9911796707
TMI Blog2008 (12) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... red cheques based on which the complaint under Section 138 r/w Section 141 142 N.I. Act was filed by respondent No. 2. In Criminal Miscellaneous No. 2667/2007 the petitioner does not dispute that he was director of M/s M.K. International Ltd. on the relevant date of the commission of the offence and he had also written a letter dated 9.9.2005 on behalf of the said company whereby 36 cheques were sent to the respondent No. 2 as security which ultimately got dishonoured due to the non-availability of sufficient balance amount in the concerned bank account of the drawer of these cheques. While in two other cases i.e. Crl. M. No. 1637/07 and Crl. M. No. 1597/2007 the petitioners have claimed that they were not the directors on the relevant date of the commission of the crime as by that time they had already resigned from the Directorship of the said company. In support of this plea the petitioners have also filed form 32 which shows that they had resigned from the directorship of the company on 25.10.2005. All other legal grounds are common in all the three petitions. Crl. M. No. 2667/2007 3. The facts of the case which are not in dispute are that the 36 cheques were issued for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainable only against a person who is a drawer of the cheque and who has drawn the cheque in an account maintained by him and such a person alone shall be deemed to have committed an offence and shall be punished with imprisonment or with fine as specified in the section. The contention of the counsel for the petitioner is that the complaint under Section 138 N.I. Act cannot be maintained against a person who is not a drawer of the cheque and on whose account the cheque has not been issued. Drawing strength from the definition of the drawer as given in Section 7 of the N.I. Act the counsel submits that it is only the maker of bill of exchange or a cheque who can be considered as drawer and no other person. Section 7 of N.I. Act is reproduced as under: The maker of a bill of exchange or Cheque is called the drawer ; the person thereby directed to pay is called the Drawee . Drawee in case of need : When the bill or in any endorsement thereon the name of any person is given in addition to the drawee to be resorted to in case of need such person is called a drawee in case of need . Acceptor : After the drawee of a bill has signed his assent upon the bill, or, if there are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 2001 (2) JCC (Delhi) 61 Smt. Kamana Gupta v. NCT of Delhi and Anr. especially para 8 and the judgment of the Apex Court reported as 2000 (1) JCC (SC) 1 Anil Hada v. Indian Acrylic Ltd. and special reference has been invited to the paras 11 and 12 of the same which are reproduced as under: Normally an offence can be committed by human beings who are natural persons. Such offence can be tried according to the procedure established by law. But there are offences which could be attributed to juristic person also. If the drawer of a cheque happens to be a juristic person like a body corporate it can be prosecuted for the offence under Section 138 of the Act. Now there is no scope for doubt regarding that aspect in view of the clear language employed in Section 141 of the Act. In the expanded ambit of the word company even firms or any other associations of persons are included and as a necessary adjunct thereof a partner of the firm is treated as director of that company. 12. Thus when the drawer of the cheque who falls within the ambit of Section 138 of the Act is a human being or a body corporate or even firm, prosecution proceedings can be initiated against such drawer. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, 1, Siddhartha Enclave, New Delhi. Sir, Sub: Payments with post dated cheques as security. With reference to the above cited subject pertaining to Raw Sugar Imports pursuant to the various High Seas Sale Agreements between us and you (NAFED), and also in continuation with our earlier letter dated 12th August 2005 and various subsequent meetings with you and your officers, we are, thereby, as a consequence acting on your advice, we are enclosing 36 cheques. These 36 cheques are being arranged as security in order to make you feel secure of your payment. Here, it is outmost importance and pertinent to mention that these cheques are given as security and are to be definitely returned back by you to us on receiving the particular payment as per the schedule. Further, please note that before invoking the enclosed security a minimum of 15 (Fifteen) Days notice is to be serve, in order to enable us to make arrangement of the amount in the account. Kindly acknowledge and oblige Thanking you Your faithfully, For M.K. International Limited AUTHORIZED SIGNATORY 10. Counsel for the respondent further submitted that necessary averments so as to hold all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused and they should not be allowed to scuttle the legal process under false and flimsy pleas of their not being drawer or signatory of the dishonoured cheques. Counsel for the respondent also submitted that even otherwise all these questions can only be gone into during trial and the provision of Section 482 Cr.P.C. which can be resorted to in rare and exceptional circumstances should not come to the rescue of such petitioners. 12. I have heard learned Counsel for the parties at considerable length and carefully gone through the documents filed on record. 