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TMI Blog2023 (12) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... assured him to return the same on demand. The complainant is an employee of the Society. The Society did not pay his salary for 14 months. The complainant requested the society to pay the money due to him and the Society issued a cheque for Rs. 5 lac in discharge of its legal liability. The complainant presented the cheque for its realisation but it was dishonoured. Hence, the complaint was filed for taking action against the accused. 2. The learned Trial Court found sufficient reasons to summon the accused for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act. 3. Being aggrieved from the filing of the complaint and the order summoning the accused, the petitioner approached this Court for quashing of the complaint and the summoning order. It was asserted that no salary was fixed. The Society is a non-governmental organization/NGO and is working on a noprofit and no-loss basis. The NGO paid the amount due to the complainant. The cheque was signed by accused no. 1 and 2 in their official capacity. The Society was not made an accused and the complaint was filed only against the office bearers of the Society. A complaint against the office b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not permissible to prosecute the Directors in the absence of the Company. It was observed that: "58. Applying the doctrine of strict construction, we are of the considered opinion that the commission of the 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 to 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." 11. This judgment was followed by the Hon'ble Supreme Court in Charanjit Pal Jindal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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. 14. We, accordingly, are of the view that the High Court was in error in rejecting the petition under Section 482 CrPC. We hence allow the appeal and set aside the judgment of the High Court. In consequence, the complaint, being CRP No. 27 of 2004 shall stand quashed." 13. Similar is the judgment in Dilip Hariramani v. Bank of Baroda, 2022 SCC OnLine SC 579, wherein it was held: 15. The judgment in Dayle De'souza v. Government of India through Deputy Chief Labour Commissioner (C), answered the question of whether a director or a partner can be prosecuted without the company being prosecuted. Reference in this regard was made to the views expressed by this Court in State of Madras v. C.V. Parekh on the one hand and the divergent view expressed in Sheoratan Agarwal v. State of Madhya Pradesh and Anil Hada v. Indian Acrylic Ltd. This controversy was settled by a three-judge Bench of this Court in Aneeta Hada (supra), in which, interpreting and expounding the difference between the primary/substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out in AneetaHada (supra), which applies when there is a legal bar for prosecuting a company or a firm, is not felicitous for the present case. No such plea or assertion is made by the respondent." 14. This position was reiterated in Pawan Kumar Goel v. State of U.P., 2022 SCC OnLine SC 1598 and it was held : 25. This Court has been firm with the stand that if the complainant fails to make specific averments against the company in the complaint for the commission of an offence under Section 138 of the NI Act, the same cannot be rectified by taking recourse to general principles of criminal jurisprudence. Needless to say, the provisions of Section 141 impose vicarious liability by deeming fiction which pre-supposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-Section (1) and (2) would not be liable to be convicted on the basis of the principles of vicarious liability. 15. Therefore, in view of the binding precedents of the Hon'ble Supreme Court, the submission that the prosecution of the Company is necessary before prosecuting its of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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