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2001 DIGILAW 1250 (PNJ)

S. K. Sood v. Tata Iron and Steel Company Ltd.

2001-11-07

V.M.JAIN

body2001
JUDGMENT V.M. Jain, J. - This order shall dispose of 24 petitions bearing Criminal Misc. No. 13019-M of 2000, 13022-M of 2000, 13025-M of 2000, 13028-M of 2000, 13031-M of 2000, 13034-M of 2000, 13037M of 2000, 13040-M of 2000, 13043-M of 2000, 10346-M of 2000, 21861-M of 2000, 21864-M of 2000, 21867-M of 2000, 21870-M of 2000, 21873-M of 2000, 21876-M of 2000, 21879-M of 2000, 21882-M of 2000, 21885-M of 2000, 21888-M of 2000, 21891-M of 2000, 21891-M of 2000, 21897M of 2001) and 21900-M of 2000, under Section 482 Criminal Procedure Code filed by the accused-petitioners, seeking the quashment of the various criminal complaints (twelve in number), summoning orders passed by the Judicial Magistrate, summoning the petitioners as accused in those criminal complaints, for the offences under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act) and all subsequent proceedings taken thereon. 2. Since common questions of law and facts are involved in these petitions, all these cases are being disposed of by a single order. For the purpose of convenience, the facts of the case bearing Criminal Misc. No. 13019-M of 2000 are being referred. 3. Complainant M/s Tata Iron and Steel Company Ltd. filed a criminal complaint, copy Annexure P-1 against the accused, including the accused- petitioner under Section 138 read with Section 141 of the Act. The learned Magistrate, after recording preliminary evidence, ordered the summoning of the accused under Section 138 of the Act, vide order dated 7.3.1998, copy Annexure P-2. Aggrieved against the same, the petitioner filed the petition under Section 482 Criminal Procedure Code in this Court, seeking the quashment of the criminal complaint, summoning order and all subsequent proceedings taken thereon. 4. The learned counsel for the accused-petitioners submitted before me that accused-petitioner S.K. Sood (petitioner in 12 of the petitions) and accused- petitioner Avtar Singh Gill (petitioner in remaining 12 petitions) were mere Directors of the Company M/s Atma Tube Products Limited and that they had resigned from the directorship of the company much prior to the date of commission of the offence. It was submitted that in any case accused- petitioners S.K. Sood and Avtar Singh Gill had nothing do with the running of the said company and were neither incharge of the said company nor responsible to the company for the conduct of the business of the company and as such they have been wrongly impleaded as accused in these complaints and have been wrongly summoned as accused in these complaints by the learned Magistrate. 5. There is a considerable force in this submission of the learned counsel for the accused-petitioners. 6. Section 141 of the Negotiable Instruments Act reads as under : "Offences by Companies - (1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly : Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable 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." 7. In the present case, the disputed cheques were issued in the name of the company. Primarily, it is the company, which would be liable for the same. In the present case, the disputed cheques were issued in the name of the company. Primarily, it is the company, which would be liable for the same. Under Section 141 of the Act, if the offence has been committed by a company, then every person who, at the time of offence was incharge of, and was responsible to, the company for the conduct of the business of the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished, besides the said company. Thus, the petitioners namely, S.K. Sood and Avtar Singh Gill, would be liable as accused only if at the time, when the offence was committed, they were incharge and were responsible to the company for the conduct of the business of the company. 8. In the present case, in the complaint filed by the complainant-company, copy Annexure P-1, nowhere it has been alleged that the present petitioners namely S.K. Sood and Avtar Singh Gill, were incharge of the accused-company or were responsible to the said company for the conduct of the business of the said company. The only allegation made by the complainant-company in the complaint, copy Annexure P-1 is as under :- "These orders were placed by the accused-company through its competent and authorised person with full concurrence of all the Directors of the accused- company." 9. With regard to co-accused Deepak Singh, it was alleged that the cheque in question was signed by accused No. 2 Deepak Singh, Managing Director-cum- Authorised Signatory of the accused-company. However, not a word has been said about the involvement of accused-petitioners S.K. Sood and Avtar Singh Gill. In para 4 of the complaint, it has only been stated that the notice sent to accused No. 1 (company) was duly received by it whereas accused S.K. Sood, Deepak Singh and Avtar Singh Gill, avoided and managed the return of the registered envelopes. It has further been alleged in para 5 of the complaint that all the accused had committed offence punishable under Section 138 with Section 141 of the Act and all the accused were liable to be prosecuted. 10. However, as referred to above, there is no allegation in the criminal complaint filed by the complainant-company that the accused-petitioners were incharge of, and were responsible to the company for the conduct of the business of the company. 10. However, as referred to above, there is no allegation in the criminal complaint filed by the complainant-company that the accused-petitioners were incharge of, and were responsible to the company for the conduct of the business of the company. Under these circumstances, in my opinion, even from the allegations made in the criminal complaint, the accused-petitioners could not be prosecuted under Section 138 read with Section 141 of the Act. Reliance in this regard may be placed on the law laid down by the Honble Supreme Court. In the case reported as K.P.G. Nair v. M/s. Jindal Menthol India Ltd., 2000(6) SCALE 578. 11. No other point has been urged before me in these petitions. 12. For the reasons recorded above, these petitions are allowed and the various criminal complaints (12 in number), summoning orders and all subsequent proceedings taken thereon in respect of accused-petitioners S.K. Sood and Avtar Singh Gill, are hereby quashed. Copy of the order be sent to the learned trial Magistrate, for proceeding further in the matter, in accordance with law. It is further directed that the trial Magistrate shall proceed with the trial (against the remaining accused) expeditiously. Petitions allowed.