13. In view of the judgment of the Supreme Court in Adalat Prasad v. Jindal 113 (2004) DLT 356(SC) : III (2004) CCR 176 (SC) : 2004 VIII AD (SC) 533, after summoning orders are passed by the Trial Court, it has no power to recall the same and in that case, the remedy available to the aggrieved party is to approach the High Court alone by filing petition under Section 482 of the Code of Criminal Procedure. Because of this position in law, the responsibility of the Magistrates to carefully examine the complaint and the pre-summoning evidence before issuing the summons becomes paramount. Invariably, it has been noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge 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 proceeded against and punished accordingly]; Provided that nothing contained in this Sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. (2) Notwithstanding anything contained in Sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attribute to, any neglect on the part of, any director, Manager, secretary, or other office of the company, such dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count alone is liable in the event of that cheque drawn by him having bounced. 18. However, Section 141 of the N.I. Act envisage a situation where the drawer of the cheque is a juristic person like a company or other association of individuals. The language of Section 141 of N.I. Act also makes it explicitly clear that if a person who has drawn the cheque is a company then not only the company alone but also every person who at the time the offence was committed was in charge and was responsible for the conduct of the business of the company is liable for the commission of an offence under Section 138 of N.I. Act. Section 141 of N.I. Act thus postulates three categories of persons who can be held liable and responsible for the penal consequences which are: (i) the company in itself who committed the offence; (ii) every person who was in charge and was responsible for the conduct of the business of the company at the relevant time; (iii) any other person who is a Director or Manager or Secretary or an officer of the company with whose connivance or due to whose negligence the company had committed the offence. 19. The mandate of the section clearly indicates that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding the fact that the accused was a partner in charge of and was responsible to the firm for the conduct of business of the firm nor was there any allegation that the offence was made with the consent and connivance or that it was attributable to any neglect on the part of the accused. It was held that no case was made out against the accused who was a partner and the complaint was quashed. The latest in the line is the judgment of this Court in Monaben Ketanbhai Shah v. State of Gujarat 12. It was observed as under: 4. It is not necessary to reproduce the language of Section 141 verbatim in the complaint since the complaint is required to be read as a whole. If the substance of the allegations made in the complaint fulfil the requirements of Section 141, the complaint has to proceed and is required to be tried with. It is also true that in construing a complaint a hypertechnical approach should not be adopted so as to quash the same. The laudable object of preventing bouncing of cheques and sustaining the credibility of commercial transactions resulting in enactment of Sections 138 and 141 has to be borne in mind. These provisions create a statutory presumption of dishon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said provision. That the respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non-director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial. 21. Indisputably, where the company is the principal offender then any of its Director would become liable due to the legal fiction created under Section 141 N.I. Act. For holding a person vicariously liable for an offence of which the principal accused is the company, it is essential that the incriminating act was done by him. When a person was neither signatory to the cheques nor there is any averment to the effect that he was incharge and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to face criminal prosecution for the dishonoured cheques drawn by one of the other directors from his own personal account. As would be evident from the bare reading of Section 141 of N.I. Act the Directors and other functionaries of the company can be made vicariously liable only when the principal offender is a company. I have no doubt whatsoever that the prosecution of a company is a sine qua non for prosecution of the various functionaries of the company being In-charge and responsible for the conduct of the affairs of the company at the relevant time of commission of the offence, and therefore, the first prerequisite to maintain a complaint against any Director or other functionaries of the company is to disclose sufficiently in the complaint as to how the company is liable and then only the director and other functionaries of the company can be made liable for the conduct of the business of the company. The combined reading of Section 138 and Section 141 of Negotiable Instrument Act would clearly show that a drawer for such complaints based on the dishonoured cheques necessarily has to be a company itself and thereafter the other question would arise as to which of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany on 25/10/2005 and the form 32 was accordingly submitted to Registrar of Companies before the issue of the 3 cheques on 30/6/2006. It is also not disputed that the said cheques were issued by one Sh. Avdesh Kumar Singh. It has also come on record that the cheques were issued by Sh. Avdesh Kumar Singh in his individual capacity. 28. In Crl MC No. 1637/2007 as well, the petitioner had already resigned from the company on 25/10/2005 and the form 32 was accordingly submitted to Registrar of Companies before the issue of the 36 cheques on 9/9/2005. It is also not disputed that the said cheques were issued by one Sh. Ram Chander Sharma. There are bald allegations that he was responsible for the day-to-day affairs and no material has been produced on record which would indicate that he was in charge of the affairs of the company or was vicariously liable. It has also come on record that the cheques were issued by Sh. Ram Chander Sharma in his individual capacity. 29. The law in this regard is well settled that the resignation of a Director is effective from the date he submits it, because of his intention to resign and it is for the Company to comply with the formalities, requ ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
