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TMI Blog2023 (8) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant issued a letter dated 20.02.2016 addressing the private respondents calling for refund of the money advanced. Under such circumstances, to discharge their legal liability, the private respondents in the capacity of Directors of Delicious Agro Pvt. Ltd. issued an Account Payee Cheque in favour of the appellant dated 31.01.2017 bearing No. 735627 drawn on UC Bank, Jodhpur Park Branch for an amount of Rs.10,80,270/- 3. On 03.02.2017, the appellant deposited the said cheque bearing No. 735627 drawn on UC Bank, Jodhpur Park Branch for Rs.10,80,270/- with Canara Bank, Khar Branch in Account No.5822201000038, well within the validity period of the said Chqeue. But the said cheque was dishonoured due to insufficient fund and the said cheque was returned to the appellant by Canara Bank on 03.03.2017 by way of Speed Post along with an attached Returned Memo. 4. That through his learned Advocate the appellant issued a notice by way of Registered Post with Acknowledgment Due under Section 138(b) of the Negotiable Instruments Act dated 15.03.2017 upon the private respondents causing demand for payment of the cheque amount of Rs.10,80,270/- in total in lieu of the dishonoured cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self or through the police, then the Learned Magistrate is empowered to do so by virtue of the powers conferred upon him in the provisions of Section 202 of the Code of Criminal Procedure. Upon adherence to the above referred procedure, on being satisfied that prima facie ingredients of an offence is present in the allegations, the Learned Magistrate may issue process against the accused persons or if the Learned Magistrate is not satisfied about prima facie presence of ingredients of any offence in the complaint, the Learned Magistrate may dismiss the same. 10. The Learned Magistrate while acquitting the private respondents by passing the impugned order erred to concede with the legal position that from the stage of filing of a complaint, till issuance of process under Section 204 of the Code of Criminal Procedure, there is no scope for hearing an accused person. 11. The Learned Magistrate failed to appreciate that in the event of the contingency of erroneous issuance of process against an accused person, the accused cannot move before the Learned Magistrate praying for dismissal of the complaint in terms of Section 203 of the Code of Criminal Procedure as the accused is not asc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.10,80,270/-. 20. In U.P. Pollution Control Board v. Modi Distilleries, (1987) 3 SCC 684. Therein, the name of the accused company was wrongly mentioned in the complaint as Modi Distilleries instead of Modi Industries Limited, which was sought to be amended. The Hon'ble Supreme Court, considering the same as a mere curable legal infirmity observed, ".....furthermore the legal infirmity is of such nature which could be easily cured......". 21. The court further held:- "This is an instance where due to the Sheer negligence on the part of the legal advisors in drafting the complaint, a large business house is allowed to escape the consequences of the breaches committed by it of the provisions of the Act..........." The Court directed the learned Chief Judicial Magistrate to proceed with the trial. 22. In S.R. Sukumar v. S. Sunaad Raghuram, (2015) 9 SCC 609, the Supreme Court held:- "17. Insofar as merits of the contention regarding allowing of amendment application, it is true that there is no specific provision in the Code to amend either a complaint or a petition filed under the provisions of the Code, but the Courts have held that the petitions seeking such amendment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ("NI Act") was maintainable against a Director or Authorized signatory of a company, without joining the company as an accused? 24. The Court further held:- "43. In view of our aforesaid analysis, we arrive at the irresistible conclusion 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. We say so on the basis of the ratio laid down in C.V. Parekh (supra) which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal (supra) does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada (supra) is overruled with the qualifier as stated in paragraph 37. The decision in Modi Distilleries (supra) has to be treated to be restricted to its own facts as has been explained by us hereinabove." 25. Thus the prosecution of other persons under Section 138 NI Act is permissible only when the Company is named as an accused in the complaint. 26. Where the Company due to, inter alia, inadvertence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs M/s. Panchami Stone Quarry, Criminal Appeal No. .........of 2022 (arising out of SLP (Crl.) No. 10396 of 2019), on 1 August, 2022, the Supreme Court held:- "43. Liability depends on the role one plays in the affairs of a company and not on designation or status alone as held by this Court in S.M.S. Pharmaceuticals Ltd. (supra).................." 30. In the present case, the petition of complaint itself starts with the statement "It is the case of the complainant that he as a proprietor of M/s. Maa Manasha Enterprise had made payment to Delicious Agro Food Pvt. Ltd. for food product, but the said company had not delivered any such food item and accused being director of the said company had returned the money by issuing a cheque in favour of the complainant". The accused/petitioner had on application before the trial court also stated that the complainant had entered into the transaction with the company, "Delicious Agro Food Pvt. Ltd.". The petitioner as director of the company was the person who issued the cheque in this case and the transaction was carried out by the petitioner as director on behalf of the company. As such there is clear averments in the complaint itself, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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