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2001 DIGILAW 131 (MAD)

Dr. O. P. Mehra v. Mansi Finance (Chennai) Ltd.

2001-02-05

M.KARPAGAVINAYAGAM

body2001
Judgment :- The proceedings initiated under Ss. 138 and 141 of the Negotiable instruments Act are sought to be quashed in these petitions filed under S. 482, Cr. P.C. by the petitioner, who are arrayed as A-9, A-7, A-8 and A-6. Mr. Murali, the learned counsel appearing for the petitioners, though would raise several grounds, while seeking to quash the proceedings, I am impressed upon one of the grounds, on the basis of which the proceedings can be quashed as against these petitioners. It is settled law that when a complaint has been filed under Ss. 138 and 141 of the Negotiable Instruments Act in respect of non-payment of cheque amount against the company, all the directors or partners in charge and responsible for the affairs of the company are also liable to be punished and as such, the complaint against all the directors is maintainable. However, it is laid down by this Court as well as the Apex Court that there shall be necessary averments in the complaint that those directors are incharge and responsible for the affairs of the company and in the absence of such allegation, the complaint cannot be maintained as against such person, even though he is a director. In that view of the matter, when we look at the complaint, there is no specific averment in the complaint as against these petitioners, as contained in S. 141(1) of the Act. I find that there is bald allegation in para 14 of the complaint which is as follows : It is submitted that accused 1 to 12 are managing the first accused-company and they are jointly and severally liable for the offence committed by them." In my view, these averments, which are vague and bald cannot be said to have satisfied the requirement of S. 141(1) of the Negotiable Instruments Act. It shall be mentioned in the complaint that on the date when the offence was committed, the Directors were in-charge and responsible for the conduct of the business of the company. It shall be mentioned in the complaint that on the date when the offence was committed, the Directors were in-charge and responsible for the conduct of the business of the company. In this context, it shall be appropriate to note sub-section (1) of S. 141 of the Negotiable Instruments Act, which is in the following terms :- "If the person committing an offence under S. 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." On a reading of S. 141 of the Act, it is clear that when the accused-company committed the offence under S. 138 of the Act, then not only the company, but also every person, at the time when the offence was committed, who was in-charge and responsible for the conduct of the business of the company shall be deemed to be guilty of the offence and liable to be punished. From this, it is clear that a person other than the company can be proceeded against under this Act only when the person was in-charge and responsible for the conduct of the business of the company. It is true, as pointed out by Mr. Govindaraj, the learned counsel for the respondent, that it is averred in para 14 of the complaint, the accused 2 to 12 are managing the day to day's affairs and business of the company and as such, they are jointly and severally liable for the offences committed by them and it would be sufficient to satisfy the basic requirement of Section 141(1) of the Negotiable Instruments Act. But, in my view, these words would not directly indicate or indirectly reveal that the petitioners who are arrayed as A-9, A-7, A-8 and A-6, were the directors in charge and responsible for the affairs of the company when the offence was committed. But, in my view, these words would not directly indicate or indirectly reveal that the petitioners who are arrayed as A-9, A-7, A-8 and A-6, were the directors in charge and responsible for the affairs of the company when the offence was committed. Under those circumstances, when it is clear that the allegation made in the complaint does not either in express words or with reference to the allegation contained therein make out a case that at the time of commission of the offence, the petitioners were in charge and responsible for the conduct of the business of the company, the proceedings are liable to be quashed, in view of the dictum laid down by the Supreme Court in K. P. G. Nair v. Jindal Menthol India Ltd., (2000) 4 CTC 432. The learned counsel for the respondent would cite the decisions in Krishna Murari Poddar v. State of Maharashtra, (2000) 1 MWN DCC 85 : (1999 Cri LJ 1094) (Born) and M. Sivakami v. Bharat Ginning and Oil Mill Factory, (2000) 3 Crimes 346 : (2000 Cri LJ 1043) (Guj). Those decisions would not apply to the present facts of the case, as in those cases, there were specific averments in the complaint as against the accused persons as contained in Section 141(1) of the Act referred to in those decisions, but in the case on hand, there are no such allegations. Therefore, those decisions would be of no use to the respondent. On the other hand, the decision in Nair, K. P. G. v. Jindal Menthol India Ltd., (2000) 4 CTC 432 rendered by the Supreme Court would squarely apply to the present facts of the case. The relevant portion of the observation made by the Supreme Court is as follows : "All the accused persons are also responsible for the dishonourment of the cheques under the Negotiable Instruments Act and all are liable to be punished for the offences committed under Section 138 NIA. All the accused persons have failed to make the payment of the dishonoured cheques despite the legal notice which was sent by registered post. From a perusal of the excerpts of the complaint, it is seen that nowhere it is stated that on the date when the offence is alleged to have been committed, the appellant was in charge of or was responsible to the accused company for the conduct of its business. From a perusal of the excerpts of the complaint, it is seen that nowhere it is stated that on the date when the offence is alleged to have been committed, the appellant was in charge of or was responsible to the accused company for the conduct of its business. The above observation would reveal that the Supreme Court, while quashing the proceedings insofar as one of the directors is concerned, would specifically hold that mere mentioning that all the accused persons are also responsible for the dishonourment of the cheques under the Act and all are liable to be punished for the offences under Section 138 of the Act would not suffice to satisfy the requirements of Section 141(1) of the Act. Similarly, the words contained in the present plaint that "the accused 1 to 12 are managing the first accused company and they are jointly and severally liable for the offence committed by them" would not be held to be sufficient to satisfy the ingredients of Section 141 of the Act. Furthermore, the petitioners, namely A-6 to A-9, admittedly, are not the signatories of the cheques in question. Therefore, the proceedings as against these petitioners are liable to be quashed and accordingly, the same are quashed. In the result, these petitions are allowed. Consequently, the connected Cril. M.Ps. are closed. Petitions allowed.