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2001 DIGILAW 493 (MAD)

T. Giri And Others v. Y. S. Mathivanan

2001-04-20

B.AKBAR BASHA KHADIRI

body2001
Judgment :- The petitioner has come forward with the instant Criminal Original Petition is to call for records in C.C. No. 287 of 2000, pending on the file of the Judicial Magistrate No. I, Erode, and quash the same. This Criminal Original Petition has arisen in this way :- The respondent Y. S. Mathivanan filed a private complaint under Section 200 of the Code of Criminal Procedure alleging that one Jayalakshmi was the President of Sri Amman Trust, that the trust was running educational institutions like schools and colleges, that for the purpose of running the institutions, for and on behalf of Sri Amman Trust, Jayalakshmi borrowed Rs. 30,00,000/- from the respondent, who is a financier on 6-4-2000 and issued two post-dated cheques bearing Nos. 046133 for Rs. 20,00,000/-, 046134 for Rs. 10,00,000/-. The cheques were dated 12-4-2000. The respondent/complainant sent the cheques for collection to the bank on 12-4-2000, but they were returned on the same date with an endorsement "funds insufficient". The respondent/complainant issued statutory notice to the accused demanding payment on 12-4-2000. The second accused Jayalakshmi received the notice on 15-4-2000 and sent a reply. The other accused, namely, the petitioners herein, have not sent any reply at all. Since no amount was forthcoming after expiry of the statutory period, the respondent Y. S. Mathivanan preferred the private complaint, which the learned Judicial Magistrate took cognizance in C.C. No. 287 of 2000. Now, the petitioners seek to quash the proceedings on the following grounds :- (i) There is no allegation against the petitioners that they were actually participating in the affairs of the society. Petitioners 1 and 2 were studying in Engineering College at Chennai; (ii) The third petitioner is an aged lady. She is a permanent resident of Karur and she had no active role to play in the affairs of the Society. (iii) The respondent had want only given wrong address of the petitioners in the notice and the complaint only to avoid service of statutory notice. (iv) As per the Bye-laws of the society, the borrowing on behalf of the society can be done in the particular manner known under law and the respondent cannot array the petitioners as accused. Heard both sides. Regarding the first contention of the petitioners, I have gone through the complaint. (iv) As per the Bye-laws of the society, the borrowing on behalf of the society can be done in the particular manner known under law and the respondent cannot array the petitioners as accused. Heard both sides. Regarding the first contention of the petitioners, I have gone through the complaint. In State of Bihar v. K. J. D. Singh, 1994 SCC (Cri) 63 : (1993 Cri LJ 3537), the Apex Court has pointed out that the inherent power under Section 482. Cr. P.C. has to be exercised for the ends of justice and should not be arbitrarily exercised to cut short the normal process of a criminal trial. It has been pointed out that the exercise of the powers by the High Court under Section 482, Cr. P.C. to quash the prosecution launched against the respondent at the stage when the trial had not even commenced was not proper. Such course should be followed in the cases where further continuance of proceedings would amount to abuse of process of law. In Anil Hada v. Indian Acrylic Ltd., (2000) 1 Mad LW (Crl) 422 : (2000 Cri LJ 373) a question was posed by the Apex Court; when a Company, which committed offence under Section 138 of the Negotiable Instruments Act, eludes from being prosecuted thereof, can be Directors of that company be prosecuted for that offence ? The Apex Court has pointed out that the offender under Section 138 of the Negotiable Instruments Act is drawer of the cheque, but by virtue of fiction envisaged in Section 141 of the Negotiable Instruments Act, three categories of the persons can be discerned within the purview of penal liability. They are (1) The Company which committed the offence; (2) Everyone who was incharge of and responsible for the business of the company; (3) Any other person who is a Director or a Manager or a Secretary or officer of the company, with whose connivance or due to whose neglect the company has committed the offence. Their Lordships of the Apex Court have stated as under in paragraph 12 :- "12. Thus when the drawer of the cheque who falls within the ambit of Section 138 of the Act is a human being or a body corporate or even firm, prosecution proceedings can be initiated against such drawer. Their Lordships of the Apex Court have stated as under in paragraph 12 :- "12. Thus when the drawer of the cheque who falls within the ambit of Section 138 of the Act is a human being or a body corporate or even firm, prosecution proceedings can be initiated against such drawer. In this context the phrase 'as well as' used in sub-section (1) of Section 141 of the Act has some importance. The said phrase would embroil the persons mentioned in the first category within the tentacles of the offence on a par with the offending company. Similarly, the words "shall also" in sub-section (2) are capable of bringing the third category persons additionally within the dragnet of the offence on an equal par. The effect of reading Section 141 is that when the company is the drawer of the cheque such company is the Principle offender under Section 138 of the Act and the remaining persons are made offenders by virtue of the legal fiction created by the legislature as