Recon Agrotech Limited v. Tadikonda Trading Corporation
2009-02-26
R.KANTHA RAO
body2009
DigiLaw.ai
JUDGMENT: This appeal is filed by the complainant in C.C. No. 97 of 2000 on the file of the Court of VIII Metropolitan Magistrate for Municipal Cases, Vijayawada whereby and whereunder the accused Nos. 1, 3, 4 and 5 i.e., the respondents 1 to 4 herein were acquitted of the offence under Section 138 of Negotiable Instruments Act. 2. The appellant company filed a complaint under Section 138 of Negotiable Instruments Act against the first respondent/A-1 firm, Chintala Siva Krishna Prasad (A-2), the Managing Partner representing the firm, A-3 and A-4, the respondents 2 to 4 herein who are the partners of the firm under Section 138 of Negotiable Instruments Act. At the conclusion of the trial, the learned Magistrate convicted A-2, the Managing partner of the accused firm alone and acquitted A-1 firm and all the remaining partners who were figured as A-3 to A- 5. The present appeal is filed by the appellant/complainant company challenging the acquittal of the accused 3 to 5 i.e., the respondents 1 to 4 herein. On the ground that having convicted the second accused, the Managing partner of the firm, the learned Magistrate should also have convicted the respondents 1 to 4 and as such the appellant in this appeal seeks to set aside the order of acquittal passed by the Court below in so far as the respondents 1 to 4 are concerned and to convict them for the offence under Section 138 of Negotiable Instruments Act in this appeal by reversing the judgment of the learned Court below. 3. It is true that the complaint was filed by the appellant against the firm as well as all the partners including the Managing partner of the firm and the trial Court convicted the Managing partner (A-2) alone and acquitted the remaining accused including the firm itself. There was no specific denial by the respondents 1 to 4 as regards their identity. Further in Ex.P-17, copy of the written statement in Original Suit No. 484 of 1999 on the file of III Additional Senior Civil Judge, Vijayawada, the respondents 1 to 4 did not deny their legal status. 4.
There was no specific denial by the respondents 1 to 4 as regards their identity. Further in Ex.P-17, copy of the written statement in Original Suit No. 484 of 1999 on the file of III Additional Senior Civil Judge, Vijayawada, the respondents 1 to 4 did not deny their legal status. 4. As such the short question that falls for consideration in this appeal is whether it is obligatory on the part of the learned Magistrate to convict the respondents 1 to 4 along with the Managing partner (A-2), when admittedly the prosecution was launched against A-2 as well as the respondents 1 to 4. 5. Admittedly the second accused issued Ex.P-6 cheque dated 06.08.1999 in discharge of legally enforceable debt due to the appellant by the firm as well as all its directors and in proof of the same, the appellant also filed Ex.P-3 ledger copy in the trial Court signed by the second accused in the capacity of the Managing Director. Since the questions whether the impugned cheque was issued by A-2 in discharge of legally enforceable debt or liability of all the accused is not very much in dispute, the only question as stated above relevant for consideration is whether the respondents 1 to 4 are also liable for conviction along with A-2 who is the Managing partner. 6. The learned trial Court having regard to the evidence forth coming before it which was revealed from the oral testimony of P.W-1 Mr. G. Koteswarao, customer service Manger of the appellant company and Exs.P-1 to P-17 documents marked by the appellant, arrived at the opinion that on 30.11.1998 A-2 on behalf of A-1, A-3 to A-5 signed on the account copy of the firm which is marked as Ex.P-2. He also issued payment schedule on behalf of the remaining accused on 10.10.1998 and that he was representing A-1 firm at relevant time. The learned trial Court also perused the account katha sheets Exs.P-3 and P-4 opened by the accused No.2 in the company on behalf of A-1 firm and also A-3 to A-5. It further noticed that the signatures on Exs.P-3 and P-4 are that of A-2 and also the fact that Ex.P-5 payment schedule also contains the signature of A-2. 7.
