TMI Blog2017 (10) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany for the conduct of the business of the company. It is crystal clear that if the person who commits an offence under Section 138 of the Act is a company the company as well as other person in charge of or responsible to the company for the conduct of business of company at the time of commission of offence is deemed to be guilty of the offence. It creates constructive liability on the person responsible for the conduct of business of the company. In the light of the aforesaid observations, it will have to be seen that the applicant is one of the person whose is concerned with the day to day affairs of the company. As stated in complaint the applicant is looking after day to day affairs of accused no.1. He has dealt with complainant company in respect of subject transaction. He has acted in connivance with other in dishonour of cheque. The complainant must be given an opportunity to prove the same by leading the evidence before the trial Court. The proceedings cannot be quashed at the threshold. No reason to interfere in the order issuing process passed by the trial Court. As perused the reply filed by the advocate for the complainant and the documents in the form of E- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used no.1 through accused nos.2, 4 and 5 had approached the complainant company for publication of an advertisement in the news paper for publication of accused no.1 in the news paper, KHALEEJ TIMES , Dubai on 20th, 21st, 22nd and 23rd November, 2014. (d) On instructions from accused no.1 through accused nos.2, 4, and 5, the complainant company have fulfilled their obligations by publishing the advertisement on behalf of accused no.1 in the news paper KHALEEJ TIMES , Dubai. The complainant, thereafter, raised the invoices bearing no.215912 dated 24th November, 2014 for ₹ 6,84,250/-, 215916 dated 24th November, 2014 for ₹ 2,97,500/- and 215918 dated 24th November, 2014 for ₹ 4,16,500/-. (e) Towards discharge of liability against the aforesaid invoices, the accused issued At Par Cheque bearing no.138703 dated 13th January, 2015 for ₹ 13,70,286/- drawn on Axis Bank Limited in favour of complainant company. (f) The complainant presented the aforesaid cheques for encashment with their bankers, viz. BNP Paribas, Mumbai on 24th February, 2015. The said cheque was dishonoured and returned to the complainant along with bank memo with an endorsement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the trial Court. (v) The applicant does not fall under any category as enumerated under section 138 read with Section 141 of the Negotiable Instruments Act. The applicant cannot be held vicariously liable for the liability of the accused no.1. (vi) In the complaint accused no.2 has been referred to Vijay Murthy and it is alleged that the accused no.2 is the authorized signatory and C.F.O. of accused no.1. In the notice issued by the complainant company it is stated that the addressee no.2 is the signatory to the cheque. In the verification statement, it was stated that accused no.2 is the signatory to the cheque. It is also stated that as per the instructions from accused no.1 through accused nos.3 and 4, complainant company have published the advertisement in the newspaper KHALEEJ TIMES , Dubai, in favour of accused no.1 company. It is submitted that the complainant is not sure about the role of the applicant. (vii) It is submitted that the applicant is not the signatory to the cheque nor he is C.F.O. or Director of the accused no.1 company. It is submitted that the applicant has not acted in any manner in the entire transaction. (viii) It is further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lamation ought not to have been issued against the applicant. The complainant cannot rely upon the E-mails in support of complaint. It is, therefore, submitted this Court in exercise of the inherent powers under Section 482 of Cr.P.C. may quash and set aside the proceedings. 5. Learned counsel for the applicant placed reliance upon the following decisions in support of his submissions: (1) National Bank of Oman Vs. Barakara Abdul Aziz; (2013) 2 SCC 488 (2) Sunil Bharti Mittal Vs. CBI; AIR 2015 SC 923 (3) Standard Chartered Bank Vs. State of UP; AIR 2016 SC 1750 (4) A.C. Narayanan Vs. State of Maharashtra Anr.; (2014) 11 SCC 790 (5) Facebook India Online Services Vs. Vinay Rai; Cri.M.C.No.102 of 2012, dt. 11.01.2012 (6) M/s.Pepsi Food Ltd. Vs. Special Judicial Magistrate; AIR 1998 SC 128 (7) Net Core Solutions Pvt. Ltd. Vs. Pinnacle Teleservices Ltd. 2012(3) Mh.L.J. 724 6. The learned counsel for the respondent no.1 submitted that there is no substance in the submissions advanced by the advocate for the applicant. The applicant is absconding since long. The trial Court has issued proclamation against him. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant company resolving that the company would initiate legal proceedings under Section 138 of the Negotiable Instruments Act against such parties and for such matters may be deemed necessary and for the said purpose the company authorizes Shri Girish Joshi and others to sign all documents for and on behalf of the company including complaint, suits, verifications, affidavit etc. in connection with any proceedings under Section 138 of the Negotiable Instruments Act. It is submitted that the applicant was instrumental in drawing the consent terms to settle the matter between the parties. The said Consent Terms are annexed to the application. It is submitted that although the applicant is not signatory to the said consent terms, the applicant has participated in the talks of settlement. The applicant has played major role in the transactions and in respect to the issuance of the cheques which were dishonoured. 