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2006 DIGILAW 141 (PAT)

Mahendra Prasad v. State Of Bihar

2006-02-07

M.L.VISA

body2006
Judgment M.L.Visa, J. 1. This application by the petitioner has been filed for quashing the order dated 4-11-2004 passed by Sri S. B. Prasad Singh. Judicial Magistrate. Gaya, in Complaint Case No. 317 of 1997 rejecting the prayer of petitioner to discharge him and for quashing entire criminal proceeding of the case. 2. Brief facts of the case are that opposite party No. 2 Rajendra Prasad Shah, Branch Manager, Magadh Branch. Bihar State Financial Corporation, Gaya (For short BSFC) filed complaint which was numbered as Complaint Case No. 317 of 1997 against the petitioner, his father and his brother alleging therein that Anant Ram, father of petitioner is Managing Director of Shree Bishnu Roller Flour and Oil Mill Pvt. Ltd. Gaya and petitioner and his brother Brijendra Prasad are the directors of the aforesaid Mill and a term loan of Rs. 56.50 Lacs was given by BSFC to accused persons in the name of third Mill and the amount of loan was to be repaid with interest and other expenditures in due installments but the Mill of the accused persons defaulted in payment of premium in due time and the amount with interest was to the tune of Rs. 1,02,29,430.51 as on 28-2-1997, in spite of demand made by the BSFC. Notices were duly served on accused persons but they did not pay any heed to the demand and the complainant ultimately wrote a letter to the District Manager, Food Corporation of India, Gaya to stop supply of wheat to the Mill of the accused persons. The further case is that on 18-12-1996 at 11.30 AM the petitioner along with his father and brother came to the office of the complainant and assured the complainant that they were ready to make payment of Rs. 1,50,005.00 in favour of the BSFC for which they issued three post dated cheques which were payable from their account in Punjab National Bank, Tekari Road, Gaya and they further said that they would make provision for payment from the bank in time for honouring of the said cheques and requested the complainant to direct the District Manager, Food Corporation of India to resume supply of wheat to the Mill of accused persons. The complainant believing their assurances agreed to receive post dated cheques by way of part payments and wrote letter to the District Manager, Food Corporation of India to supply wheat to the Mill of the accused persons. Anant Ram, father of the petitioner signed three post dated cheques each of Rs. 50,000.00 dated 30-12-1996, 15-1-1997 and 25-1-1997. When the cheque No. 686367 dated 30-12-1996 was presented for encashment it was dishonoured and returned with bankers remark "insufficient fund" but after great persuasion the accused persons replaced the same by bank draft on 14-2-1997. Thereafter accused persons made request to the complainant through letter dated 10-1-1997 to present the remaining two cheques in the last week of February, 1997 and accordingly when complainant presented those two cheques on 28-2-1997, both cheques were dishonoured and returned to complainant on 5-3-1997 with bankers remark "insufficient fund". Thereafter the complainant sent notice to the accused persons for payment of amount of two dishonoured cheques but neither payment was made nor any reply was given by the accused persons. The complainant then filed the complaint case against the petitioner and his father and brother u/s. 420 Indian Penal Code, 1860 . 3. The petitioner had filed Cr. Misc. No. 7447 of 1998 before this Court under Sec. 482 Cr. P. C. for quashing entire criminal proceeding including the order dated 25-10-1997, by which cognizance of the case was taken under Section 420 Indian Penal Code, 1860 . This application was dismissed (Annexure-2). 4. In the present application petitioner has challenged the order dated 4-11-2004 passed by the learned Judicial Magistrate by which prayer of petitioner to discharge him has been rejected. 5. Learned Counsel of petitioner has argued that no doubt petitioner was one of the directors of the Company but he resigned from this post on 1-6-1993 and information of this fact was given to the BSFC on 1-9-1993 as well as on 10-7-1996 and the both the letters were received by the office of the BSFC and on the date of issue of cheques petitioner was not the director of the Company nor he had gone to the office of the BSFC. Further contention of the petitioner is that the cheques in question were signed by accused Anant Ram alone and although the account was standing in the name of the Company but it was opened by accused Anant Ram and not by the petitioner. Further case is that during the pendency of the case Anant Ram and Brijendra Prasad, other two remaining persons died and after lapse of a period of about 6 years prosecution examined only one witness whose evidence is quite inconsistent to the case as made out in the complaint petition. The Court below in spite of the these materials rejected the prayer of the petitioner to discharge him and the order of the Court below is not proper and cannot be sustained in law in absence of any material against the petitioner. 6. Learned Counsel of petitioner by relying upon a decision in the case reported in AIR 2005 SC 3512 : 2005 Cri LJ 4140 has argued that because on the date when cheques were issued petitioner was not the director of the company, therefore, he cannot be held responsible for issuance of cheques and their subsequent dishonour as alleged. This judgment does not support the argument advanced on behalf of the petitioner because by this Judgment it has been held that "the liability arises on account of conduct, act or omission on the part of the person and not merely on account of holding an office and or a position in a company." In this case it was further held that "a liability u/s. 141 of the Act is sought to be fastened vicariously on a person connected with a company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Sec. 141 of the Act contains the requirements for making a person liable under the said provision. That respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within the parameter of sec. 141, he would issue the process. That respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within the parameter of sec. 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of sec. 141. Even a non director can be liable u/s. 