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2012 (8) TMI 1192 - MADRAS HIGH COURTOffence by Companies - Public charitable - "A Person" Or "A Company" as referred to in Section 141 of the Negotiable Instruments Act (Act) - Trustees of the first accused Trust in-charge of the day-to-day affairs of the first accused Trust - Whether a Public Charitable Trust has been recognised as a juristic person for the purpose of Act - HELD THAT:- Applying the law laid down by the Constitution Bench of the Hon'ble Supreme Court in Punjab Land Development and Reclamation Corporation Ltd., Chandigarh Vs. Presiding Officer [1990 (5) TMI 229 - SUPREME COURT], as I have already concluded, considering the intention of the Legislature while bringing in Chapter- XVII of the Negotiable Instruments Act and the fact that a Trust having two or more trustees will squarely fall within the ambit of 'association of individuals' which in turn will fall within the meaning of the term 'company', I am of the view that a Trust having a single trustee should also be brought within the definition of the term 'company' and thus the expression 'Trust' should be read into the Explanation 'a' to Section 141 of the Negotiable Instruments Act. If this interpretation is not given, certainly Sections 138 and 141 of the Act will not have force and life, so far as they relate to a Trust having a single Trustee. Further, if one holds that a Trust having two or more trustees is a 'company' falling within the sweep of Sections 138 and 141 of the Act, at the same time a Trust having a single trustee will not fall within the ambit of Sections 141 and 138 of the Act, the result, as I have already concluded is only an absurdity. In order to avoid the said absurdity and in order to give force and life to the provisions of Sections 138 and 141 of the Act, I hold that the expression 'company' as explained in Section 141 of the Act takes into its ambit a Trust having a single trustee also. In view of this interpretation, I firmly hold, that a Trust, having either a single trustee or two or more trustees, is a 'company' in terms of Section 141 of the Negotiable Instruments Act. My conclusions are summed up as follows:- (i) A Trust, either private or public / charitable or otherwise, is a juristic person who is liable for punishment for the offence punishable u/s 138 of the Negotiable Instruments Act. (ii) A Trust, either private or public / charitable or otherwise, having either a single trustee or two or more trustees, is a company in terms of Section 141 of the Negotiable Instruments Act. (iii) For the offence u/s 138 of The Negotiable Instruments Act, committed by the Trust, every trustee, who was in-charge of the day-to-day affairs of the Trust shall also be liable for punishment besides the Trust. A perusal of the complaint would go to show that there are sufficient averments to the effect that these petitioners being the trustees of the Trust (Company) were in-charge of running of the Trust along with the second accused and they all entered into a Memorandum of Understanding on 06.10.2008, with the respondent in which they agreed to honour the cheques in question. The Memorandum of Understanding dated 06.10.2008, filed before the lower Court is found in page Nos. 69 to 88 of the typed set of papers filed by the petitioners. A reading of the above Memorandum of Understanding would go to show that the issuance of the said cheques in question on behalf of the first accused has been admitted by the petitioners and that they have assured that the cheques will be honoured on presentation. The above averments in the complaint together with the Memorandum of Understanding would go to prima facie show that they were in-charge of the day-to-day affairs of the Trust (Company) and, therefore, the prosecution is maintainable as against them also. At this juncture, I wish to add that it is not my conclusive finding that these petitioners 2 to 8 are liable for punishment u/s 138 of the Negotiable Instruments Act by applying vicarious liability as envisaged in Section 141 of the Negotiable Instruments Act. I only say that as of now, there are prima facie materials to make out a prima facie case so as to maintain the prosecution. It is for the Trial Court to decide on evidence as to whether these petitioners 2 to 8 were really in-charge of the day-to-day affairs of the Trust (company) and so whether they are liable for punishment vicariously for the offences committed by the first accused Trust. Thus, I hold that these petitions deserve only to be dismissed and accordingly, they are dismissed. Consequently, the connected miscellaneous petitions are closed.
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