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2004 DIGILAW 730 (CAL)

OM PRAKASH AGARWAL v. STATE OF WEST BENGAL

2004-11-19

DEBIPRASAD SENGUPTA

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DEBIPRASAD SENGUPTA, J. ( 1 ) SINCE similar point is involved in all the ten revisional applications, those are taken up analogously for disposal. ( 2 ) THE petitioner has challenged an order dated 28. 1. 2004 passed by the learned Chief Judicial Magistrate, Alipore, South 24-Parganas in Case No. C-2610/2000 under section 138 of Negotiable Instruments Act, 1881 thereby allowing the application of the complainant/ opposite party and adding the present petitioner and one Mannalal Chamaria as accused persons in the case. ( 3 ) FOR deciding the present applications, it is not necessary to discuss about the factual background of each case. The present proceeding was initiated on the basis of a complaint lodged by one Rupali Sarkar (complainant-O. P. No. 2 herein) alleging that three cheques totalling an amount of Rs. 12,49,000/- were issued by the accused Raj Kumar Chamaria on behalf of the company namely m/s. Heritage Herbs Limited. On being dishonoured by the concerned bank, the complainant sent demand notice to the accused company as also its chairman namely Raj Kumar Chamaria demanding payment of the cheque amount. On failure to make the payment, proceeding was initiated by the complainant alleging commission of offence under section 138 of the N. I. Act. The learned Magistrate issued process against the accused company as well as against the accused No. 2 being the Chairman of the company. ( 4 ) DURING pendency of the proceeding, the accused No. 2 Raj Kumar chamaria died on 10th December, 2003. On 28. 1. 2004, an application was filed before the learned Magistrate stating that the accused No. 2, who was the chairman and Director of the company, died on the date as aforesaid and subsequently, it came to the knowledge of the complainant that there are two other Directors namely Mannalal Chamaria and Om Prakash Agarwal in the said company at the material time. It was further stated that the cheques were issued by the accused company, where the accused No. 2 Raj Kumar was the signatory as Chairman of the company. The company (accused No. 1) was the principal offender and cheques were issued by the accused No. 2 on behalf of the company. It was further stated that the cheques were issued by the accused company, where the accused No. 2 Raj Kumar was the signatory as Chairman of the company. The company (accused No. 1) was the principal offender and cheques were issued by the accused No. 2 on behalf of the company. In view of the provision of section 141 of the N. I. Act, the other directors, Manager, Secretary or other officers of the company, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of its business, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. In such circumstances, it was prayed by the complainant that the other two Directors, namely Om Prakash Agarwal and Mannalal Chamaria may be impleaded as accused persons in the case and process may be issued against them. ( 5 ) THE learned Magistrate by his order dated 28. 1. 2004 allowed such prayer and directed that the said two Directors be added as accused persons in the case and also directed issuance of process against those persons. Challenging such order, the petitioner has preferred the present revisional application before this Court. ( 6 ) THE main contention of the learned Advocate of the petitioner is that there is no averment in the petition of complaint that the present petitioner was in charge of or responsible to the accused company for its business and as such the present proceeding is not at all maintainable against him. It is the further contention of the learned Advocate of the petitioner that in a case under section 138 of the N. I. Act, certain conditions are to be satisfied in order to arraign a person as an accused. In the present case, no demand notice was sent to the present petitioner demanding payment of the cheque amount and as such question of his failing to pay cannot arise. So, there cannot be. any cause of action for which the present proceeding can be initiated. In the present case, no demand notice was sent to the present petitioner demanding payment of the cheque amount and as such question of his failing to pay cannot arise. So, there cannot be. any cause of action for which the present proceeding can be initiated. ( 7 ) IN support of his contention, the learned Advocate of the petitioner relies upon a judgement reported in 2002 Supreme Court Cases (Cri) 1038, K. P. G. Nair vs. Jindal Menthol India Ltd. In the said judgement, it was held by the hon'ble Apex Court that in view of section 141 of the N. I. Act, a person other than the company can be proceeded against only if that person was in charge of, and was responsible to, the company for the