Anant Slinderam v. Saroj Gupta

3) because five cheques, all drawn on HDFC Bank Ltd., Surya Niketan Building, K.G. Marg Branch, New Delhi-l00001, issued by the accused company.in favour of "R.K. Computers &Services" were dishonoured on account of iinsufficient funds" and "account closed" on 20.2.2002. It is claimed by the respondent that she had business terms with the accused persons including petitioner. herein in view of MOU and Franchise Agreement dated 8.3.2000 and the said cheques were issued by the accused persons in favour of the respondent for discharge of their liability against various bills for a total sum of Rs.3,23,200 raised by the respondent for the services rendered by her to the accused no. I company. The respondent has also claimed that alegaVdemand notice dated 25.2.2002 was sent to the accused persons (including the petitioner herein) through Regd. AD as well as UPC, but accused persons failed to make the payment of the said cheques. And this led to the filing of a complaint under section 138 read with section 141 Negotiable Instruments Act, 1881 by the respondent against all the accused persons. And taking into consideration the above allegations made in the complaint, the ? Crl.M.C.No. 857 lzotL l1/ 3. leamed Metropolitan Magistrate proceeded against the accused persons under section 138 read with section 141 of the Negotiable Instruments Act and ordered issuance of summons against them vide order dated 4.4.2002. The grievance raised by the petitioner against the said summoning order dated 4.4.2002 passed by the learned Metropolitan Magistrate is thatalthough the petitioner was in the board of directors of the accused company on the date of issuance of cheques in question and he had also signed the dishonoured cheques as an authorised signatory, but he had resigned from the accused Company soon after the issuance of said cheques and was not a director at the time of dishonour of the cheques. He submits that he issued the cheques in question in Augustz}}I and resigned from the Board of Directors of the Company on 8.9.2001 and intimated about the same to the Companies Act on 12.9.2001 which was very much within the knowledge of the complainant. It is also the case of the Petitioner that the said complaint has been filed by the Complainant in collusion with Accused No. 3 as the complainant has withdrawn the allegations made against Accused Crl.M.C.No. 857 /20LL 4. 'c no. 3 without any monetary settlement taking place between them even though he is very much covered under the ambit of Section 141 of the N.I. Act as he was the Managing Director at the time of the commission of the offence and was also the signatory of the dishonoured cheques.

5. I have heard the Counsel for the parties and given my anxious considerations to the argurnents advanced by them.

6. Section 141 deals with the offence committed by the coffIpany. On a reading of section 141 of the Negotiable Instruments Act, 1881, it is quite clear that if a company commits an offence under Section 138 of the Act, then the company as well as every person in charge of and responsible to the company for the conduct of business of the company at the time of commission of offence would be guilty of the offence. Section I4I thus consists of a 'deemed' concept of criminal liability and raises a legal fiction by virtue of which, a person, who may not be personally liable for commission of an offence under section 138, would be vicariously liable for the same. Saying it differently, the courts get jurisdiction.to convict the persons under section 141 only by reason of fantasy of law or a myth of law contained in the said section and not because such person Crl.M.C.No. 857 l2OLL )Y commits the offence himself. An accused, in other words, is not prosecuted under section 141 of the Act in his individual capacity but on the basis of the vicarious liability for the commission of the offence by the company. This position can also be inferred from the recent judgment of the ApeI Court in Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd., AIR 2012 SC 2795 which lays down that a director in a company or a signatory of a dishonoured cheque cannot be separately prosecuted unless the company is arrayed as an accused.

7. Corning to the facts of the case in hand, the respondent had filed a complaint under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 against the accused no. 1 company and the petitioner/accused no.2 and accused No.3 were impleaded therein as Directors of the ruid Co-pany. As per the complaint,the accused company had issued five account payee cheques. against the bills raised by the complainant for the services rendered by the complainant in terms of the MOU and franchise agreement dated 8.3.2000 but all the aforesaid cheques were returned dishonoured after they were presented by the complainant with her bank, J & K Bank Ltd, Rajendra Place, New Delhi-l10008 for encashment. The Crl.M.C.No. 857 /zOLl \5 (r petitioner/accused no. 2 and accused No. 3 were summoned by the learned Metropolitan Magistrate and during the pendency of the said complaint case, matter between the complainant and accused no. 3 was compromised and as per the compromise, the complainant agreed not to prosecute the said complaint against accused no. 3. Relevant portion of the order dated 30'h May, 2006 is reproduced as under:- "30.05.2006 Present: Shri R.K. Bindal, Advocste along with ShriN.K.Guptu, Attorney of the Complainant Accused Alok Jain in person along with Shri Ajoy Gupta, Advocste On 28.04.2006 it wos submitted by the ottorney of the complainont thut he wunted to drop the proceedings against the uccused No.2. Today, it is submitteql on behalf of the complainunt tltut complainant wish to prosecute his complaint against the accused No.2. It is submitted by the counsel for tlte comploinant thst the complainant wish to compromise the matter with the accused No.3 AIok Jain and, therefore, she does not want to prosecute the compluint against the accused No.3 and she withdruw the same qua the accused No.3. Let the statement of the attorney of the complainant be recorded. Statement recorded. It is stated by the attorney of the complainant thut the complainant ltus compromised the matter with the accused No.3, therefore, she does not want to prosecute tlte complaint against him and the complaint may be dismissed against the accused No.3 cts withdrawn, Crl.M.C.No. 857 /20II -v Heard. In view of the statement msde by the attorney of tlte complainont the complaint is dismissed as withdrawn against the accused No.3. The accused No.3 is acquitted. On filing of PF etc. issue fresh summons against the accused to be served by way Speed Post with AD due returnable on 25.01.2007. sd- MM:30.05.2006'

8. As already discussed above, the Directors or the other offrce holders in the company, who were responsible for the conduct of the business of the company and who played some role during the relevant period of transaction between the complainant and accused company that led the accused company to issue the cheques in question, become vicariously liable for the offence committed by the company in terms of section 141 of the Act. If at any stage of the case, the matter is compromised between one of the Directors and the complainant, then the complainant cannot proceed with the complaint case against the other Directors or the officials of the company and take a plea that the matter has been compromised with one of the Directors and the liability of the other Directors in respect of the dishonoured cheques still remains. Such a plea will be against Crl.M.C.No. 857 /2011. \4 -t 't the very concept of the said vicarious liability of the Director, which is there only because the company itself is an accused for committing offence under Section 138 of the Negotiable Instruments Act. Thus the complainant having entered into the compromise with one of the Directors cannot proceed with the same complaint case against the other Directors.

9. The petitioner, therefore, succeeds in the present petition and consequently the complaint case No. 12381112010 is hereby quashed qua the petitioner.

10. It is ordered accordingly. n Inl rcxrMwBHIR,J \., MAY 13,2013 Crl.M.C.No. 857 /20tL