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TMI Blog2023 (5) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.02.2015 passed under Section 138 of NI Act, 1881, by the learned MM in CC No. 612890/2016. 2. The present case concerns a complaint under 138 NI Act pertaining to dishonour of a cheque for an amount of Rs. 40,00,000/-.The cheque was allegedly taken by the petitioners as a friendly loan from the respondent. The petitioners were summoned in the said case, against which they preferred the aforesaid revision petitions before the Sessions Court, which came to be dismissed vide the impugned order dated 01.04.2021. 3. The grievance of the Petitioners is threefold. Firstly, no demand notice was served to the company M/s HG Retail Solutions Pvt. Ltd and only to the directors of the erstwhile company. Secondly, the complaint u/s 138, NI Act dated 21.11.2014 is time barred and beyond limitation as prescribed u/s 138 of NI Act. Moreover, since no application seeking condonation of delay was filed by the respondent along with the complaint, the complaint fails in terms of the judgement in Ashwani Kumar Julka v. Parthojit Choudhary, 2007 (93) DRJ 185. Thirdly, no specific averment or role has been attributed to the petitioner/co-accused Smt. Kusum Tanwar [petitioner in Crl. MC 1967/2022], e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectors to avail a friendly loan from the Respondent. 7. Subsequently, a loan agreement was entered into between petitioner company i.e. H.G. Retail Solutions (P) Ltd., represented by its Director Mr. Karan Tomar and the respondent on 17.06.2014. An amended loan agreement was also executed on 18.06.2014. Pursuant to these agreements the petitioner company represented by Mr. Karan Tomar, in need of money, availed a friendly loan of Rs. 40 lakhs from the respondent. According to the terms of agreement, the loan amount was to be repaid within one month from the disbursement date i.e. by 17.04.2014 along with interest @ 5% p.m. In the event of non-payment within thirty days, an additional penal cost of Rs. 200/- per day was imposed over the interest amount. 8. Accordingly, the respondent released a sum of Rs. 40,00,000/- through RTGS Cheque 840125 dated 19.06.2014 from his bank. 9. In terms of the agreement dated 17.06.2014 and 18.06.2014, the Director of the petitioner company issued two post-dated cheques, one for Rs. 40,00,000/- towards re-payment of the loan amount and the other for Rs. 2,50,000/- towards interest payable to the respondent. However, both cheques were returned un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to recover a sum of Rs. 42,50,000/- and interest @ 6% p.a. on the principal amount of Rs. 40 lakhs from 17.07.2014 till its realization along with granting cost of the suit. It has been submitted that the said order has attained finality. 16. The following salient legal propositions have been raised before this Court: I. On the issue: Legal Notice not served upon the Company Contentions on behalf of the Petitioners a. Ld. Counsel for the petitioners submit that the proviso to Section 138, NI Act, lays down the prerequisites for establishing an offense under the provision. It is mandatory to serve a notice upon the drawer of the cheque, which, in this case, is the Company - H.G. Retail Solutions. The statutory provisions clearly outline the procedural steps for initiating a complaint, without compliance of which, the complaint cannot be deemed maintainable. Ld. Counsel submits that thus, the present complaint is not maintainable as the demand notice was never served on the Company. b. Ld. Counsel has placed reliance upon the judgement in Himanshu v. B. Shivamurthy AIR 2019 SC 3052, whereby, the Hon'ble Supreme Court, held that in the absence of a notice of demand b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al pronouncements in C.C. Alavi Haji Vs. Palapetty Muhammed and Ors.(2007) 6 SCC 555; Ashwani Kumar Julka v. Parthojit Choudhary, 2007 (93) DRJ 185 and Datta S. Nadkarni Vs. Salvador Fernandes and Ors., Crl. A 46/2013 decided on 16.07.2015. Additionally on 04.10.2014, the notices were also served at the residential addresses of the petitioner directors but were undelivered and returned with the postal endorsement "Door Locked." However, the postal department preferred to serve the notice again on 07.10.2014 - when it was received by the petitioners. Ld. Counsel submits that in terms of C.C. Alavi Haji (supra) the date of refusal or non-claim of the envelope should be considered as deemed service i.e. on 04.10.2014. d. In C.C. Alavi Haji (supra), a Three Judge Bench of the Hon'ble Supreme Court held that when a notice sent by registered post is returned with a postal endorsement indicating refusal or unavailability, due service should be presumed. Thus, the petitioner contends that in the present case, the legal notice dated 01.10.2014 was duly served on 04.10.2014 when the petitioner refused to accept the notice. e. Ld. Counsel has placed reliance on the judgement in Ashwani Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 999 SC 16091 to support this