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TMI Blog2024 (9) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ny wherein M.R.Trading Co was required to be arrayed as an accused and in view of the settled law in the case of Aneeta Hada Vs. M/s Godfather Travels and Tours Pvt Ltd. [ 2012 (5) TMI 83 - SUPREME COURT ] wherein it has been held that for maintaining the prosecution under section 141 of the Negotiable Instruments Act, 1881 arraigning of a company as an accused is imperative. A company being an artificial person acting through its management has a separate legal entity wherein it owns its assets and is liable for debts. To attract section 138 of NI Act, it is necessary to understand the essence of the section 141 of NI Act in true sense which unmistakably on a plain reading itself makes clear the importance of impleading the company in cases involving cheques issued on its behalf. This court while finding merit in this case strongly holds that the petitioner in his official capacity cannot be prosecuted in the absence of the company. Even otherwise, it is crystal clear that the petitioner had signed the cheque in his capacity of an authorized signatory however, the trial court while passing summoning order had not looked into this legal aspect. The complaint dated 04.02.2021 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three post dated cheques bearing no. 113603, 000031, 000034 amounting to Rs. 6,70,000/-, 90,000/-, 90,000/- respectively which got dishonoured. Thereafter, legal notice was sent to the petitioner and two complaints were filed u/s 138 of Negotiable Instruments Act, 1881 bearing NACT/608/2021 and NACT/1731/2021. 5. He further contends that, since the issuance of the cheques, the petitioner had mala fide intention to defraud the respondent-company wherein he has specifically declared that three cheques were given by the petitioner himself to the respondent-company in regard to its legal liability and therefore by his act and conduct, had fraudulent and dishonest intention to deceive the respondent-company. 6. It is vehemently argued that the said M. R. Trading Co. is a sole proprietorship firm which has no separate legal identity wherein Surinder Kumar Jain is the sole proprietor and therefore it is only the proprietor who can be held liable u/s 138 of Negotiable Instruments Act, 1881 on account of the fact that the proprietorship firm has no separate legal identity. He further argues while relying upon Raghu Lakshminarayanan vs M/s. Fine Tubes(2007) 5 SCC 103 wherein it has been hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the receipt of the said notice. 9. Some of the ingredients, which emerge on perusal of section 138 of the Negotiable Instruments Act are as follows:- (i) Cheque is drawn by a person on an account maintained by him with a banker; (ii) The cheque is drawn for payment of any amount of money to another person from out of that account for discharge, in whole or in part of any debt or other liability; (iii) The cheque drawn is returned by the bank unpaid. 10. Before proceeding further, it will be relevant to have a look on the provisions of section 141 of the Negotiable Instruments Act, 1881, which related to offences by company or a firm, which reads as follows:- 141 Offences by companies.- (1) If the person committing an offence was committed, under Section 138 is a company, every person who, at the time the was in 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 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 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind that the power of punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the company. The learned counsel for the respondents have vehemently urged that the use of the term as well as' in the Section is of immense significance and, in its tentacle, it brings in the company as well as the director and/or other officers who are responsible for the acts of the compary 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. In Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. and others, (1987)1 SCC 424 it has been laid down that the entire statute must be first read as a whole, then section by section, clause by clause, phrase by phrase and word by word. The same principle 'has been reiterated in Deewan Singh and others v. Rajendra Prasad Ardevi and others, (2007)10 SCC 528 and Sarabjit Rick Singh v. Union of India, (2008)2 SCC 417. Applying the doctrine of of the considered opinion that strict construction, we are commission of offen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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