Research › Search › Judgment

Bombay High Court · body

2013 DIGILAW 1906 (BOM)

Sushanta J. Sarkar v. State of Maharashtra

2013-09-19

M.L.TAHALIYANI

body2013
Judgment : 1. Heard finally. 2. Heard Mr. Mundargi, advocate for the petitioners. The petitioners are accused nos. 5 to 9 in the criminal case No.1720/SS/2011, pending in 63rd Metropolitan Magistrate Andheri, Mumbai. They are facing trial for the offence punishable under Section 138 read with Section 141 of the Negotiable Instrument Act (NI Act). It is alleged by the respondent no.2 K. Sera Sera Limited (complainant) that the petitioners and other accused were in the management of accused no.1 Hydrocarbon Development Co Private Limited and therefore they are responsible for the offence committed by the company punishable under Section 138 of the NI Act. The learned Magistrate had issued process against accused no.1 Hydrocarbon Development Co. Pvt. Ltd. and all the directors who are accused nos. 2 to 10. As already stated the petitioners before this Court are accused nos. 5 to 9. It is admitted position that accused no.2 S.R. Das is the managing director of accused no.1 Hydrocarbon Development Co. Private Limited. It is further admitted position that accused no.10 Mr. Sanjay G. Tripathi was authorized signatory of accused no.1. 3. As far as the petitioners are concerned, it is submitted by learned counsel Mr. Mundargi that except the allegations at paragraph No.3 of the complaint, no allegations have been made against them involving them in the alleged offence. Paragraph no.3 of the complaint runs as under: “3. That the Accused Nos. 2 to 10 is the management of the Accused Company who are involving in day to day transactions of the companies.” 4. It is submitted by Mr. Mundargi that in view of the judgment of the Hon'ble Supreme Court in the matter of National Small Industries Corporation Limited V/s. Harmeet Singh Paintal ( 2010 (3) SCC 330 ). The complaint against the petitioner cannot be sustained and it needs to be quashed. After discussing various Judgments delivered by the Hon'ble Supreme Court on the issue involving Section 141 of the NI Act, the Hon'ble Supreme Court has said at paragraph 25 as under: (i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction. (ii) Section 141 does not make all the Directors liable for the offence. For fastening the criminal liability, there is no presumption that every Director knows about the transaction. (ii) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company. (iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition, are made so as to make accused therein vicariously liable for offence committed by company along with averments in the petition containing that accused were in-charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with. (iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred. (v) If accused is Managing Director or Joint Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with. (vi) If accused is a Director or an Officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in complaint. (vii) The person sought to be made liable should be in-charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases. 5. Thus, it is abundantly clear that it is necessary for the complainant in a complaint under Section 138 of NI Act to make specific averments disclosing the role of the directors in the alleged offence. It is clearly stated by the Hon'ble Supreme Court that the criminal liability can be fastened only on those who, at the time of commission of the offence, were in charge of and were responsible for the conduct of business of the company. Only bald and vague allegations will not be sufficient for the trial Magistrate to issue process against the directors. Only bald and vague allegations will not be sufficient for the trial Magistrate to issue process against the directors. It is obligatory on the part of the complainant to state in brief as to how and in what manner the directors, who are sought to be made accused, were responsible for the conduct of business of the company at the relevant time. The trial Magistrate on the basis of the averments made in the complaint will be in position to decide as to whether a process can be issued against the directors who are arraigned as accused in the complaint. As such the complainant has to place sufficient material before the Magistrate to enable the Magistrate to decide as to whether a process can be issued or not against the particular director. The learned counsel Mr. Nargolkar has invited my attention to paragraph no.8 of the complaint and has submitted that the complainant has sufficiently averred as to the role of the petitioners and other accused in complaint. Paragraph 8 of the complaint reads as under: 8. That on the personal visit of the representative of the Complainant, for the reconciliation of the said project fund and payment of loan amount is requested for which false assurances were given that payment would be made soon. That apart, numerous emails and calls have been made whereby accused were requested to clear the debit balance. After marathon efforts from the employees of Complainant accused have finally issued cheque of Rs.5,00,00,000/- (Rupees Five Crore Only) dated 10.05..2011 as full and final settlement infavour of Complainant through cheque no. 083641 drawn on the Induslnd Bank, Opera House Branch. Hereto Annexed and Marked as Exhibit “B” is the copy of the aforesaid Cheque issued by the Accused Company.” 6. The reading of paragraph 8 of the complaint also does not help to ascertain as to what role has been played by the petitioners in the alleged offence. The allegations made in paragraph no.8 are also vague in nature and do not specify the role of each of the petitioners. 7. The reading of paragraph 8 of the complaint also does not help to ascertain as to what role has been played by the petitioners in the alleged offence. The allegations made in paragraph no.8 are also vague in nature and do not specify the role of each of the petitioners. 7. As such in my considered opinion since the averments made against the petitioners in the complaint are not sufficient enough to make them vicarious liable for the offence punishable under Section 138 of NI Act, the proceedings pending against the petitioners in the Metropolitan Magistrate's 63rd Court Andhri, Mumbai vide Criminal Case No.1720/SS/2011 need to be quashed and are accordingly quashed. Bail bonds, if any, of the petitioners shall stand cancelled. 8. Ad-interim order, if any, stands vacated.