conduct of its business. In the petition of compliant, there was no allegation, either in express words or with reference to the allegations, that at the time of commission of the offence, the appellant was in charge of, and was responsible to, the company for the conduct of its business. Accordingly, the Hon'ble Apex Court quashed the proceeding against the appellant. ( 8 ) THE next judgment referred to by the learned Advocate of the petitioner is reported in 2003 Supreme Court Cases (Cri) 151, Katta Sujatha vs. Fertilizers and Chemicals Travancore Ltd. and Anr. From a reading of the said judgment, it appears that a proceeding under section 138 of the N. I. Act was initiated against the firm and its partners including a partner to whom no particular act was specifically attributed. There was no allegation in the complaint that the said partner was in charge of, and was responsible to, the company for its day to day business. There was no allegation that the offence was committed with her consent or connivance. In such circumstances, it was held by the Hon'ble supreme Court that no case was made out against the said partner and accordingly it was held that the said complaint was not maintainable against her. ( 9 ) IN the next judgement reported in JT 2004 (6) SC 309, Monaben Ketanbhai shah and Anr. vs. State of Gujarat and Ors. In the said judgment, it was held that the primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. ( 9 ) IN the next judgement reported in JT 2004 (6) SC 309, Monaben Ketanbhai shah and Anr. vs. State of Gujarat and Ors. In the said judgment, it was held that the primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. The obligation of the accused to prove that at the time of the offence, they were not in charge of, and were not responsible to, the company for the conduct of its business, would arise only when the complainant makes necessary averments in the complaint to establish that fact. Since the complaint in the said case totally lacked the requisite averments, it was held by the Hon'ble Apex Court that the complaint could not be sustained. ( 10 ) RELYING upon the aforesaid judgments, it is submitted by the learned advocate of the petitioner that since there is no averment in the petition of complaint that the present petitioner Om Prakash Agarwal was in charge of, and was responsible to, the company for its business, the present proceeding should not be allowed to continue against him and the same should be quashed. ( 11 ) THE learned Advocate for the complainant/ opposite party submits that the cheques were issued by the company of which the accused No. 2 Raj Kumar chamaria was the Director and Chairman and was the authorised signatory. Since the offence has been committed by the company, every person who was in charge of, and responsible for, the affairs and conduct of the business at the time when the offence was committed, is also liable for prosecution along with the company. In the present case, Raj Kumar Chamaria was made accused No. 2 along with accused No. 1 company and he was the Chairman and also Director of the company. Other Directors were not made accused in the petition of complaint as only Raj Kumar Chamaria was the authorised signatory on behalf of the company. On the death of Raj Kumar Chamaria, the complainant filed an application before the learned Magistrate for impleading the other two directors of the company, who are equally responsible to the company for its business, as accused persons in the present case. It is further submitted that the amount involved in the present case is more than Rs. On the death of Raj Kumar Chamaria, the complainant filed an application before the learned Magistrate for impleading the other two directors of the company, who are equally responsible to the company for its business, as accused persons in the present case. It is further submitted that the amount involved in the present case is more than Rs. 12 lacs and several proceedings were initiated against the said company and its Directors and those are pending before the learned Magistrate. It is further pointed out by the learned Advocate of the complainant-O. P. that the present petitioner Om prakash Agarwal is conducting the said proceedings on behalf of the company before the learned Magistrate. The petitioner is looking after the business and he is very much responsible to the company for the conduct of its business. So far as demand notice is concerned, it is submitted that after the cheques were dishonoured, demand notice was sent to the company itself and as such further demand notice upon the present petitioner, who is one of the Directors, is not at all necessary as he is also equally responsible for the offence committed by the company. ( 12 ) I have heard the learned Advocates of the respective parties. I have also perused the judgements of the Hon'ble Apex Court as referred to above. The act