TMI Blog2022 (6) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case in hand. However, such vicarious liability arises only when the company or the firm commits offence as primary offence. The judgment relied by Mr. Singh, the learned counsel appearing on behalf of the petitioners in the case of ANEETA HADA VERSUS GODFATHER TRAVELS TOURS (P.) LTD. [ 2012 (5) TMI 83 - SUPREME COURT ] is on the same footing which is helping the petitioners. Recently, the Hon'ble Supreme Court has again examined this aspect of the matter in the case of Dilip Hariramani v. Bank of Baroda [ 2022 (5) TMI 424 - SUPREME COURT ] - By the Hon'ble Supreme Court in the judgment clearly held that section 141 of the Negotiable Instruments Act extends vicarious criminal liability to the officers associated with company or firm when one of twin requirements of section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. In absence of the firm and looking into the admitted position that the petitioner is not the drawer and in both the case he cannot be liable to be punished. Petition allowed. - Cr.M.P. No. 2183 of 2017 Cr.M.P. No. 2190 of 2017 - - - Dated:- 8-6-2022 - HON BLE MR. JUSTICE SANJAY KU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficult to continue with the work and asked the complainant for some financial support and the complainant transferred money in the account of the accused. In the month of September, 2015 when the work was about to finish and the accused started getting money from the concerned department, the accused started demanding money from the accused. The accused person issued one cheque worth Rs.10 Lakhs bearing no.128768 drawn on State Bank of India. The cheque was deposited by the complainant in her account, however, it returned by the Bank on 19.11.2015 on the ground of insufficient fund in the account of the accused. The complainant served a legal notice to the accused through her lawyer on 18.12.2015, and the accused assured through negotiation that he will pay the money but nothing has been paid. It is alleged that the accused knowing it well that there is no sufficient fund in the account still issued the cheque and made himself liable u/s 138 of N.I.Act. The facts of the case in Cr.M.P. No. 2190 of 2017 are as follow: The O.P.No.2 has filed the instant complaint case alleging therein that the opposite party no.2 being the complainant filed the criminal complaint being Complai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the firm is not made accused in the complaint case. He submits that it is crystal clear from the explanation of section 141 of Negotiable Instruments Act that unless the company or firm is not made accused and the persons who are having control over the day to day affairs of the company or the firm thereafter only it can be made to vicarious liability. To buttress his such argument, he relied in the case of Aneeta Hada v. Godfather Travels and Tours Private Limited reported in (2012) 5 SCC 661 and by way of referring this judgment, Mr. Singh, the learned senior counsel appearing on behalf of the petitioners submits that this case was referred to the Larger Bench by Hon'ble Supreme Court and the Larger Bench has held that the law laid down by the Hon'ble Supreme Court in the case of in the case of State of Madras v. C. V. Parekh and another , [(1970) 3 SCC 491] has held to be the correct law and in the Division Bench of Hon'ble Supreme Court in the case of Aneeta Hada v. Godfather Travels and Tours Private Limited (supra) has held not to be the correct law. Mr. Singh, the learned senior counsel appearing for the petitioners further relied on the paragraph nos.41, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and events and not in vacuum. We have already pointed out that the technical flaw in the complaint is attributable to the failure of the industrial unit to furnish the requisite information called for by the Board. Furthermore, the legal infirmity is of such a nature which could be easily cured. Another circumstance which brings out the narrow perspective of the learned Single Judge is his failure to appreciate the fact that the averment in para 2 has to be construed in the light of the averments contained in paras 17, 18 and 19 which are to the effect that the Chairman, Vice-Chairman, Managing Director and members of the Board of Directors were also liable for the alleged offence committed by the Company. Be it noted, the two-Judge Bench has correctly stated that there can be no vicarious liability unless there is a prosecution against the company owning the industrial unit but, regard being had to the factual matrix, namely, the technical fault on the part of the company to furnish the requisite information called for by the Board, directed for making a formal amendment by the applicant and substitute the name of the owning industrial unit. It is worth noting that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as has been explained by us hereinabove. Mr. Singh, the learned senior counsel appearing for the petitioners further submits that it is well settled that every person signing a cheque on behalf of a company on whose account a cheque is drawn does not become the drawer of the cheque. To buttress his such argument, he relied on the case of N.Harihara Krishnan v. J. Thomas reported in (2018) 13 