrPC 0o77*n0*s 9it t* 9ors if in t* oinion of t*

M'gistr't* t',ing 0ogni'n0* of 'n off*n0* t*r* is suffi0i*nt

groun for ro0**ing 'n t't ''rt2 t* 9ors suffi0i*nt

groun for ro0**ing 'g'in sugg*st t't groun soul 3*

7'* out in t* 0o7l'int for ro0**ing 'g'inst t*

r*son*nt. T* tr**"Jug* +*n0 's rul* t't it is

s*ttl* l'9 t't 't t* ti7* of issuing of t* ro0*ss2 t*

M'gistr't* is r*:uir* to s** onl4 t* 'll*g'tions in t*

0o7l'int 'n 9*r* t* 'll*g'tions in t* 0o7l'int or t*

0'rg*s**t o not 0onstitut* 'n off*n0* 'g'inst ' *rson2 t*

0o7l'int is li'3l* to 3* is7iss*.



13/30

13

. Aft*r so st'ting2 t* Court '1*rt* to t* 0o7l'int fil*

un*r S*0tion &5! of t* A0t 'n oin* t't t* 0o7l'int

soul 7',* out ' 0's* for issu* of ro0*ss. As f'r 's t*

offi0*rs r*sonsi3l* for 0onu0ting t* 'ff'irs of t* 0o7'n4

'r* 0on0*rn*2 t* Court r*f*rr* to 1'rious ro1isions of t*

Co7'ni*s A0t2 &?6# 'n 'n'l4s* S*0tion && of t* A0t to

l'4 o9n 's follo9s"

8't is r*:uir* is t't t* *rsons 9o 'r*sougt to 3* 7'* 0ri7in'll4 li'3l* un*r S*0tion&& soul 3*2 't t* ti7* t* off*n0* 9's0o77itt*2 in 0'rg* of 'n r*sonsi3l* to t*0o7'n4 for t* 0onu0t of t* 3usin*ss of t*0o7'n4. E1*r4 *rson 0onn*0t* 9it t*0o7'n4 s'll not f'll 9itin t* '73it of t*ro1ision. It is onl4 tos* *rsons 9o 9*r* in

0'rg* of 'n r*sonsi3l* for t* 0onu0t of 3usin*ss of t* 0o7'n4 't t* ti7* of 0o77ission of 'n off*n0*2 9o 9ill 3* li'3l* for0ri7in'l '0tion. It follo9s fro7 tis t't if 'ir*0tor of ' 0o7'n4 9o 9's not in 0'rg* of 'n 9's not r*sonsi3l* for t* 0onu0t of t*3usin*ss of t* 0o7'n4 't t* r*l*1'nt ti7*2 9illnot 3* li'3l* un*r t* ro1ision. T* li'3ilit4 'ris*s fro7 3*ing in 0'rg* of 'n r*sonsi3l* for

t* 0onu0t of 3usin*ss of t* 0o7'n4 't t*r*l*1'nt ti7* 9*n t* off*n0* 9's 0o77itt*'n not on t* 3'sis of 7*r*l4 oling '*sign'tion or offi0* in ' 0o7'n4. Con1*rs*l42 '*rson not oling 'n4 offi0* or *sign'tion in '0o7'n4 7'4 3* li'3l* if * s'tisfi*s t* 7'inr*:uir*7*nt of 3*ing in 0'rg* of 'n r*sonsi3l*



14/30

14

for t* 0onu0t of 3usin*ss of ' 0o7'n4 't t*r*l*1'nt ti7*. Li'3ilit4 **ns on t* rol* on*l'4s in t* 'ff'irs of ' 0o7'n4 'n not on*sign'tion or st'tus. If 3*ing ' ir*0tor or7'n'g*r or s*0r*t'r4 9's *noug to 0'st0ri7in'l li'3ilit42 t* s*0tion 9oul '1* s'i so.Inst*' of *1*r4 *rson t* s*0tion 9oul '1*s'i *1*r4 ir*0tor2 7'n'g*r or s*0r*t'r4 in '0o7'n4 is li'3l*-2 *t0. T* l*gisl'tur* is '9'r*t't it is ' 0's* of 0ri7in'l li'3ilit4 9i0 7*'nss*rious 0ons*:u*n0*s so f'r 's t* *rson sougtto 3* 7'* li'3l* is 0on0*rn*. T*r*for*2 onl4 *rsons 9o 0'n 3* s'i to 3* 0onn*0t* 9it t*

0o77ission of ' 0ri7* 't t* r*l*1'nt ti7* '1*3**n su3G*0t* to '0tion.

