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TMI Blog2024 (6) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. [ 2021 (3) TMI 94 - SUPREME COURT] Section 14 of the IBC applies to the corporate debtor and it is not applicable to the natural person. From the proceeding under Section 138 of the N.I. Act they are not exonerated from criminal liability. Thus, these applicants, who are natural persons cannot be benefited by the said order of NCLT. and Section 14 of the IBC. The argument of learned Senior Counsel Shri R.N. Dhorde for applicants is not acceptable in this regard. The second ground for quashing complaint is absence of knowledge of issuing of cheque - HELD THAT:- It is admitted fact that applicants have not signed any of cheques in question. The statutory notices were not send to them after dishonour of cheques - It is necessary to plead the knowledge of all these applicants which is require as per first proviso of Section 141 of the N.I. Act. Their specific status and role is not specified in the complaint. Their liability to pay that amount under dishonoured cheque is not establishing from the averments in the complaint. It is not established from any document or conduct that disputed cheques were signed with their knowledge. Therefore, all the applicants cannot be held l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ques were deposited in the Union Bank, Aurangabad Branch, Aurangabad for realization and it were dishonoured. Therefore, it were returned with cheque return memo dated 06.11.2017 with the endorsement Funds Insufficient . The respondent No. 2 sent a statutory notices under Section 138 of the Negotiable Instruments Act, 1881 to the applicants. The notice to the Amtek Company was served on 04.12.2017. The complaint along with application for condonation of delay of 43 days was filed. The delay was condoned. The process was issued against all the petitioners. 5. Learned Senior Counsel Mr. R.N. Dhorde, for the applicants submitted and pointed out the grounds of objections of this application that the complaint is illegal and process is illegally issued by the trial Court against the applicants without considering fact about their liability to pay that amount. It is abuse of the process of the Court. He further submitted that the Amtek Auto Limited is a Company registered under the Companies Act. It filed insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (for short, the IBC ) for appointment of Interim Resolution Professional before the National Company Law Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Report for the year 2016-2017. 6. Learned Senior Counsel Shri R.N. Dhorde for the applicants is relying upon following the authorities : i) Rajeev Kumar and others Vs. State of Maharashtra, 2019(2) Mh.L.J. 628 in which it is held that when accused persons are not signatory to the disputed cheque, an order of issuance of process cannot be sustained. ii) N.K. Wahi Vs. Shekhar Singh Ors., 2007 DGLS (SC) 293 , in which it is held that to lodge a prosecution against a Director there must be a specific allegation in the complaint as to the part played by them in the transaction. iii) Aparna A. Shah Vs. Sheth Developers Pvt. Ltd., 2013 DGLS (SC) 456, it is only drawer of the cheque who can be made an accused. 7. Learned Senior Counsel Shri R.N. Dhorde for the applicants lastly prayed that complaint is not maintainable as per Section 141 of the N.I. Act against this applicant and it would be abuse of the process of Court. He prayed to quash the complaint. 8. Learned Senior Counsel Mr. R.S. Deshmukh for the respondent No. 2 submitted that liability of all the applicants are pleaded and prima facie established from complaint as per Section 141 of the Negotiable Instruments Act. He pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the acts of the company and, therefore, a prosecution against the Directors or other officers is tenable even if the company is not arraigned as an accused. The words as well as have to be understood in the context. xxx xxx xxx 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Co. Ltd. (in liquidation) Vs. NR, 1999 (4) Bom. C.R. 748 in which it is held that the proceeding contemplated under Sections 442 and 446 (1) of the Companies Act cannot cover criminal proceeding under Section 138 of the N.I. Act. 9. Learned Counsel for the respondent No. 2 lastly prayed to reject this application as there is no any legal or factual justifiable ground to quash said complaint. 10. Nobody will dispute ratio laid down in above authorities cited on behalf of both sides. However each case must be decided on its own merits and for that material facts of the case i.e. complaint are decisive. 11. The first ground of objection of this application is that under Section 14 of the IBC Act there is order of the NCLT Chandigarh and therefore no criminal liability of the applicants arise. But in view of the law laid down in P. Mohanraj and others Vs. M/s. Shah Brohters Ispat Pvt. Ltd. (supra) Section 14 of the IBC applies to the corporate debtor and it is not applicable to the natural person. From the proceeding under Section 138 of the N.I. Act they are not exonerated from criminal liability. Thus, these applicants, who are natural persons cannot be benefited by the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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