9911796707
TMI Blog2000 (11) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... he complaint, filed against the petitioner, inter alia, it has been averred that Al is the working director and A2 is the managing director of S. R. L. L. firm and the first managing director of the company by name Dr. K. V. Surendranath entered into a memorandum of understanding on August 27, 1999, with the petitioner wherein it was agreed, inter alia, to participate in the equity capital and management of the company from August 27, 1999, onwards by paying an amount of ₹ 69 lakhs to Dr. K. V. Surendranath towards net value of 50 per cent. total equity, and despite the same, the petitioner had been postponing the payment even after the said Dr. K. V. Surendranath fulfilled his part of promise. The averments made in the complaint further show that the petitioner-A2 failed to make the payment as per the memorandum of understanding dated August 27, 1999, despite several rounds of discussions initiated by the said Dr. K. V. Surendranath. Subsequently, the petitioner-A2 along with Al executed an agreement dated April 11, 2000, in favour of Dr. K. V. Surendranath and issued post-dated cheques, pursuant to the terms of the agreement, bearing Nos. 374993, dated May 15, 2000, for an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contentions raised on either side, the short question that falls for determination in these cases is whether the petitioner, who has been arrayed as A2 in both the cases, can be vicariously made liable along with A1 for the offence punishable under Section 138 of the Act. 9. For brevity and better understanding of the matter, it is expedient at the outset to consider Section 138 of the Act, which may be extracted hereunder in so far as it is relevant to the present purpose, thus : 138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event of that cheque drawn by him having bounced. 12. The Act has not envisaged any penal consequences for the conspiracy, abetment and attempt to commit the said offence. The expressions used in Section 138, viz., by a person , on an account maintained by him , and such person make it manifest that the person who has drawn the cheque on an account maintained by him alone is liable. However, Section 141 of the Act envisages a situation where if the person who has drawn the cheque is a juristic person, like a company, firm or other association of individuals. It makes it clear that if the person who has drawn the cheque is the company not only the company but also every person who at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company is liable. On a perusal of Section 141 of the Act in its entirety, three categories of persons are discernible who are liable for the penal consequences through legal fiction envisaged in the section. They are (1) the company which committed the offence, (2) every one who was in charge of and was responsible for the business of the company and (3) any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany by adding an Explanation to that section. Clause (a) of the Explanation appended under Section 141 is germane for consideration in this context. According to this clause the company means any body corporate and includes a firm, or other association of individuals. Laying emphasis on the words other association of individuals it is the contention of learned counsel for the respondent that A1 and A2 having together entered into an agreement they come within the ambit of the expression other association of individuals . It is no doubt true that the definition of company as given in Clause (a) of the Explanation under Section 141 is an inclusive definition. On a perusal of Clause (a) it is obvious that the specific words body corporate and a firm are followed up by a general expression other association of individuals . The expression other association of individuals shall have to be construed in the context in which it has come to be incorporated. Section 141 of the Act takes care of the situation where an offence is perpetrated by a juristic person as afore discussed, such a juristic person may be either a company or a firm or other association of individuals. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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