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TMI Blog2022 (5) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent. In March-April, 2013 the respondent is alleged to have issued five cheques across the company duly signed by him as Managing Director to discharge the company's liability to pay the rent aggregating to Rs.16,95,000. These bounced. As a result of which, the complaint was filed. 3. Mr. Mahesh K. Mehta, learned counsel for the petitioner submitted that the learned Trial Court dismissed the complaint observing that since the company had not been impleaded as an accused, the liability of the respondent as its Managing Director could not be attached under section 141 of the N.I. Act. Reliance was placed on the judgment of the Supreme Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661. According to the learned counsel for the petitioner, this reliance was misplaced and instead of rectifying the error, the learned Appellate Court also concluded that the dismissal of the complaint was proper, as the Trial Court had followed the decision of the Supreme Court which had held that for maintaining the prosecution under Section 141 of the N.I. Act, the Company had to be arrayed mandatorily as an accused. The learned counsel has relied on various judgments, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the Chairman, Vice-Chairman, Managing Director and other members of the Board of Directors of the Company [under Section 47 of the Water (Prevention and Control of Pollution) Act, 1974] unless there was a prosecution of the Company, which in that case was M/s Modi Industries Ltd. and not M/s Modi Distillery. That was the reason why the court went on to hold that in order to make the controlling company of the Industrial Unit as an accused in the complaint, all that was required was filing of a formal application for amendment seeking leave to amend or substitute the name of M/s Modi Industries Ltd. in place of M/s Modi Distillery. 8. Clearly the facts are distinguishable from the present case as we shall see. 9. A perusal of the complaint placed on the record as Annexure P-1 would show that in the present matter, the company has not been impleaded, leave alone a wrong company, as was the case in U.P. Pollution Control Board (supra). That makes a material difference in the fact situation in the present case. 10. In Rajneesh Aggarwal's case (supra), the complaint had been filed without impleading the company as an accused and the cheques which had bounced had been issued in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shable under the aforesaid provisions without the Company being arrayed as an accused." 14. The question of impleadment of a company before vicarious liability could be invoked, was considered in the light of the conflicting views taken by the two Division Benches of the Supreme Court and the question was answered with no ambiguity that is sought to be canvassed before this Court. Various judgments were considered and extensive arguments were advanced before the Supreme Court on the question of vicarious liability, the liability of the company, the impleadment and the prosecution of the Directors and other persons in charge of the business of the company. After consideration of all the cited judgments and the arguments advanced, it was held by the Supreme Court that on a reading of the provisions of Section 141 of the N.I. Act "it is plain as day" that where the offence has been committed by a Company, the Company as well as every person incharge and responsible for the conduct of its business at the time of commission of the offence, is "deemed" to be guilty of the offence. It further held that the word "deemed" used in Section 141 of the N.I. Act applied to the company and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial unit. It noted that there was a peculiar factual matrix in that case, as the technical fault in impleading the Company had arisen, because the Company had failed to furnish the requisite information to the Pollution Control Board. That was why a direction was issued for filing of a formal amendment by the applicant for substitution of the name of the company M/s Modi Distilleries in place of M/s Modi Industries. 19. It was held that, thus it was a defective complaint which was curable, but nowhere either U.P. Pollution Control Board (supra) or Aneeta Hada (supra) concludes that even without the primary liability of the Company, vicarious liability can be imposed on its Directors/Officers. Considering that Section 141 of the N.I. Act imposes a liability which was penal in nature, the Supreme Court concluded that a strict construction of the provision was necessary and warranted. It further observed that a penalty cannot be imposed affecting the rights of a person, whether juristic entities or individuals, unless they were arrayed as accused. 20. Applying the doctrine of strict construction, the Supreme Court held that the commission of offence by the company is an express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is clear that any amendment would go to the root of the matter and is not merely a curable/simple infirmity. 25. In the other case decided by the High Court of Madhya Pradesh in Manish Kalani (supra), which was dealing with a complaint under Sections 138 and 141 of the N.I. Act read with Section 319 of the Cr.P.C. the Company could be impleaded as an accused not originally so impleaded, as the complainant had referred to the Company throughout the complaint and the only shortcoming was the absence of the name of the company in the memo of parties. Thus, a curable infirmity was permitted to be removed by way of an amendment. That again is not the case here. 26. In the light of the observations in Aneeta Hada's case and the reiteration of the view taken in SMS Pharmaceuticals (supra), it is clear that the complaint must aver in clear terms, the commission of an offence by the Company. If such averment was there in the complaint and the only infirmity is the naming of the Company in the memo of parties, it could be said that the infirmity is only a minor infirmity which can be rectified by permitting amendment. But when there is no averment at all in respect of the Company, amen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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