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TMI Blog2010 (7) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... minal case against him stands quashed, but both the aforesaid criminal revisions so far as the petitioner no. 2 is concerned stands dismissed for the reasons stated hereinabove. - C.R.R. Nos. 3197 of 2005 and 20 of 2006 with CRAN Nos. 16 and 17 of 2010 - - - Dated:- 23-7-2010 - Ashim Kumar Roy, J. Shri Joymalya Bagchi, M.S. Yadav, for the Petitioner. Shri Swapan Kumar Mullick, for the Respondent. JUDGMENT Both the criminal revisions, C.R.R. No. 3197 of 2005 as well as C.R.R. No. 20 of 2006 are taken up for hearing together as a common question of law arises in both the said criminal revisions for decision. 2. Invoking Section 482 of the Code of Criminal Procedure, while in C.R.R. No. 3197 of 2005 the petitioners have approached this Court for quashing of the Complaint Case No. C-773 of 2004, similarly in C.R.R. No. 20 of 2006 they have approached for quashing of the Complaint Case No. C-649 of 2004. Both the aforesaid complaint cases are pending before the learned Additional Chief Judicial Magistrate, Barrackpore. While the first impugned complaint relates to the offences punishable under Section 63 of the Standards of Weights and Measures Act, 1976 and under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Oil Corporation Limited. (g) It appears from the allegations made in the complaint that offence has been committed by the M/s. Freedom Services, the distributorship concern. (h) There was no averment in the petition of complaint that the petitioners were in-charge and responsible for running, the day to day business of the company. (i) The learned Magistrate most arbitrarily and mechanically issued the process and set the criminal law into motion. (j) There is no effectual foundation that the accused company Indian Oil Corporation Limited has actually made, manufactured, packed and sealed or caused to be packed or distributed, delivered or offered, exposed for sale the seized articles. (k) The proceeding has been launched out of utter mala fide. 4. The learned Counsel appearing for the petitioners in support of his contention relied on an unreported decision of this Hon ble High Court relating to C.R.R. No. 2528 of 2005 in the case of M.S. Ramchandran Anr. v. Sri Sandip Mehta Anr. He has also relied on the following decisions, viz., (i) S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla Anr., reported in 2005 SCC (Cri) 1975, (ii) K.K. Ahuja v. V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied. (b) The answer to the question posed in sub-part (b) has to be in the negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases. (c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 956 with the definitions in clauses (24), (26), (30), (31), (45) of Section 2 of that Act would show that the following persons are considered to be the persons who are responsible to the company for the conduct of the business of the company : (a) the managing director/s; (b) the whole-time director/s; (c) the manager; (d) the secretary; (e) any person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act; (f) any person charged by the Board with the responsibility of complying with that provision (and who has given his consent in that behalf to the Board); and (g) where any company does not have any of the officers specified in clauses (a) to (c), any director or directors who may be specified by the Board in this behalf or where no director is so specified, all the directors. Section 141 uses the words was in charge of, and was responsible to the company for the conduct of the business of the company . It is evident that a person who can be made vicariously liable under sub-section (1) of Section 141 is a person who is responsible to the company for the conduct of the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the day to day management of the company or by stating that he was in charge of, and was responsible to the company for the conduct of the business of the company , he cannot be made vicariously liable under section 141(1) of the Act. (para 17) It should, however, be kept in view that even an officer who was not in charge of and was responsible to the company for the conduct of the business of the company can be made liable under sub-section (2) of Section 141. For making a person liable under Section 141(2), the mechanical repetition of the requirements under Section 141(1) will be of no assistance, but there should be necessary averments in the complaint as to how and in what manner the accused was guilty of consent and connivance or negligence and therefore, responsible under sub-section (2) of section 141 of the Act. (para 18) Another aspect that requires to be noticed is that only a Director, Manager, Secretary or other officer can be made liable under sub-section (2) of Section 141. But under sub-section (1) of section 141, it is theoretically possible to make even a person who is not a director or officer, liable, as for example, a person falling under clauses (e) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r officers of a company can be made liable only under sub-section (2) of Section 141, be averring in the complainant their position and duties in the company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence. (para 20) In this connection this Court feels that it would be relevant also to refer another decision of the Hon ble Supreme Court in the case of Municipal Corporation of Delhi v. Ram Kishan Rohatgi Ors., reported in 1983 SCC (Cri) 115, wherein the Apex Court held as follows : Before going to the complainant, we might state that it is common ground that the complaint clearly contains the allegations regarding the visit of the Inspector to the shop of respondent No. 6 (Madan Lal) and that the sample taken by him, which was sent to the Public Analyst, was manufactured by Upper Ganges Sugar Mills, Darayaganj, Delhi, having its registered office at Calcutta and that the Public Analyst found the samples to be adulterated. There is no dispute regarding these facts. The only point on which the controversy centers is as to whether or not on the allegations, the Manager as also the other respondents 1 to 5 committed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the argument of the High Court that no case against the Directors (accused Nos. 4 to 7) has been made out ex facie on the allegations made in the complaint and the proceedings against them were rightly quashed. (Para 15) We, however, do not agree that even accused No. 3, respondent No. 1, who is Manager of the Company and therefore directly in charge of its affairs, could fall in the same category as the Directors. Hence, we wrould set aside that part of the judgement of the High Court which quashes the proceedings against the Manager, respondent No. 1 (Ram Kishan Rohtagi). (Para 16) 6. So far as the grounds on which the petitioners sought for quashing of the case, viz., the petitioner No. 2 being the General Manager was only involved in dealing with policy matters and no way involved in running the day to day affairs of the company and it is the distributor through whom the retail sales are affected are responsible for such violation over whom the petitioner had no control are pure question of facts are essentially their defence and as such the same cannot be taken into consideration to decide the question whether on the basis of the same the complaint can be quashed or no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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