&B. Aft*r so st'ting2 t* Court l'0* r*li'n0* on

su3"S*0tion $ of S*0tion && of t* A0t for g*tting suort of

t* 'for*s'i r*'soning 's t* s'i su3"S*0tion *n1is'g*s

ir*0t in1ol1*7*nt of 'n4 Dir*0tor2 M'n'g*r2 S*0r*t'r4 or

ot*r offi0*r of ' 0o7'n4 in t* 0o77ission of 'n off*n0*.

T* Court ro0*** to o3s*r1* t't t* s'i ro1ision

o*r't*s 9*n in ' tri'l it is ro1* t't t* off*n0* 's 3**n

0o77itt* 9it t* 0ons*nt or 0onni1'n0* or is 'ttri3ut'3l* to

n*gl*0t on t* 'rt of 'n4 of t* ol*rs of t* offi0*s in '

0o7'n4. It 's 'lso 3**n o3s*r1* t't ro1ision 's 3**n

7'* for ir*0tors2 7'n'g*rs2 s*0r*t'ri*s 'n ot*r offi0*rs of



15/30

15

' 0o7'n4 to 0o1*r t*7 in 0's*s of t*ir ro1* in1ol1*7*nt.

It is 3*0'us* ' *rson 9o is in 0'rg* of 'n r*sonsi3l* for

0onu0t of 3usin*ss of ' 0o7'n4 9oul n'tur'll4 ,no9 94 '

0*:u* in :u*stion 9's issu* 'n 94 it got isonour*

'n si7ult'n*ousl4 it 7*'ns no ot*r *rson 0onn*0t* 9it

' 0o7'n4 is 7'* li'3l* un*r S*0tion && of t* A0t. T*

li'3ilit4 'ris*s2 's t* tr**"Jug* +*n0 oin*2 on '00ount

of 0onu0t2 '0t or o7ission on t* 'rt of 'n offi0*r 'n not

7*r*l4 on '00ount of oling offi0* or osition in ' 0o7'n4

'n2 t*r*for*2 in or*r to 3ring ' 0's* 9itin S*0tion && of

t* A0t2 t* 0o7l'int 7ust is0los* t* n*0*ss'r4 f'0ts 9i0

7',*s ' *rson li'3l*. In t* s'i 0's*2 t* Court 's r*f*rr*

to t* *0isions in Secundera4ad #ealth !are Ltd. v.

Secundera4ad #os"itals 6P7 Ltd.8 2 9. Sudheer :edd0 v.

State of A.P.; 2 :. *anan v. *ota+ Mahindra inance Ltd.


16/30

16

and inance Ltd.1= 2 Sunil *umar !hha"aria v. )a++a

>sh(araiah 112 State of #ar0ana v. Bri- Lal Mittal 1 2 *.P.G.

Nair v. ?indal Menthol India Ltd.1& 2 *atta Su-atha v.

ertili/ers % !hemicals 'ravancore Ltd.1, 'n *1*ntu'll4

*@r*ss* tus"

A li'3ilit4 un*r S*0tion && of t* A0t is sougtto 3* f'st*n* 1i0'riousl4 on ' *rson 0onn*0t*9it ' 0o7'n42 t* rin0i'l '00us* 3*ing t*

0o7'n4 its*lf. It is ' *'rtur* fro7 t* rul* in0ri7in'l l'9 'g'inst 1i0'rious li'3ilit4. A 0l*'r0's* soul 3* s*ll* out in t* 0o7l'int'g'inst t* *rson sougt to 3* 7'* li'3l*.S*0tion && of t* A0t 0ont'ins t* r*:uir*7*ntsfor 7',ing ' *rson li'3l* un*r t* s'iro1ision. T't t* r*son*nt f'lls 9itin t*'r'7*t*rs of S*0tion && 's to 3* s*ll* out.A 0o7l'int 's to 3* *@'7in* 34 t*

M'gistr't* in t* first inst'n0* on t* 3'sis of '1*r7*nts 0ont'in* t*r*in. If t* M'gistr't* iss'tisfi* t't t*r* 'r* '1*r7*nts 9i0 3ringt* 0's* 9itin S*0tion &&2 * 9oul issu* t*ro0*ss. 8* '1* s**n t't 7*r*l4 3*ing*s0ri3* 's ' ir*0tor in ' 0o7'n4 is notsuffi0i*nt to s'tisf4 t* r*:uir*7*nt of S*0tion&&. E1*n ' non"ir*0tor 0'n 3* li'3l* un*rS*0tion && of t* A0t. T* '1*r7*nts in t*

10 (2003) 115 Comp Cas 957 (Del)

11 (2002) 108 Comp Cas 687 (AP)

12 (1998) 5 SCC 343

13 (2001) 10 SCC 218

14 (2002) 7 SCC 655



17/30

17

0o7l'int 9oul 'lso s*r1* t* uros* t't t**rson sougt to 3* 7'* li'3l* 9oul ,no99't is t* 0's* 9i0 is 'll*g* 'g'inst i7. Tis 9ill *n'3l* i7 to 7**t t* 0's* 't t* tri'l.

