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2018 DIGILAW 126 (GAU)

Jadumoni Goswami v. Indreswar Gogoi

2018-01-24

RUMI KUMARI PHUKAN

body2018
JUDGMENT : Rumi Kumari Phukan, J. 1. Heard Mr. A.K. Gupta, learned counsel for the accused petitioner and Mr. D. Saikia, learned counsel for the respondent No. 1 and Mr. T.K. Mishra, learned Addl. P.P. Assam. The present application has been filed U/S 482 CrPC challenging the order dated 17.9.2011 passed by the learned SDJM Sadar Dibrugarh in case No. 528C/10 taking cognizance of the offence U/S 138 of the NI Act and also the 7.6.2012 passed by learned Sessions Judge Dib in criminal revision No. 57(4)/2011 upholding the above order of taking cognizance by the learned SDJM. 2. Necessary fact in nutshell is that petitioner is working as Branch Manager at Nagaon Branch of Basil International Ltd. The Respondent No. 1 Indreswar Gogoi lodged a complaint against the Branch Manager, M/s. Bansi Export Limited now renamed as M/s. Basil International Limited (as accused No. 1) and the two authorized signatories of cheque of the company U/S 138 of N.I. Act. It is stated that accused No. 1 has been carrying on business of investment and deposits under the company under the name and style Bhamashi Export Limited. Complainant fix deposited Rs. 50,000/- vide money receipt No. 1507525 and Rs. 50,000/- vide Money receipt No. 1507526 with the company on 27.9.2003 for a period of six years. On maturity the complainant/respondent demanded the maturity amount of Rs. 1 lac. The accused No. 1 delivered two numbers of cheques bearing cheque No. 510469 dated 27.8.2010 for Rs. 50,000/-. The respondent deposited the said cheque in his bank for encashment but both the cheques were dishonoured. After complying the procedure of sending notice of demand etc the respondent has lodged the complaint, whereupon learned trial Court took cognizance against all the three accused named in the complaint petition and issued process. 3. Challenging the aforesaid order of cognizance the petitioner preferred a revision and the leaned Revisional Court by referring to Section 141 NI Act held that since the present petitioner as a Branch Manager and representative of the company, was in charge of the Company at the relevant point of time he can also be prosecuted in view of Section 141 NI Act and he can prove his innocence in the trial by defence evidence but not at the time of taking cognizance. The mere fact that the petitioner is not the signatory of the cheque cannot exonerate him from the liability as Manager and accordingly it was held that there is no irregularity in taking cognizance by the Court. 4. The present petition has been preferred as against the aforesaid order of both the Courts. 5. I have considered the submissions of learned counsel for both the parties. 6. According to the learned counsel for the respondent No. 1 the petitioner was the Branch Manager of the Company at the relevant point of time and as such he was responsible for the company as well as issuance of cheque on behalf of the company and the fact that he was not liable for issuance of the cheques and the affairs of the company, can only be proved during the course of trial and the complaint cannot be quashed on the said ground. In this context petitioner has referred to the decision of 2005 Cr.L.J. 2566 (1) S.V. Mazumdar & Ors. v. Gujarat State Fertiliser Company Ltd., 2010 Cr.L.J 1907 National Small Industries Corporation Ltd. v. Harmeet Singh Paintal & Ors. 7. On the other hand, learned counsel for the petitioner by referring to the averments made in the complaint petition as well as the communication made by the concerned Bank, has submitted that a bare perusal of the complaint would reflect that the petitioner herein simply delivered the cheque that was prepared by the company and cheque was not drawn by him. Moreover, there is nothing to show that he was liable/responsible for the affairs of the company. Moreso, the aforesaid company was not made a party to the compliant which is another lacuna as, in absence of the parents company any other persons working under the company cannot be held liable for the affairs of the company. Reliance has been placed upon the decision of 2009 (10) SCC 48 K.K. Ahuja v. V.K. Vora & Ors., 2012 5 SCC 661 Aneeta Hada v. God Father Travels and Tours Pvt. Ltd. (and other connected appeals.) 8. In the given case there is no dispute that the cheque was issued on behalf of the Basil International Ltd. which is a company and same was not made party in the case. In the given case there is no dispute that the cheque was issued on behalf of the Basil International Ltd. which is a company and same was not made party in the case. In K K Ahuja as well as Aneeta Hada (supra) it has been elaborately dealt with as to who is the person can be held liable U/S 141 of NI Act for dishonor of cheque drawn by the company. Let us first analyse the provisions of Section 141 NI Act which provides as follows: "141. Offices of Companies:- (1) If the person committing an offence under Section 138 is a company every person who, at the time of 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 noting 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-sec (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 of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall liable to be proceeded against and punished