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2012 DIGILAW 78 (CHH)

SURENDRA KUMAR JAIN v. PRADEEP KUMAR AGRAWAL

2012-03-02

T.P.SHARMA

body2012
JUDGMENT T.P.Sharma, J. [1] By this petition under Section 482 of the Cr. P.C., the petitioner has prayed for quashment of criminal proceeding in Criminal Complaint Case No. 290/2008 pending before the Court of Additional Chief Judicial Magistrate, Surajpur for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act'). I have heard learned counsel for the parties, perused the order taking cognizance, dated 29-5-2008 passed by the Additional Chief Judicial Magistrate, Surajpur in Criminal Complaint Case No. 290/2008 whereby cognizance of the offence punishable under Section 138 of the Act has been taken against the petitioner and process has been issued. [2] Learned counsel for the petitioner vehemently argued that as per allegation made in the complaint, in the year 1996, the respondent had given loan of Rs. 2,50,000/- to Bhilai Cement Company Private Limited and the petitioner was the Director of the said Company. The said Company is required to pay interest and they deposited the interest till 31-3-1999 and thereafter, the said Company defaulted in paying interest. Total due including interest claimed by the respondent is Rs. 9,67,906.26 ps. The petitioner issued a postdated cheque for Rs. 2,70,250/-. The respondent has presented the cheque for payment before the Bank and same was dishonoured on account of direction of the petitioner for 'stop payment'. Thereafter, notice has been issued and complaint was filed. Learned counsel further argued that in his detailed complaint, the respondent has nowhere mentioned the fact that whether the petitioner as Director of the Company was responsible to the Company for the conduct of business of the Company and what was the responsibility and duty of the petitioner. Learned counsel also argued that cheque of Rs. 2,70,250/- was presented for encashment and same was dishonoured, but by issuing notice, the respondent/complainant has claimed Rs. 9,67,906.26 ps. and not the amount of cheque. Learned counsel submitted that the respondent has not made the Company as accused in terms of Section 141 of the Act. In absence of specific allegation relating to responsibility of the petitioner, non-impleading the Company as accused and not claiming the amount of cheque by serving notice, the petitioner is not liable to pay any dues and criminal proceeding pending before the Court is only abuse of process of the Court. [3] Learned counsel for the petitioner placed reliance in the matter of K.R. Indira v. Dr. [3] Learned counsel for the petitioner placed reliance in the matter of K.R. Indira v. Dr. G. Adinarayana, 2003 8 SCC 300 in which the Supreme Court has held that complainant is required to demand the amount of cheque and specific demand is required to be made by issuing notice, in absence of such specific demand of the amount of cheque, notice held to be invalid. Learned counsel further placed reliance in the matter of National Small Industries Corporation Limited v. Harmeet Singh Paintal and another, 2010 3 SCC 330 in which the Supreme Court has held that liability of the Director in terms of Section 141 of the Act is vicarious liability of the Director or Joint/Managing Director, therefore, the complainant is required to make averment relating to responsibility of the Director and role of the concerned person, in absence of such allegation, the complaint is liable to be quashed. [4] Learned counsel for the petitioner contended that in accordance with Section 141 of the Act, principal offender or the person liable is the Company and not the Director, therefore, if the Company is not impleaded as accused, then in absence of principal offender, the Director is not liable for commission of offence. [5] On the other hand, learned counsel for the respondent opposed the petition and submitted that specific allegation has been made in the complaint and notice in which specific amount has been demanded. Learned counsel further submitted that the complaint filed by the respondent is maintainable under the law. [6] In the present case, the petitioner has been made accused on the ground that he was Director of the Company, notice has been served upon the petitioner in which it has teen mentioned that said cheque has been issued by the petitioner, but interest was due on the cheque amount and total amount of Rs. 9,67,906.26 ps. has been due against the petitioner. Cheque was presented for payment and it was dishonoured on the ground that the petitioner has issued direction for stop payment. The respondent has claimed Rs. 9,67,906.26 ps. [7] In paras 1 & 2 of the complaint, it has been mentioned that the petitioner, Director of the Company, has issued cheque for the Company. In para 3, it has been mentioned that the petitioner has paid interest up to 31-3-1999, thereafter, he has not paid interest. The respondent has claimed Rs. 9,67,906.26 ps. [7] In paras 1 & 2 of the complaint, it has been mentioned that the petitioner, Director of the Company, has issued cheque for the Company. In para 3, it has been mentioned that the petitioner has paid interest up to 31-3-1999, thereafter, he has not paid interest. In para 5, it has been further mentioned that the petitioner has tendered the cheque to the respondent. In para 7, it has been further alleged that the petitioner is responsible for payment of dues. The petitioner has replied the notice issued by the respondent vide reply dated 1-6-2007. [8] As held in K.R. Indira v. G ADINARAYANA, 2003 AIR(SC) 4689, the complainant is required to make specific demand of the amount of cheque and even the demand is made relating to other than the amount of cheque covered by the cheque which does not invalidate the notice. The Supreme Court has observed in paras 10 & 11 of the said judgment as follows:- 10. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence: (1) drawing the cheque by a person on account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/in part any debt or liability, (2) presentation of the cheque by the payee or the holder in due course to the bank, (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, and (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice. 11. 