Research › Search › Judgment

Calcutta High Court · body

2019 DIGILAW 339 (CAL)

N. K. BHAGAT v. BISWANATH DEY @ BISWAKANTHA DEY

2019-03-11

ASHA ARORA

body2019
JUDGMENT : ASHA ARORA, J. 1. By the instant application the petitioners have assailed the judgment and order dated 23/9/2011 passed by the learned Additional Sessions Judge Fast Track Court No. 1 Barasat in Criminal Appeal No. 8 of 2009 affirming the judgment of conviction dated 16/1/2009 passed by the learned Chief Judicial Magistrate, Barasat in C Case No. 868 of 2015 but setting aside the order of sentence passed therein. Petitioners have also challenged the judgment and order dated 25/7/2018 passed by the learned Additional Sessions Judge 3rd Fast Track Court Barasat in Criminal Appeal No. 29 of 2014 modifying the order dated 5/7/2014 passed by the learned Chief Judicial Magistrate Barasat in C Case No. 868 of 2015 under section 138 of the Negotiable Instruments Act whereby the petitioners were sentenced by the trial Court to pay compensation of Rs. 3 lacs and also to pay a fine of Rs. 2,000/- each in default of which to suffer simple imprisonment for two years and three months respectively. The aforesaid order of sentence was modified by the appellate Court to the extent that the petitioners herein/appellants were directed to pay compensation of Rs. 1,50,000/- each in default of which to suffer simple imprisonment for six months each. 2. The facts in brief giving rise to the present revisional application may be summarized as follows: In the year 2005 the opposite party herein/complainant filed a complaint under section 138 of the Negotiable Instruments Act against the present petitioners in the court of the Chief Judicial Magistrate Barasat, alleging that the accused no. 2/petitioner no. 2 as the authorized signatory of the partnership firm named "Adeptecs" issued a cheque dated 8/6/2005 for Rs. 1,50,000/- for receiving the goods from the factory of the complainant. On being presented to the bank, the aforesaid cheque was dishonoured with endorsement "payment stopped by Drawer". A demand notice was sent to the accused/petitioners who failed to make payment within the stipulated period despite receipt of the notice so a complaint under section 138 of the Negotiable Instruments Act was filed against them which was registered as C Case No. 868 of 2015. Upon conclusion of trial, the learned Magistrate, after considering the evidence convicted the accused-petitioners for the offence under section 138 of the Act and sentenced them as aforesaid. Upon conclusion of trial, the learned Magistrate, after considering the evidence convicted the accused-petitioners for the offence under section 138 of the Act and sentenced them as aforesaid. The petitioners preferred an appeal before the Sessions Judge at Barasat against the judgment and order of conviction and sentence being Criminal Appeal No. 8 of 2009. The aforesaid appeal was heard and disposed of by the Additional Sessions Judge Fast Track Court No. 1 Barasat by the judgment and order dated 23/9/2011 whereby the judgment of conviction of the petitioners was affirmed but the order of sentence was set aside and the case was remanded to the trial Court for hearing the convicts on the point of compensation and for considering the provision of section 360 of the Code of Criminal Procedure. Aggrieved, the petitioners preferred a revision petition before this Court being CRR 3683 of 2011 which was disposed of vide order dated 28/1/2013 with the following observation: "(a) Let the trial court decide the questions regarding sentence formulated by the lower appellate court within three months from the receipt of the photostat certified copy of this order. (b) Petitioners in case are aggrieved against the order passed by the trial court, they may file fresh appeal in the court of Sessions and the appeal so filed by them shall be decided within six months from the date of such filing. (c) In case grievance of either of the parties survives, they may approach this Court by filing a revision petition." In compliance with the order of this Court as well as the order of the lower appellate Court, the trial Court heard the petitioners on the point of compensation and passed the order dated 5/7/2014 whereby the petitioners were sentenced to pay compensation of Rs. 3 lacs and also to pay a fine of Rs. 2000/- each in default of which to suffer simple imprisonment for two years and three months respectively. Against the aforesaid order the petitioners filed an appeal before the Sessions Judge Barasat being Criminal Appeal no. 29 of 2014 which was disposed of on 25/7/2018 by the impugned judgment and order as aforesaid. 