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TMI Blog2013 (7) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... held responsible for the bouncing back of the cheques said to have been issued by the second accused on behalf of other accused persons including the petitioners herein and they are also not liable to be prosecuted under Sections 138, 141 and 142 of Negotiable Instruments Act, 1881 (as amended by Act 2005). 2.2. The respondent Visalatchi Enterprises, a partnership firm, seems to have filed three private complaints dated 30.08.2007, before the learned Judicial Magistrate No.II, Madurai, under Sections 190(1)(A) and 200 Cr.P.C., as against seven accused persons, including the petitioners herein, to deal with them in accordance with law, as envisaged under Sections 138, 141 and 142 of Negotiable Instruments Act, 1881 (Amended Act, 2005) and the same were taken on file in S.T.C.Nos.1290, 1292 and 1293 of 2007. 2.3. As per the complaints, the second accused P.Sivaraman is the Managing Director of the first accused Company. The accused 3 to 7 (including the petitioners herein) are the Directors. 2.4. The complainant has been engaging in the business of sale of consumer goods and is doing distribution of Samsung Electronic consumer durables. During the month of March and April 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complainant had intimated the same to the accused. Whileso, the second accused, on behalf of other accused, had informed the complainant that due to some unexpected financial crisis, those cheques could not be honoured and he had also requested the complainant to re-present them during first week of July, 2007 and it was also promised that this time, all the cheques would be honoured. 2.8. As assured by the second accused, on behalf of the other accused, the complainant had re-presented the cheques on 12.07.2007 before their banker for encashment. Even this time also all the cheques were returned with the same endorsement 'exceeds arrangement' on 13.07.2007 and the same was also intimated to the complainant by their banker on 14.07.2007. 2.9. The attitude of the accused would go to show that the cheques were issued with an intention of cheating the complainant, knowing fully well that they would not be honoured, which is not only punishable under the provisions of the Negotiable Instruments Act, 1881 and also punishable under Sections 406, 417 and 420 I.P.C., 2.10. For the reasons stated above, the complainant has sought the relief of punishing all the accused per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent/complainant. 7. In order to substantiate his contention, Mr.S.Subbiah, during the course of his arguments, has produced the certified copies of Form No.32 pertaining to the resignation of the petitioners from the office of the directorship of the first accused Company. 8. On a careful perusal of the certified copies of Form No.32 maintained by the Registrar of Companies, Tamil Nadu, it is explicited that the petitioners had resigned from their respective offices of the directorships of the first accused company on 03.01.2007, 15.11.2003, 31.10.1999 and 31.12.2003 respectively. 9. The certified copies of Form No.32, issued by the Office of the Registrar of Companies, Tamil Nadu, are public documents and these documents would go to disclose the fact that at the crucial time i.e., at the time of the alleged transaction said to have been taken place between the second accused, on behalf of the first accused Company and the respondent Company and also at the time of issuance of the alleged cheques on various dates viz., 22.05.2007, 23.05.2007, 24.05.2007 and 30.05.2007 respectively, the petitioners were not stick on to the office of the directorship of the first accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) to Section 141 enacts that: (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was incharge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punishable accordingly. 16. As it reveals from sub-section (1) to Section 141 of the Negotiable Instruments Act, 1881, the phraseology 'every person incharge' includes and connotes the meaning that every person, in connection with the company, shall not fall within the ambit of the provision. It is only those persons, who were in charge of and responsible for the conduct of the business of the company at the time of commission of an offence, who will be liable for criminal action. The word 'person' employed in section 141 means that every person, who was in charge of and was responsible for the conduct of the business of the company, shall be deemed to be guilty, along with the company. 17. In the instant case on hand, as rightly argued by Mr.S.Subbiah, learned counsel appearing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 those 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. 22. In support of his contention, Mr.S.Subbiah, learned counsel appearing for the petitioners has also placed reliance upon the following decisions: i. K.K.Ahuja vs. V.K.Vora and another, reported in 2009(5) CTC 81; ii. Ronaldo Colaco vs. M/s.Nelsun Paper Mills Limited, reported in 2009-1- L.W.(Crl.) 175; and iii. Anita Malhotra vs. Apparel Export Promotion Council and another, reported in (2012) 1 SCC 520. 23. In K.K.Ahuja's case (cited supra), R.V.Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Director, Manager, Secretary or other officer of the Company with whose consent and connivance, the offence under Section 138 has been committed; and (iii)any Director, Manager, Secretary or other Officer of the Company whose negligence resulted in the offence under Section 138 of the Act, being committed by the Company. While liability of persons in the first category arises under sub-section (1) of Section 141, the liability of persons mentioned in categories (ii) and (iii) arises under sub-section (2). The scheme of the Act, therefore is that a person who is responsible to the Company for the conduct of the business of the Company and who is in charge of business of the Company is vicariously liable by reason only of his fulfilling the requirements of sub-section (1). But, if the person responsible to the Company for the conduct of business of the Company, was not in charge of the conduct of the business of the Company, then he can be made liable only if the offence was committed with his consent or connivance or as a result of his negligence. 25. In Ronaldo Colaco's case, (cited supra), the learned single Judge of this Court has held that: Petitioner was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first accused Company and the third to seventh accused are the directors of the first accused company and that they are the only persons known to the complainant, who are in-charge of day-to-day management of the first accused company and actually involved in the conduct of the business of the first accused company at the time when the offence was committed and therefore they are liable to be prosecuted along with the first accused company. 29. In support of his contention, he has placed reliance upon the following decisions: i. Rajkumar Menon and another v. M/s.Upasana Finance Limited, Chennai, reported in (2004) MLJ (Crl.) 315; ii. Malwa Cotton and Spinning Mills Ltd., v. Virsa Singh Sidhu and Others, reported in (2008) 3 MLJ (Crl) 1084 (SC); iii. D.Sendilkumar v. M.Sadasivam, reported in CDJ 2008 MHC 1714; and iv. Abdul Salam and another v. Taj Trading Corporation, reported in (2010) 1 MLJ (Crl) 1084. 30. In Rajkumar Menon's case (cited supra), a plea was taken by the petitioners therein that they were ceased to be the directors of the company on whose behalf the cheque was signed, on the date of the presentation of the cheque, on the basis of an unmarked docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant case on hand, as it has been stated herein before, the documents viz., Form No.32 produced by the learned counsel appearing for the petitioners, are all public documents as contemplated under Section 74(2) of the Indian Evidence Act, 1872 and also in terms of Section 610 and 163 of the Companies Act, 1956 and therefore no doubt they are admissible in evidence and on the face of the documents, this Court is of considered view that it is beyond suspicion or doubt, placed on record by the accused and if it is considered, the accusation against the petitioners cannot stand and therefore the documents viz., Form No.32 have a bearing on the matter even at the initial stage and therefore as observed by the Apex Court in Anita Malhotra's case (cited supra), the relief, which is sought for in the petition can very well be granted by exercising the inherent jurisdiction of this Court under Section 482 Cr.P.C., 35. As observed by R.V.RAVEENDRAN, J., on behalf of the Division Bench in K.K.Ahuja's case (cited supra), the prevailing trend appears to require the complainant to state as to how a Director who is sought to be made an accused, was in charge of the business of the Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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