&!. On t* 3'sis of t* 'for*s'i 'n'l4sis2 t* Court in tis

r*g'r 0on0lu* t't"

It is n*0*ss'r4 to s*0ifi0'll4 '1*r in ' 0o7l'intun*r S*0tion && t't 't t* ti7* t* off*n0*9's 0o77itt*2 t* *rson '00us* 9's in

0'rg* of2 'n r*sonsi3l* for t* 0onu0t of 3usin*ss of t* 0o7'n4. Tis '1*r7*nt is 'n*ss*nti'l r*:uir*7*nt of S*0tion && 'n 's to3* 7'* in ' 0o7l'int. 8itout tis '1*r7*nt3*ing 7'* in ' 0o7l'int2 t* r*:uir*7*nts of S*0tion && 0'nnot 3* s'i to 3* s'tisfi*.

&?. Aft*r t* tr**"Jug* +*n0 'ns9*r* t* r*f*r*n0*2 t*

7'tt*r 9's l'0* 3*for* ' t9o"Jug* +*n0. T* t9o"Jug*

+*n02 *'ring S.M.S. Pharmaceuticals Ltd. v. Neeta

Bhalla and another 1 (hereinafter referred to as ‘SMS

Pharma II’ )2 r*rou0* ' 'ss'g* fro7 Sa4itha

:amamurth0 v. :.B.S. !hanna4asavaradh0a 15

9i0 r*'s

's follo9s"

15 (2007) 4 SCC 70

16 (2006) 10 SCC 581



18/30

18

B. A 3'r* *rus'l of t* 0o7l'int *titions*7onstr't*s t't t* st'tutor4 r*:uir*7*nts0ont'in* in S*0tion && of t* N*goti'3l*Instru7*nts A0t ' not 3**n 0o7li* 9it. It7'4 3* tru* t't it is not n*0*ss'r4 for t*0o7l'in'nt to s*0ifi0'll4 r*rou0* t*9orings of t* s*0tion 3ut 9't is r*:uir* is '0l*'r st't*7*nt of f'0t so 's to *n'3l* t* 0ourtto 'rri1* 't ' ri7' f'0i* oinion t't t*'00us* 'r* 1i0'riousl4 li'3l*. S*0tion && r'is*s' l*g'l fi0tion. +4 r*'son of t* s'i ro1ision2 '*rson 'ltoug is not *rson'll4 li'3l* for0o77ission of su0 'n off*n0* 9oul 3*

1i0'riousl4 li'3l* t*r*for. Su0 1i0'rious li'3ilit4 0'n 3* inf*rr* so f'r 's ' 0o7'n4 r*gist*r* orin0oror't* un*r t* Co7'ni*s A0t2 &?6# is0on0*rn* onl4 if t* r*:uisit* st't*7*nts2 9i0'r* r*:uir* to 3* '1*rr* in t* 0o7l'int*tition2 'r* 7'* so 's to 7',* t* '00us*t*r*in 1i0'riousl4 li'3l* for t* off*n0*0o77itt* 34 t* 0o7'n4. +*for* ' *rson 0'n3* 7'* 1i0'riousl4 li'3l*2 stri0t 0o7li'n0* 9it

t* st'tutor4 r*:uir*7*nts 9oul 3* insist*.

$%. T*r*'ft*r t* Court r*f*rr* to t* 'utorit4 in Saro-

*umar Poddar v. State 6N!' of )elhi7 and another 18 'n

not* t* o3s*r1'tions 9i0 9* tin, it 't to r*rou0*"

&. A'rt fro7 t* Co7'n4 'n t* '*ll'nt2

's noti0* *r*in3*for*2 t* M'n'ging Dir*0tor'n 'll ot*r Dir*0tors 9*r* 'lso 7'* '00us*. T* '*ll'nt i not issu* 'n4 0*:u*. H*2 'snoti0* *r*in3*for*2 ' r*sign* fro7 t*ir*0torsi of t* Co7'n4. It 7'4 3* tru* t't

17 (2007) 3 SCC 693



19/30

19

's to *@'0tl4 on 9't 't* t* s'i r*sign'tion9's '00*t* 34 t* Co7'n4 is not ,no9n2 3ut2*1*n ot*r9is*2 t*r* is no '1*r7*nt in t*0o7l'int *titions 's to o9 'n in 9't7'nn*r t* '*ll'nt 9's r*sonsi3l* for t*0onu0t of t* 3usin*ss of t* Co7'n4 orot*r9is* r*sonsi3l* to it in r*g'r to itsfun0tioning. H* ' not issu* 'n4 0*:u*. Ho9* is r*sonsi3l* for isonour of t* 0*:u* 'snot 3**n st't*. T* 'll*g'tions 7'* in 'r' 52tus2 in our oinion o not s'tisf4 t*r*:uir*7*nts of S*0tion && of t* A0t.