11. Strong reliance was placed by the learned counsel for the appellants in Suman Sethi v. Ajay K. Churiwal, 2000 2 SCC 380 to contend that if the indication in the notice of other amounts than that covered by the cheque issued, does not as held by this Court invalidate the notice, there is no reason as to why a consolidated notice for two complainants cannot be issued. The extreme plea as is sought to be raised in this case based upon Suman Sethi case: (,: 2000 AIR(SC) 828 is clearly untenable. Though no formal notice is prescribed in the provision, the statutory provision indicates unmistakable terms as to what should be clearly indicated in the notice and what manner of demand it should make. In Suman Sethi case on considering the contents of the notice, it was observed that there was specific demand in respect of the amount covered by the cheque and the fact that certain additional demands incidental to it, in the form of expenses incurred for clearance and notice charges were also made, did not vitiate the notice. In a given case if the consolidated notice is found to provide sufficient information envisaged by the statutory provision and there was a specific demand for the payment of the sum covered by the cheque dishonoured, mere fact that it, was a consolidated notice, and/or that further demands in addition to the statutorily envisaged demand were also found to have been made may not invalidate the same. This position could not be disputed by the learned counsel for the respondent. However, according to the respondent, the notice in question is not separable in that way and that there was no specific demand made for payment of the amount covered by the cheque. We have perused the contents of the notice. Significantly, not only the cheque amounts were different from the alleged loan amounts but the demand was made not of the cheque amounts but only the loan amount as though it is a demand for the loan amount and not the demand for payment of the cheque amount, nor could it be said that it was a demand for payment of the cheque amount and in addition thereto made further demands as well. What is necessary is making of a demand for the amount covered by the bounced cheque which is conspicuously absent in the notice issued in this case. The notice in question is imperfect in this case not because it had any further or additional claims as well but it did not specifically contain any demand for the payment of the cheque amount, the noncompliance with such a demand only being the incriminating circumstance which exposes the drawer for being proceeded against under Section 138 of the Act. That being the position, the ultimate conclusion arrived at by the trial Court and the High Court does not call for interference in these appeals, though for different reasons indicated by us. The appeals are, accordingly dismissed. [9] In Harmeet Singh's case, the Supreme Court has held that the complainant is required to allege specific role of the Director of the Company in terms of Section 141 of the Act. [10] In the complaint, the respondent has made specific allegation against the petitioner in paras 1, 2, 3, 6 & 7 that the petitioner has received money for the Company, he has paid interest, he is responsible for payment, he has directed the Bank for stop payment and also he has replied the notice. In first para of reply to the notice by the petitioner, the petitioner himself has mentioned the fact that he had no business or dealing with the respondent, but has not alleged in the notice that he has no business with the Company or that he is not the Director of the Company, inter alia, he has received notice as Director of the Company and he has replied the notice and has made different allegations relating to the Company. First para of the reply made by the petitioner is as follows:- 1. I have had no business or dealing with your client in any way and as such the allegations made in your said letter are unlawful and are all denied and disputed by me. [11] As regards maintainability of the complaint relating to the Director only, as per Section 141 of the Act, person responsible to the Company for conduct of the business of the Company as well as the Company both are responsible for payment and liable for commission of offence. Section 141 of the Act reads thus, 141. [11] As regards maintainability of the complaint relating to the Director only, as per Section 141 of the Act, person responsible to the Company for conduct of the business of the Company as well as the Company both are responsible for payment and liable for commission of offence. Section 141 of the Act reads thus, 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: 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. 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. [12] While dealing with maintainability of complaint against the person responsible for the conduct of the business of the Company, the Supreme Court in the matter Anil Hada v. Indian Acrylic Limited, 2000 AIR(SC) 145 has held that prosecution is maintainable against the Director even if the prosecution against the Company is dropped because of winding up of the Company. [13] In the present case, specific allegation has been made relating to the petitioner in the complaint and the petitioner has not denied the fact that he is Director of the Company, inter alia, he has made specific allegation in reply relating to business of the Company. By issuing notice, the respondent has demanded the amount of cheque along with interest due thereon. [14] As held by the Supreme Court in K.R. Indira's case and in Suman Sethi's, by claiming more amount than the amount of cheque relating to cheque does not invalidate the notice. [15] For the foregoing reasons, I do not find any illegality in taking cognizance against the petitioner for the offence punishable under Section 138 of the Act. [16] Consequently, I do not find any ground for exercising the extraordinary inherent jurisdiction in terms of Section 482 of the Cr. P.C. The petition is, therefore, liable to be dismissed and is hereby dismissed. I.A. No. 1 stands disposed of. Petition dismissed.