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Gauhati High Court · body

2019 DIGILAW 375 (GAU)

Partha Pratim Borthakur v. Mayurply Industries (P. ) Ltd.

2019-03-25

RUMI KUMARI PHUKAN

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JUDGMENT : 1. Heard Mr. D. Sarma, learned counsel for the petitioner as well as Ms. S. Jahan, learned counsel appearing for and on behalf of the respondent. 2. By filing this revision under section 482, Cr.PC, the petitioner has prayed for setting aside the order of taking cognizance by the learned trial court dated 16.1.2013, in Case No. 102C/2013, whereby the learned court has issued summons to the present petitioner. 3. The respondent herein filed a complaint petition under section 138 of the N.I. Act, before the Court of learned Magistrate at Guwahati, alleging that the accused No. 1 is the private limited company having its business at 2nd Floor, Sanmati Plaza, Chatribari Road, Guwahati, the accused No. 2 is the Managing Director and the accused Nos. 3 and 4 are its director and all of them are looking after day-to-day affairs of the company and are responsible for the affairs and business of the company. The accused No. 1 purchased Film Faced plywood from the complainant branch office at Guwahati and to discharge all its liabilities, issued two cheques amounting to Rs. 4,22,403, dated 25.8.2012 and 30.8.2012 but the said cheques were dishonoured for insufficient funds and it was the allegation of the complainant that they had deceitfully issued the said cheques having reason to believe that there are not sufficient funds to honour the cheques. Accordingly the complaint petition under section 138 of the N.I. Act was filed before the court with the allegation that the accused No. 2, Managing Director and the accused Nos. 3 and 4, who are the Active Directors of the company and are in-charge and responsible for the business activities of the accused No. 1 are vicariously liable for and on behalf of the company for issuance of such cheques. 4. The learned trial court on examination of the complainant took the cognizance of the offence under section 138 of the N.I. Act against all the accused-persons named above including the petitioner by its order dated 16.1.2013 and issued summons to all the accused-persons to face the trial. 4. The learned trial court on examination of the complainant took the cognizance of the offence under section 138 of the N.I. Act against all the accused-persons named above including the petitioner by its order dated 16.1.2013 and issued summons to all the accused-persons to face the trial. Challenging the aforesaid order of taking cognizance and issuance of summons, the present petition has been preferred to quash the aforesaid order on the ground that the petitioner is one of the Directors of the Board of the company and is not responsible to the day to day activities of the said company and he did not issued the alleged cheques and the same have been issued only by the Managing Director, Binoy Kr. Khandelia/respondent No. 2. 5. Mr. D. Sarma, learned counsel for the petitioner has contended that the learned trial court has taken the cognizance of the offence in the mechanical manner without applying its judicial mind and issued the summons to him, whereas he is not at all liable for the alleged offence. 6. Relying on a decision reported in National Small Industries Corporation Ltd. v. Harmeet Singh Painted, (2010) 3 SCC 330 , it has been contended that as the complainant/respondent has not specifically spell out as to how the petitioner being the Director is liable for the company, so the petitioner is no way liable for the offence and to face the trial. It has been contended that the Managing Director, who had issued the cheques and was in-charge of the Company, is liable for the offence under section 138 of the N.I. Act, where the drawer of the cheque is liable for issuance of such cheque and the present petitioner being only one of the Directors, is not associated with all the matters of the company, should not be arrayed as an accused in the aforesaid case. 7. Refuting such submission of learned counsel for the petitioner, Ms. S. Jahan, learned counsel for the respondent has submitted that the complaint itself filed by the respondent/complainant is clear enough to suggest the complicity of the petitioner. 7. Refuting such submission of learned counsel for the petitioner, Ms. S. Jahan, learned counsel for the respondent has submitted that the complaint itself filed by the respondent/complainant is clear enough to suggest the complicity of the petitioner. Reference has been made to the paras 2, 6 and 8 of the complaint petition to submit that they have made specific allegation against all the accused-persons, i.e., the company, the Managing Director and the Directors of the company and the present petitioner is stated to be in-charge and responsible for the business activities of the company/accused No. 1. Accordingly it has been submitted that while the complaint itself prima fade raised allegation against all the Directors of the company to be responsible for the affairs of the company with specific averment in the complaint, this court should not interfere into such matter of taking cognizance by way of invoking the provision of 482, Cr.PC, which is meant for only to resist the abuse of process of law and/or otherwise secure the ends of justice. 8. The learned counsel for the respondent has also made a deliberation upon the provisions of under sections 138 and 141 of the N.I. Act, to say that the Legislature in its wisdom has made liable all the Directors of the company, if such specific allegation is made out in the complaint itself and which is very much available in the present complaint. 