TMI Blog1991 (3) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... nded by the Banking. Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988. In the aforesaid complaint, it was, inter alia, alleged- That accused No. 1, Dilip Jaiswal, who is the director of M/s. Hisco Steel Pvt. Ltd., accused No. 1, on behalf of his company placed an order on February 5, 1989, to the complainant's company for supplying various sizes of moulding boxes. Pursuant to the aforesaid order, the complainant's company, on two different dates, supplied a total of 45 numbers of moulding boxes to accused No. 1, under proper receipts on September 12 and 13, 1989. Thereafter, the complainant's company submitted two bills, one for ₹ 46,582.50 and another for ₹ 1,06,665.60 when, on October 12, 1989, accused No. 2, on behalf of his company, accused No. 1, issued a cheque in favour of the complainant's company towards the payment for the cost of the said articles. On the same day, accused No. 2 as the managing director of Hotel Hindusthan International, by a letter dated October 12, 1989, guaranteed the payment of the dues of the complainant's company amounting to ₹ 1,52,648.10 and issued a post-dated cheque fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 138 of the Negotiable Instruments Act, 1881. as amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, and face the trial. The petitioner contends that the impugned prosecution against the petitioner as well as against Hisco Steel Pvt. Ltd. is wholly misconceived, that as the goods supplied by the company to the opposite party being defective and having been rejected, there could be no liability on the petitioner company to pay for the aforesaid sub-standard articles and consequently the dishonour of the cheque to pay for the said goods does not amount to an offence under Section 138 of the Negotiable Instruments Act. It is also submitted that, in any event, the prosecution of the petitioner under Section 138 of the Negotiable Instruments Act is wholly illegal inasmuch as, prior to the lodging of the complaint, no notice of demand was served upon him. It is, therefore, prayed that the Case No. C/374/89 be quashed. 4. The revision petition is opposed by the opposite party. It is submitted that the goods that were supplied were not of sub-standard quality, that no such complaint within thirty days of the receipt of the goods w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank, such person shall be deemed to have committed an, offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier ; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid ; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.--For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner is concerned, is liable to be quashed. 7. On behalf of the opposite party, it is submitted that the offence under Section 138 under the Negotiable Instruments Act was committed by the limited company and, therefore, the limited company was served with the notice as contemplated by proviso (b) to Section 138 of the Act, that the petitioner being the director-in-charge of the said company is being prosecuted along with the company in view of Section 141 of the Act and that under the Negotiable Instruments Act, for such a person who is being prosecuted under Section 141 of the Act along with the limited company who is alleged to have committed the offence, no separate notice is required to be given and, therefore, even if such a notice was not given to the petitioner, he can be prosecuted under Section 138 read with Section 141 of the Negotiable Instruments Act. 8. On a clear perusal of Clause (b) of the proviso to Section 138, we are of the view that, before instituting criminal proceedings under Section 138 of the Negotiable Instruments Act, the payee or the holder in due course of the cheque, as the case may be, has to make a demand for payment of the said amount of money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny 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 the 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. 11. We are of the view that the contention of the opposite party is correct. In the petition of complaint, the present petitioner being the director is being prosecuted under Section 141 of the Act along with the company. Therefore, we are unable to accept the submission of Mr. Roy that a separate notice upon the petitioner-director is required to be given under proviso (b) to Section 138 of the Negotiable Instruments Act for prosecuting him along with the company for the offence alleged to have been committed by the company under Section 138 of the Negotiable Instrumen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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