TMI Blog2014 (7) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court in Aneeta Hada, we have no other option but to set aside the rest part of the impugned judgment whereby the High Court held that the proceedings against the appellant can be continued even in absence of the Company. - Decided in favor of appellant. - Criminal Appeal No. 1364 of 2014 (arising out of SLP(Crl.) No.7039 of 2007) - - - Dated:- 7-7-2014 - Sudhansu Jyoti Mukhopadhaya And V. Gopala Gowda,JJ. JUDGMENT Sudhansu Jyoti Mukhopadhaya,J. Leave granted. 2. This appeal is directed against the judgment dated 13th August, 2007 passed by the High Court of Delhi at New Delhi in Criminal Miscellaneous Case No.2380 of 2004. By the impugned judgment, the High Court held that the complaint under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the, Act ) was barred by limitation and quashed the summon order against respondent no.2-Visionaries Media Network (hereinafter referred to as the, Company ). It further held that the dispute qua the appellant (petitioner no.2 before High Court) is within limitation and affirmed the summon order against the appellant. 3. The factual matrix of the case is as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.2004 constituted a valid notice under Section 138 of the Act and hence the complaint based on second notice against respondent no.2-Company was not maintainable and quashed the summon issued by the Trial Court against respondent no.2-Company. However, so far as appellant is concerned, the High Court relying on decision of this Court in Anil Hada v. Indian Acrylic Ltd., (2000) 1 SCC 1, held that the proceeding against the Director can be issued even in absence of the Company being impleaded, The High Court further held that the summoning order was valid since the first notice was not addressed to the appellant and the second notice which was also addressed to the appellant was issued within time and. therefore, criminal complaint filed by respondent no.1 against the appellant on the basis of the said notice is maintainable. 7. Learned counsel appearing on behalf of the appellant contended that the order of the High Court is contrary to the law in as much as this is not a case where proceedings were initiated against the Managing Director alone. On the contrary, the proceedings are instituted against the company/accused and its Managing Director. In the event of the company/acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or offence under Section 138 will be deemed to be upon other persons connected with the Company in view of Section 141 of the Act, which reads as follows: 141. Offences by companies. (1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, 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 subsection shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in subsection (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aged in Section 141 of the Act. 21. We, therefore, hold that even if the prosecution proceedings against the Company were not taken or could not be continued, it is no bar for proceeding against the other persons falling within the purview of sub-sections (1) and (2) of Section 141 of the Act. In the light of the aforesaid view we do not consider it necessary to deal with the remaining question whether winding-up order of a company would render the company nonexistent. 13. In Aneeta Hada v. Godfather Travels and Tours Pvt. Ltd., (2008) 13 SCC 703, taking note of the maxim lex non cogit ad impossibilia, two Judge Bench of this Court observed: 54. True interpretation, in my opinion, of the said provision would be that a company has to be made an accused but applying the principle of lex non cogit ad impossibilia i.e. if for some legal snag, the company cannot be proceeded against without obtaining sanction of a court of law or other authority, the trial as against the other accused may be proceeded against if the ingredients of Section 138 as also Section 141 are otherwise fulfilled. In such an event, it would not be a case where the company had not been made an accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. 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 drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh17 which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with the qualifier as stated in para 51. The decision in Modi Distillery has to be treated to be restricted to its own facts as has been explained by us hereinabove. 15. In the present case, the High Court by impugned judgment dated 13th August, 2007 held that the complaint against respondent no.2-Company was not maintainable and quashed the summon issued by the Trial Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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