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2006 DIGILAW 791 (RAJ)

Rajkumar Malhotra v. Bhanwarlal

2006-03-08

GOPAL KRISHAN VYAS

body2006
Judgment G.K. Vyas, J.-By way of filing the present petition under Section 482, CrPC, the petitioner has challenged order dated 24.07.2004 passed by the learned Judicial Magistrate, Pali in Criminal Case No. 191/2003. 2. Facts mentioned in the petition indicate that the respondent filed a complaint against the petitioner and others before the Additional Chief Judicial Magistrate, Pali under Section 138, Negotiable Instruments Act, stating therein, that Sargam Sputex Ltd. Bhilwara is engaged in processing of suitings and petitioner Rajkumar Malhotra is its Managing Director. It is further stated that the complainant is owner of M/s Anil Dyes and Chemical Company doing business of selling chemicals and, since 1997, he had been selling chemicals to the firm in which the petitioner is Managing Director. 3. It is contended in the petition that a total sum of Rs. 5,96,000/-fell due in the firm till 31.03.1999 and 3 cheques for Rs. 2,00,000/-each, bearing No. 658413, 658414 and 658415 were issued to the complainant firm by the firm in which the petitioner is Managing Director. The said cheques were deposited in the Bank and were dishonoured. Thereafter, notice was given as required under Section 138(b) of the Negotiable Instruments Act. However, no payment was made within the stipulated time, therefore, complaint was filed before the Magistrate. The learned Additional Chief Judicial Magistrate Pali, upon the complaint and statement of the complainant, took cognizance vide order dated 20.09.2002 passed in Criminal Case No. 144/2000. Cognizance of offence was taken against the firm and its Directors. Against the said order of taking cognizance, three Directors preferred revision petition before this Court and the said revision petition was registered as S.B. Criminal Revision Petition No. 213/2002. This Court allowed the said revision petition and quashed the order of cognizance taken against the petitioners (in the revision petition) who were not in-charge and responsible for the conduct of the companys business at the relevant time by following the Judgment of the Supreme Court. The said order of this Court is reported in 2003 CrLR 173 (Raj.). At the time of challenging the cognizance order against the three Directors of the Company it was specifically contended that in the complaint there is no allegation that cheques were issued by Raj Kumar Malhotra, present petitioner with consent and knowledge of the petitioners who were Directors of the Company. At the time of challenging the cognizance order against the three Directors of the Company it was specifically contended that in the complaint there is no allegation that cheques were issued by Raj Kumar Malhotra, present petitioner with consent and knowledge of the petitioners who were Directors of the Company. It was categorically mentioned in that petition that cheques were issued by Raj Kumar Malhotra, present petitioner under his signature and assured the non-petitioner about sufficiency of the amount in the Bank account, therefore, following the Judgment of the Supreme Court and the fact that the cheques were issued by the present petitioner, the other three Directors who were not incharge and responsible for the conduct of the business of the company, were held not liable for prosecution. Accordingly, the cognizance order against them was quashed. The present petitioner is admittedly signatory of the cheques and he is Managing Director of the firm; and on behalf of the firm, he issued the cheques in question in favour of the complainant firm Anil Dyes and Chemical Factory, Pali. The present petitioner, after quashing of the proceedings against the other Directors filed an application before the learned trial Court that the order of cognizance may be recalled because the said order has been passed without giving any opportunity of hearing; and further it is contended that notice was given to the company and not to Raj Kumar Malhotra, petitioner in person, therefore, the cognizance order is required to be recalled and may be cancelled. It is also contended in the application that notice to Raj Kumar Malhotra was to be given in accordance with provisions of Proviso (b) to Section 138. The said proviso to Section 138 of the Negotiable Instruments Act reads as under:- “Provided that nothing contained in this section shall apply unless - .(a) ........... .(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;” The learned Magistrate rejected the application filed by the petitioner for recalling of the order of cognizance. It is specifically observed in the order that as per the Judgment rendered in AIR 2001 SC 518 in which it has been held that having regard to the object of issuance of such notice, the notices cannot be construed in a narrow technical way without examining the substance of the matter. It is admitted position of the case that on behalf of the company the petitioner Raj Kumar Malhotra issued cheques in question in the capacity of Managing Director and notice was given to the company and as such it was incumbent upon him to see that the payments are made to the satisfaction of the cheques within the stipulated period of 15 days. It is not disputed by the petitioner that he is holding the post of Managing Director, more so in the revision petition filed by the other Directors before this Court, specific plea was taken that they are not responsible for the conduct of the business of the company and, if any act is done without their consent and knowledge by Raj Kumar Malhotra then, in that case, they are not responsible. Their contention prevailed with the Court and the said revision petition was allowed holding that Raj Kumar Malhotra (present petitioner) was working as Managing Director of the company and he had issued the cheques on behalf of the company. Obviously the notices were issued to the company and payments were to be made by the company. In the circumstances, being active representative of the company in the transaction with the complainant firm the petitioner can be arrayed accused for non-payment of the amount upon the cheques so issued being dishonoured. 