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Madhya Pradesh High Court · body

2006 DIGILAW 929 (MP)

CHANDA DWIJEN BANERJEE v. HARSHWARDHAN LABORATORIES P. LTD.

2006-07-31

S.V.VYAS

body2006
( 1 ) THIS is a petition filed under s. 482 of the Cr. P. C. against the impugned order dated 17-1-2006 passed by Judicial magistrate First Class, Indore, (Mr. Udaisingh Maravi) whereby after allowing the application filed by complainant/respondent permitted him to add the names of present petitioners as accused Nos. 2 and 3 in the complaint. ( 2 ) BRIEF facts of the case which are necessary for deciding the present petition are that respondent complainant has filed a private complaint on 26-4-2003 before the trial Magistrate against Debco Pharma, 19-A. Paddapukur Lane, Lolkata, West Bengal as accused No. 1 and accused No. 2 Mr. Dwijen Banerjee who was authorized signatory of the said Pharma under S. 138 of the negotiable Instruments Act (hereinafter shall be referred to as the "act") and S. 420 of the penal Code making the averments therein inter alia that Firm Debco Pharma had issued a cheque of Rs. 1,72,924. 34 P. to the respondent complainant under the signature of accused No. 2 Dwijen Banerjee and handedover the cheque to the complainant with assurance that he will get the amount after its presentation to the bank. ( 3 ) IN the complaint only Dwijen Banerjee has been named as an authorized signatory of accused No. l Debco Pharma and there is no averment made regarding the present petitioners and their capacity in the said firm. ( 4 ) DWIJEN Banerjee who was accused no. 2 before learned Magistrate, had earlier filed a petition bearing No. 2685 of 2005 under S. 482 of Cr. P. C. seeking quashment of the order of learned Magistrate with regard taking cognizance against him under s. 138 of the Act. The said petition was allowed vide order dated 21-9-2005 by this court holding that the case will proceed only against Debco Pharma and not against accused No. 2 Dwijen Banerjee and proceedings against accused No. 2 were ordered to be dropped. ( 5 ) THEREAFTER on 19-10-2005, respondent complainant moved an application before the learned Trial Magistrate, wherein, it has been stated that present petitioners are the partners of the Firm Debco Pharma and according to the partnership deed of the firm, these are the persons who are dealing with the affairs of the Firm and therefore it was prayed that they be impleaded as accused in the complaint. The application was allowed by the impugned order and directed for issuance of summons to the present petitioners, it is this order which has been challenged in this petition. ( 6 ) MR. Amitabh Upadhyaya, learned counsel appearing for petitioners has assailed the impugned (order) on four grounds. Firstly he submitted that the complainant did not make any averments in the complaint regarding the act and capacity of the present petitioners. Therefore for want of such averments against the petitioners, neither any cognizance can be taken, nor they be impleaded as accused. ' ( 7 ) SECONDLY he submitted that even in the statement of the complainant recorded before the Trial Magistrate under S. 200 of cr. P. C. nothing has been stated against the present petitioners and whatever has been stated was only against the Debco pharma and original accused No. 2 Dwijen banerjee. Thirdly he submitted that there is no provision in the Code of Criminal Procedure under which amendments can be made in private complaint at a later stage. ( 8 ) LASTLY he submitted that no new material through evidence has come before the trial Magistrate for taking cognizance against the present petitioners. Therefore the trial Magistrate has committed an error of law in taking cognizance against the present petitioners and in directing issuance of summons to them. ( 9 ) PER contra, learned counsel Mr. S. V. Dandwate, appearing for respondent complainant has submitted that original accused no. 2 Dwijen Banerjee has himself produced the partnership deed in earlier petition and on the basis of the alleged partnership deed proceedings initiated against him was ordered to be quashed. ( 10 ) LEARNED counsel Mr. Dandwate has further submitted that present petitioner are none else, but wife and son respectively of dwijen Banerjee original accused No. 2 and all these three persons have committed fraud and cheating with the respondent complainant and, therefore, they are liable to be prosecuted. Mr. Dandwate further submitted that s. 319 of Cr. P. C. gives very wide power to the learned Magistrate to take cognizance against the persons who appears to have committed the same offence along with the original accused at any stage or inquiry or trial. Mr. Dandwate further submitted that s. 319 of Cr. P. C. gives very wide power to the learned Magistrate to take cognizance against the persons who appears to have committed the same offence along with the original accused at any stage or inquiry or trial. ( 11 ) LEARNED Counsel further submitted that as per provisions of S. 141 of the Act any person who is In-charge of the company and who deals day to day affairs of the company can also be prosecuted under S. 138 of the Act. Therefore, learned Trial Magistrate has committed no error of law in passing the impugned order and allowed to add the present petitioners as accused Nos. 2 and 3 and in directing issuance of summons to them. ( 12 ) S. 141 of the Act reads as under :- "141. Offences by companies - (1) If the person committing an offence under Section 