TMI Blog2005 (7) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... shonoured for insufficient funds. After receipt of the intimation, the complainant requested the company to pay the amounts covered by the cheques, but the company failed to pay the said amount. On 27-2-2001 the petitioner issued a legal notice under Section 138 of the Negotiable Instruments Act (for short 'the Act') calling for the accused-company to pay the amounts covered by the cheques within 15 days from the date of receipt of the legal notice. The company Instead of arranging payment issued a reply notice raising some contentions. Since the accused-company failed to make payment of the amount covered by the cheques, the complainant prosecuted the company by contending that the accused-company deliberately failed to pay the amounts. The learned Magistrate took cognizance of the offence and issued summons to the company. During the pendency of the said ease, the accused-company filed Criminal Misc. Petition No. 3598 of 2003 under Sections 239 and 245, Cr. P.C. for discharge and acquittal for the offence under Section 138 read with Section 141 of the Act. In the said application Sri Rahul Kejriwal. Director of the company pleaded that as the complainant did not mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge of and responsible for day-to-day conduct of the business. It is also not explained how the commission of offence is attributable to the negligence of the revision petitioner in his individual capacity. ... Taking into consideration of the legal position 1 hold that taking cognizance of the offence itself is illegal and erroneous since the provisions under Section 141 of the Act are riot complied with by the complainant. The other grounds of appeal are not seriously pressed during the course of arguments. 5. The learned Sessions Judge while making the above observations allowed the revision petition by setting aside the order passed by the learned Magistrate. The learned Sessions Judge further ordered that the revision petitioner shall be discharged as prayed for. 6. The complainant being aggrieved by the order of the learned Sessions Judge dated 19-1 -2003 preferred this revision case challenging its validity and legality. 7. Sri C. Padmanabha Reddy, learned Senior Counsel representing the revision petitioner submitted that since the cheques issued by the company were dishonoured, the prosecution against the company is perfectly maintainable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 this section-- (a) company means any body corporate and includes a firm or other association of individuals; and (b) director , in relation to a firm, means a partner in the firm. 12. The above provision makes it clear that the company as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 138 as against the appellant are quashed. 15. In Katta Sujatha v. Fertilizers and Chemicals Travancore Ltd., , the Supreme Court while dealing with Sections 138 and 141 of the Negotiable Instruments Act considered the aspect regarding the maintainability of the complaint against a partner to whom no particular act was specifically attributed. In the said complaint under Section 138, the allegations were levelled against the firm and its partners, including a partner to whom no particular act was specifically attributed. No allegation was made in the complaint that the said partner was incharge of and was responsible to the firm for the conduct of the business of the firm and there is no allegation that the offence was committed with the consent or connivance of the said partner or that the same was attributable to any negligence on her part in the matter of issuance of the cheque. In the above circumstances, the Supreme Court held that in such circumstances it can be said that no case is made out against the partner. Hence, the complaint against her is not maintainable. 16. In Monaben Ketanbhai Shah v. State of Gujarat, , the Supreme Court held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Court was only against the company and not against the respondent in his individual capacity. Therefore, no prejudice is going to be caused to Sri Rahul Kejriwal due to the conviction of the company for the offence under Section 138 of the Act. He submitted that if the second respondent is not inclined to represent the company in this case, he has every liberty to make an application under Section 305, Cr. P.C. requesting the Court to delete his name and to direct the complainant to show the name of such person who is managing the affairs of the company as the person representing the company. He further submitted that the appellate Court came to an erroneous conclusion that unless the person who is incharge of the affairs of the company is prosecuted, the company alone cannot be prosecuted. 20. The learned Counsel for the revision petitioner further submitted that a provision covered by Section 10 of the Essential Commodities Act is similar to Section 141 of the Negotiable Instruments Act and the Supreme Court while considering the scope of Section 10 of the Essential Commodities Act held that separate prosecution of person in charge or officer of company without prosecu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consent or connivance or because of neglect attributable to whom the offence has been committed. Any one or more or all of them may be prosecuted and punished. The company alone may be prosecuted. The person-in-charge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person-in-chargc of an officer of the company may not be prosecuted unless he be ranged alongside the company Itself. Section 10 indicates the persons who may be prosecuted where the contravention is made by the company. It does not lay down any condition that the person-in-chargc or an officer of the company may not be separately prosecuted if the company itself is not prosecuted. Each or any of them may be separately prosecuted or along with the company. 23. Section 141 is specifically incorporated to prosecute the companies for the offence under Section 138 of the Act. The mandate of the section clearly indicates that the company is liable for prosecution when a cheque is Issued on its behalf and bounced on presentation of such cheque. The intendment of the section is not to give scope for individuals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure, which does not contemplate a stage of discharge like Section 259, Cr. P.C. which provides a discharge in a warrant case. Therefore, when once the plea of the accused is recorded under Section 252 of the Code, the procedure contemplated under Chapter XX has to be followed, which is to take the trial to its logical conclusion. 26. Though the application was made by the accused under Sections 239 and 245, Cr. P.C. for discharge, the trial Court may treat the said application as one under Section 258, Cr. P.C. and if the Court finds that there is no material to proceed with the trial, it may stop further proceedings and it may amount to discharge. Section 258, Cr. P.C. reads as follows : 258. Power to stop proceedings in certain cases : In any summons case instituted otherwise than upon complaint, a Magistrate of First Class, or with the previous sanction of the Chief Judicial Magistrate, any other Judicial Magistrate, may, for reasons to be recorded by him, stop the proceedings at any stage without pronouncing any judgment and where such stoppage of proceedings is made after the evidence of the principal witnesses has been recorded, pronounce a judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