8. The complainant is relying upon several E-mails which shows the involvement of the applicant. It is the case of the complainant that the applicant and other directors of accused no.1 company had approached the complainant for publication of advertisement in the news ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case as well as on the basis of record with complainant company. The verification statement also mentions that Shri Joshi has been appointed by the complainant company by passing Board Resolution, authorizing him to file complaint and lead evidence against the accused as he knows the facts of the case. In view of the above, there is no infirmity in the filing of the complaint of Shri Girish Joshi as authorized representative of respondent no.1. 10. In the case of A.C. Narayanan (Supra) relied upon by the counsel for the applicant, the Apex Court has considered the issue relating to filing of complaint under Section 138 of the Negotiable Instruments Act to power of attorney holder or legal representatives. It was also under consideration whether a power of attorney holder can be verified on oath under 200 of the Code and/or whether specific averments as to the knowledge of the power of attorney holder in the transaction must be explicitly asserted in the complaint and whether the power of attorney holder can verify the complaint on oath if he fails to exert explicitly to the knowledge of the complaint on the basis of presumption of knowledge. In paragraph no.26 of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complaint through authorized representatives was not maintainable as he has no personal knowledge of the transaction. 11. The other submission advanced by the advocate for the applicant about the contradictions in the complaint, demand notice and verification statement qua the role of applicant in the subject transaction is a matter which can be considered during the trial and the proceedings cannot be quashed on that ground. Learned counsel further contended that the applicant is residing beyond the jurisdiction of the trial Court and, therefore, it was mandatory to conduct an inquiry in accordance with the amended provisions of Section 202 of the Code of Criminal Procedure. It was argued that although in the order issuing process there is a reference to invoking Section 202 of the Cr.P.C, no inquiry was conducted in proper perspective. In the case of National Bank of Oman (Supra), the Supreme Court has considered the aspect of carrying out such an inquiry as per the said amended provisions of Cr.P.C. The said decision is related to the offences under the Indian Penal Code. In the Judgment of this Court in the case of Netcore Solution Private Limited Vs. Vinay Rai , 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate the process if there is material to indicate application of mind. Similar view was taken in another decision of this Court in Criminal Application No.716 of 2015, 717 of 2015 and 718 of 2015 (Dr.(Mrs.) Rajul Ketan Raj Vs. Reliance Capital Ltd. Anr. In the said decision, this Court has also taken note of decision in Netcore Solutions Pvt. Ltd. (Supra), relied upon by the advocate for the applicant in this application. The Court also referred to decisions of the Apex Court in the case of Vijay Dhanuka Vs. Najma Mamitaj 2014 ALL MR (Cri) 1924 (SC) and National Bank of Oman's (Supra) case while considering scope of Section 202 of Cr.P.C. qua Section 138 of Negotiable Instruments Act. I am in agreement with the view taken by this Court that the amended provisions of Section 202 of Cr.P.C. referred to above as per Section 138 of Negotiable Instruments Act is only directory. 12. The submissions of the counsel for the applicant is that there are no requisite averments to invoke Section 141 of the Negotiable Instruments Act against the applicant. In the complaint it is stated that accused nos.2 to 5 are looking after day to day affairs of the accused no.1 company a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in sub-section (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 be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.- For the purposes of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a company may be liable if he satisfies the main requirement of being in charge of and responsible for the conduct of business of a company at the relevant time. Liability depends on the role one plays in the affairs of a company and not on designation or status. If being a director or manager or secretary was enough to cast criminal liability, the section would have said so. Instead of every person the section would have said every director, manager or secretary in a company is liable ..., etc. The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action . 17. After so stating, the Court placed reliance on sub-Section 2 of Section 141 of the Act for getting support of the aforesaid reasoning as the said sub-Section envisages direct involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case within Section 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a nondirector can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial . In the light of the aforesaid observations, it will have to be seen that the applicant is one of the person whose is concerned with the day to day affairs of the company. As stated in complaint the applicant is looking after day to day affairs of accused no.1. He has dealt with complainant company in respect of subject transaction. He has acted in connivance with other in dishonour of cheque. The complainant must be given an opportunity to prove the same by leading the evidence before the trial Court. The proceedings cannot be quashed at the threshold. 13. The other submission of the counsel for the applicant that the E-mails, electronic evidence relied upon by the complainant cannot be considered in view of Section 65B of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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