SCC 663, paragraph nos.22, 26 and 27 of the said judgment are quoted hereinbelow: 22. The High Court failed to appreciate that the liability of the appellant (if any in the context of the facts of the present case) is only statutory because of his legal status as the Director of Dakshin. Every person signing a cheque on behalf of a company on whose account a cheque is drawn does not become the drawer of the cheque. Such a signatory is only a person duly authorised to sign the cheque on behalf of the company/drawer of the cheque. If Dakshin/drawer of the cheque is sought to be summoned for being tried for an offence under Section 138 of the Act beyond the period of limitation prescribed under the Act, the appellant cannot be told in view of the law declared by this Court in Aneeta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee) and needs investigation and would not normally be in dispute unless the person who is alleged to have drawn a cheque disputes that very fact. The other facts required to be proved for securing the punishment of the person who drew a cheque that eventually got dishonoured is that the payee of the cheque did in fact comply with each one of the steps contemplated under Section 138 of the Act before initiating prosecution. Because it is already held by this Court that failure to comply with any one of the steps contemplated under Section 138 would not provide cause of action for prosecution . Therefore, in the context of a prosecution under Section 138, the concept of taking cognizance of the offence but not the offender is not appropriate. Unless the complaint contains all the necessary factual allegations constituting each of the ingredients of the offence under Section 138, the Court cannot take cognizance of the offence. Disclosure of the name of the person drawing the cheque is one of the factual allegations which a complaint is required to contain. Otherwise in the absence of any authority of law to investigate the offence under Section 138, there would be no person against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it be for discharging dues of the appellant Company and its Directors, the appellant Company and its Directors cannot be made liable under Section 138. Thus, we observe that in the abovementioned case, the personal liability was upheld and the Company and its Directors were absolved of the liability. The logic applied was that the section itself makes the drawer liable and no other person. This Court in P.J. Agro Tech Ltd. noted as under: (SCC p. 150, para 14) 14. An action in respect of a criminal or a quasicriminal provision has to be strictly construed in keeping with the provisions alleged to have been violated. The proceedings in such matters are in personam and cannot be used to foist an offence on some other person, who under the statute was not liable for the commission of such offence. Going by the strict interpretation of the provision, the drawer which in the present case is the respondent, is liable under Section 138 of the NI Act. 13. Thus, in the light of the position which the respondent in the present case held, we are of the view that the respondent be made liable under Section 138 of the NI Act, even though the Company had not been named in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butable 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. On perusal of this section, it is crystal clear that vicarious liability under sub section 1 or 2 of section 141 of the Negotiable Instruments Act can be fastened if the person is having the control over the day to day affairs of the company. Looking to the explanation of the said section, it is crystal clear that the firm or the company are required to be made an accused in the complaint, which is lacking in the case in hand. However, such vicarious liability arises only when the company or the firm commits offence as primary offence. The judgment relied by Mr. Singh, the learned counsel appearing on behalf of the petitioners in the case of Aneeta Hada v. Godfather Travels ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability is fastened under certain statutes. It has been so held by a three-Judge Bench in Aneeta Hada v. Godfather Travels and Tours (P) Ltd. in the context of the Negotiable Instruments Act, 1881. 18 (2019) 3 SCC 797:13. By the Hon'ble Supreme Court in the judgment clearly held that section 141 of the Negotiable Instruments Act extends vicarious criminal liability to the officers associated with company or firm when one of twin requirements of section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. In absence of the firm and looking into the admitted position that the petitioner is not the drawer and in both the case he cannot be liable to be punished. In the judgment relied by Mr. Mazumdar, the learned Senior counsel appearing on behalf of the O.P.No.2 in the case of Mainuddin Abdul Sattar Shaikh v. Vijay D. Salvi (supra), the petitioner was the drawer in that case and in that situation, the Hon'ble Supreme Court has held that when the drawer is an accused even if the company is not made accused, or noticed, the case can be maintained. This fact is lacking in the case in hand. In view of the above facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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