TMI Blog2022 (4) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... any makes it clear when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof that the company is a juristic person. The petitions have been filed at the stage of framing of charges. Whether it would be maintainable ? In order to arrive at an answer to the query, the complaint and the orders summoning the accused is examined. Admittedly, the company was not made an accused in the cases expect the Directors, therefore, applying the law laid down by the Supreme Court as cited supra, it appears that while summoning the accused, the Magistrate has failed to see the principles of law and in turn when the objection was made, the learned Sessions Judge also failed to take into account the principles laid down by the Supreme Court - applying the principles as has been decided in case of M/S. PEPSI FOODS LTD. ANR VERSUS SPECIAL JUDICIAL MAGISTRATE ORS [ 1997 (11) TMI 518 - SUPREME COURT ] which mandates that the Magistrate has to carefully scrutinize the evidence brought on record and cannot be a silent spectator at the time of recording of prelimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director would not lie. Learned counsel for the petitioners would submit that the respondents herein are very well in know of the fact that the cheques were issued by petitioners as directors of company, which is evident from copy of the cheques itself. He would submit that the cheques were issued by the petitioners in the capacity of the Director of the Company M/s. Saini Industries. Admittedly, Saini Industries being not arrayed as a party before the Trial Court, in a result, in view of the law laid down in case of Aneeta Hada v. Godfather Travels Tours (P) Ltd. (2012) 5 SCC 661 , the prosecution of the like nature would not lie. He placed his reliance in (2020) 10 SCC 751, (2019) 3 SCC 797, (2018) (13) SCC 663, (2012) 5 SCC 661 and lastly (2009) 6 SCC 729 and would submit that no specific averments have been made that what role the petitioners have played on behalf of the company as an authorised signatory. Therefore, if the company is not made a party as accused, the prosecution itself would not be maintainable. 6. Per contra, learned counsel for the respondents would submit that there is no dispute about the legal proposition, however, the petitioners were the Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to fill up the lacuna is not a fair option exercised by the High Court as the failure of the trial court to convict the Company renders the entire conviction of the nominated person as unsustainable. 10. Likewise in case of Himanshu v. B.Shivamurthy Another (2019) 3 SCC 797 , the Supreme Court held that commission of offence by the company is an express condition precedent to attract the vicarious liability of others and the word as well as the company makes it clear when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof that the company is a juristic person. At para 7, 8, 9,10, 12 13 held as under : 7. The first submission on behalf of the appellant is no longer res integra. A decision of a three-Judge Bench of this Court in Aneeta Hada v. Godfather Travels and Tours Private Limited (2012) 5 SCC 661 governs the area of dispute. The issue which fell for consideration was whether an authorized signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 without the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us : (SCC p.188 para 12)- 12. The proviso to Section 138, however, is all important and stipulates three distinct conditions precedent, which must be satisfied before the dishonour of a cheque can constitute an offence and become punishable. The first condition is that the cheque ought to have 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. The second condition is that the payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. The third condition is that the drawer of such a cheque should have failed to make 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. It is only upon the satisfaction of all the three conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emerged in these two appeals is whether the company could have been made liable for prosecution without being impleaded as an accused and whether the directors could have been prosecuted for offences punishable under the aforesaid provisions without the company being arrayed as an accused. 7. While assailing the said order before the two-Judge Bench, the substratum of argument was that as the Company was not arrayed as an accused, the legal fiction created by the legislature in Section 141 of the Act would not get attracted. It was canvassed that once a legal fiction is created by the statutory provision against the Company as well as the person responsible for the acts of the Company, the conditions precedent engrafted under such deeming provisions are to be totally satisfied and one such condition is impleadment of the principal offender. 58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words as well as the company appearing in the Section make it absolutely unmistakably clear that when the company can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that the cheques were issued on behalf of the company not in the individual capacity of the petitioners. Consequently, in the complaint when the company has not been arrayed as accused, the prosecution simplicitor against the Director without making specific averments about the role played by them would not be maintainable. 14. The petitions have been filed at the stage of framing of charges. Whether it would be maintainable ? In order to arrive at an answer to the query, the complaint and the orders summoning the accused is examined. Admittedly, the company was not made an accused in the cases expect the Directors, therefore, applying the law laid down by the Supreme Court as cited supra, it appears that while summoning the accused, the Magistrate has failed to see the principles of law and in turn when the objection was made, the learned Sessions Judge also failed to take into account the principles laid down by the Supreme Court. Therefore, applying the principles as has been decided in case of Pepsi Foods Limited Anr. v. Special Judicial Magistrate (1998) 5 SCC 749, which mandates that the Magistrate has to carefully scrutinize the evidence brought on record and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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