$&. T* s'i o3s*r1'tions 9*r* 0l'rifi* 34 st'ting t't"

$#. A f'int sugg*stion 9's 7'* t't tis Courtin Saroj Kumar Poddar (sur') 's l'i o9n t*l'9 t't t* 0o7l'int *tition not onl4 7ust0ont'in '1*r7*nts s'tisf4ing t* r*:uir*7*nts of S*0tion && of t* A0t 3ut 7ust 'lso so9 's too9 'n in 9't 7'nn*r t* '*ll'nt 9'sr*sonsi3l* for t* 0onu0t of t* 3usin*ss of t*

0o7'n4 or ot*r9is* r*sonsi3l* to it in r*g'rto its fun0tioning. A l'in r*'ing of t* s'i Gug7*nt 9oul so9 t't no su0 g*n*r'l l'99's l'i o9n t*r*in. T* o3s*r1'tions 9*r*7'* in t* 0ont*@t of t* s'i 0's* 's it 9's*'ling 9it ' 0ont*ntion t't 'ltoug no ir*0t'1*r7*nt 9's 7'* 's 'g'inst t* '*ll'nt of t* s'i 0's* fulfilling t* r*:uir*7*nts of S*0tion && of t* A0t 3ut t*r* 9*r* ot*r

'1*r7*nts 9i0 9oul so9 t't t* '*ll'ntt*r*in 9's li'3l* t*r*for.



20/30

20

$$. T* s'i 0l'rifi0'tion 9's r*it*r't* in >verest

Advertisin$ 6P7 Ltd. v. State3 Govt. of N!' of )elhi and

others 1; .

$5. In t* s'i 0's*2 t',ing not* of t* 'ss*rtions in t*

0o7l'int 9i0 9*r* r*'ll4 1'gu*2 t* Court *0lin* to

int*rf*r* 9it t* or*r 'ss* 34 t* Hig Court 9i0 '

oin* t't t* 0o7l'in'nt i not is0los* 0o77ission of

off*n0* 'g'inst t* '00us* *rsons.

$. +* it not*2 t* o3s*r1'tions 7'* in Saro- *umar

Poddar (sur') 'n 0l'rifi0'tion gi1*n in SMS Pharma II

(sur') 'n >verest Advertisin$ 6P7 Ltd. (sur') 9*r* t',*n

not* of in *.*. Ahu-a v. 9.*. 9ora and Anr 1


21/30

21

'n is r*sonsi3l* to t* 0o7'n42 for t* 0onu0tof t* 3usin*ss of t* 0o7'n4. It is suffi0i*nt if 'n'1*r7*nt is 7'* t't t* '00us* 9's t*M'n'ging Dir*0tor or Joint M'n'ging Dir*0tor 'tt* r*l*1'nt ti7*. Tis is 3*0'us* t* r*fi@M'n'ging to t* 9or Dir*0tor 7',*s it 0l*'rt't t*4 9*r* in 0'rg* of 'n 'r* r*sonsi3l* tot* 0o7'n42 for t* 0onu0t of t* 3usin*ss of t*0o7'n4.

(ii ) In t* 0's* of ' Dir*0tor or 'n offi0*r of t*0o7'n4 9o sign* t* 0*:u* on 3*'lf of t*0o7'n42 t*r* is no n** to 7',* ' s*0ifi0'1*r7*nt t't * 9's in 0'rg* of 'n 9'sr*sonsi3l* to t* 0o7'n42 for t* 0onu0t of t*3usin*ss of t* 0o7'n4 or 7',* 'n4 s*0ifi0'll*g'tion '3out 0ons*nt2 0onni1'n0* or n*glig*n0*. T* 1*r4 f'0t t't t* isonour* 0*:u* 9'ssign* 34 i7 on 3*'lf of t* 0o7'n42 9oul gi1*ris* to r*sonsi3ilit4 un*r su3"s*0tion ($) of S*0tion &&.