accordingly." In view of Section 141 of the NI Act in case of offence committed by the company, the following persons are liable to be prosecuted. (i) Person/Persons in charge of the company at the time of commission of offence. (ii) The Company. (i) Person/Persons in charge of the company at the time of commission of offence. (ii) The Company. (iii) Any person/persons with whose consent or connivance the office has been committed. (iv) Any director, manager, secretary or other officer of the company for whose negligence the offence could be committed. The Hon'ble Supreme Court in Aneeta Hada it has been held that - Section 141 uses the term' person' and refers it to a company. The company is a juristic person. The concept of corporate criminal liability is attracted to a corporation and company and it is so luminescent from the language employed under Section 141 of the Act. The person enactment is one where the company itself and certain categories of offices in certain circumstances are deemed to be guilty of the offence. The company can have criminal liability fastened on it, and if a group of persons that guide the business of the companies have the criminal intent, that would be imputed to the body corporate. Section 141 of the Act clearly stipulates that when a person which is a company commits an offence, then certain categories of persons in charge as well as the company would be deemed to be liable for the offences under section 138. Thus, the statutory intent is absolutely plain. The provision makes the functionaries and the companies to be liable and that is by deeming fiction. A deeming fiction has its own signification. It is bounden duty of the court to ascertain for what purpose the legal fiction has been created. It is also the duty of the court to imagine the fiction with all real consequences and instances unless prohibited from doing so. That apart, the use of the term 'deemed" (used in the present case in Section 141) has to be read in its context and further, the fullest logical purpose and import are to be understood. It is because in modern legislation, the term, "deemed" has been used for manifold purposes. The object of the legislature has to be kept in mind. The word "deemed' uses in Section 141 of the Act applies to the company and the persons responsible for the acts of the company. It crystallizes the corporate criminal liability and vicarious liability of a person who is in charge of the company. The object of the legislature has to be kept in mind. The word "deemed' uses in Section 141 of the Act applies to the company and the persons responsible for the acts of the company. It crystallizes the corporate criminal liability and vicarious liability of a person who is in charge of the company. The criminal liability on account of dishonor of cheque primarily falls on the drawer company and is extended to the officers of the company and as there is a specific provision extending to the officers of the company and as there is specific provisions extending the liability to the officers, the condition incorporated in Section 141 have to be strictly complied with. The conditions are intended to ensure that a person who is sought to be made vicariously liable for an offence of which the principal accused is the company, had a role to play in relation to the incriminating act and further that such a person should know what is attributed to him to make him liable. 9. It is accordingly held that a person is vicariously liable u/s. 141(1) NI Act only when he is responsible to the company to the conduct of the business of the company and also in charge of the business of the company. Person in charge of the company is a person who is in overall control of day to day business of the company. In case of a person who does not fulfill the first condition, question of fulfilling the 2nd condition does not arise. 10. In the present case there is no averment in the complaint petition that the present petitioner being the Branch Manager of the Company is responsible for the conduct of the business of the company to make him liable for the affairs of the company. He cannot be made vicariously liable u/s. 141 (2) of the NI Act. If he has to be made liable u/s. 141 (2) the necessary averments relating to consent/connivance/negligence should have been made out but no such averment is made. 11. In K.K. Ahuja (supra) it is held as below: "To be vicariously liable under Section 141 (1), a person should be responsible to the company for the conduct of the business of the company and also a person in charge of the business of the company. 