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TMI Blog2019 (9) TMI 1540X X X X Extracts X X X X X X X X Extracts X X X X ..... t is settled position of law that when a statute requires a particular thing to be done in a particular manner, then that must be performed in the same manner and not in any other manner. In such circumstances, in the absence of the notice being issued to the Company, which is the drawer of the cheque in question, the invocation of proceedings under Section 138 of the NI Act must necessarily fail in the absence of the statutory compliance of sub-clause (b) of the proviso appended to Section 138. In any contingency, the Applicant is also entitled to avail the benefit under Section 141 of the NI Act since it is an admitted position that he was not a Director, and, therefore, not in control of the affairs of the Company on the date when the cheque was presented i.e. on 31/01/2017 and on the said date, he had already ceased to be the Director of the Drawer Company. In the absence of the drawer i.e. the Company being issued with a notice as contemplated in Clause (b) of proviso to Section 138 before initiation of complaint under Section 138, the impugned order cannot be sustained. Application allowed. - Criminal Application No. 1316 of 2017 - - - Dated:- 26-9-2019 - Bharati H. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the NI Act. 4. The Applicant is aggrieved by the issuance of the process and the learned counsel Mr. Desai would submit that the unembellished and elemental facts have not been taken into consideration by learned Magistrate while issuing the process. He would submit that on 28/12/2016, the Applicant has tendered his resignation from the post of Director of the Company through a communication addressed to the Board of Directors of Landmark Real Estate Developers Limited. Pursuant to this, a Resolution was passed by the Board on the same day i.e. on 28/12/2016, thereby resolving that the resignation of the Applicant from the Directorship of the Company is accepted from 28/12/2016. The factum of resignation is also depicted in Form DIR-12 maintained by the Ministry of Corporate Affairs and the said document confirms that the Applicant, with effect from 28/12/2016, is not associated with Landmark Real Estate Developers Limited. 5 . Another aspect which the learned counsel for the Applicant has pressed into service is that the notice which was addressed by the Complainant was not addressed to the Company which is the drawer of the cheque dated 31/01/2017 issued to the Complainan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les prescribed thereunder. Once this fact has surfaced on record that the Applicant is no longer the Director of the Company when the cheque was dishonoured on 31/01/2017, in the context of Section 141 of the NI Act, the Applicant cannot be held liable. Section 141 of the NI Act which is based on the principle of vicarious liability to be devolved upon when an offence is committed by the Company, every person who at the time when the offence was committed, was in charge of and was responsible to the Company for the conduct of its business is to be held liable. What emerges from plain reading of Section 141 of the NI Act is that not only the person who at the time when the offence was committed was in charge of the affairs of the Company but also the Company itself shall be deemed to be guilty of the offence and liable to be proceeded against and punished accordingly. 8. What has been not looked into by the learned Sessions Judge is the provisions of Section 138 and in specific clause (b) thereof, which clearly stipulate that the provisions of Section 138 cannot be invoked unless the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is in charge of and was responsible to the Company for conduct of 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 punished accordingly. The only exception being that if a person liable for punishment proves that the offence was committed without his knowledge or that he has exercised all diligence to prevent commission of such offence or where a person is a nominated Director as contemplated in the second proviso to the said section. 11. Section 138 is to be distinctly and conjunctively read with Section 141 of the NI Act. Where a Company is liable for commission of offence, apart from the said company every person who was responsible for the affairs of the Company shall also be deemed to be guilty of commission of the said offence. The notice issued and placed on record at page 53 of the paper-book reveals that the notice has been issued to the two Directors of the Company and it is not at all addressed to the Company, which incidentally is the drawer of the cheque dated 31/01/2017. The Apex Court in the case of Kirshna Texport and Capital Markets Limited v. ILA A. Agrawal Others repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawee issuing a notice to every Director of the Company who was in charge and responsible to the Company for conduct of its business. This requirement of issuance of notice to an individual Director in terms of sub-clause (b) of proviso to Section 138 cannot be read into the said provision. Merely on an assumption that when a notice is issued to the Director and then the Director would necessarily inform the Company of such a notice being received, do not make it imperative for a drawer to issue a notice to any other person other than the drawer of the cheque. It is settled position of law that when a statute requires a particular thing to be done in a particular manner, then that must be performed in the same manner and not in any other manner. In such circumstances, in the absence of the notice being issued to the Company, which is the drawer of the cheque in question, the invocation of proceedings under Section 138 of the NI Act must necessarily fail in the absence of the statutory compliance of sub-clause (b) of the proviso appended to Section 138. In any contingency, the Applicant is also entitled to avail the benefit under Section 141 of the NI Act since it is an admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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