(iii ) In t* 0's* of ' Dir*0tor2 s*0r*t'r4 or 7'n'g*r's *fin* in S*0tion $($) of t* Co7'ni*s A0tK or' *rson r*f*rr* to in 0l'us*s (e ) 'n ( f ) of S*0tion6 of t* Co7'ni*s A0t2 'n '1*r7*nt in t*0o7l'int t't * 9's in 0'rg* of2 'n 9'sr*sonsi3l* to t* 0o7'n42 for t* 0onu0t of t*3usin*ss of t* 0o7'n4 is n*0*ss'r4 to 3ring t*0's* un*r S*0tion &&(&) of t* A0t. No furt*r'1*r7*nt 9oul 3* n*0*ss'r4 in t* 0o7l'int2

toug so7* 'rti0ul'rs 9ill 3* *sir'3l*. T*4 0'n'lso 3* 7'* li'3l* un*r S*0tion &&($) 34 7',ingn*0*ss'r4 '1*r7*nts r*l'ting to 0ons*nt 'n0onni1'n0* or n*glig*n0*2 in t* 0o7l'int2 to 3ringt* 7'tt*r un*r t't su3"s*0tion.



22/30

22

(iv ) Ot*r offi0*rs of ' 0o7'n4 0'nnot 3* 7'*li'3l* un*r su3"s*0tion (&) of S*0tion &&. Ot*roffi0*rs of ' 0o7'n4 0'n 3* 7'* li'3l* onl4 un*rsu3"s*0tion ($) of S*0tion &&2 34 '1*rring in t*0o7l'int t*ir osition 'n uti*s in t* 0o7'n4 'n t*ir rol* in r*g'r to t* issu* 'n isonourof t* 0*:u*2 is0losing 0ons*nt2 0onni1'n0* orn*glig*n0*.

$6. In #armeet Sin$h Paintal (sur')2 ' t9o"Jug* +*n0

i not 'gr** 9it t* st'n of t* '*ll'nt2 *7'si* on

t* '1*r7*nts 'n foun t't in t* 0o7l'int *tition t*r*

9*r* no s*0ifi0 '1*r7*nts 'n2 '00oringl42 is7iss* t*

'*'l fil* 34 t* '*ll'nt"Coror'tion t*r*in. T* Court

in 'r'gr's &B 'n &! of t* Gug7*nt r*rou0* t* 'rt

of t* 0o7l'int. 8* '1* 0'r*full4 *rus* t* s'i

'1*r7*nts in t* 0l'i7 *tition 'n 9* 'r* of t* oinion t't

t*r* 0'nnot 3* 'n4 s'o9 of ou3t t't t* 'ss*rtions 7'*

t*r*in i not 7**t t* r*:uir*7*nts of S*0tion && of t*

A0t.

$#. In A.*. Sin$hania (sur')2 'ft*r r*f*rring to t* r*1ious

Gug7*nts2 t* Court foun t't it 9's iffi0ult to inf*r t't

t*r* 9's 'n4 '1*r7*nt t't t* t9o '00us* *rsons 9o

' 0o7* to tis Court2 9*r* in 0'rg* 'n r*sonsi3l* for t*



23/30

23

0onu0t of t* 3usin*ss of t* Co7'n4 't t* ti7* t*

off*n0* 9's 0o77itt*. T* 'll*g'tion in t* 0o7l'ints in

su7 'n su3st'n0* 9's t't 3usin*ss 'n fin'n0i'l 'ff'irs of

t* Co7'n4 us* to 3* *0i*2 org'ni* 'n '7inist*r*

34 '00us* *rsons 'long 9it ot*r Dir*0tors.

$B. In Gunmala Sales Pvt. Ltd. (sur') t* Court 9's

0on0*rn* 9it Dir*0tors 9o issu* t* 0*:u*s. Tis

'utorit42 's 9* noti0*2 's to 3* 'osit*l4 un*rstoo. T*

t9o"Jug* +*n0 r*f*rr* to SMS Pharma I 'n ot*r *'rli*r

*0isions2 'n 0'7* to ol t't"

5%. 8*n ' *tition is fil* for :u'sing t*ro0*ss2 in ' gi1*n 0's*2 on 'n o1*r'll r*'ing of t*

0o7l'int2 t* Hig Court 7'4 fin t't t* 3'si0'1*r7*nt is suffi0i*nt2 t't it 7',*s out ' 0's*'g'inst t* Dir*0tor t't t*r* is noting to sugg*stt't t* su3str'tu7 of t* 'll*g'tion 'g'inst t*Dir*0tor is *stro4* r*n*ring t* 3'si0 '1*r7*ntinsuffi0i*nt 'n t't sin0* off*n0* is 7'* out'g'inst i72 is furt*r rol* 0'n 3* 3rougt out int* tri'l. In 'not*r 0's*2 t* Hig Court 7'4 :u's t* 0o7l'int *sit* t* 3'si0 '1*r7*nt. It

7'4 0o7* '0ross so7* uni7*'0'3l* *1i*n0* or'00*t'3l* 0ir0u7st'n0*s 9i0 7'4 in its oinionl*' to ' 0on0lusion t't t* Dir*0tor 0oul n*1*r'1* 3**n in 0'rg* of 'n r*sonsi3l* for t*0onu0t of t* 3usin*ss of t* 0o7'n4 't t*r*l*1'nt ti7* 'n t*r*for* 7',ing i7 st'n t*



24/30

24

tri'l 9oul 3* 'n '3us* of ro0*ss of 0ourt 's nooff*n0* is 7'* out 'g'inst i7.