11. In K.K. Ahuja (supra) it is held as below: "To be vicariously liable under Section 141 (1), a person should be responsible to the company for the conduct of the business of the company and also a person in charge of the business of the company. The averment in complaint that an accused is a Director and that he is in charge of and is responsible to the company for the conduct of the business of the company, duly affirmed in the sworn statement, may be sufficient for the purpose of issuing summons to him. But if the accused is not one of the persons who falls under the category of "persons who are responsible to the company for the conduct of the business of the company", then merely by stating that " he was in charge of the business of the company" or he was in charge of the day-today management of the company" or "he was in charge of the day -to-day management of the company" or " hew as in charge of, and was responsible to the company for the conduct of the business of the company", he cannot be made vicariously liable under Section 141(1) of the Act. If a person does not meet the first requirement, that is, being a person who is responsible to the company for the conduct of the business of the company, neither the question of his meeting the second requirement (being a person in charge of the business of the company), nor the question of such person being liable under subsection (1) of Section 141 arises. To put it differently, to be vicariously liable under sub-section (1) of Section 141, a person should fulfill the "legal requirement" of being a person in law (under the statute governing companies) responsible to the company for the conduct of the business of the company and also fulfill the "factual requirement" of being a person in charge of the business of the company. However, even an officer who was not in charge of and was responsible to the company for the conduct of the business of the company can be made liable under Section 141(2) if necessary averments are made in the complaint as to how and in what manner the accused was guilty of consent and connivance or negligence." 12. However, even an officer who was not in charge of and was responsible to the company for the conduct of the business of the company can be made liable under Section 141(2) if necessary averments are made in the complaint as to how and in what manner the accused was guilty of consent and connivance or negligence." 12. Section 138 of the Act, which deals with the offence for dishonor of the cheque and the consequent non-payment of the amount due thereon, reads as follows- 38. Dishonor of cheque for insufficiency, etc., of funds in the accounts- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. 13. 13. The main part of the provision can be segregated into three compartments, namely, (i) the cheque is drawn by a person, (ii) the cheque drawn on an account maintained by him with the banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of a debt or other liability, is returned unpaid, either because the amount of money standing to the credit of that account is insufficient to honour the cheque or its exceeds the amount arranged to be paid from the account by an arrangement made with the bank, and (iii) such prejudice to any other provision of the Act, be punished with imprisonment for a term which may extend to two years or with fine which may extend to twice the amount of the cheque or with both. The proviso to the said section postulates under what circumstances the section shall not apply. In the case at hand, we are not concerned with the said aspect. It will not be out of place to state that the main part of the provisions deals with the basic ingredients and the proviso deals with certain circumstances and lays certain conditions where it will not be applicable. The emphasis has been laid on the factum that the cheque has to be dawn by a person on the account maintained by him and he must have issued the cheque in discharge of any debt or other liability. 14. Section 7 of the Act defines "drawer" to mean the maker of a bill of exchange or a cheque. An authorised signatory of a company becomes a drawer as he has been authorised to do so in respect of the account maintained by the company. In the instant case admittedly petitioner is not the drawer of cheque but simply delivered the cheque to the complainant, it was signed by two authorised signatory of the company. 15. Thus on merit and reading the complaint as a whole does not disclose commission of any offence on the part of the present petitioner and continuation of the proceeding against the present petitioner will be nothing but an abuse of process of law, which is liable to be quashed. Mr. 15. Thus on merit and reading the complaint as a whole does not disclose commission of any offence on the part of the present petitioner and continuation of the proceeding against the present petitioner will be nothing but an abuse of process of law, which is liable to be quashed. Mr. D. Saikia, learned counsel for the respondent No. 1 fairly submitted that the complainant deal with the petitioner on behalf of the company, who delivered him the cheque and as such he is required to be examined to prove his case. The said submission is not opposed by the learned counsel for the petitioner that he is ready to appear as a witness to the above transaction. 16. In the light of above discussion and the legal principle and the submission made before this Court, the proceeding of C.R. Case No. 528C/10 including taking cognizance of the offence U/S 138 of the NI Act hereby stands quashed and set aside as against the present petitioner. In the result, the order passed by learned Sessions Judge Dibrugarh in criminal revision No. 57(4)/2011 will no more in force. It is also hereby made clear that the petitioner may be examined by the complainant/respondent as a witness in this case and the same shall be allowed by the learned trial Court. The case being related 2014 the learned trial Court will expedite the case and dispose the same at the earliest. The petition stands disposed of accordingly. Return the LCR forthwith along with a copy of the order.