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial." 7. Learned Counsel of petitioner has cited a number of other decisions also. In the case reported in AIR 2005 SC 268 where main accused who had alleged to have hatched conspiracy and who had motive to kill the deceased was already discharged and the order of High Court discharging the respondent by holding that no purpose would be served in further proceeding was upheld. That case was in respect of criminal conspiracy and admitted position was that respondent was not present in the town where the incident happened and he was implicated in the case on the basis of alleged conspiracy between him and original accused who was already discharged by the Sessions Judge and the order of discharge was upheld by High Court and special leave to Appeal filed before the Supreme court was also dismissed. In that case, there was no other material which was placed before Court to prove, complicity of the respondent and in that view of the matter the order of discharge of respondent was upheld. In the case reported in AIR 2004 SC 3623 : 2004 Cri LJ 3042 accused merely introduced a co-accused to bank for opening an account and six months thereafter co-accused presented bogus drafts and withdrew the amount and bank passed drafts of co-accused when there was no sufficient money in his credit. In the case reported in AIR 2004 SC 3623 : 2004 Cri LJ 3042 accused merely introduced a co-accused to bank for opening an account and six months thereafter co-accused presented bogus drafts and withdrew the amount and bank passed drafts of co-accused when there was no sufficient money in his credit. In that case accused was not responsible for the loss sustained by the bank because there was no evidence to show that accused instigated the co-accused to present bogus drafts before the bank and because bank passed the cheque acting on bogus drafts in spite of the fact co-accused had not sufficient money in his credit it was held that accused who had introduced the co-accused about six months back cannot be made liable for abetment of cheating. 8. Facts of the present case are quite different. It is not the case that petitioner had simply introduced other accused persons to BSFC who granted loan to other accused persons who subsequently in absence of petitioner issued cheques which were dishonoured. 9. In the case reported in AIR 1997 SC 3424 : 1997 Cri LJ 4070 conviction of accused in a case where allegations against him were for writing invitations on a letter head of a minister inviting actors for cultural show. The conviction of accused u/s. 417 Indian Penal Code, 1860 was not found proper considering the fact that the act of accused was not likely to cause loss to any body. In the present case on the basis of cheques which were subsequently dishonoured the complainant wrote a letter to Food Corporation of India for supply of wheat to accused persons and therefore, allegation of pecuniary loss to complainant has been made. 10. The further argument on behalf of the petitioner is that only one witness before charge has been examined whose evidence is contradictory to the case of complainant as made out in the complaint petition because this witness in his evidence has said that petitioner along with other accused persons had gone to the office of the BSFC in the month of January when they gave three cheques each of Rs. 50,000.00 to him and he has further said that cheques were given to him by petitioner whereas case of the complainant as made out in the complaint petition is that on 18-12-1996 petitioner and other two co-accused persons had come to the office of the BSFC and had given the cheques (Annexure-3). It is true that Arun Kumar Singh (PW-1) examined on behalf of the complainant in his evidence has said that in the month of January petitioner along with other two co-accused persons had come to the office of BSFC when cheques were handed over. It is also true that he has said that petitioner and co-accused Anant Ram handed over the cheques to him and in the act of handing over the cheques he had not named accused Brijendra Prasad. The complainant has yet to examine other witnesses and merely for a minor contradiction in the evidence of PW-1 that accused persons had gone to the office of the BSFC in the month of January whereas in the complaint petition it is mentioned that accused persons had gone there on 18-12-1996, the entire case of complainant cannot be disbelieved particularly when his evidence supports the case of complainant that petitioner along with two other accused persons had come to his office and petitioner and co-accused Anant Ram handed over the cheques to him. The question when the cheques were handed over the petitioner was not a director of the company because prior to that he had already resigned from that post is to be decided by the Court below. Besides this, finding on this point in favour of the petitioner will not itself absolve the petitioner from the entire allegations made in the complaint petition which includes the conduct of the petitioner in going to the office of the BSFC along with other accused persons, handing over the cheques, giving assurances that cheques would be honoured, making the request for restoring the supply of wheat to the company of accused persons etc. At the time of framing of the charge, the Court has to see whether a prima facie case is made out against an accused or not and if it is satisfied that prima facie case is made out it will frame charge against him. At the time of framing of the charge, the Court has to see whether a prima facie case is made out against an accused or not and if it is satisfied that prima facie case is made out it will frame charge against him. In the present case, complainant was examined on SA and thereafter one witness on his behalf was also examined and the learned Magistrate, after considering the materials on record was satisfied that there is prima facie case as made out against the petitioner and in view of this fact he has rejected the prayer of petitioner to discharge him. As discussed earlier the accused cannot claim discharge only on the ground that he had already resigned from the post of Director before the cheques were issued in favour of the BSFC. 11. I, therefore, find no merit in this application which is accordingly dismissed. 12. Here it is made clear that observations on the point of facts in this order are for the purpose of deciding the application of petitioner under consideration and any such observation will not form the basis of deciding the case which will be decided by the Court below considering the entire evidence adduced by the parties during trial.