2014 (3) TMI 860 - SC - Indian Laws

Necessity of impleadment person in charge of company dishonor of cheque - complaint filed under Sections 138 and 141 of the Negotiable Instruments Act, 1881 - Substance of accusation - There is no allegation worth the name against any of the appellants in either of the complaints - The appellants were not even made parties in the first complaint and therefore there is no question of any allegations being made against them in that complaint - Held that - Judgment in A.K.Singhania vs. Gujarat State Fertilizer Company Ltd. 2013 (10) TMI 895 - SUPREME COURT followed - It is necessary for a complainant to state in the complaint that the person accused was in charge of and responsible for the conduct of the business of the company - Although, no particular form for making such an allegation is prescribed and it may not be necessary to reproduce the language of Section 138 of the Negotiable Instruments Act, 1881, but a reading of the complaint should show that the substance of the accusation discloses that the accused person was in charge of and responsible for the conduct of the business of the company at the relevant time - From the averment made in the complaint, it can be said that there is no specific or even a general allegation made against the appellants Decided in favour of appellants.

Summary

Issues: Alleged failure to specifically state the accused persons' responsibility for the conduct of the business in a complaint under Sections 138 and 141 of the Negotiable Instruments Act, 1881.

Analysis:
1. The complaint filed by Pradip Sarkar alleged that Heritage Herbs had collected money from investors and issued post-dated cheques to him, which were dishonored by the bank, leading to legal proceedings under Sections 138 and 141 of the Negotiable Instruments Act, 1881.
2. After the death of one accused, Raj Kumar Chamaria, Pradip Sarkar sought to implead other accused persons, including the appellants, who were allegedly in charge of the company's business. The Magistrate allowed the application, and summons were issued to the appellants.
3. The appellants challenged their impleadment in the Calcutta High Court, contending that no specific allegations were made against them in the original or amended complaints filed by Pradip Sarkar.
4. The Supreme Court reviewed the complaints and noted that there were no substantial allegations against the appellants regarding their responsibility for the conduct of the company's business, as required under Section 141 of the Negotiable Instruments Act, 1881.
5. Referring to established legal principles, the Court emphasized the necessity for a complainant to clearly state in the complaint that the accused person was in charge of and responsible for the company's business conduct. The Court found the complaints lacking in specific or general allegations against the appellants.
6. Consequently, the Supreme Court held that the complaint against the appellants should be dismissed, disagreeing with the High Court's decision. The appeals were allowed, and the High Court's order was set aside.