The learned trial Court also perused the account katha sheets Exs.P-3 and P-4 opened by the accused No.2 in the company on behalf of A-1 firm and also A-3 to A-5. It further noticed that the signatures on Exs.P-3 and P-4 are that of A-2 and also the fact that Ex.P-5 payment schedule also contains the signature of A-2. 7. The learned trial Court further noticed that there is no oral or documentary evidence available on record to establish that A-3 to A-5 are partners representing on behalf of A-1 firm and that they are signing on behalf of A-1 firm and no such document was filed by the appellant/complainant. Ultimately the trial Court arrived at the conclusion that A-3 to A-5 never represented the above stated impugned transactions and accordingly absolved them of criminal liability along with A-1 firm. For the above-mentioned reasons, the trial Court having arrived at a definite conclusion that A-2 alone was responsible for bouncing of cheque convicted him alone and acquitted the respondents 1 to 4. 8. In the instant case the correctness of the decision rendered by the learned trial Court in acquitting the respondents 1 to 4 while convicting A-2 alone is challenged. According to the learned Counsel appearing for the appellant company the trial Court, which convicted A-2, the Managing partner representing the firm should also have convicted the respondents 1 to 4. To appreciate the contention urged on behalf of the appellant company it would be essential to refer to the following decisions rendered by the apex Court. 9. In Sheoratan Agarwal Vs. State of Madhya Pradesh1, the Supreme Court considered the question whether the prosecution of the Directors, officers and servants of the company or other persons is precluded unless the company itself is prosecuted for contravening the provisions of Sections 3 and 7 of Essential Commodities Act. Interpreting Section 1 of the Essential Commodities Act, which is identical to Section 141 of the Negotiable Instruments Act, the Supreme Court explained the legal position in the following terms. "The section appears to our mind is plain enough.
Interpreting Section 1 of the Essential Commodities Act, which is identical to Section 141 of the Negotiable Instruments Act, the Supreme Court explained the legal position in the following terms. "The section appears to our mind is plain enough. If the contravention of the order made under Section 3 is by a Company, the persons who may be held guilty and punished are (1) the Company itself (2) every person who, at the time the contravention was committed, was in charge of, and was responsible to, the Company for the conduct of the business of the Company whom for short we shall describe as the person-in-charge of the Company, and (3) any director, manager, secretary or other officer of the Company with whose consent or connivance or because of neglect attributable to whom the offence has been committed, whom for short we shall describe as an officer of the Company. Any one or more or all of them may be prosecuted and punished. The company alone maybe prosecuted. The person-in-charge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person-in-charge or an officer of the Company may not be prosecuted unless he be ranged alongside the Company itself. 10. Similarly in Anil Hada Vs. Indian Acrylic Limited2, the Apex Court held that the provisions of Section 141 of Negotiable Instruments Act 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 third categories mentioned in the said provision. 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-section (1) and (2) of Section 141 of the Act. 11. However, in the present case, the A-1 firm was prosecuted along with the Managing partner and the remaining partners. In view of the above stated legal position even without prosecuting A-1 firm, the Managing partner in fact concerned with the affairs and management of the company can individually be prosecuted. The Court ultimately records a finding of conviction taking into account the actual role played by each of the accused basing on the evidence adduced by the complainant in proof of the guilt of each accused.
The Court ultimately records a finding of conviction taking into account the actual role played by each of the accused basing on the evidence adduced by the complainant in proof of the guilt of each accused. The proviso to sub-section (1) of Section 141 of Negotiable Instruments Act envisages that if any of the accused proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence, he shall not be rendered liable to punishment. Therefore, in case of offence committed by companies, each and every person who has been arrayed as accused on the ground that he is concerned with the business and affairs of the company need not be convicted. In the instant case the learned trial Court considering the entire evidence before it arrived at a definite conclusion that A-2 alone was responsible for commission of the alleged offence under Section 138 of Negotiable Instruments Act and the remaining accused who are the respondents herein are not actually responsible for commission of such offence. Since the conclusion arrived at by the learned trial Court is based on evidence before it fastening criminal liability on A-2 alone is permissible in law despite the fact that the remaining persons concerned with the affairs of the Company were also arrayed as accused in the case. On facts and evidence, the learned trial Court is perfectly justified in convicting A-2 alone and acquitting the remaining accused who are the respondents herein. There is absolutely no legal basis for the contention that when A-2 was convicted for the offence under Section 138 of Negotiable Instruments Act, the remaining accused who are the respondents herein are also liable for conviction. Absolutely there is no merit in the contention urged on behalf of the appellant/complainant. 12. In the result, the appeal is dismissed.