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; provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence; (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation - For the purposes of this section - (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director" in relation to a firm, means a partner in the firm. Explanation - For the purposes of this section - (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director" in relation to a firm, means a partner in the firm. " ( 13 ) MERE reading of S. 141 shows that every person who, at the time of commission of offence, was, in charge of the firm and was responsible to the company for conduct of the business of the company can be prosecuted in an offence punishable under s. 138 of the Act. The company is a juristic person and if the drawer of the cheque happens to be of juristic person like a body corporate, company or firm, it can be prosecuted for offence under S. 138 of the Act in the expanded ambit of the word, "company" even firm or other association all the persons included and, therefore, the firm or company can independently be prosecuted when the drawer of the cheque happens to be a company or a firm or a body corporate, prosecution proceedings can be initiated against such drawer which is a company as well as other persons who are responsible for day to day affairs of the business of the (Company and who are in charge of that company. The provision of S. 141 of the Act makes them guilty along with the company and therefore, they can also be punished along with the company. ( 14 ) FOR the purpose of showing that a person is in charge of and was responsible to the company for conduct of the business of the company, necessary averments are required to be made in the complaint itself. A complaint filed under S. 138 of the Act is a criminal complaint which can ultimately turn into conviction with jail sentence also. Therefore in'such criminal prosecution there should be material on record to indicate that the person against whom the Court is proceeding is a person who is in charge of company/firm who is looking after day to day affairs of the company. ( 15 ) WHEN we go through the complaint filed by respondent complainant, it is apparent that there are no averments made regarding the act and capacity of the present petitioners. ( 15 ) WHEN we go through the complaint filed by respondent complainant, it is apparent that there are no averments made regarding the act and capacity of the present petitioners. The proceedings were commenced with the same date when original accused No. 2 Dwijen Banerjee was the authorized signatory of the firm accused No. 1 and he actually signed the cheque which was given to the respondent complainant. In the complaint not a single word has been uttered against the present petitioners. When complainant was examined before the Trial magistrate under the provisions of S. 200 of cr. P. C. , he simply stated that accused has given him a cheque and when the same was submitted to the bank for payment, which was returned unpaid. Thereafter a notice was issued to the accused, instead no payment was made. Except the aforesaid averments nothing has been stated in the statement recorded under S. 200 of Cr. P. C. ( 16 ) THUS it is crystal clear that neither in the complaint, nor in the statement of the complainant nothing has been stated against the present petitioners. ( 17 ) LEARNED counsel for respondent submitted that original accused No. 2 himself has filed a copy of the partnership deed in a petition filed by him under S. 482 of Cr. P. C. because he is husband and father of petitioner Nos. 1 and 2. Therefore, on the basis of the alleged partnership deed, cognizance could have been taken against the present petitioners. ( 18 ) I am afraid, the aforesaid submissions of the learned counsel is not as per provisions of law. S. 319 of Cr. P. C. authorizes the Trial Magistrate to take cognizance against any person who has not been tried with the accused, but, who appears to be a person committed the alleged offence along with the accused persons and in such situation that person can also be tried together with the original accused, subject to the condition precedent that under the provision of S. 319 of Cr. P. C. it must appear from the evidence during course of inquiry or trial that any other person than the original accused have also committed the alleged offence along with the original accused, then, only cognizance can be taken under the provisions of S. 319. P. C. it must appear from the evidence during course of inquiry or trial that any other person than the original accused have also committed the alleged offence along with the original accused, then, only cognizance can be taken under the provisions of S. 319. It is also pertinent to note that before taking any cognizance, the Court should first record the evidence of the complainant and on the basis of such evidence an appropriate order can be passed under S. 319 of Cr. P. C. ( 19 ) Learned counsel for petitioners placed strong reliance on a judgment of the apex Court reported in the matter of monaben Ketanbhai Shah and another v. State of Gujarat and Ors. , ( (2004) 7 SCC 15 : (2004 Cri LJ 4249) ). The Apex Court has observed in para 6, reads as under :-"from the above, it is evident that in the complaint there are no averments against the appellants except stating in the title that they are partners of the firm. Learned counsel for the respondent complainants contended that a copy of the partnership deed was also filed which would show that the appellants were active in the business. No such document was filed with the complaint or made part thereof. The filing of the partnership deed later is of no consequence for determining the point in issue. Section 141 does not make all partners liable for the offence. The criminal liability has been fastened on those who, at the time of the commission of the offence were in charge of and were responsible to the firm for the conduct of the business of the firm. These may be sleeping partners who are not required to take any part in the business of the firm; they may be ladies and others who may not know anything about the business of the firm. