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TMI Blog2019 (9) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... r 31, 2009 fails to obtain NOC from the HDFC in respect of the sale, transfer and conveyance of the said premises in favour of BCCL and fails to register the definitive documentation in respect of the said premises in favour of BCCL, then, the company shall on or before November 3, 2009 pay to BCCL the sum of Rs. 4,00,00,000 (rupees four crores only) whether or not total commitment has been utilized by the company. On payment of sum of Rs. 4,00,00,000 (rupees four crores only) the total commitment shall stand revised to Rs. 4,00,00,000 (rupees four crores only)." 3. The case of the complainant is that in view of the non-compliance with the obligations under the aforesaid advertising agreement dated November 3, 2009 another subsidiary of IDEB group of companies issued a cheque bearing No. 201008, dated November 1, 2009 drawn on Centurion Bank of Punjab Ltd., Bengaluru-560 027. The said cheque when presented for encashment, was dishonoured on the ground of "funds insufficient". The complainant having issued notice, did not elicit the desired response. Accordingly, the complainant initiated action against the petitioners as well as accused No. 1 under section 138 of the Negotiable In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 7 of the complaint that with the knowledge and consent of the petitioners in both these petitions the disputed cheque was issued. Therefore, the petitioners are jointly and severally liable for payment of the amount covered under the aforesaid cheque. 7. In support of his arguments, learned counsel has placed reliance on the decision of the hon'ble Supreme Court of India in the case of Standard Chartered Bank v. State of Maharashtra reported in [2016] 198 Comp Cas 177 (SC) ; [2016] 6 SCC 62 and with reference to paragraphs 23 and 26, has emphasized that the necessary averments giving rise to the culpability of the petitioners having been averred in accordance with provisions of section 138 of the Negotiable Instruments Act and section 141 of the Negotiable Instruments Act, the contention urged by the petitioner in Crl. P. No. 5676 of 2012 that she was not concerned with the issuance of cheque and that she was not knowing the affairs of the company, could be decided only during trial and hence, there is no case for quashment of the complaint. 8. I have considered the rival contentions urged by the parties and have perused the averments made in the complaint and law l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 anybody corporate and includes a firm or other association of individuals ; and (b) 'director', in relation to a firm, means a partner in the firm." 10. In the case of Standard Chartered Bank v. State of Maharashtra reported in [2016] 198 Comp Cas 177 (SC) ; [2016] 6 SCC 62 relied on by learned counsel for the petitioners, the hon'ble Supreme Court has analyzed the law on the point and has reiterated the ratio laid down in K. K. Ahuja v. V. K. Vora [2009] 152 Comp Cas 520 (SC), as under (page 535 of 152 Comp Cas) : "The position under section 141 of the Act can be summarized thus : (i) If the accus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responsible for the conduct of the business of the company. It stands to reason that the affairs of the company being managed by the managing director, he is answerable to the acts of commission or omission by the company without further proof of the fact that at the time of the commission of the offence he was in charge of the affairs of the company. But, in so far as the proceedings against the directors are concerned, as held in the above decision that a specific averment is required to be made in the complaint that the director who is sought to be prosecuted for the criminal offences was in charge of or was responsible to the affairs of the company at the relevant time. This requirement would arise only when the director is sought to be prosecuted for the offences committed by the company. 12. In a case as in the instant case, when the managing director and also a director of the company are sought to be prosecuted, it cannot be presumed that the director was also running the affairs of the company and was in charge and management of the company. As held in the case of S. M. S. Pharmaceuticals Ltd. v. Neeta Bhalla [2005] 127 Comp Cas 563, 573 (SC) ; [2005] 8 SCC 89 : "What i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the affairs of the company and with her knowledge and consent, the cheque in question was issued through IDEB Projects P. Ltd., merely by reproducing the ingredients of section 141(2) of the "Act", the criminal liability cannot be fastened on her. In my view, the petitioner in Crl. P. No. 5676 of 2012 cannot be prosecuted in her capacity solely on the ground that she was director of the said company as on the date of the issuance of the said cheque. Learned counsel for the respondent has emphasized on the language employed in sub-section (2) of section 141 wherein, it has been stated that 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. But, in the instant case, as already held above, the circumstances detailed in the complaint do not suggest that the issuance of cheque was within the knowled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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