TMI Blog2023 (1) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... rrectness - Further, it appears that in the complainant petition, the respondent has not specifically stated as to how the petitioners are responsible for the conduct of the business of the company i.e. Durga Krishna Store Pvt. Ltd. Merely because the petitioner No.1 is the signatory of the cheque in question, is not at all sufficient to arraign him as an accused. Moreover, the respondent has never made any averment in the complaint against the petitioner No.2 as to how he is responsible for the conduct of the business of the company, though he appears to be the director of the company. There are sufficient merit in this petition, and accordingly, the same stands allowed. - Crl.Pet./742/2022 - - - Dated:- 3-1-2023 - HONOURABLE MR. JUSTICE ROBIN PHUKAN For the Petitioner : Mr. R Hussain For the Respondent : Mr. D Chakrabarty JUDGMENT (CAV) Heard Mr. R. Hussain, learned counsel for the petitioners. Also heard Mr. D. Chakravarty, learned counsel for the sole respondent. 2. In this petition, under Section 482 of the Cr.P.C., the two petitioners have prayed for quashing of the order, dated 16.03.2020, and all subsequent orders, passed by the learned Chie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other category, could have been made vicariously liable for the offence under section 138 NI Act, and as the complainant has failed to implead the company as party, the petitioners cannot be made liable for the offence under section 138 NI Act; (vi) The company is a necessary party to the proceeding and without the company being arrayed as party to the proceeding, the liability towards the petitioners did not arise; (vii) The cheque in question, since been issued as security cheque, not in discharge of legally enforceable debt, and as such presentation of the said cheque without notice to the company, would not attract the liability under section 138 NI Act; (viii) The complainant has never made any averment in the complainant against the petitioner No.2, and as such, issuance of process, under section 138 of the NI Act is nothing but an abuse of the process of the court; (ix) The petitioner No.1 is neither the director of the company, nor he has issued any cheque, nor he has any authority to act on behalf of the company and the complainant has not filed any document to show that in what capacity he was responsible for the day to day affairs of the company; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... que is liable for prosecution for dishonor of the cheque and as such the Directors have been arraigned as party in the case, and that there is no merit in this petition, and therefore, it is contended to dismiss the same. Mr. Chakravarty has also relied upon paragraph No.21 of the decision of Hon ble Supreme Court in Ashutosh Asok Parasrampuriya and Another vs. M/s Gharkul Industries Pvt. Ltd. and Ors, reported in AIR 2021 SC 4898 , to bolster his submission. 8. Having heard the submission of learned Advocates of both sides, I have carefully gone through the petition and the documents placed on the record and also gone through the case laws referred by Mr. Hussain, learned counsel for the petitioners and also the case law referred by Mr. D. Chakravarty, learned counsel for the respondent. 9. It appears from the complaint-Annexure-VIII, that there was business transaction between the petitioners and the sole respondent and allegedly the petitioners have purchased goods on credit and as per ledger account of the respondent, total outstanding, with interest came to an amount of Rs. 27,54,000/ and in discharge of the said debt the petitioner No.1, being the Director of Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. Durga Krishna Store Pvt. Ltd, was not made a party, the petitioner No.1 and petitioner No.2 cannot be prosecuted without invoking Section 141 of the N.I. Act, and the case law, Aneeta Hada (Supra) referred by Mr. Hussain also to lend support to his version. 13. It is to be noted here that in the said case, Hon ble Supreme Court has held that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. 14. The said decision in Aneeta Hada (Supra), has also been followed consistently in the case of Himanshu vs. B. Shivamurthy another in Criminal Appeal No.1465/2009 and also in the case of Hindustan Unilever Ltd. vs. State of Madhya Pradesh, in Criminal Appeal No.715/2020 (arising out of SLP Criminal No.578/2020), which is quoted here-in-below for ready reference: 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 vic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from manifest illegality and thus, failed to withstand the test of legality, propriety and correctness. 16. Further, it appears that in the complainant petition, the respondent has not specifically stated as to how the petitioners are responsible for the conduct of the business of the company i.e. Durga Krishna Store Pvt. Ltd. Merely because the petitioner No.1 is the signatory of the cheque in question, is not at all sufficient to arraign him as an accused. Moreover, the respondent has never made any averment in the complaint against the petitioner No.2 as to how he is responsible for the conduct of the business of the company, though he appears to be the director of the company, in view of Annexure Annexure-I. Hon ble Supreme Court in the case of S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla and others reported in (2005) 8 SCC 89; held as under:- What is required is that the persons who are sought to be made criminally liable under Section 141 should be at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly relate to the purported offence made by the Company. With a view to make a Director of a Company vicariously liable for the acts of the Company, it was obligatory on the part of the complainant to make specific allegations as are required in law. 19. In National Small Industries Corporation Limited v. Harmeet Singh Paintal and Another reported in (2010) 3 SCC 330 : the summarization of law on Section 141 N.I. Act is made as under:- 39. From the above discussion, the following principles emerge: (i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction. (ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company. (iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hon ble Supreme Court in the said case has summarized the finding as under:- 30. In view of the discussion above, we summarize our findings below: (i) For the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation; (ii) If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque; (iii) When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted; (iv) The first respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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