4. Per contra, the learned Counsel for the non-petitioner argued that the present petition is not maintainable inasmuch as the petitioner has not challenged the order dated 20.05.2002 and if the petitioner seeks to agitate the validity of the order whereby cognizance has been taken of the offence against him, he must challenge that order. Learned Counsel for the non-petitioner contended that after the recent Judgment of the Supreme Court in Adalat Prasads case the order of cognizance cannot be recalled. Learned Counsel for the non-petitioner contended that after the recent Judgment of the Supreme Court in Adalat Prasads case the order of cognizance cannot be recalled. Learned Counsel for the non-petitioner contended that at the time of challenging the order of cognizance against the other Directors, it was specifically contended that the present petitioner who is Managing Director of the company was responsible for payment upon the cheques issued by him on behalf of the company, therefore, obviously when notice was served upon the company the petitioner was performing and acting on behalf of the company and as such cognizance taken against him for the offence under Section 138 of the Act cannot be said to be illegal. 5. Learned Counsel for the non-petitioner contended that the object of the legislature was to enhance the acceptability of cheque in settlement of liabilities may making the drawer liable for penalties in case of bouncing of cheques due to insufficient arrangements made by the drawer with adequate safeguards to prevent harassment of honest drawers, the Negotiable Instruments Laws (Amendment) Act, 1988 has been introduced and it has come into force with effect from 01.04.1989. Learned Counsel for the non-petitioner argued that if the cheque is dishonoured for insufficiency of fund or that it exceeds the amount arranged to be paid from the account, the drawer is to be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of cheque or with both. It is submitted that the object to bring Section 138 on the statute appears to be to inculcate faith in the efficacy of banking operations and creditability in transacting business on negotiable instruments. 6. He contended that in the circumstances while the company is represented by none else than the petitioner then the notice issued to the company on whose behalf petitioner Raj Kumar Malhotra drew the cheques in favour of the non-petitioner is under duty-bound obligation to make payment on behalf of the company within 15 days from the date of receipt of the notice. Therefore, as per contention of the learned Counsel for the non-petitioner, hyper-technical objections sought to be taken by the petitioner to shirk the responsibility would not survive. Therefore, as per contention of the learned Counsel for the non-petitioner, hyper-technical objections sought to be taken by the petitioner to shirk the responsibility would not survive. Learned Counsel for the non-petitioner, therefore, argued that notice was served upon the company while the petitioner was holding the post of Managing Director and as such obviously, in that capacity, he is managing the affairs of the company. 7. Learned Counsel for the non-petitioner laid great emphasis on the fact that the original order of cognizance is not under challenge and the learned trial Court rightly rejected the application filed by the petitioner for recalling the order of cognizance which finds support from the Adalat Prasads case. 8. In the present case, it is admitted position that the order of cognizance is not under challenge and petitioner moved the application for recalling the order principally on the ground that notice was served upon the company. The petitioner vigorously strove to take the shelter of the order of this Court whereby cognizance taken against the other three Directors, was quashed in the revision petition filed by those Directors. But, in that petition, it was specific averment before the Court that neither the petitioners (in that revision petition) were performing any transactions on behalf of the company nor while issuing the cheques in question the present petitioner Raj Kumar Malhotra took their consent or brought the fact of issuing the cheques in their knowledge. Following the principles enunciated by the Apex Court, this Court set aside the order of cognizance qua the petitioners in that case and, therefore, in view of the Judgment of the Supreme Court in Adalat Prasads case, the learned trial Court righlty rejected the application of the petitioner for recalling the order of cognizance. 9. The present petition is filed under Section 482, CrPC. The scope of interference by this Court under Section 482, CrPC is limited to preventing abuse of process of Court or, to secure the ends of justice. In the present petition, the petitioner has raised sheer technical ground that notice was served upon the company and not on him as person. The petitioner is none else than the Managing Director of the company and has signed the cheques in question on behalf of the company knowing fully well that the amount on cheques must be paid by the company. The petitioner is none else than the Managing Director of the company and has signed the cheques in question on behalf of the company knowing fully well that the amount on cheques must be paid by the company. When the petitioner has signed the cheques in transaction of the business on behalf of the incorporeal company as its representative, there cannot be an occasion for a separate notice upon the petitioner who is not only author of the cheques but as Managing Director of the company is representing it towards all dues and liabilities to which he is party. 10. In the circumstances, the petitioner is bereft of merit and the same is hereby dismissed.