5&. 8*n in 1i*9 of t* 3'si0 '1*r7*nt ro0*ss isissu* t* 0o7l'int 7ust ro0** 'g'inst t*Dir*0tors. +ut2 if 'n4 Dir*0tor 9'nts t* ro0*ss to3* :u's* 34 filing ' *tition un*r S*0tion !$ of t* Co* on t* groun t't onl4 ' 3'l '1*r7*nt is7'* in t* 0o7l'int 'n t't * is r*'ll4 not0on0*rn* 9it t* issu'n0* of t* 0*:u*2 * 7ustin or*r to *rsu'* t* Hig Court to :u's t*ro0*ss *it*r furnis so7* st*rling in0ontro1*rti3l*7't*ri'l or '00*t'3l* 0ir0u7st'n0*s tosu3st'nti't* is 0ont*ntion. H* 7ust 7',* out '0's* t't 7',ing i7 st'n t* tri'l 9oul 3* 'n'3us* of ro0*ss of 0ourt. H* 0'nnot g*t t*0o7l'int :u's* 7*r*l4 on t* groun t't ''rtfro7 t* 3'si0 '1*r7*nt no 'rti0ul'rs 'r* gi1*n int* 0o7l'int '3out is rol*2 3*0'us* orin'ril4 t*3'si0 '1*r7*nt 9oul 3* suffi0i*nt to s*n i7 totri'l 'n it 0oul 3* 'rgu* t't is furt*r rol*0oul 3* 3rougt out in t* tri'l. u'sing of '

0o7l'int is ' s*rious 7'tt*r. Co7l'int 0'nnot 3*:u's* for t* 's,ing. For :u'sing of ' 0o7l'intit 7ust 3* so9n t't no off*n0* is 7'* out 't 'll'g'inst t* Dir*0tor.

E7'sis suli*K

$!. Aft*r so st'ting2 t* Court ro0*** to su77'ris* its

0on0lusions2 'r*0i't* t* '1*r7*nts 7'* in t* 0o7l'int

*tition 'n oin* tus"

- P*rtin*ntl42 in t* 'li0'tion fil* 34 t*r*son*nts2 no 0l*'r 0's* 9's 7'* out t't 't t*7't*ri'l ti7*2 t* Dir*0tors 9*r* not in 0'rg* of 'n 9*r* not r*sonsi3l* for t* 0onu0t of t*



25/30

25

3usin*ss of t* Co7'n4 34 r*f*rring to orrou0ing 'n4 in0ontro1*rti3l* or uni7*'0'3l**1i*n0* 9i0 is 3*4on susi0ion or ou3t or 'n4 tot'll4 '00*t'3l* 0ir0u7st'n0*s. It is 7*r*l4 st't*t't Si'rt M*t' ' r*sign* fro7 t*ir*0torsi of t* Co7'n4 on 5%"?"$%&% 3ut noin0ontro1*rti3l* or uni7*'0'3l* *1i*n0* 9'srou0* 3*for* t* Hig Court 's 9's on* inAnita Malhotra 20 to so9 t't * '2 in f'0t2r*sign* long 3*for* t* 0*:u*s in :u*stion 9*r*issu*. Si7il'r is t* 0's* 9it 'n'i4' L'l M*t''n Anu M*t'. Noting 9's rou0* tosu3st'nti't* t* 0ont*ntion t't t*4 9*r* not in

0'rg* of 'n not r*sonsi3l* for t* 0onu0t of t*3usin*ss of t* Co7'n4 't t* r*l*1'nt ti7*. Int* 0ir0u7st'n0*s2 9* 'r* of t* oinion t't t*7'tt*r *s*r1*s to 3* r*7itt* to t* Hig Court forfr*s *'ring. Ho9*1*r2 9* 'r* in0lin* to 0onfir7t* or*r 'ss* 34 t* Hig Court :u'sing t*ro0*ss 's 'g'inst So3' M*t'. So3' M*t' isst't* to 3* 'n ol l'4 9o is o1*r B% 4*'rs of 'g*.Consi*ring tis f'0t 'n on 'n o1*r'll r*'ing of

t* 0o7l'int in t* *0uli'r f'0ts 'n0ir0u7st'n0*s of t* 0's*2 9* f**l t't 7',ing *rst'n t* tri'l 9oul 3* 'n '3us* of ro0*ss of 0ourt. It is o9*1*r2 n*0*ss'r4 for t* Hig Court to0onsi*r t* 0's*s of ot*r Dir*0tors in ligt of t**0isions 0onsi*r* 34 us 'n t* 0on0lusionsr'9n 34 us in tis Gug7*nt.

