TMI Blog2016 (2) TMI 1302X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner No. 2 of such notice and his response thereto can be attributed to the juristic entity as the former is nothing but the alter ego of such corporate entity. Negotiable Instruments Act is a legislation operating in the commercial field and section 138 thereof was incorporated to give tooth and claw to the legislation so as to ensure greater accountability and creditability in commercial transactions relating to cheques. This legislative intention ought to be the guiding principle while construing the validity of notice issued under the aforesaid provision of law - The issue as to whether a notice issued upon the director/authorized signatory of the company can be deemed to be a valid notice under Section 138(b) of the Negotiable Instruments Act fell for consideration Bilakchand Gyanchand Co. Vs. A. Chinnaswami [ 1999 (3) TMI 620 - SUPREME COURT] and Rajneesh Aggarwal Vs. Amit J. Bhalla [ 2001 (1) TMI 855 - SUPREME COURT] . In Bilakchand, notice issued upon the Managing Director/signatory was held to be a valid notice under Section 138(b) of the Act. The petitioner No. 1 company had sufficient notice of dishonor of the cheques and had failed to make payment within the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Bank Ltd., Kharagpur Branch on 8.7.2010, however, my client's banker through the letter dated 12th July, 2010 as served upon my client informed him that the said cheque has been dishonoured due to 'insufficient fund in your account'. By this notice/letter I do hereby request you to make payment of the said amount of ₹ 3,50,00,000/- to my client within 15 (fifteen) days from the date of receipt of the instant notice/letter, failing which my client may be compelled to take appropriate steps under the provisions of law against you before the appropriate forum without any further reference to you. Thanking you, Yours faithfully, (Pingal Bhattacharyya) Advocate 4. Mr. Bhattacharjee, learned advocate appearing for the petitioners submitted that the notice under Section 138(b) of the Negotiable Instruments Act, 1881 is to be issued upon the drawer of the cheque. Admittedly, the petitioner No. 1/company is the drawer of the cheque and notice being issued in the name of the petitioner No. 2 does not comply with the aforesaid requirement of law. Hence the impugned prosecutions are liable to be quashed on such score. 5. Per contra, Mr. Sandipan Gangul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2 of such notice and his response thereto can be attributed to the juristic entity as the former is nothing but the alter ego of such corporate entity. 11. The principle of alter ego and attribution of intent of the human agency, who is the alter ego of the company, upon the body corporate itself was approved and applied in criminal jurisprudence by the Apex Court in Iridium India Telecom Ltd. Vs. Motorola Incorporated Ors., (2011) 1 SCC 74 as follows:-- 55. ...virtually in all jurisdictions across the world governed by the rule of law, the companies and corporate houses can no longer claim immunity from criminal prosecution on the ground that they are incapable of possessing the necessary mens rea for the commission of criminal offences. The legal position in England and the United States has now crystallised to leave no manner of doubt that a corporation would be liable for crimes of intent. 59. The courts in England have emphatically rejected the notion that a body corporate could not commit a criminal offence which was an outcome of an act of will needing a particular state of mind. The aforesaid notion has been rejected by adopting the doctrine of attribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has disappeared in modern times and now mostly the question is what is true construction of the statute? A passage in Craies on Statute Law, 7th Edn. reads to the following effect: The distinction between a strict and a liberal construction has almost disappeared with regard to all classes of statutes, so that all statutes, whether penal or not, are now construed by substantially the same rules. 'All modern Acts are framed with regard to equitable as well as legal principles.' 'A hundred years ago,' said the court in Lyons' case, 'statutes were required to be perfectly precise and resort was not had to a reasonable construction of the Act, and thereby criminals were often allowed to escape. This is not the present mode of construing Acts of Parliament. They are construed now with reference to the true meaning and real intention of the legislature. At p. 532 of the same book, observations of Sedgwick are quoted as under: The more correct version of the doctrine appears to be that statutes of this class are to be fairly construed and faithfully applied according to the intent of the legislature, without unwarrantable severity on the one hand or u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aused to the petitioner company on such account. 19. The issue as to whether a notice issued upon the director/authorized signatory of the company can be deemed to be a valid notice under Section 138(b) of the Negotiable Instruments Act fell for consideration Bilakchand Gyanchand Co. Vs. A. Chinnaswami reported in (1999) 5 SCC 693 and Rajneesh Aggarwal Vs. Amit J. Bhalla reported in (2001)1 SCC 631. In Bilakchand (supra), notice issued upon the Managing Director/signatory was held to be a valid notice under Section 138(b) of the Act. In Rajneesh (supra) the Apex Court observed as follows:-- The object of issuing notice indicating the factum of dishonour of the cheques is to give an opportunity to the drawer to make the payment within 15 days, so that it will not be necessary for the payee to proceed against in any criminal action, even though the bank dishonoured the cheques. It is Amit Bhalla, who had signed the cheques as the Director of M/s. Bhalla Techtran Industries Ltd. When the notice was issued to said Shri Amit Bhalla, M/s. Bhalla Techtran Industries Ltd., it was incumbent upon Shri Bhalla to see that the payments are made within the stipulated period of 15 days. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this reason that no notice is additionally contemplated to be given to such Directors. 22. Hence, I am of the opinion that the aforesaid authorities relied on by Mr. Bhattacharjee do not answer the issue raised before this Court which has been squarely answered in Bilakchand and Rajneesh (supra). 23. The other authorities relied upon by Mr. Bhattacharya are not applicable to the facts of the case. In 1991 C.Cr.LR (Cal) 171 (Dilip Kumar Jaiswal Vs. Debapriya Banerjee) and 2005 Cri. LJ 1931 (M/s. Target Overseas Exports Pvt. Ltd. Ors. Vs. A.M. Iqbal Anr.) the issue was whether notice of dishonour was required to be given to the directors of the company when notice had been served upon the company itself. In 2015 ACD 886 (HP) [M/s. Century Vision Organic Farms Pvt. Ltd. Vs. Pushpa Bhanot] the Court did not consider the ratio in Bilakchand (supra) and Rajneesh (supra). In (2013) 2 CLT 139/(HC) [SSS Loha Marketing Pvt. Ltd. Vs. Bibby Financial Services India Pvt. Ltd.] the Court was dealing with a notice under section 434 of the Companies Act, which had not been sent to the registered office of the company. In the instant case, the notice of dishonour was sent to the register ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
