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Allahabad High Court · body

2016 DIGILAW 1253 (ALL)

Suresh Kumar Rajasekaran v. State of U. P.

2016-04-06

OM PRAKASH VII

body2016
JUDGMENT Om Prakash-VII,J. This application under Section 482 Cr.P.C. has been filed for quashing the entire proceedings of Complaint Case No. 1630 of 2015 (Amit Kumar Gupta Vs. M/s. Helios and Matheson Information Technology and others) under Sections 138/141 of the Negotiable Instrument Act, 1881 (In Short the 'Act'), Police Station Indra Puram, District Ghaziabad pending in the Court of Addl. Civil Judge (J.D.)/Judicial Magistrate, Court No.3, Ghaziabad. Further prayer has been made to stay the further proceedings of the aforesaid case. 2. Heard learned counsel for the applicant and learned A.G.A. for the State. 3. It was submitted by the learned counsel for the applicant that the complainant has not averred in the complaint about the responsibility/liability of the applicant for the conduct of the business of the company. He has not disclosed that applicant was also responsible for day-to-day affairs of the company or its business transactions. In this state of affair, complaint cannot go on against the applicant. Attention of the Court was drawn to the averments made in the complaint by the learned counsel, who further submitted that mere assertion that the applicant is the director of the company is not sufficient to make him liable under sections 138/141 of the Act. In support of his contention, learned counsel for the applicant placed reliance on the decision of the Apex Court in the case of A.K. Singhania Versus Gujarat State Fertilizer Co. Ltd. & Anr., [2014 (1) JIC 648 (SC)]. 4. Per contra, learned A.G.A. opposed the prayer made by the applicant and submitted that the complaint clearly demonstrates that the persons, including the present applicant, arrayed as opposite parties in the complaint are the directors and officials of the company and they are responsible for the conduct of the business of the company. It was further submitted that the complainant - opposite party no.2 had invested some money in that company in term deposit plan. On maturity of the term deposit, cheques in question were issued by the company in favour of the complaint, which, on presentation before the bank, were dishonoured. Thus, the applicant, who is one of the directors of the company, cannot take such plea that he cannot be prosecuted. 5. I have considered the submissions made by learned counsel for the parties and have gone through the entire record. 6. Thus, the applicant, who is one of the directors of the company, cannot take such plea that he cannot be prosecuted. 5. I have considered the submissions made by learned counsel for the parties and have gone through the entire record. 6. Apex Court in the case of A.K. Singhania (supra) in paragraphs no. 16 to 20 held as under. 16. We have perused the complaints and, in fact, the relevant portions of the allegations have been reproduced in the foregoing paragraphs of the judgment. From that it is difficult to infer that there is any averment that these two accused were in-charge of and responsible for the conduct of the business of the company at the time the offence was committed. The allegations in the complaints in sum and substance mean that business and financial affairs of the company used to be decided, organized and administered by accused Nos. 2 to 6 and while doing so, other Directors including the two accused herein were consulted. The inference drawn by the complainant on that basis that these two accused, therefore, are in- charge and responsible to the company for the conduct of its business, is absolutely misconceived. We are, therefore, of the opinion that essential averment in the complaints is lacking. 17. In case of offence by company for dishonour of cheque, the culpability of the Directors has to be decided with reference to Section 141 of the Act, same reads as follows: "141. We are, therefore, of the opinion that essential averment in the complaints is lacking. 17. In case of offence by company for dishonour of cheque, the culpability of the Directors has to be decided with reference to Section 141 of the Act, same reads as follows: "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." 18. From a plain reading of the aforesaid provision it is evident that every person who at the time the offence was committed is in charge of and responsible to the Company shall be deemed to be guilty of the offence under Section 138 of the Act. From a plain reading of the aforesaid provision it is evident that every person who at the time the offence was committed is in charge of and responsible to the Company shall be deemed to be guilty of the offence under Section 138 of the Act. In the face of it, will it be necessary to specifically state in the complaint that the person accused was in charge of and responsible for the conduct of the business of the Company? In our opinion, in the case of offence by Company, to bring its Directors within the mischief of Section 138 of the Act, it shall be necessary to allege that they were in charge of and responsible to the conduct of the business of the Company. It is necessary ingredient which would be sufficient to proceed against such Directors. However, we may add that as no particular form is prescribed, it may not be necessary to reproduce the words of the section. If reading of the complaint shows and substance of accusation discloses necessary averments, that would be sufficient to proceed against such of the Directors and no particular form is necessary. However, it may not be necessary to allege and prove that, in fact, such of the Directors have any specific role in respect of the transaction leading to issuance of cheque. Section 141 of the Act makes the Directors in charge and responsible to Company "for the conduct of the business of the Company" within the mischief of Section 138 of the Act and not particular business for which the cheque was issued. We cannot read more than what has been mandated in Section 141 of the Act. 19. A large number of authorities of this Court have been cited by the counsel representing the party to bring home their point. We deem it inexpedient to refer to all of them. Suffice it to say that this question has been answered eloquently by a three-Judge Bench decision of this Court in the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 , in the following words: "19. We deem it inexpedient to refer to all of them. Suffice it to say that this question has been answered eloquently by a three-Judge Bench decision of this Court in the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 , in the following words: "19. In view of the above discussion, our answers to the questions posed in the reference are as under: (a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in-charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied." 20. This Court in the case of National Small Industries Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 , after reviewing all its earlier judgments summarized the legal position as follows: "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. (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. (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." 7. From a perusal of the record, it is evident that present applicant is the director in the company and is also share-holder. The company runs the business of giving software solutions to its customers. Apart to this, the company is also accepting, issuing, renewing and repaying the fixed deposits of the public as permitted under the Companies Act. Complainant was also a term deposit holder in the said company. On maturity of term deposit of the complainant, company had issued the cheques in question in lieu of the maturity amount, which were dishonoured. 8. If the contents of the complaint are taken into consideration, it cannot be said that applicant was not responsible for day-to-day affairs and business of the company. He is the director of the company. Specific averment has been made regarding responsibility in the complaint. Therefore, applicant cannot say at this stage that present complaint cannot go on for want of specific averment regarding liability / responsibility of the applicant for conducting the business of the company at the time of the offence. 9. Considering the contents of the complaint, I do not find any ground go invoke the jurisdiction under section 482 Cr.P.C. The law laid down by the Apex Court in the case of A.K. Singhania (supra) does not help the applicant in any way, as the facts of the present case are different from the facts of the case referred to above. 10. The application under section 482 Cr.P.C., being devoid of merit, is accordingly dismissed.