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2014 DIGILAW 507 (MP)

Sonali Thanawala v. Rahul Ginning Industries

2014-05-02

PRAKASH SHRIVASTAVA

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Judgment: Prakash Shrivastava, J. 1. This petition under Section 482 of Cr.P.C. has been filed by the petitioner challenging the order dated 10-9-08 taking cognizance of the offence under Section 138 of Negotiable Instruments Act against the petitioner as also the order dated 22-1-09 rejecting the prayer for review of the said order. In brief, respondent No. 1 had filed a complaint under Section 200 of Cr.P.C. alleging commission of offence under Section 138 of Negotiable Instruments Act. The Trial Court on 10-9-08 had heard the arguments of respondent No. 1 on the question of registering the complaint and had taken cognizance of the offence under Section 138 of Negotiable Instruments Act against the petitioner. The petitioner had filed an application for deleting Her name from the array of the parties but the said application was rejected by order dated 22-1-2009 on the ground that after taking the cognizance under Section204 of Cr.P.C., there is no power with the Magistrate to review the said order. 2. Learned Counsel for the petitioner submits that there is no allegation against the petitioner in the complaint and that the petitioner has unnecessarily been added in the complaint only on the ground that petitioner was one of the Director of the Company. He has further submitted that the petitioner had neither signed the cheque in question nor she was responsible for the offence. 3. In spite of service of notice respondents have not appeared to oppose the petition. 4. I have heard the learned Counsel for petitioner and perused the record. 5. It cannot be disputed that Section 141 is a penal provision creating vicarious liability and same must be strictly construed. The complaint should spell out as to how and in what manner the concerned respondent was in-charge of or was responsible to the accused/company for the conduct of its business. A company may have a number of directors and to make any or all the directors as accused in a complaint merely on the basis of a statement that they are in-charge of and responsible for the conduct of the business of the company without anything more is not a sufficient or adequate fulfillment of the requirements under Section 141. (See: National Small Industries Corporation Ltd. Vs. Harmeet Singh Paintal and another, reported in 2010 Cri. L.J. 1907). 6. (See: National Small Industries Corporation Ltd. Vs. Harmeet Singh Paintal and another, reported in 2010 Cri. L.J. 1907). 6. It is also settled position in law that with a view to make a director of a company vicariously liable for the acts of the company, it is obligatory on the part of the complainant to make specific allegations as are required under the law and under Section 141 of the Act and that in absence of such specific averments in the complaint showing as to how and in what manner the director is liable, the complaint should not be entertained. [See: Saroj Kumar Poddar Vs. State (NCT of Delhi), reported in 2007 (5) M.P.H.T. 431 (SC) : (2007) 3 SCC 693 ; SMS Pharmaceuticals Vs. Neeta Bhalla and another, reported in AIR 2005 SC 3512 ; and Sabitha Ramamurthy Vs. R.B.S. Channabasavaradhya, reported in 2006(4) M.P.H.T. 212 (SC) : AIR 2006 SC 3086 ]. It is also settled position in law that for launching a prosecution against the alleged directors, there must be a specific allegation in the complaint as to the part played by them in the transaction. [See: N.K. Wahi Vs. Shekhar Singh and others, reported in (2007) 9 SCC 481 ]. It is also necessary to specifically aver in a complaint under Section 141 that at the time when the offence was committed, the person accused was in-charge of, and responsible for the conduct of the business of the company and that the vicarious liability was to be attributed only if the requisite statements, which are required to be averred in the complaint petition are made so as to make the accused/director vicariously liable for the offence committed by the company. [See: Ramraj Singh Vs. State of M.P. and another, reported in (2009) 6 SCC 729 ]. 7. The Supreme Court in the matter of National Small Industries Corporation Ltd. (supra), has laid down the following principle in respect of vicarious liability of the director and the requirement in this regard by holding as under:-- "39. From the above discussion, the following principles emerge:-- (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. From the above discussion, the following principles emerge:-- (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. 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 the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the 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 the accused is a Managing Director or a 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 the 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 the 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." 8. In the present case, a perusal of the complaint reveals that the cheque in question was signed by respondent No. 3 as director of respondent No. 2/company. The only allegation against the present petitioner is that she is the director and in-charge of the company. There is no further allegation in the complaint that the petitioner was responsible for conduct of the business of the company. The only allegation against the present petitioner is that she is the director and in-charge of the company. There is no further allegation in the complaint that the petitioner was responsible for conduct of the business of the company. There is also no allegation in the complaint in respect of part played by the petitioner in the alleged transaction. The Trial Court while taking cognizance in the matter by order dated 10-9-08 had not considered the said aspect and had mechanically taken cognizance against the petitioner and when the petitioner had filed an application pointing out these relevant consideration, the Trial Court has rejected the same by order dated 21-2-09 on the ground that the order taking cognizance cannot be reviewed. 9. Since the complaint does not contain the specific averment as against the present petitioner as required under the law, therefore, the Trial Court could not have taken cognizance against the present petitioner. The vicarious liability on the part of the petitioner has not been clearly pleaded in the plaint. The petitioner had neither signed the cheque in question nor there is allegation that the petitioner is the Managing Director of the Company. There is also no allegation that the petitioner was in-charge and responsible for conduct of the business of the company at the relevant time. 10. Keeping in view the above position of law, and also taking note of the allegation made in the complaint, I am of the opinion that the Trial Court has committed an error in taking cognizance of the offence under Section 138 of Negotiable Instruments Act against the present petitioner. In view of this, the impugned orders of the Trial Court cannot be sustained and are hereby set aside. Consequently, the complaint filed against the petitioner is dismissed and this petition filed under Section 482 of Cr.P.C. is allowed to the extent indicated above. C.c. as per rules.