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TMI Blog2022 (6) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... y that inadvertently before instituting complaint under S.138, no notice could be issued to the petitioners. Once there is no allegation in the complaint that Rs. 5.00 Lakh was advanced to the firm or to other partners of the accused Rishi Rana, complaint against the petitioners is otherwise not maintainable. Mere fact that they have also signed the cheque in question, is not sufficient to conclude complicity of the petitioners in the case, especially when there is no allegation in the complaint that the complainant had advanced loan to the tune of Rs. 5.00 Lakh to the firm or the persons sought to be arrayed as accused - True it is that in the case at hand, cheque in question has been signed by petitioners alongwith respondent/accused Rishi Rana, but once there is no liability if any of these persons towards complainant, they otherwise cannot be held liable for issuance of cheque, which ultimately came to be dishonoured on account of insufficient funds. Interestingly in the case at hand, there is no allegation worth the name in the complaint against the petitioners, that they had taken loan from complainant and they with a view to discharge their liability issued cheque whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving bank account No. 7893002100000314. However, the fact remains that the said cheque on its presentation was dishonoured on account of insufficient funds. Since despite issuance of legal notice, accused Rishi Rana failed to make the payment, complainant instituted proceedings under S.138 of the Act in the court of learned Chief Judicial Magistrate, Chamba. 3. After recording of evidence in the case, complainant preferred an application under S.319 CrPC, (Annexure P-4), praying therein to array petitioners herein as an accused on the ground that the cheque in question was also signed by them. In the aforesaid application, complainant averred that during the course of cross-examination, it transpired that the cheque in question is issued from a current account, which is in the name of the firm and the same has been signed by the persons sought to be arrayed as an accused, in addition to Rishi Rana. Apart from above, complainant also averred that inadvertently notice under S.138 of the Act was only issued to Rishi Rana being the authorized signatory but since the petitioners also signed the cheque, they are required to be arrayed as an accused. 4. Learned court below vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing partners in the firm, issued notice and as such, petitioners cannot be held liable for action if any, of one of the partners i.e. respondent No.2 Rishi Rana, who had raised personal loan. Above named counsel further argued that since at no point of time, legal notice, if any, ever came to be issued against the petitioners before initiation of proceedings under S.138 of the Act, complaint, if any, qua them otherwise is not maintainable. 7. To substantiate aforesaid submission learned counsel for the petitioners invited attention of this Court on a judgment of Hon'ble Apex Court in Ashoke Mal Bafna v. Upper India Steel Mfg. Engg. Co. Ltd. , (2018)14 SCC 202, wherein, it has been held that before summoning an accused under Section 138 of the Act, the Magistrate is expected to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof. 8. Having heard learned counsel for the parties and perused the material available on record, vis- -vis reasoning assigned by learned court below, while passing the order impugned in the instant proceedings, this court finds force in the submission of learned counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ramani v. Bank of Baroda , Cr. Appeal No. 767 of 2022, decided on 9.5.2022, has held as under: 10. We would also refer to the summarisation of law on Section 141 by this Court in National Small Industries Corporation Limited v. Harmeet Singh Paintal and Another,10 to the following effect: 10 (2010) 3 SCC 330: The case dealt with challenge to a summoning order. Withal, interference by the courts at the stage of summoning order is restricted/limited. 39. From the above discussion, the following principles emerge: (i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction. (ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company. (iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause of 11 (1971) 3 SCC 189 12 State of Karnataka v. Pratap Chand and Others, (1981) 2 SCC 335. the director, manager, secretary, or other officer's personal conduct, functional or transactional role, notwithstanding that the person was not in overall control of the day-today business of the company when the offence was committed. Vicarious liability under sub-section (2) is attracted when the offence is committed with the consent, connivance, or is attributable to the neglect on the part of a director, manager, secretary, or other officer of the company. 13. Interestingly in the case at hand, there is no allegation worth the name in the complaint against the petitioners, that they had taken loan from complainant and they with a view to discharge their liability issued cheque which subsequently came to be dishonoured on account of insufficient funds. 14. Otherwise also it is well settled by now that only the person who was at the helm of affairs of the Company and in charge of and responsible for the conduct of the business at the time of commission of an offence will be liable for criminal action. Hon'ble Apex Court has held in Ashoke Mal Bafna supra, as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciples on the issue. Impliedly, it is necessary for Courts to ensure strict compliance of the statutory requirements as well as settled principles of law before making a person vicariously liable. 14. The Superior Courts should maintain purity in the administration of Justice and should not allow abuse of the process of Court. Looking at the facts of the present case in the light of settled principles of law, we are of the view that this is a fit case for quashing the complaint. The High Court ought to have allowed the criminal miscellaneous application of the appellant because of the absence of clear particulars about role of the appellant at the relevant time in the day to day affairs of the Company. 15. No doubt under S.319 CrPC, court enjoys vast power to order impleadment of those persons as accused against whom, some evidence appears during trial or enquiry that he has also committed offence alongwith other accused but in the case at hand, there is /was no material available before court below to arrive at a conclusion that persons sought to be arrayed as accused i.e. petitioners herein had committed offence punishable under S.138 of the Act. 16. No doubt, Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X
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