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction. The obligation of the appellants to prove that at the time the offence was committed they were not in charge of and were not responsible to the firm for the conduct of the business of the firm, would arise only when first the complainant makes necessary averments in the complaint and establishes that fact. The present case is of total absence of requisite averments in the complaint". ( 20 ) THE facts of the above referred case were better than the case in hand. In the above referred case the accused persons were named in the complaint and partnership deed was also filed, instead, for want of necessary averments regarding the conduct of business of the firm, the order of discharge of accused was passed by learned magistrate, was, found correct and upheld. In the case in hand, there is no averments made regarding the act of present petitioners. The original partnership deed was also not called by the complainant during inquiry. Moreover complainant also did not depose anything against the present petitioners. Thus for want of necessary averments and evidence they are not liable to be prosecuted for offence punishable under S. 138 of the Act. Therefore the impugned order deserves to be quashed. ( 21 ) LEARNED counsel Mr. Amitabh upadhyay appearing for petitioners also placed reliance on a judgment reported in the matter of Kunstocom Electronics (I) Ltd. v. State of M. P. and Ors. , (2002 (5) MPLJ 178 ). In the said matter the learned single judge of this Court has observed in para 19 which read as under :- "this Court would not fail to mention here that there is no provision in the Code of criminal Procedure giving right to the parties to file an application for amendment in the pleadings and give powers to lower courts to allow the same. In the present case, learned Trial Court should not have entertained the application for amendment in the complaint for correcting the factual position about withdrawal of full amount of learned counsel. In the present case, learned Trial Court should not have entertained the application for amendment in the complaint for correcting the factual position about withdrawal of full amount of learned counsel. If there was any mis-statement of fact in the complaint because of bona fide mistake or intention, the same could be explained in Court statement by the complainant. " ( 22 ) LEARNED counsel for respondent lastly submitted that accused No. 1 being a firm cannot be prosecuted alone and there should be some one to represent the firm and in that capacity present petitioners have been made accused in the case in hand. In my view, this line of arguments of learned counsel has no force. Because as per provisions of S. 141 of the Act the Firm alone can also be prosecuted, if, necessary aver -ments are made only then some other persons as well as,the company/firm can be prosecuted together. In this regard observations of Apex Court in the matter of Anil handa v. Indian Acrylic Ltd. , ( AIR 2000 SC 145 ) : (2000 Cri LJ 373), which read as under. :- "if the offence was committed by a company, it can be punished only if the company is prosecuted. But instead of prosecuting the company if a payee opts to prosecute only the persons falling within the second or third category, the payee can succeed in the case only if he succeeds in showing that the offence was actually committed by the company. In such a prosecution, the accused can show that the company has not committed the offence, though such company is not made an accused, and hence the prosecuted accused is not liable to be punished. The provisions do not contain a condition that prosecution of the company is sine qua non for prosecution of the other persons, who fall within the second and the third categories mentioned above. No doubt, a finding that the offence was committed by the company is sine qua non for convicting those other persons. But if a company is not prosecuted due to any legal snag or otherwise, the other prosecuted persons cannot, on that score alone, escape from the penal liability created through the legal fiction envisaged in S. 141 of the Negotiable Instruments Act. But if a company is not prosecuted due to any legal snag or otherwise, the other prosecuted persons cannot, on that score alone, escape from the penal liability created through the legal fiction envisaged in S. 141 of the Negotiable Instruments Act. Even if the prosecution proceedings against the company were not taken or could not be continued, it is no bar for proceeding against the other persons falling within the purview of sub-sections (1), (2) of S. 141 of the Negotiable Instruments Act. ( 23 ) FROM the aforesaid discussion, in absence of specific averments in the complaint and in the statement recorded under s. 200 of Cr. P. C. , the learned trial Magistrate erred in taking cognizance against the present petitioners. ( 24 ) CONSEQUENTLY the petition succeeds and is allowed. The impugned order dated 17-1-06 is hereby quashed. Petition allowed. .