9. Reliance has been placed to the decision of the Apex Court in K.K. Ahuja v. V.K. Vora, (2009) 10 SCC 48 and in the case of Standard Chartered Bank v. State of Maharashtra, (2016) 6 SCC 62 and submitted that the hon'ble Apex Court has summarized the provision as regards the liability of the Company, the Managing Director and the Directors of the Company, who may be made liable for the affairs of the company, under section 141 of the N.I. Act. 10. I have gone through the decisions rendered in all the cases relied and referred by both the parties. The decision that has been referred by the petitioner in National Small Industries Corporation Ltd. (supra), has also been taken note of in the recent decision of Standard Chartered Bank (supra). So obviously the recent decision will prevail over and above all the decisions. The decision that has been referred by the petitioner in National Small Industries Corporation Ltd. (supra), has also been taken note of in the recent decision of Standard Chartered Bank (supra). So obviously the recent decision will prevail over and above all the decisions. In the said decision, the observation of K.K. Ahuja (supra) has also been taken note of where in para 27, clause (iii), it has been mentioned as below: “27. The position under section 141 of the Act can be summarised, thus: ********* (iii) In the case of a Director, secretary or manager [as defined in section 2(24) of the Companies Act] or a person referred to in clauses (e) and (f) of section 5 of the Companies Act, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company is necessary to bring the case under section 141(1) of the Act. No further averment would be necessary in the complaint, though some particulars will be desirable. They can also be made liable under section 141(2) by making necessary averments relating to consent and connivance or negligence, in the complaint, to bring the matter under that subsection. *********” 11. Finally in para 33 of the judgment of Standard Chartered Bank (supra), the hon'ble Apex Court opined that in view of specific averment that the Directors were in charge of day to day business of the company and all of them with active connivance, intentionally issued the cheque in question, quashing of the case or summoning one of the Directors held to be proper and it has also been held that quashing of such order of summoning or taking cognizance by the High Court against such Director, in view of specific averment in the complaint itself, is bad in law. 12. The above legal pronouncement has a bearing on the entire issue before this court, as the present petitioner is also similarly situated who have contended that he may one of the Director of the company, is not any way associated with the affairs related to issuance of cheque. 13. I have given due consideration to the submission made before this court and it would be relevant to refer and reproduce the provision of section 141 of the N.I. Act, which reads as follows: “141. 13. I have given due consideration to the submission made before this court and it would be relevant to refer and reproduce the provision of section 141 of the N.I. Act, which 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.” 14. A bare reading of the aforesaid section would reveal that to make a person vicariously liable for the affairs of the Company, it is to be made out that the offence was committed by the person who was in charge of: (1) …………………………… and (2) was responsible for the conduct of the business of the company. 15. A bare reading of the aforesaid section would reveal that to make a person vicariously liable for the affairs of the Company, it is to be made out that the offence was committed by the person who was in charge of: (1) …………………………… and (2) was responsible for the conduct of the business of the company. 15. Now in the instant case, as has been discussed above, the complaint petition itself has specifically spell out that all the Directors of the Company, including the Managing Director was in charge of and was responsible for the day-to-day activities of the company and the learned trial court, on the basis of such specific averments in the complaint petition itself and the evidence of the complainant under section 200, Cr.PC, has taken cognizance of the offence and issued summons to the accused-person. 16. The provision contained in section 141 of the N.I. 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 liable for the offence under section 138 of the N.I. Act. Thus, the statutory intendment is absolutely plain and the provision makes the functionaries and the companies to be liable by a deeming fiction. The law provides that there should be specific averments in the complaint as regards the name of persons who were in-charge and responsibility for the conduct of business of the company. The requirement of section 141 of the N.I. Act, would be specified (sic) if such averment is made in the complaint itself. 17. For the purpose of taking cognizance of the offence, the learned court is to satisfy itself about the prima fade case as to whether the requirement of law has been reflected in the complaint itself so as to constitute an offence as alleged in the complaint. 18. In the present case, the complaint itself constituted all the necessary averments in the petition implicating the present petitioner to be responsible and in-charge of the company. That being so, there is no illegality or impropriety in the order of taking cognizance by the learned trial court. The petitioner can refute such allegation only in course of trial, if he is no way associated with the aforesaid affairs of the company. 19. That being so, there is no illegality or impropriety in the order of taking cognizance by the learned trial court. The petitioner can refute such allegation only in course of trial, if he is no way associated with the aforesaid affairs of the company. 19. Having regard to the entire matters on record and the legal pronouncements on the area, I find it not a fit case to invoke the provision of section 482, Cr.PC, as has been sought for. 20. Accordingly, the petition stands dismissed. Stay order, if any, stands vacated.