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2024 (5) TMI 793 - HC - Indian LawsDishonour of Cheque - vicarious liability - demand notice not addressed to the petitioners in their individual capacity - Proviso (b) to Section 138 of the NI Act - proceedings can be initiated against all the Trustees of a Trust or not - Section 141 of the NI Act - HELD THAT - Proviso (b) to Section 138 of the NI Act read with Section 142 of the NI Act shows that for the maintainability of a complaint for an offence under Section 138 of the NI Act, the payee or the holder in due course of the cheque, as the case may be, should make a demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. The notice, therefore, is to be given to the drawer of the cheque - In the present cases, the cheques are drawn by the accused no. 2 Trust. It is, therefore, the drawer of the cheques . The notice has, admittedly, been issued to the drawer , that is, the accused no. 2- Trust. The same has been addressed to be served on the drawer/Trust through its Trustees. Presently, it is not disputed by the petitioners that they are the Trustees of the accused No. 2-Trust. Section 141 of the NI Act states that where the offence under Section 138 of the NI Act is committed by a company, every person who, at the time the offence was committed, was in-charge and was responsible to the company for the conduct of the business of the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly - the only plea of the petitioners is the lack of notice under Proviso (b) to Section 138 of the NI Act and the purported lack of pleadings in the Complaint Cases against the petitioners herein in their individual capacity. In Kirshna Texport and Capital Markets Ltd. 2015 (6) TMI 344 - SUPREME COURT the Supreme Court, considering the provision of Proviso (b), Section 141 and Section 7 of the NI Act has held ' Section 138 of the Act does not admit of any necessity or scope for reading into it the requirement that the Directors of the Company in question must also be issued individual notices under Section 138 of the Act. Such Directors who are in charge of affairs of the Company and responsible for the affairs of the Company would be aware of the receipt of notice by the Company under Section 138. Therefore, neither on literal construction nor on the touchstone of purposive construction such requirement could or ought to be read into Section 138 of the Act.' The above judgment would squarely apply to the facts of the present cases. There is no requirement for separate notice(s) to be issued to each of the Trustees of the accused no. 2-Trust to make them vicariously liable and to be proceeded against in terms of Section 138 of the NI Act read with Section 141 of the NI Act. The notice having been served on the Trust through its Trustees, all the Trustees are deemed to have been duly served with the legal/demand notice(s), thereby meeting the requirement of Proviso (b) to Section 138 of the NI Act. The averments are sufficient for the purpose of attracting Section 141 of the NI Act against the petitioners. Even otherwise, in their capacity as Trustees of the accused no. 2, the petitioners are officers in charge of the Trust. The petitioners shall have to lead their defence under Section 141 of the NI Act, in case they are to escape their liability as the Trustees of the accused no. 2- Trust, who is the drawer of the cheque(s) in question. Such defence is not to be considered by this Court or the learned Trial Court at this stage. There are no merits in the present petitions. The same are, accordingly, dismissed.
Issues Involved:
1. Maintainability of complaint u/s 138 of the NI Act without individual notice to petitioners. 2. Sufficiency of pleadings in complaint cases against petitioners. Summary: Issue 1: Maintainability of Complaint u/s 138 of the NI Act Without Individual Notice to Petitioners The petitions challenge the order dated 20.12.2019 by the Trial Court summoning the petitioners as additional accused in Complaint Cases filed u/s 138 of the NI Act. The petitioners argue that for a complaint to be maintainable u/s 138 read with Section 142 of the NI Act, service of notice on the accused is mandatory. They contend that the demand notice dated 28.01.2019 was not addressed to them in their individual capacity, thus rendering the complaints against them unsustainable. They rely on various judgments to support their claim. The respondent(s) counter that the Trust (accused no. 2) was served the legal notice through its Trustees, and the petitioners, being Trustees, were aware of the notice. They argue that the notice addressed to the Trust suffices for the Trustees as well, citing the Supreme Court judgment in *Kirshna Texport & Capital Markets Ltd. v. Ila A. Agrawal & Ors.* (2015) 8 SCC 28. The court agreed with the respondent(s), stating that Section 138 requires notice to be sent to the 'drawer' of the cheque, which was the Trust in this case. The Trustees, being in charge of the Trust, are deemed to have been served with the notice, thus fulfilling the requirement of Proviso (b) to Section 138 of the NI Act. Issue 2: Sufficiency of Pleadings in Complaint Cases Against Petitioners The petitioners also argue that merely amending the complaints to include them as accused does not satisfy the requirements of Section 141 of the NI Act. The court finds no merit in this argument, noting that the amended complaints contain sufficient averments to attract Section 141 against the petitioners. The complaints allege that the petitioners, as Trustees, were involved in the transactions and responsible for the conduct of the business of the Trust. The court emphasizes that the petitioners must lead their defense under Section 141 during the trial, and such defense cannot be considered at this stage. Conclusion: The court dismisses the petitions, finding no merit in the arguments presented by the petitioners. It clarifies that the court has not expressed any opinion on the merits of the Complaint Cases, and the observations made will not prejudice the petitioners in their defense. The pending applications are also disposed of as infructuous.
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