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TMI Blog2023 (6) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... acquittal of the respondent no.2 - original accused for the offence punishable under Section 138 of the Negotiable Instruments Act. 3.0. The gist of the complaint as contended in the criminal case by the complainant is as under: 3.1. The complainant is running a shop in the name of Laxmi Store and the accused viz. Hemant Shah who is referred as proprietor of M/s.Vadiyawala Logistic Private Limited is running his business in the name of " M/s. Vadiyawala Logistic Private Limited". It is the case of the complainant that having business relationship, the complainant was knowing the accused very well. It is further alleged that the accused had requested to complainant to deliver goods and against the outstanding amount of purchase of goods, the accused had issued cheque bearing no.925949 of ICICI Bank, Suraj Plaza, Vadodara Branch dated 29.12.2015 for an amount of Rs.1,50,000/-. 3.2. It is further alleged that as instructed by the accused, the complainant had presented the aforementioned cheque on 16.1.2016 with the Bank viz. State Bank of India, Akshar Chawk Branch, Vadodara. However, the said cheque had been dishonored on 19.1.2016 with an endorsement of account closed. 3.3. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leave to appeal. 5.0. With the consent of the learned advocates for the respective parties, both the leave to appeal as well as appeal were taken up for final hearing at the admission stage. 6.0. Mr.Nikul Soni, learned advocate for the appellant- original applicant has invited attention of this Court to the reasons recorded by the trial Court and has submitted that the learned Magistrate on erroneous ground that the company has not been joined in the original proceedings, has proceeded to pass impugned order. He invited attention of this Court to the cause title of the complaint and submitted that name of the accused Hemant Shah was reflected as proprietor of M/s. Vadiyawala Logistic Pvt. Ltd. He further submitted that joining of the company as a party respondent may not be necessary as it is the person in charge of and responsible for the affairs of the company who is made accused. He has further submitted that Mr. Hemant Shah is the authorized signatory to the disputed cheque. He further submitted that similar issue arose for consideration before the Hon'ble Supreme Court, wherein it has been held that there was no necessity for the complainant to prove that the respondent- ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness. By relying upon the aforesaid decisions, Mr. Soni, learned advocate for the appellant has urged this Court to grant leave to appeal. 7.0. On the other hand, the aforesaid submissions of learned advocate for the applicant is vehemently objected by Mr. Dhruv Dave, learned advocate for the respondent no.2- original accused. He has invited attention of this Court to the cause title of the original complaint and has submitted that name of the accused appeared in his capacity as the proprietor of the M/s.Vadiyawala Logistic Private Limited, which is the company registered under the Companies Act. He further invited attention of this Court to the contents of the complaint as reproduced in the impugned order and submitted that no averments have been made by the complainant as to in what capacity the respondent accused was associated with the public limited company. He further submitted that the name of the company does not appear in the cause title as being joined as accused. At this stage, he referred to and relied upon Section 141 of the Negotiable Instruments Act which deals with the offence by company. He submitted that on reading of the said provisions and Section 138 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No.29748 of 2016 and allied matters wherein the Court quashed and set aside the proceedings under the Negotiable Instruments Act in exercise of powers conferred under Section 482 of the Code of Criminal Procedure and further held that the application under Section 319 of the Code of Criminal Procedure to implead the company as accused at later stage is not maintainable in law as held in the case of Oanali Ismaiji Sadikot vs. State of Gujarat & Anr reported in (2016) 3 GLR 1991. 7.5. By referring to the aforesaid decisions, Mr. Dave submitted that no error can be attributed to the learned Magistrate in arriving at a finding that the application was not maintainable in absence of company being joined as party respondent accused. 8.0. I have extensively heard the learned advocates for the respective parties and have perused the record. The Court is conscious of the fact that the learned Magistrate has proceeded to record the order of acquittal on two grounds firstly where the learned Magistrate has formed an opinion that the complaint itself is not maintainable in absence of company being joined as party accused nor being served with the legal notice. Secondly, the Court has appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice that Section 141 is specifically with regard to offence by the company itself and the certain categories of officers in certain circumstances are deemed to be guilty of the offence. The Hon'ble Supreme Court upon analysis of the deeming fiction created in the proviso to Section 141 held that it crystallizes the corporate criminal liability and vicarious liability of a person who is in charge of the company. The reliance was placed on its earlier decision in the case of SMS Pharmaceuticals (supra) as well as in the case of C V Parekh (supra), the Hon'ble Supreme Court by following the ratio laid down by the Larger Bench proceeded to held as under: "53. It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant. 54. In this con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thers v. Rajendra Prasad Ardevi and others[45] and Sarabjit Rick Singh v. Union of India 58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the company" appearing in the Section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is indicted. 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel for the respondent had disputed the aforesaid submission and had contended that the appellant had not made M/s. Shah Enterprise as party respondent. It is in light of the aforesaid facts, the Hon'ble Supreme Court confirmed the order of the High Court by dismissing the appeal. The reliance was placed upon the decision of the Hon'ble Supreme Court in the case of Anil Hada vs. Indian Acrylic Limited reported in (2000) 1 SCC 1, it would be worthwhile to mention here that aforesaid decision of the Hon'ble Supreme Court in the case of Anil Hada has been overruled subsequently by the Hon'ble Supreme Court in the case of Aneeta Handa (supra). In my opinion, the aforesaid view is not goodf law after the Larger Bench decision in the case of Aneeta Handa (supra). 12. So far as reliance placed by learned advocate Mr.Soni in the case of National Small Industries Corporation Limited (supra), the same is applicable in the facts of the present case. It was a case where the SLP was filed at the instance of the original complainant challenging the common judgment and order, High Court in batch of cases whereby the High Court had quashed the summoning orders passed by the trial Court agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are liable to be proceeded with. (iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred. (v) If accused is Managing Director or Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. (vi) If accused is a Director or an Officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in complaint. (vii) The person sought to be made liable should be incharge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases." 13. Thus, the Court notice that in absence of specific averment as to the role of the respondent and particularly in view of the material at the relevant time, which in no manner connected with the affairs of the company, rejected the appeal of the complainant. In the instant case, the contents of the complaint as reproduced in the impugned order goes to suggest that the complainant has even failed to make necessary averments with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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