Bharat Niketan Engineering College v. S. Natarajan
2008-03-06
K.N.BASHA
body2008
DigiLaw.ai
Judgment : 1. Mr. K. Asokan learned senior counsel for the petitioners in both the petitions submitted that the petitioners have came forward with these petitions seeking the relief of quashing the proceedings initiated for the alleged offence under Section 138 of the Negotiable Instruments Act. 2. It is submitted by the learned senior counsel that the petitioners have been arrayed as A1, A1, A4 and A5 out of five accused in this case. It is contended by the learned senior counsel that admittedly as per the complaint, the cheque was signed by A3. The learned senior counsel also produced the certified copy of the disputed dishonoured cheque before this Court today, containing the signature of A3 as Managing Trustee for the first accused college. It is further contended that except the vague and bald allegation in the complaint alleging that the petitioners are also responsible and in-charge of the day to day affairs of the first accused college, there is no other allegation levelled against the petitioners herein. It is contended that allowing the proceedings to continue against the petitioners would amount to a clear case of abuse of process of Court. 3. The learned Senior counsel further submitted that in respect of the first petitioner in both these petitions, the petition may be permitted to be withdrawn and the learned counsel also made an endorsement to that effect. 4. The learned Senior counsel placed reliance on the decision of the Hon‘ble Apex Court reported in (2007) 4 Crimes310 (SC) and also placed reliance on the decision of he Hon‘ble Apex Court in (2007) 4 Crimes 244 (SC). 5. Per contra, Mr. Veera Kathiravan learned counsel appearing of the respondents/complainants vehemently contended that there are enough and sufficient allegations levelled against he petitioners in the complaint filed for the offence under Section 138 of Negotiable Instruments Act. The learned counsel further took this Court to the relevant portions of the complaint and contended that it was specifically mentioned in the complaint to the effect that the amounts were borrowed only in the presence of these petitioners and further the cheque was handed over in their presence, as such, they are having knowledge and only with their knowledge and consent, A3 is said to have issued the cheque on behalf of A1.
Therefore, it is contended by the learned counsel for the respondents that the petitioners 2 to 4 in both the petitions are also vicariously liable for the offence said to have been committed by the first accused College. The learned counsel placed reliance on the decision of the Hon‘ble Apex Court in (2007) 2 SCC (Cri.) 460. 6. I have carefully considered the rival contentions put forward by the learned counsel on either side and also perused the impugned complaint in this case. 7. It is seen that the petitioners 2 to 4 in both these petitions have been arrayed as A2, A4 and A5 and in respect of the first petitioner in both these petitions, it is submitted by the learned senior counsel that these petitions may be permitted to be withdrawn and as such, these petitions are dismissed as withdrawn only in respect of the first petitioner. 8. A perusal of the impugned complaint discloses that only A3 is said to have signed and issued the cheque in favour of the complaints/respondents herein on behalf of the first accused college. As far as he petitioners in both the petitions are concerned, they have been implicated on the allegation that they are aware about the amount borrowed by A3 and as such, the amount was borrowed only in their presence. Apart form such allegation, there is yet another allegation is to the effect that all the four accused were jointly responsible and in charge of the day to day affairs of the first accused college. This Court is of the considered view that such bald and vague allegation itself is not sufficient to implicate the petitioners 2 to 4, who have been arrayed as A2, A4 and A5 to be held vicariously liable for the offence said to have been committed under Section 138 of Negotiable Instruments Act by the first accused college. The undisputed fact remains that it is only A3 who said to have borrowed the amount and only he is said to have signed and issued the cheque.
The undisputed fact remains that it is only A3 who said to have borrowed the amount and only he is said to have signed and issued the cheque. The learned Senior Counsel for the petitioners in both these petitions rightly placed reliance on the decision of the Hon‘ble Apex Court in (supra) has held that 5Negotiation for obtaining financial assistance on behalf of the Company by its Directors itself is not an ingredient for the purpose of constituting an offence under Section 138 of the Negotiable Instruments Act. Furthermore, a vicarious liability on the part of a person must be pleaded and proved. It cannot be a subject matter of mere inference.” 9. The learned Senior Counsel rightly pointed out that the Hon‘ble Apex Court in (supra) has taken a similar view. 10. The Hon‘ble Apex Court even in an earlier decision rendered by the Larer Bench in (2005) 8 SC 89 has held that, “With a view to make a Director of a Company vicariously liable for the acts of the Company, it was obligatory on the part of the complaint to make specific allegations as are required in law”. 11. In yet another decision in 2007 (2) Supreme 811 the Hon‘ble Apex Court has taken a similar view. In that case, the Hon‘ble Apex Court had held as follows: “To launch a prosecution therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. There should be clear and unambiguous allegation…” 12. The Hon‘ble Apex Court has also held in yet another decision in) 2007 (1) CTC 529 that, “13 The purported averments which have been made in the Complaint Petitions so as to make the appellant vicariously liable for the offence committed by the Company read as under: “That the accused No. 1 is a pubic limited company incorporated and registered under the Companies Act, 1956 and the accused 2 to 8 are/were its Directors at the relevant time and the said company is managed by the Board of Directors and they are responsible for the in charge of the conduct and business of the company-Accused No. 1. However, cheques referred to in the complaint have been signed by the Accused No. 3 and 8 i. e. K.K. Pilania and N.K. Munjal for and on behalf of the Accused Company No.1”.
However, cheques referred to in the complaint have been signed by the Accused No. 3 and 8 i. e. K.K. Pilania and N.K. Munjal for and on behalf of the Accused Company No.1”. “there is no averment in the Complaint Petitions as to how and in what manner the appellant was responsible for the conduct of the business of the company or otherwise responsible to it in regard to its functioning. He had not issued any cheque. How he is responsible for dishonour of the cheque has not been stated. The allegations made in paragraph 3, thus, in our opinion do not satisfy the requirements of Section 141 of the Act. 13. Therefore, the well settled principle of law laid down by the Hon‘ble Apex Court in the decisions cited supra is squarely applicable to the facts of the instant case as in this case there is only a bald and vague allegation to the effect that the petitioners A-2, A-4 and A-5 aware are about the borrowing of the amount by A-3 on behalf of A-1 and they were jointly responsible and in-charge of the day to day affairs of the first accused College and that itself is not sufficient to fasten the petitioners, A-2 A-4 and A-5 also to be held vicariously liable for the alleged offence committed by A1, the College. Therefore, this Court is of the considered view that allowing the proceedings to continued against the petitioners, namely A-2, A-4 and A-5 concerned would amount to a clear case of abuse of process of Court and as such this Court is constrained to quash the proceedings insofar as the petitioners 2 to 4, namely, A-2, A-4 and A-5 are concerned in S.T.C. Nos. 136 and 135 of 2007 respectively, on the file of the District Munsif, Uthamapalayam, Theni District. 14. This Court is also constrained to direct the learned District Munsif, Uthamapalayam, Theni District, to expedite the trial as expeditiously as possible, more particularly within a period of five months from the date of receipt of a copy of this order. 15. With the above direction, these petitions are allowed. Consequently, connected Miscellaneous petitions are closed.