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2020 DIGILAW 542 (ALL)

Devendra Kumar Garg v. State of U. P.

2020-02-19

SAURABH SHYAM SHAMSHERY

body2020
JUDGMENT : 1. The present application under Section 482 Cr.P.C. has been filed by the applicant seeking following relief: "quashing the order dated 17.7.2013 passed by A.C.J.M., Court No.2, Muzaffarnagar in Criminal Complaint Case No.152/9 of 2013, "Pawan Kumar Goel Vs. Devendra Kumar Garg" and order dated 05.12.2015 passed by learned Additional Sessions Judge, Court no.10, Muzaffarnagar in Criminal Revision No.290 of 2013, 'Devendra Kumar Garg Vs. Pawan Kumar Goel’, as well as the entire proceedings of Criminal Complaint Case No.152/9 of 2013, 'Pawan Kumar Goel Vs. Devendra Kumar Garg' under Section 138 of N.I.Act, Police Station-Civil Lines, District-Muzaffarnagar, presently pending before the Court of learned A.C.J.M. IInd, Muzaffarnagar.” 2. Heard Shri. Amit Daga, learned counsel for the applicant, Shri. Ajay Kumar Sharma, learned counsel appearing on behalf of the State O.P. No.2 is represented through his counsel Shri. Pankaj Bharti, but none appeared on his behalf even in the revised call and the judgment was reserved. 3. The facts as narrated in the application are as follows: (i) The O.P. No.2 filed a criminal complaint against the applicant under Section 138 of the N.I. Act before the Court of learned Additional Chief Judicial Magistrate, Court No.II, Muzaffarnagar, on 28.1.2013. In the complaint it was alleged that the complainant’s firm indulged in the business of Machineries and the accused/applicant was running a chemical factory in the name and style "Ravi Organics Ltd." It was further alleged that during the course of transaction, accused applicant being director of his firm issued one cheque bearing No.802275 dated 31.10.2012 of Rs.10 lakhs payable at Union Bank of India, Muzaffar Nagar. It was further alleged in the complaint that the said cheque was deposited in the complainant's bank at State Bank of Patiala Court Road, Muzaffarnagar for encashment however, the same was returned by the bankers of the accused applicant with an endorsement “Exceeds Arrangement.” It was further alleged that complainant sent one registered legal demand notice to the applicant on 29.12.2012 through registered post however, when the amount was not paid, the aforesaid complaint was filed. (ii) On the basis of the complaint as well as other materials on record, the learned Magistrate took cognizance and called the complainant to record his statement under Section 200 Cr.P.C. The complainant filed the statement by way of an affidavit. (ii) On the basis of the complaint as well as other materials on record, the learned Magistrate took cognizance and called the complainant to record his statement under Section 200 Cr.P.C. The complainant filed the statement by way of an affidavit. On the basis of materials available on record, the learned A.C.J.M. Court No.II, Muzaffarnagar took cognizance by order dated 17.7.2013. (iii) The applicant being aggrieved by the summoning order dated 17.7.2013 preferred a Criminal Revision No.290 of 2013, before the Additional Sessions Judge, Muzaffarnagar which was dismissed by the learned Sessions Court on 17.7.2013. The applicant thereafter preferred present application for quashing of the order dated 17.7.2013 as well as the order dated 05.12.2015. (iv) Shri. Pankaj Bharti has filed his Vakalatnama on behalf of O.P. No.2 on 22.1.206 however, no counter affidavit was filed despite the matter was listed on many occasions as well as counsel was not even present when judgment was reserved on 07.2.2020. (v) This Court passed the following order on 05.12.2016: “Heard learned counsel for the applicant, learned counsel for the complainant as well as learned A.G.A. for the State and perused the record. This application under Section 482 Cr.P.C. has been filed by the applicant with the prayer to quash the order dated 17.07.2013 passed by Additional Chief Judicial Magistrate, Court No. 2, Muzaffarnagar in Criminal Complaint Case No. 152/9 of 2013, and order dated 05.12.2015 passed by Additional Sessions Judge, Court No. 10, Muzaffarnagar in Criminal Revision No. 290 of 2013, under Section 138 of Negotiable Instrument Act, Police Station Civil Lines, District Muzaffarnagar. Submission of the learned counsel for the applicant is that complaint has been filed without making party to the company though complainant case is that cheque in question had been issued by the applicant in capacity of the director of Ravi Organics Limited. At this stage learned counsel for the applicant placed reliance on the following case laws. I. S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and another (2005)8 Supreme Court Cases 89. II. Yogendra Kumar Khullar @ Bittoo Vs. State of U.P. and another 2012 (79) ACC 789. III. Anita Hada Vs. Godfather Travels and Tours Private Limited (2012) 5 Supreme Court Cases 661. Learned A.G.A. as well as learned counsel for the complainant argued that non-bailable warrant has been issued in the matter. Applicant is authorized signatory hence complaint can go on. Yogendra Kumar Khullar @ Bittoo Vs. State of U.P. and another 2012 (79) ACC 789. III. Anita Hada Vs. Godfather Travels and Tours Private Limited (2012) 5 Supreme Court Cases 661. Learned A.G.A. as well as learned counsel for the complainant argued that non-bailable warrant has been issued in the matter. Applicant is authorized signatory hence complaint can go on. Having heard the learned counsel for the parties and in view of the law laid down in Anita Hada (supra), Yogendra Kumar Khullar@ Bittoo (supra) and S.M.S. Pharmaceuticals Ltd. (supra), matter requires thorough consideration. Learned AGA has accepted notice on behalf of the opposite party no.1. Issue notice to opposite party no. 2. Steps be taken by Registered Post A.D. within a week. All the opposite parties may file counter affidavit within four weeks. Rejoinder affidavit may be filed within two weeks thereafter. List on 25.04.2016 before the appropriate Bench. Till the next date of listing, further proceedings of the aforesaid complaint case shall remain stayed only against the applicant.” 