3. 2000/- each in default of which to suffer simple imprisonment for two years and three months respectively. Against the aforesaid order the petitioners filed an appeal before the Sessions Judge Barasat being Criminal Appeal no. 29 of 2014 which was disposed of on 25/7/2018 by the impugned judgment and order as aforesaid. 3. Learned counsel for the petitioners argued that the partnership firm named "M/S Adeptecs" being the drawer of the cheque in question should have been arraigned and impleaded as an accused which is a condition precedent for invoking the vicarious liability of the partners/directors of the said firm/company under section 141 of the Negotiable Instruments Act. It is pointed out that the cheque was issued by the partnership firm and signed by the accused no. 2/petitioner no. 2 as an office bearer of the firm and as its authorized signatory. To fasten the liability upon the partners of the firm or upon the directors of the company, impleading the Company/firm as an accused is imperative. M/S Adeptecs, the drawer of the cheque not having been arraigned as an accused, the judgment and order of conviction and sentence against the petitioners are not sustainable. It is canvassed that the proviso to section 138(b) of the Negotiable Instruments Act was not complied by the holder of the cheque/complainant. Since no notice of demand was served upon M/S Adeptecs, the drawer of the cheque, the petitioners could not be prosecuted in their individual capacity without impleading the firm as an accused in view of the fact that the alleged transaction was between M/S Adeptecs and the opposite party herein/complainant. To buttress his argument learned counsel for the petitioners relied on the decision of the Supreme Court in the case of Aneeta Hada versus Godfather Travels and Tours Private Limited reported in, (2012) 5 SCC 661 . Reference has also been made to the case of Ajit Balse versus Ranga Karkere reported in, (2015) 15 SCC 748 and Himanshu versus B. Shivamurthy and another reported in, 2019 2 Scale 100 . 4. Learned counsel for the opposite party/complainant countered that it is clear from the complaint that the cheque was issued by the accused no. 2/petitioner no. 2 as per instruction of the accused no. 1/petitioner no.1 and not by the partnership firm as contended. 4. Learned counsel for the opposite party/complainant countered that it is clear from the complaint that the cheque was issued by the accused no. 2/petitioner no. 2 as per instruction of the accused no. 1/petitioner no.1 and not by the partnership firm as contended. It is argued that the accused/petitioners were at the relevant time in charge of and responsible to the firm for its conduct of business. So they cannot be exonerated from the liability for the offence under section 138 of the Negotiable Instruments Act. In support of his argument learned counsel relied on the case of Tamil Nadu News Print and Papers Limited versus D. Karunakar and others reported in, (2016) 6 SCC 78 paragraph 15. Learned counsel for the opposite party also referred to the decision in the case of State of Madras versus C.V. Parekh and another reported in, (1970) 3 SCC 491 , in the case of Kaushalya Devi Massand versus Roopkishore Khore, (2011) 2 CalCriLR 241 (Supreme Court) and Shri Chhedi Lal Gupta versus Shri Suresh Damani and Another reported in, (2007) 1 CalCriLR 692 (Cal). 5. In the case in hand, it appears from the cheque dated 8/6/2005 that it was signed by the petitioner no. 2 on behalf of the firm named Adeptecs as its authorized signatory. The cheque does not show that it was issued by the signatory in his personal capacity. The name of the firm "Adeptecs" in the cheque above the signature of the petitioner no. 2 indicates that the cheque was not issued by the signatory in his individual capacity. The question is whether an authorized signatory of the firm/company would be liable for prosecution under section 138 of the Negotiable instruments Act without the company/firm being arraigned as an accused. In this context it may be useful to refer to paragraphs 58 and 59 of the judgment in Aneeta Hada's Case (supra) wherein the Supreme Court held as follows: "58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the company" appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity it its reputation. There can be situations when the corporate reputation is affected when a Director is indicted." "59. In view of our aforesaid analysis, we arrive at irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with the qualifier as stated in para 51. The decision in Modi Distillery has to be treated to be restricted to its own facts as has been explained by us hereinabove." 