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2017 (6) TMI 1384 - HC - Indian LawsDishonour of Cheque - absence of due service of statutory demand notice - vicarious liability of Director - acquittal of the accused - Section 138 and 141 of NI Act - HELD THAT:- Section 141 again does not lay down any requirement that in such eventuality, the individual directors must individually be issued separate notices under Section 138 and that the persons, who are in charge of the affairs of the company and running its affairs must naturally be aware of the notice of demand under Section 138 of the Act issued to such company and that it is precisely for this reason that no notice is additionally contemplated to be given to such directors. That the opportunity to the "drawer" by issuing statutory demand notice is considered good enough for those who are in charge of the affairs of such company, etc., and if it is their case that the offence was committed without their knowledge or that they had exercised due diligence to prevent such commission, it would be a matter of defence to be considered at the appropriate stage, etc. Therefore, it is crystal clear that in a case, where the drawer of the dishonoured cheque is a company, then statutory demand notice should mandatorily be served on the drawer company but that separate individual notices to the individual directors and officials of the company is not mandatory. The Appellate Court cannot be found fault with in any manner in rendering the impugned view. Since the prosecution is not maintainable as against the drawer company in view of this ground, then the prosecution against the individual director would also crumble to the ground as the offence under S. 138 of the N.I. Act is essentially and primarily attracted as against the drawer of the cheque. If no offence is made out against the accused drawer company, then the question of convicting the individual Directors and officials of that company on the basis of vicarious liability under Section 141 of the N.I. Act does not arise. For these reasons, the Lower Appellate Court was fully right in holding that all the accused are entitled for acquittal. Therefore, without the basic averment in the complaint that the drawer of the dishonoured cheques in question is the company and not the individual director, it is not right and proper to convict the accused company for the above said offence. That apart, in the facts and circumstances of a case like this, even if an application for amendment of averments in the complaint had been filed, it could not have been allowed as it could have caused serious prejudice to the accused company - Going by the legal principles laid down by this Court in the decisions of this Court as in Linda John Abraham v. Business India Group Company & ors. [2013 (2) TMI 572 - HIGH COURT OF KERALA], HAFSA RAHMAN T VERSUS STATE OF KERALA AND ORS. [2017 (4) TMI 1615 - KERALA HIGH COURT] as well as the rulings of the Apex Court as in UP. Pollution Control Board v. M/s. Modi Distillery & Ors. [1987 (8) TMI 449 - SUPREME COURT], S.R. Sukumar v. S. Sunaad Raghuram [2015 (7) TMI 1260 - SUPREME COURT], such a plea for amendment of the averments in the complaint could not have been entertained at all in the facts of this case. This is all the more so, inasmuch as in the facts of this case, any plea for such amendment was not brought forth before the issuance of summons to the accused company. This Court is constrained to uphold the view taken by the appellate sessions court that the accused persons are entitled for acquittal - Appeal dismissed.
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