.

$?. 8* '1* r*f*rr* to t* 'for*s'i *0ision in *@t*nso2 's

9* 'r* of t* 0on1in0* oinion t't t* 'n'l4sis 7'* t*r*in

20 (2012) 1 SCC 520



26/30

26

9oul s:u'r*l4 'l4 to t* 0's* 't 'n 'n it s'll 3* 0l*'r

9*n 9* r*rou0* 0*rt'in 'ss'g*s fro7 t* 0o7l'int.

5%. Prior to t't2 9* 7'4 rofit'3l4 r*f*r to ' t9o"Jug*

+*n0 *0ision in 'amil Nadu Ne(s Print % Pa"ers Ltd. v.

). *aruna+ar and Others 1. In t* s'i 0's*2 t* Court 's

r*f*rr* to t* *0ision r*n*r* in S.M.S. Pharma I (sur')

'n2 t*r*'ft*r2 t',*n not* of t* '1*r7*nts 7'* in t*

0o7l'int. +* it not*2 in t* s'i 0's* it ' 3**n '1*rr* in

t* 0o7l'int *tition t't t* '00us* Nos. $ to ? 9*r*

Dir*0tors 'n 9*r* in '4 to '4 7'n'g*7*nt of t* '00us*

0o7'n4 'n in t't 0ont*@t t* Court 's oin* 's follo9s"

Uon *rus'l of t* 0o7l'int2 9* fin t't 'n'1*r7*nt 's 3**n 7'* to t* *ff*0t t'tA00us* Nos.5 to &% 9*r* in f'0t2 in"0'rg* of t*'4"to"'4 3usin*ss of A00us* No.&"0o7'n4.

5&. 8* '1* r*f*rr* to t*s* *0isions 's t*4 *@li0itl4

st't* t* *1*lo7*nt of l'9 'n 'lso l'4 o9n t* ut4 of t*

Hig Court 9il* *@*r0ising t* o9*r of :u'sing r*g'r

3*ing ' to t* '1*r7*nts 7'* in t* 0o7l'int *tition to

21 (2015) 8 SCALE 733



27/30

27

'ttr'0t t* 1i0'rious li'3ilit4 of t* *rsons r*sonsi3l* un*r

S*0tion && of t* A0t.

5$. No92 is t* ti7* to s0'n t* 0o7l'int. Mr. Di1'n2

l*'rn* s*nior 0ouns*l '*'ring for t* '*ll'nt"3'n,2 's

r'9n our 'tt*ntion to 'r'gr's $2 'n &% of t*

0o7l'int *tition. T*4 r*' 's follo9s"

$. I furt*r s'4 t't I ,no9 t* '00us* '3o1*

n'7*. T* '00us* No.& is ' Co7'n4 in0oror't* un*r t* Co7'ni*s A0t2 &?6#'1ing its r*gist*r* 'r*ss 's 7*ntion* in t*0'us* titl*. T* '00us* Nos.$ to B 'r* t*C'ir7'n2 M'n'ging Dir*0tor2 E@*0uti1* Dir*0tor'n 9ol* ti7* Dir*0tor 'n 'utori*sign'tori*s of '00us* No.& r*s*0ti1*l4. As su03*ing t* C'ir7'n2 M'n'ging Dir*0tor2E@*0uti1* Dir*0tor 'n 8ol* Ti7* Dir*0tor 9*r*

'n 'r* t* *rsons r*sonsi3l* 'n in 0'rg* of '4 to '4 3usin*ss of t* '00us* No.& 1i.8*n t* off*n0* 9's 0o77itt*. T* '00us*Nos.# 'n B 3*ing sign'tori*s of t* 0*:u* 'r*'9'r* of t* tr'ns'0tion 'n t*r*for* t*'00us* Nos.$ to B 'r* li'3l* to 3* ros*0ut* Gointl4 or s*1*r'll4 for '1ing 0ons*nt* 'n=or0onni1* in t* 0o77ission of r*s*nt offi0* int*ir 0''0it4 's t* C'ir7'n2 M'n'ging

Dir*0tor2 E@*0uti1* Dir*0tor2 8ol* Ti7* Dir*0tor'n 'utori* sign'tori*s of '00us* No.&2furt*r t* off*n0* is 'ttri3ut'3l* to '00us*Nos.$ to B on '00ount of t*ir n*gl*0t to *nsur*'n 7',* '*:u't* 'rr'ng*7*nts to Honour t*0*:u* issu* 34 '00us* No.& 'n furt*r on'00ount of t* n*gl*0t of '00us* Nos.& to B to



28/30

28

0o7l4 9it t* r*:uisition 7'* in t* D*7'nNoti0* issu* un*r t* ro1isions of S*0tion&5!(0) of t* N*goti'3l* Instru7*nts A0t 9itint* stiul't* *rio. T* '00us* 'r* t*r*for*li'3l* to 3* ro0***.

