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Gauhati High Court · body

2008 DIGILAW 72 (GAU)

Vivek Anand Singhania v. State of Assam

2008-01-30

I.A.ANSARI

body2008
JUDGMENT I.A. Ansari, J. 1. When a company or one of the directors of the company issues a cheque and the cheque, so issued, is dishonoured by the bank on whom the cheque is drawn, is every director of the company, whose cheque is so dishonoured by the banker of the company, liable to be proceeded against for offence punishable under Section 138 of the Negotiable Instruments Act (in short, 'the N.I. Act')? This is the moot question, which this criminal petition, made under Section 482 Cr.P.C., has raised. 2. The opposite party No. 2 herein, namely, Sri Surendra Nath Sarma, lodged a complaint, in writing, with the Chief Judicial Magistrate, Golaghat, alleging, inter alia, thus: The complainant, while working in Rangajan Tea & Plantation Pvt. Limited, owned by opposite party No. 2, retired on 13.02.2004. After his retirement, the complainant wrote a letter, through the opposite party No. 1, to the accused-opposite party to make payment give of gratuity amount. On 18.10.2006, the complainant accordingly received a cheque, issued by opposite party No. 2, namely, Sri Surendra Nath Sarma, for an amount of Rs. 1,45,000.00, drawn on State Bank of India, Golaghat Branch. This cheque, on being deposited with the bank aforementioned, was dishonoured, on 31.10.2006, by the said Bank due to insufficiency of fund and the bank accordingly informed the complainant, on 07.11.2006. Though the complainant has served notice on all the accused demanding payment of the amount for which the said cheque was issued to him, no action has been taken by the accused aforementioned to make payment of the dues under the said cheque amount. 3. The complaint, which was lodged by the complainant, came to be registered as CR Case No. 2928/2006, under Section 138 of the Negotiable Instrument Act (in short, 'the NI Act'). By order, dated 04.01.2007, learned Judicial Magistrate 1st Class, Golaghat, took cognizance of the offence under Section 138 of the NI Act and directed accordingly issuance of summons against all the accused named by the complainant. It is the order, dated 04.01.2007, which stands impugned, in the present complaint petition, made under Section 482 CrPC. 4. Heard Mr. A.M. Bora, learned Counsel for the accused-petitioner, and Mr. B.S. Sinha, learned Additional Public Prosecutor, Assam, appearing on behalf of the opposite party No. 1. None has appeared on behalf of the complainant-opposite party No. 2. 5. It is the order, dated 04.01.2007, which stands impugned, in the present complaint petition, made under Section 482 CrPC. 4. Heard Mr. A.M. Bora, learned Counsel for the accused-petitioner, and Mr. B.S. Sinha, learned Additional Public Prosecutor, Assam, appearing on behalf of the opposite party No. 1. None has appeared on behalf of the complainant-opposite party No. 2. 5. While considering this criminal petition, it is pertinent to note that it is Section 141 of the NI Act, which deals with offence by companies. Section 141 reads: 141. Offence 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: Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. (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 with the consent or connivance of, or is attributable to, any neglect on the part of, 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. 6. 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. 6. A careful reading of Section 141(2) clearly shows that where any offence, under Section 138 of the N.I. Act, has been committed by a company and it is also proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, 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. Before, however, prosecuting a person as a Director of such a company, what must be shown, as required by Sub-section (1) of Section 141, is that the Director, who is sought to be prosecuted as an accused, was incharge of, and was responsible to, the company for the conduct of business of the company. In short, without making an accusation in the complaint against a person that he, as a Director of the company, was incharge of, and was responsible to, the company for the conduct of the business of the company, prosecution of such a person, as a director, for commission of an offence, under Section 138 of the NI Act, is not permissible. 7. In the backdrop of law as pointed out above, when one turns to the complaint, in question, what clearly transpires is that neither in the complaint nor in the statement of the complainant recorded under Section 200 Cr.P.C., it has been asserted by the complainant that the present petitioner was incharge of, and was responsible to, the company for the conduct of the business of the company. In such circumstances, the petitioner cannot be treated to be guilty of the offence allegedly committed by the accused company. Thus, the complaint, in question, does not satisfy the basic ingredients for sustaining prosecution of the present petitioner, as an accused, under Section 142 of the N.I. Act. 8. Because of what has been discussed and pointed out above, the impugned order, to the extent that it directs issuance of the summons against the petitioner, cannot be sustained. Thus, the complaint, in question, does not satisfy the basic ingredients for sustaining prosecution of the present petitioner, as an accused, under Section 142 of the N.I. Act. 8. Because of what has been discussed and pointed out above, the impugned order, to the extent that it directs issuance of the summons against the petitioner, cannot be sustained. The impugned order is, therefore, set aside to the extent that it relates to the present petitioner as accused. With the above observations and directions, the criminal petition shall stand disposed of.