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TMI Blog2005 (1) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... is located at Mumbai. The accused company is conducting business in dairy and dairy products and accused 3 - 10 are the Directors of the 1st accused company. Accused 11 and 12 - petitioners herein, are the employees of the 1st accused company. It is stated that accused 2 to 10 were in-charge of the day-to-day affairs of the company at the time of commission of the alleged offence. It is further alleged that all the accused jointly conspired and connived in committing the offence as contemplated under the Negotiable instruments Act. It is stated that on behalf of the 1st accused company, the other accused availed the facility of discounting the Bill of Exchange against the cheques paid by their suppliers in the course of business, from the complainant. The complainant - respondent had discounted two bills of exchange raised on the accused company - one No.112 dated 26.9.1996 for ₹ 2,50,000/- by C S Printers, Bombay and another No.117 dated 12.10.1996 for ₹ 51,42,500/- by C S Printers, Bombay. The accused, in repayment of the discounted bills on the above account, is said to have issued two cheques dated 23.11.1996 for ₹ 25,74,000/- and ₹ 26,92,800/- drawn on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Magistrate that they have signed the two cheques in question as signatories. Accused 10 who was a nominee director of the company, was discharged by this Court. It is also stated in the application that after issuing of non-bailable warrant against accused 1 to 9, there is no possibility of securing them and has ordered that the case against accused 1 to 9 be split up and against accused 11 and 12, the case be numbered separately. It is submitted that it is settled law that to hold accused 11 and 12 guilty, there has to be a finding of guilt against accused 1 to 9 and no finding of guilt against the company could be given since the case against them has been split up. As such, in the absence of accused 1 to 9, accused 11 and 12 cannot be held guilty and in the application filed by the petitioners, if the case against the 1st accused is dismissed, that amounts to acquittal of the 1st accused in which case, here can be no finding of guilt against the 1st accused and consequently, the case against accused 11 and 12 has to be dismissed and the petitioners be acquitted. 6. It appears, by order dated 13.3.2000, learned Magistrate is said to have passed an order regarding split ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners before the Magistrate under Section 255, Cr.PC is not maintainable and that the learned Magistrate can only acquit the accused if he finds that the accused is not guilty of the alleged offence after looking into the evidence placed on record by the parties and not otherwise and as such no application under Section 255, Cr.PC seeking for discharge is maintainable. Further, it is stated that both the Magistrate and the learned Sessions Judge in revision, have not come to a definite conclusion on the allegation made in the complaint against the petitioners. Of course they have been given liberty to contend all contentions at the time of argument on merits. It is contended that petitioners are the authorised signatories on behalf of the 1st accused company and they have signed the cheques on behalf of the company and as such, the petitioners and other accused have willfully and intentionally issued two cheques with a malafide intention of deceiving the complainant. 9. It is further submitted that the case against the accused company is not split up from the main case. Since accused 1 is a juristic person, the non-bailable warrant issued cannot be executed and it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also the officials of the company. It is their contention that when the company - 1st accused is being exonerated or split up and the case against the company is not proceeded against, the petitioners who are not responsible for the conduct of the business of the company also ought to have been acquitted and the application filed by them before the Magistrate under Section 255, Cr.P.C ought to have been allowed, and the Presiding Officer who proceeded further against the petitioners in the trial Court at the stage when the case was split up against accused 1 to 9, ought not to have done so as against accused 11 and 12 / petitioners who are signatories to the cheque and they cannot be held liable. 11. It is well settled by the decision of the Apex Court that if the company is under winding up proceedings it need not necessarily be made a party and the proceedings can be continued against other accused persons who are responsible for the conduct of the business of the company. In the decision in Anil Hada's case - 2000CriLJ373, it is held thus: When a company which committed the offence under Section 138 eludes from being prosecuted thereof; on account of complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e against other directors when it cannot be proceeded against the company against which winding up proceedings had been initiated. 12. Further, as provided in the exception to the proviso to Section 141 of the Negotiable instruments Act nothing contained in the sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent -the commission of such offence. As per this proviso, it is for accused 11 and 12 to make out a case to the effect that the dishonour of cheque was without there being a role by them and also without their involvement and that they are not liable to be held guilty of the offence. 13. Apart from that, keeping in view that the proceedings under Section 138 of the Negotiable Instruments Act being quasi-criminal in nature and also in the nature of coercive measure for breach of contract, instead of splitting up the case as against accused 1 to 9, the trial Court could have directed the complainant to take all steps to proceed against them in accordance with the procedure provided as well under the Civil Procedure Code to cause service of notice by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the case is heavy. What is noticed in this case is that, on the basis that summons and warrant issued were not served on some of the accused, i.e., A2 to 9 the case as against accused 1 to 9 was split up and the case has been proceeded against accused 11 and 12 only. Of course accused 10 is said to be a nominee director and this Court keeping in view the proviso to Section 141 that a nominee director need not be made a necessary party to prosecute, has given up the proceedings against accused 10. In so far as the case against the other accused are concerned, since steps have to be taken it is for the complainant to pursue the trial court once again to reopen the case against accused 1 to 9 and take all steps to proceed against other accused so that ultimately responsibility can be fixed by the Court after hearing who are all responsible for the conduct of the business of the 1st accused company and at whose instance such default/dishonour of cheque has taken place and also who is liable for payment. 15. In view of the discussion made above, the order of splitting of the case against accused 1 to 9 is liable to be quashed and the case has to be re-opened against accused 1 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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