per the Section. Hence the actual offence should have been committed by the company, and then alone the other two categories of persons can also become liable for the offence." In the instant case, in page No. 3, of the typed-set, the respondent/Complainant had clearly stated as under :- ............. "Besides accused No. 2, accused Nos. 3 to 5 are actively participating in all the affairs of Trust and they are fully aware of the borrowings made by the 2nd accused from the complainant." ......................... In the complaint, the respondent/complainant had described the first petitioner herein as the Secretary, the second petitioner as Treasurer and the third petitioner as Executive Committee Member. The very averments in the complaint that they are at helm of the affairs of the trust, would bring them under Clause (2) pointed out in the decision reported in Anil Hada v. Indian Acrylic Ltd., (2000) 1 Mad LW (Cri) 422 : (2000 Cri LJ 373) cited supra. In Girish K. Bhandari v. Lakshmi Finance & Ind. Corpn. The very averments in the complaint that they are at helm of the affairs of the trust, would bring them under Clause (2) pointed out in the decision reported in Anil Hada v. Indian Acrylic Ltd., (2000) 1 Mad LW (Cri) 422 : (2000 Cri LJ 373) cited supra. In Girish K. Bhandari v. Lakshmi Finance & Ind. Corpn. Ltd., (2000) 2 Cur Cri R 161 : (1999 Cri LJ 2718), a single Judge of the Andhra Pradesh High Court has pointed out that in terms of Section 141 of the Negotiable Instruments Act if an offence is committed by company under Section 138 of the Negotiable Instruments Act every person who at the time of offence was responsible to the company for the conduct of the company, shall be vicariously liable for the offence. The single Judge has also pointed out that it is sufficient to make an allegation in the complaint with regard to the liability of the accused and whether they are actually liable or not will have to be considered through evidence. In the instant case, the respondent/complainant had expressly stated in the complaint that the petitioners are in charge of the day-to-day affairs of the company. Further, by virtue of being Secretary, Treasurer and Executive Member, there is an implication that they are at the helm of the affairs of the company as stated in Rajesh Bajaj v. State, NCT of Delhi, (1999) 1 Andh LT (Cri) 301 : AIR 1999 SC 1216 : (1999 Cri LJ 1833), wherein the Apex Court has held that in a petition under Section 482 of Cr. P.C. it is not permissible to adopt a strictly hyper-technical approach and "sieve the complaint through a cullendar of finest gauzes for testing the ingredients" of the offence alleged against the accused, and that as to whether the person in question was really in-charge of the affairs of the company and was responsible to the affairs of the company or not, and as to what functions, he was assigned in the affairs of the company and whether those functions could be considered sufficient to hold that he was in-charge of the affairs of the company are matters which have to be gone into the trial. If the first and second petitioners are to contend that they are studying at Engineering College and the third petitioner is the permanent resident of Karur and there is no occasion for them to part-take in the day-to-day affairs of the company, it is for them to prove that fact by letting in evidence before the trial Court. The averment in the complaint would prima facie indicate that they are at the helm of the affairs of the company and it is for them to negative the same by letting in evidence. The next contention is that the address of the petitioner mentioned in the notice and the complaint are different, in that they are residents of Erode, but petitioners 1 and 2 are residing at Chennai and the third petitioner is residing at Karur. The question whether or not proper address is given and the exact location of the petitioners are all matters which have to be decided by the trial Court. Prima facie, this Court cannot make a probe into this aspect and decide the criminal proceedings in part. It is nextly contended that as per the Bye-laws, the borrowing can be done only in the particular manner laid down under the same and the respondent cannot array the petitioners as accused. It is worth to mention that cause of action for offence under Section 138 of the Negotiable Instruments Act arises not on the borrowing, not even on issuance of cheque or bouncing of the cheque, but only on failure to make payment within fifteen days from the date of receipt of the statutory notice. Therefore, the question whether or not the borrowing was proper is a question for consideration by the trial Court. It is not the case of the petitioner that they have not received the notice at all. Nowhere they have stated so. Their case is that the respondent/complainant has want only given wrong address. I have already indicated that if there is any legal defect in the notice, this Court can go into the aspect to find out whether such defect vitiates the proceedings under Section 138 of the Negotiable Instruments Act. When the petitioner plead a factual defect that the respondent had wantonly sent the notice to a wrong address, it is for them to prove so before the trial Court. When the petitioner plead a factual defect that the respondent had wantonly sent the notice to a wrong address, it is for them to prove so before the trial Court. I do not find any merits in the Criminal Original Petition and accordingly, the same is dismissed. Consequently, Crl. M.P. Nos. 3811 and 3812 of 2000 are also dismissed. Petitions dismissed.