of one partner ordinarily binds all other partners of the firm. Hence where the cheque issued by one of the partners is returned unpaid by the bank, the liabilities of all the partners under section 138 of the N. I. Act is joint and several. If one or more of the partners/ Directors of the company other than the partner who issued the cheque, wants to avoid the regiors of section 138 of the N. I. Act, he or they will be required to prove that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. This is purely the factual aspect and cannot be considered at this initial stage when the learned Magistrate has taken cognizance of the offence and issued process against the petitioner. ( 13 ) IT is true that in the petition of complaint, the present petitioner was not made an accused. This is purely the factual aspect and cannot be considered at this initial stage when the learned Magistrate has taken cognizance of the offence and issued process against the petitioner. ( 13 ) IT is true that in the petition of complaint, the present petitioner was not made an accused. Only the company and its Chairman and Director were made accused since the Chairman Raj Kumar Chamaria was the authorised signatory of the company. On the death of Raj Kumar, a petition was filed on behalf of the complainant praying for addition of the names of the present petitioner and one Mannalal Chamaria as accused persons in the case, who were also the directors of the company at the material time when the offence was committed. It was stated in the said petition that the company-accused No. 1 was the principal offender who issued the cheques in discharge of its liabilities. Cheques were issued by the accused No. 2 being the authorised signatory of the company. It is also specifically stated that the present petitioner and Mannalal Chamaria were equally responsible to the company for the conduct of its business. It is clear from a reading of section 141 of the N. I. Act that if the offence under section 138 of the N. I. Act is committed by the company or a firm, every person who was in charge of, and was responsible for, the affairs and conduct of the business of the company or firm at the time when the offence was committed, is also liable for prosecution along with the company. ( 14 ) IT is settled law that the Court takes cognizance of the offence and not of the offender. So in a proper case, if justice so requires, the learned Magistrate after taking cognizance of the offence is competent to allow the amendment of the complaint by naming the proper accused persons. So far as the service of demand notice upon the petitioner is concerned, I am of the view that where the Director of the company is prosecuted along with the company, no separate notice is required to be served upon the said Director. So far as the service of demand notice upon the petitioner is concerned, I am of the view that where the Director of the company is prosecuted along with the company, no separate notice is required to be served upon the said Director. Whether the offence was committed with the consent or connivance of the petitioner and whether the petitioner was responsible to the company for its business at the time when the offence was committed-these are disputed question of facts and cannot be considered in a revisional application under section 482 of the Code of Criminal procedure. Such points can only be decided by the Trial Court after recording evidence. ( 15 ) IN view of the discussion made above, I am of the view that the impugned order does not suffer from any illegality and the learned Magistrate was justified in allowing the prayer of the complaint-opposite party. I do not find any reason to interfere with the said order. ( 16 ) THE present application accordingly fails and the same is accordingly dismissed. Since this is an old proceeding of 2004, the learned Magistrate is directed to see that the proceeding is expedited and the same is concluded with utmost expedition without granting any unnecessary adjournment to either of the parties. ( 17 ) URGENT xerox certified copy of this judgement may be given to the respective parties at an early date if the same is applied for. C. R. R. Nos. 1191-95 of 2004; Om Prakash Agarwal vs. State of W. B. and Anr. C. R. R. No. 2029 of 2004; Om Prakash Agarwal and Two Ors. vs. State of W. B. andanr. C. R. R. No. 2030 of 2004; Om Prakash Agarwal and Two Ors. vs. State of W. B. and Anr. C. R. R. No. 2031 of 2004; Mannalal Chamaria and Anr. vs. State of W. B. and anr. C. R. R. No. 2032 of 2004; Mannalal Chamaria and Anr. vs. State of W. B. and anr. Since similar point is involved in the other revisional applications (C. R. R. Nos. 1191-95 of 2004), this judgement will also govern the said revisional applications, which are accordingly dismissed. The learned Magistrate will act according to the directions given above. Revisional applications dismissed.