4. Shri. Amit Daga, learned counsel appearing on behalf of the applicant submitted that if any complaint under Section 138 of the N.I. Act is filed in respect of dishonour of cheque issued from the account of a Company, it is incumbent on the part of the complainant to make necessary averments in the complaint that at the time when offence was committed, the person accused was incharge and was responsible for the conduct and business of the Company. However, in the complaint in question, the company was not made a party as an accused. He further submitted that it is settled position of law that for maintaining the prosecution under Section 141 of the N.I. Act arraigning of a company as an accused is imperative. In support of his submission he relied upon a judgment of three Judges of the Apex Court in Aneeta Hada Vs. Godfather Travels and Tours Private Limited (2012) 5 SCC 661 . He further relied on paragraph nos.58 and 59 of the said judgment. “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. Godfather Travels and Tours Private Limited (2012) 5 SCC 661 . He further relied on paragraph nos.58 and 59 of the said judgment. “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. 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 in 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 the 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 dragnet 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 State of Madras v. C.V. Parekh (1970) 3 SCC 491 , which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal v. State of M.P. does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada v. Indian Acrylic Ltd, (2000) 1 SCC 1 is overruled with the qualifier as stated in paragraph 51. The decision in U.P. Pollution Control Board v. Modi Distillery, (1987) 3 SCC 684 has to be treated to be restricted to its own facts as has been explained by us hereinabove.” (Emphasis supplied) 5. He further relied upon a recent judgment in Himanshu Vs. B.Shivamurthy & Anr, 2019 (3) SCC 797 , wherein in paras 12, 13 and 14 it has been held that: “12. He further relied upon a recent judgment in Himanshu Vs. B.Shivamurthy & Anr, 2019 (3) SCC 797 , wherein in paras 12, 13 and 14 it has been held that: “12. The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or 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. 13. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused. 14. We, accordingly, are of the view that the High Court was in erorr in rejecting the petition under Section 482 of the CrPC. We hence allow the appeal and set aside the judgment of the High Court. In consequence, the complaint, being C.R.P No. 27/2004 shall stand quashed.” (Emphasis supplied) 6. He further relied upon various orders passed by a co-ordinate bench of this Court where on the basis of similar contention relief has been granted to the applicant. Details of said petitions are as follows: (i) Criminal Misc. Writ Petition No.25369 of 2013 dated 19.11.2019; (ii) Criminal Misc. Writ Petition No.24377 of 2013 dated 19.11.2019; (iii) Criminal Misc. Writ Petition No.24632 of 2013 order dated 19.11.2019; (iv) Criminal Misc. Writ Petition No.25491 of 2013 order dated 19.11.2019. 7. Shri. Ajay Kumar Sharma, learned counsel appearing on behalf of the State has not disputed the legal position as submitted by the learned counsel for the applicant. 8. From perusal of the contents of the notice and complaint, it is evident that the notice as well as the complaint was filed against the applicant in his individual capacity. Company was not arrayed as a party neither in the notice nor in the complaint. 8. From perusal of the contents of the notice and complaint, it is evident that the notice as well as the complaint was filed against the applicant in his individual capacity. Company was not arrayed as a party neither in the notice nor in the complaint. Hon'ble Apex Court in the case of Aneeta Hada (supra) has held that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. 9. Judgment passed in Aneeta Hada (supra) is also followed in the case of Himanshu (supra), wherein the Apex Court has dismissed the complaint, since company was not arraigned as an accused. Present case is squarely covered by the judgment passed in Aneeta Hada (supra) and Himanshu (supra). 10. In view of the above discussions, this application is allowed and the order dated 17.7.2013 passed by A.C.J.M., Court No.2, Muzaffarnagar in Criminal Complaint Case No.152/9 of 2013, "Pawan Kumar Goel Vs. Devendra Kumar Garg" and order dated 05.12.2015 passed by learned Additional Sessions Judge, Court no.10, Muzaffarnagar in Criminal Revision No.290 of 2013, 'Devendra Kumar Garg Vs. Pawan Kumar Goel’, as well as the entire proceedings of Criminal Complaint Case No.152/9 of 2013, 'Pawan Kumar Goel Vs. Devendra Kumar Garg' under Section 138 of N.I.Act, Police Station-Civil Lines, District-Muzaffarnagar, presently pending before the Court of learned A.C.J.M. IInd, Muzaffarnagar are hereby quashed.