6. The proviso to section 138 of the Act stipulates three preconditions which must be satisfied before an offence under the aforesaid provision is made out. The decision in Modi Distillery has to be treated to be restricted to its own facts as has been explained by us hereinabove." 6. The proviso to section 138 of the Act stipulates three preconditions which must be satisfied before an offence under the aforesaid provision is made out. These conditions are as follows: (i) presentation of the cheque to the bank within six months from the date on which it is drawn or within the period of its validity, whichever is earlier (ii) a demand being made in writing by the payee or holder in due course by the issuance of a notice in writing to the drawer of the cheque within thirty days of the receipt of information from the bank regarding the return of the cheque as unpaid (iii) failure of the drawer of such a cheque to make payment of the amount of money to the payee or as the case may be, to the holder in due course within fifteen days of the receipt of the notice. It is only upon the satisfaction of all the above mentioned three conditions enumerated in the proviso to section 138 as clauses (a) (b) and (c) thereof that an offence under section 138 can be said to have been committed by the person issuing the cheque. In the case in hand, it is evident that the cheque dated 8/6/2005 was issued for and on behalf of the partnership firm named Adeptecs. It was drawn by the authorized signatory the petitioner no. 2 on behalf of "Adeptecs" as its office bearer. At this juncture, it may be worthwhile to refer to section 7 of the Negotiable Instruments Act which defines the "drawer" as the maker of a bill of exchange or a cheque. An authorized signatory of a company becomes a drawer as he has been authorized to do so in respect of the account maintained by the company. Curiously enough, though the cheque clearly shows that it was issued on behalf of "Adeptecs", no notice of demand was served on the said firm and the complaint was filed only against the petitioners without the mandatory requirement of impleading the company/firm as one of the accused. 7. Curiously enough, though the cheque clearly shows that it was issued on behalf of "Adeptecs", no notice of demand was served on the said firm and the complaint was filed only against the petitioners without the mandatory requirement of impleading the company/firm as one of the accused. 7. Learned counsel for the opposite party sought to impress that on this ground the accused/petitioners cannot be relieved of the liability for the offence under section 138 of the Act since no such plea was taken before the trial Court or before the lower Appellate Court. In this context it may be beneficial to refer to paragraph 16 of the judgment of the Supreme Court in Ajit Balse's Case (supra) which is quoted hereinbelow: "16. The learned counsel appearing on behalf of the respondent while accepting that Adivasi Machua Samiti, Sirsida on whose behalf cheque was issued was not impleaded as the accused before the trial court, contended that the judgment in Aneeta Hada case cannot be made applicable retrospectively in respect of cases where the conviction took place much prior to the judgment. However, such objection cannot be raised in the present case. Though judgment in Aneeta Hada is prospective but is applicable in all pending cases, including the trial, appeal, revision and special leave petition/appeal pending before this Court. The case of the appellants being covered by the decision in Aneeta Hada case, we set aside the impugned judgment and conviction passed by the trial court as affirmed by the appellate court and the impugned order dated 31-8-2012 passed by the High Court of Chhattisgarh at Bilaspur in Criminal Revision No. 365 of 2012." 8. There is therefore no merit in the argument advanced on behalf of the opposite party. The decisions relied on by the learned counsel for opposite party are not apposite for the purpose of the present case. 9. For the reasons aforestated and in view of the decisions referred, the impugned judgments and order of conviction and sentence are liable to be set aside. 10. Consequently, the application being CRR 2487 of 2018 is allowed and the impugned judgments and order of conviction and sentence are set aside. 11. Urgent photostat certified copy of this judgment if applied for, be given to the applicant upon compliance of requisite formalities.