TMI Blog2017 (6) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... the dishonoured cheque is a company, then statutory demand notice should mandatorily be served on the drawer company but that separate individual notices to the individual directors and officials of the company is not mandatory. The Appellate Court cannot be found fault with in any manner in rendering the impugned view. Since the prosecution is not maintainable as against the drawer company in view of this ground, then the prosecution against the individual director would also crumble to the ground as the offence under S. 138 of the N.I. Act is essentially and primarily attracted as against the drawer of the cheque. If no offence is made out against the accused drawer company, then the question of convicting the individual Directors and officials of that company on the basis of vicarious liability under Section 141 of the N.I. Act does not arise. For these reasons, the Lower Appellate Court was fully right in holding that all the accused are entitled for acquittal. Therefore, without the basic averment in the complaint that the drawer of the dishonoured cheques in question is the company and not the individual director, it is not right and proper to convict the accused compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccused therein. The Trial Court has convicted and sentenced the accused to pay fine which was also confirmed in appeal. The appellant in Crl. A. No. 555/2015 is the complainant in C.C. No. 1669/2009 before the same court alleging the same offence in which the 2nd respondent herein was originally arrayed as the sole accused. Here also the Trial Court had convicted and sentenced the accused to pay fine with default clause, which was confirmed in appeal. The complainant in all these cases are the same person and the original accused is also the same person in all these matters. The confirmation of the conviction and sentence as mentioned above was challenged by the 2nd respondent herein by filing Crl. R.P. Nos. 1704, 1705 and 1706 of 2012 before this Court by taking recourse to the remedy under S. 397 r/w S. 401 of the Cr.P.C. Before this Court it was pointed out by the accused that it has clearly come out in evidence that the dishonoured cheque in question was issued from an account maintained by the company concerned and it was not a personal account held by the sole accused and the sole accused happened to be the Managing Director of the said chit company and that it was accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the company, who is the drawer of the cheque, has not been arrayed as accused in the complaints. It was contended by the complainant that the complaint was instituted at a time when the earlier 2 Judge Bench decision of the Apex Court in Anil Hada v. Indian Acrylic Ltd., reported in 2000 (1) KLT 141 (SC) : (2000) 1 SCC 1, was in vogue and that the complainant should not be penalised as he could not foresee at the time of the institution of the complaints that the said 2 Judge Bench decision would be overruled, etc. Presumably, taking into note of this contention, this Court ordered that the complainant should be given another opportunity to continue the prosecution before the trial court after arraying the company also as accused in these 3 cases. Accordingly, this Court had remanded the matter to the Trial Court for fresh disposal of the above said complaints. It is also ordered that if the petitioners file applications for arraigning the company also as an accused in the three cases, the Magistrate shall consider and pass orders on the same day in accordance with law and continue the prosecution, etc. On this basis; this Court has finally disposed of all the Criminal Revision P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Negotiable Instruments Act without the company being arraigned as an accused. Here, in these three cases admittedly, the Company in whose account the petitioner has issued the cheques, signing the same as the authorised signatory of the company has not been arraigned as an accused. The petitioner as the Managing Director of the Company alone has been made an accused. Therefore, the ratio of the decision of the Supreme Court is squarely applicable to the facts of this case. 6. In the above circumstances, the judgments of the courts below are liable to be set aside. Accordingly, the judgments of the courts below are set aside. 7. That doesn't mean that petitioner should be acquitted straight away. At the time when the 2nd respondent filed the complaint, the law prevailing was the one in Anil Hada v. Indian Acrylic Ltd. (2000 (1) KLT 141 (SC)), wherein the Supreme Court had held that a prosecution under Section 138 of the Negotiable Instruments Act would lie against the Director of the company, even without the company also as an accused. In fact, even before the Supreme Court, there were different opinions on the question by different Judges. That is why the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is the main ground on which the Appellate Court has acquitted the accused in all the 3 appeals. It is these judgments of acquittal rendered by the appellate Sessions Court rendered on 7.5.2015 that are under challenge in these Criminal Appeals filed under S. 378(4) of the Cr.P.C. 3. Heard Sri. R. Pushpangathan Pillai, learned counsel appearing for the appellant (complainant), Sri. T.N. Hareendran, learned counsel appearing for respondents 2 3 (accused) and Sri. Saigi Jacob Palatty, learned Prosecutor appearing for R-1 State. 4. The main argument raised by Sri. T.N. Hareendran, learned counsel appearing for R-2 R-3 (accused) is that it is the admitted case of the complainant that requisite statutory demand notice in terms of the mandatory provisions contained in S. 138(b) of the N.I. Act, has never been issued to the 2nd respondent chit company, who is the drawer of the dishonoured cheque in question and that in the absence of due service of statutory demand notice, no complaints would lie as against the principal offender and if no offence would lie as against the principal offender, there is no question of implicating the other accused persons, who are Director or offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revision Petitions and even if it is assumed for argument and that the said direction given in those Criminal Revision Petitions directing the petitioner to array the company as an additional accused is illegal and improper, still those directions have become final and conclusive inasmuch as the company has not challenged the said common order dated 26.11.2012 passed by this Court in those Criminal Revision Petitions. Since the said order of this Court in the Criminal Revision Petitions has become final and conclusive it is binding on all persons including both the accused, the Trial Court and Appellate Court and even this Revisional Court, etc., if the company had any grievance regarding the legality and correctness of the said directions given by this Court on 26.11.2012 in those revisions, the company ought to have challenged the same before the Apex Court and so long as the said judgment of this Court has not been altered in the manner known to law, it has become final and conclusive and binding on all parties in the proceedings and the courts concerned even if it is assumed that those directions are not in tune with the legal principles later enunciated by the 3 Judge Bench de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout their knowledge or that they had exercised due diligence to prevent such commission, it would be a matter of defence to be considered at the appropriate stage, etc. Therefore, it is crystal clear that in a case, where the drawer of the dishonoured cheque is a company, then statutory demand notice should mandatorily be served on the drawer company but that separate individual notices to the individual directors and officials of the company is not mandatory. Therefore, going by the legal principles laid down by the Apex Court in Aneeta Hada v. Godfather Travels Tours Pvt. Ltd. reported in 2012 (2) KLT 736 (SC) : (2012) 5 SCC 661, and in Kirshna Texport Capital Markets Ltd.'s case supra, it is crystal clear that where the drawer of the dishonoured cheque in a case being a company, then the prosecution for offence under S. 138 of the N.I. Act is not maintainable without arraying the principal offender (drawer of the cheque) as an accused in such complaint. Further that even if the principal offender company is arrayed as a accused in such complaint, the same would be maintainable only if all the other conditions for the valid institution of a complaint as envisaged in S. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised or decided by this Court in those revision petitions. If the accused company could successfully point out that the statutory demand notice was never served on the drawer of the dishonoured cheque, then certainly the Trial Court, Appellate Court and revisional court, etc., are bound to apply their judicial mind and decide that issue. For deciding that issue, it is common ground that P.W-1 has clearly admitted in his evidence that prior statutory demand notice has never been served on the drawer company. Therefore, the Appellate Court cannot be found fault with in any manner in rendering the impugned view. Since the prosecution is not maintainable as against the drawer company in view of this ground, then the prosecution against the individual director would also crumble to the ground as the offence under S. 138 of the N.I. Act is essentially and primarily attracted as against the drawer of the cheque. If no offence is made out against the accused drawer company, then the question of convicting the individual Directors and officials of that company on the basis of vicarious liability under S. 141 of the N.I. Act does not arise. For these reasons, the Lower Appellate Court was ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
