2022 (7) TMI 1112 - HC - Indian Laws

Dishonor of Cheque - Insufficient Balance - offences by companies - Vicaricious liability - offence against the petitioner in an individual capacity - Section 141 of Negotiable Instrument Act, 1881 - HELD THAT - The provisions of Section 141 of Negotiable Instrument Act, 1881 are concerned with the offences by the company. It makes the other person vicariously liable for commission of an offence on the part of the company. The vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Negotiable Instrument Act stands satisfied. 'Company' means anybody corporate and includes a firm or other association of individuals. It is also clear as crystal that if a person who commits an offence under Section 138 of the Negotiable Instrument Act is a company, the company as well as other persons in charge of, are responsible to the company for the conduct of the business of the company at the time of commission of the offence shall be deemed to be guilty of the offence - In the case of ANEETA HADA VERSUS GODFATHER TRAVELS TOURS (P.) LTD. 2012 (5) TMI 83 - SUPREME COURT , it has been held that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. In the present complaint, there are averments that the petitioner/accused gave an account payee cheque bearing cheque No.909210 of Account No.34170258215 for Rs.11 lacs to the complainant on 15/09/2019. In this case there are no averments in the complaint that the petitioner-accused signed the cheque in the capacity of the director or the person in charge of the affairs of the firm or that the transaction was with the firm. The complaint has been filed without any reference to the firm. The factum that the applicant-accused signed the cheque in the capacity of the director or the person in charge of the affairs of the firm or that the transaction was with the firm can be determined during the stage of trial otherwise also invoking the powers under the provisions of Section 319 of Cr.P.C. the Court can array the firm as an accused in the course of trial. It is well settled that while exercising Inherent jurisdiction u/s 482 or Revision jurisdiction u/s 379 of The Code of Criminal Procedure where complaint is sought to be quashed, it is not proper for the High Court to consider the defense of the accused or embark upon an inquiry in respect of merits of the accusation. The present petition is hereby dismissed.

Summary

Issues:
Quashment of cognizance order under Section 482 of Cr.P.C. in a case related to Section 138 of Negotiable Instrument Act, 1981.

Analysis:
1. The petitioner sought quashment of the cognizance order dated 14/11/2019 and further proceedings before the Judicial Magistrate, First Class, Gwalior, in a case arising from a private complaint under Section 138 of the Negotiable Instrument Act, 1981.
2. The complainant alleged that the petitioner took a loan and issued a cheque that bounced due to insufficient funds, leading to the complaint under Section 138.
3. The petitioner argued that the case was filed against them individually, not as part of a company, thus not fulfilling the requirements of Section 141 of the Act.
4. Citing the case of Anita Hada Vs. M/s. Godfather Travels & Tours Pvt. Ltd., the petitioner contended that a cheque issued by a firm does not implicate an individual unless specific conditions are met.
5. The court examined Section 141 of the Act, which holds companies and individuals in charge of company affairs liable for offences committed by the company.
6. Referring to the Anita Hada case, the court emphasized that vicarious liability applies only when specific conditions are met, which were not evident in the present case.
7. The court noted that the complaint did not mention the firm or the capacity in which the petitioner signed the cheque, leaving room for further investigation during trial or under Section 319 of Cr.P.C.
8. Citing the Delhi High Court case of Sarabjit Singh Vs. State of NCT of Delhi & Ors., the court highlighted the possibility of adding the firm as an accused under Section 319 of Cr.P.C. during trial.
9. The court reiterated that while considering quashing a complaint under Section 482 or revision under Section 379 of Cr.P.C., it should not delve into the merits of the accusation but focus on legal aspects.
10. Ultimately, the court declined to quash the cognizance order and ongoing proceedings, emphasizing the need for a thorough trial to determine the involvement of the firm in the alleged offence.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the court's reasoning behind the decision not to quash the cognizance order and further proceedings in the case.