@@@@@ @@@@@

. I s'4 t't t* A00us* No. & trougA00us* Nos. $ 'n 5 'ro'0* t*Co7l'in'nt +'n, 't its +r'n0 situ't* 'tMu73'i for ' Sort T*r7 Lo'n f'0ilit4 for ' su7of Rs. $%% Cror* to 7**t t* *@*nitur* of Four

OR/ 1*ss*ls 3*ing 3uilt 't A+> Si4'r. Aft*r1*rif4ing t* o0u7*nts su37itt* t*Co7l'in'nt +'n, 1i* its s'n0tion l*tt*r 't*$!t Aril $%&$ s'n0tion* t* s'i F'0ilit4 fort* uros* 7*ntion* t*r*in. T* s'i t*r7s'n 0onitions 7*ntion* in t* s'n0tion l*tt*r't* $!t Aril $%&$ 9*r* ul4 '00*t* 34 t*A00us* No. & 34 signing t* s'7*. A00us* No.& 'lso 'gr** to '4 int*r*st 't t* n*goti't*

r't* 34 t* Co7l'in'nt 3'n,. H*r*to 'nn*@*t* 7'r,* 's E@i3it ;+< is ' 0o4 of t* s'is'n0tion l*tt*r 't* $!t Aril $%&$.

@@@@@ @@@@@

&%. I s'4 t't t* '00us* Nos.& to B 9*r*'9'r* t't t* 'for*s'i 0*:u* 9oul 3*isonour* for 3*ing A00ount +lo0,* 'n 'llt* '00us*2 in '0ti1* 0onni1'n0* 7is0i*1ousl4

'n int*ntion'll4 issu* t* 'for*s'i 0*:u*s inf'1our of t* 0o7l'in'nt +'n,.

55. T* 'for*s'i '1*r7*nts2 's 9* fin2 0l*'rl4 7**t t*

r*:uisit* t*st. It is 't to 7*ntion *r* t't t*r* 'r* s*1*n



29/30

29

'00us* *rsons. A00us* No.& is t* Co7'n42 '00us*

Nos.$ 'n 5 'r* t* C'ir7'n 'n M'n'ging Dir*0tor

r*s*0ti1*l4 'n '00us* Nos.# 'n B 9*r* sign'tor4 to t*

0*:u*s. As f'r 's t* '00us* Nos. 'n 6 9*r* 0on0*rn*2

t*4 9*r* 9ol*"ti7* Dir*0tors 'n t* 'ss*rtion is t't t*4

9*r* in 0'rg* of '4 to '4 3usin*ss of t* Co7'n4 'n 'll

of t*7 ' 9it '0ti1* 0onni1'n0*2 7is0i*1ousl4 'n

int*ntion'll4 issu* t* 0*:u*s in :u*stion.

5. Tus2 0onsi*ring t* tot'lit4 of 'ss*rtions 7'* in t*

0o7l'int 'n 'lso t',ing not* of t* '1*r7*nts ut fort

r*l'ting to t* r*son*nt Nos. $ 'n 5 *r*in t't t*4 'r*

9ol*"ti7* Dir*0tor 'n E@*0uti1* Dir*0tor 'n t*4 9*r* in

0'rg* of '4 to '4 'ff'irs of t* Co7'n42 9* 'r* of t*

0onsi*r* oinion t't t* Hig Court 's f'll*n into gr'1*

*rror 34 0o7ing to t* 0on0lusion t't t*r* 'r* no s*0ifi0

'1*r7*nts in t* 0o7l'int for issu'n0* of su77ons 'g'inst

t* s'i '00us* *rsons. 8* un*sit'tingl4 ol so 's t*

'ss*1*r'tions 7'* in t* 0o7l'int 7**t t* t*st l'i o9n

in Gunmala Sales Pvt. Ltd. (sur').



30/30

30

56. R*sult'ntl42 t* '*'ls 'r* 'llo9* 'n t* or*r

'ss* 34 t* Hig Court is s*t 'si*. T* l*'rn* M'gistr't*

is ir*0t* to ro0** 9it t* 0o7l'int 0's*s in '00or'n0*

9it l'9.

--....................J.Di', Misr'K

--....................J.Si1' irti SingK

N*9 D*liAril %#2 $%.


Documents

Standard Chartered Bank vs State of Maharashtra and Ors