contention. h. Ld. Counsel submits that the issue of limitation goes to the roots of the matter and has to be adjudicated first. However, the Revision Court, in the impugned order, considered it to be a mixed question of fact and law that should be addressed during trial. Contentions on behalf of the Respondent/Complainant a. Ld. Counsel submits that the legal notice dated 01.10.2014 were sent to Karan Tomar and Kusum Tanwar, clearly stating their positions as directors of the company and were sent to their respective addresses at 218, SFS Flats, Basant Enclave, Vasant Vihar, New Delhi, and Chhatarpur. Ld. Counsel submits that the legal notice was dispatched on the same day. On 4.10.2014, the notice was attempted to be delivered, but the house was found locked and/or the notice was refused. According to the tracking report, the notice was eventually delivered on 07.10.2014. Therefore, the respondent argues that this date should be considered for the purpose of limitation in filing the complaint under section 138 of NI Act. The complaint was filed on 21.11.2014. The respondent has also relied on Ashwani Kumar Julka vs Lt. Col. Parthojit Choudhary, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent submits that the complaint contained specific averments regarding the role of the petitioners. Ld. Counsel points out that in the complaint u/s 138 NIA the description of the parties, i.e. Karan Tomar (Accused No. 1), Kusum Tanwar (Accused No. 2) and H.G. Retail Solutions (P) Ltd. (Accused No. 3) have been properly mentioned. It is averred in the complaint that both directors were and are jointly and severally responsible for the day-to-day affairs of the company. b. It is stated that the petitioners approached the respondent with the board resolution dated 10.06.2014, authorizing the Directors to avail a friendly loan from the Respondent and signed a loan agreement. Ld. Counsel asserts that Kusum Tanwar, being a Director of the company, as on the date of the commission of the offence is liable to be prosecuted for the affairs of the company. c. Learned Counsel submits that the learned court upon due consideration of facts held that a case was made out against the petitioners and thus summoned the petitioners. Thereafter, the Ld. revision court after threadbare examining the material on record affirmed this order. Findings & Analysis 17. Before proceeding further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section, - (a) "company" means any body corporate and includes a firm or other association of individuals; a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company was not maintainable. It was held that in the absence of a notice of demand being served on the company and without compliance with the proviso to section 138, the High Court was in error in holding that the company could now be arraigned as an Accused. 23. Recently, the Hon'ble Supreme Court in Pawan Kumar Goel vs. State of UP & Anr., 2022 SCC Online SC 1598 while referring to Himanshu v. B. Shivamurthy (supra) inter alia held as under: "26. Reference in this connection may also be made to another judgment of the two-Judge Bench of this Court in Himanshu v. B. Shivamurthy (Supra), the facts wherein have a stark similarity to the facts of the present case, considering the issue where the complaint was lodged only against the director without arraigning the company as an accused and whether the company could be subsequently arraigned as an accused, it was observed as under:- "11. In the present case, the record before the Court indicates that the cheque was drawn by the appellant for Lakshmi Cement and Ceramics Industries Ltd., as its Director. A notice of demand was served only on the appellant. The complaint was lodged only against the appellant without arraigning th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, the company ought to have been sent a demand notice. Even though the company was arrayed as an accused in the complaint under 138, however, without demand notice being served to the company the complaint itself fails and cannot be maintainable in terms of the provisions contained in section 138 NI Act. It is only when the company is prosecuted and proceeded against in compliance of section 138 NI Act, that vicarious liability in terms of section 141 NI Act will extend to its directors or others responsible for the commission of the offence. 26. It is imperative that all the elements of Section 138 of the NI Act be duly satisfied prior to taking cognizance of such a complaint. In the absence of demand notice being served upon the company, which serves as the drawer of the cheque, the complaint itself fails to meet the requirements stipulated by Section 138 of the NI Act, as one of the essential elements remains unsatisfied. 27. Given the absence of a demand notice served upon the company HG Retail, which constitutes the drawer of the cheque as the principal accused, the mandatory steps outlined in Section 138 of the NI Act have not been duly adhered to. Consequently, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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