NI Act

A private limited non-banking finance company gave some money to another non-banking finance company in 1996. The giver company is not registered with the RBI as a NBFC and faces prosecution for carrying on the business of giving and taking loans. Meanwhile two directors resigned in 1997 and notice of resignation was sent to the company as well as to the ROC. When cheques of loanee company bounced, the giver company filed a complaint with the magistrate including only the company and the managing director as respondents. The names of remaining 3 directors were not included in the complaint. When the MD died, the complainant filed an application before the magistrate pleading that one of the directors should be included as an accused and summons issued to him. The Magistrate rejected the application say that the director was not an accused. Three years after this application, complainant again filed an application this time pleading that the same person should be asked to "REPRESENT" the company. While passing orders, the magistrate observed that though his predecessor had passed the above order and also that the resignation form the directorship had been accepted and is on record of company and ROC, since he was a director on the DATE OF TRANSACTION his name be included as an ACCUSED. Instead of REPRESENT the company which he cannot obviously do without authorisation from the company, the magistrate has included him as an ACCUSED. Does the magistrate have inherent power to revise his order after a period of three years and can he make him an accused? How the term "DATE OF TRANSACTION" comes into the picture when it is nowhere mentioned in the NI Act? Is there any judgement that talks of DATE OF TRANSACTION. In this way, all the directors in 1996 who duly resigned and whose resignations were accepted will be hauled up.