Calcutta High Court (Appellete Side)
Mahendra Kumar Rustagi And Another vs The State Of West Bengal And Another on 14 September, 2011
Author: Asim Kumar Ray
Bench: Asim Kumar Ray
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IN THE HIGH COURT AT CALCUTTA
Criminal Revisional Jurisdiction
C.R.R. No. 866 of 2011
Mahendra Kumar Rustagi and another
-Vs-
The State of West Bengal and another
Present :
Hon'ble Justice Asim Kumar Ray
For the petitioner : Mr. Sekhar Basu
Mr.Kaushik Gupta
Ms. Debasmita Nandi
For the Opposite Party
No.2 : Mr. Sandipan Ganguly,
Mr. Bidyut Dutta,
Mr. Bijan Datta.
For the State : Mr. Ranjit Kumar Ghosal
Heard On : 30.6.2011,8.7.11,14.7.11,19.7.11,22.7.11,27.7.11
Judgment On : 14-9-2011
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Asim Kumar Ray, J.
This revisional application under Section 482 of the Code of Criminal Procedure, 1972 is directed against the continuance of Complaint Case No. C- 28696 of 2010 under Sections 138/141 of the Negotiable Instruments Act,1881 pending before learned Metropolitan Magistrate,10th Court, Calcutta to the extent it relate to the petitioners, namely, Mahendra Kumar Rustagi and Vivek Sahay being accused nos. 5 and 7 respectively.
Mr. Sekhar Basu, learned counsel appearing on behalf of the petitioners has invited the attention of this Court to the averments made in paragraph 3 of the petition of complaint by the complainant and has contended that in the absence of specific averments that the accused person " was in charge of" as well as 'responsible for the conduct of the business of the company at the relevant point of time' , the provisions of Section 141 of the Negotiable Instruments Act (hereinafter referred to the Act) cannot be invoked. The absence of such specific averment strikes at the very root of the prosecution case.
He has contended further that merely being in charge of or merely being responsible for the conduct of the business of the company is not sufficient to invoke the rigors of the provisions of Section 141 of the act as amended upto date. The averment must state that the person who is vicariously liable for commission of 3 the offence of the company both was in charge of and was responsible for the conduct of the business of the company. Requirements laid down therein must be read conjointly and not disjunctively.
Mr. Basu has contended that the petitioners in the present case were neither directors nor persons who were in charge of and responsible to the company for the conduct of the business the company. In such event, merely stating that they were in charge of the day- to- day management of the company or by stating that they were in charge of and was responsible to the company of the conduct of the business of the company, they cannot be made vicariously liable under Section 141(1) of the act.
A person cannot be deemed to be liable merely because he holds a designation for office or in a company. Hence merely being described as Director of the company is not sufficient to satisfy the requirements of Section 141 of the act . A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business and there is no deemed liability upon the Director. The requirements of Section 141 of the act was that person who is sought to be made liable should be in charge of and responsible for the conduct of the business of the company and as such being in charge and being responsible has to be at the relevant time when the offence was committed . It is his further contention that it is mandate of law that a complainant must factually state as to how a director 4 ( or any person) who is sought to be made an accused was responsible for the commission of the offence .
He has contended that it is a settled law that a penal statute is required to be construed strictly . A penal statute providing constructive vicarious liability should be construed much more strictly since the same puts a citizen into the rigours of the criminal law Mr. Basu has placed the provision of Section 141 of the act and has relied on the following decisions:
1.S.M.S. Pharmaceuticals Ltd. -vs- Neeta Bhalla reported in (2005) 8 SCC 89,
2. Sabita Ramamurthy -vs- R.B.S. Channabasavaradhya reported in (2006) 10 SCC 581,
3.S.M.S. Pharmaceuticals Ltd. -vs- Neeta Bhalla and another reported in (2007) 2 SCC (Cri) 192,
4.S.K.Poddar-vs- State (NCT of Delhi) reported in (2007) 3 SCC 693,
5.K. K. Ahuja -vs- V.K.Vora and another reported in (2009) 10 SCC 48, Ramraj Singh vs. State of Maharashtra reported in (2009)6 SCC 729,
6. Ram Raj Singh-vs State of Maharashtra reported in (2009) 6 SCC729 and
7.National Small Industries Corporation Limited -vs Harmeet Singh Paintal and another reported in (2010) 3 SCC 330 5 Mr. Basu has relied on an unreported judgment of CRR No. 1940-1946 of 2010 passed by this Court on 14th July, 2011 wherein this Court has quashed the proceeding relying on the judgments of the Hon'ble Supreme Court. The proceeding pending before the learned Court below may be quashed.
Mr. Sandipan Ganguly, learned counsel appearing for the O.P. No. 2 has contended that relevant averment in terms of Section 141 of the act are contained at paragraphs 3, 5 and 6 of the petition of complaint . He has contended that there is no need to saying that Hon'ble Court has been called upon to exercise its extraordinary power under Section 482 of the Code of Criminal Procedure at very initial stage made by the petitioners to throttle and short cut nascent and budding prosecution. It has been contended further that the statement made in the paragraph 5 of the petition of complaint clearly reflects that the accused person including the petitioner had caused the issuance of two cheques , dishonour of which has given rise to the instant proceeding and also had caused said cheques to be delivered at the registered office of the complainant/O.P. No. 2. Paragraph 6 also reflects that the said cheques were accepted by the complainant/o.p. no.2 relying upon the representation and assurance of the accused persons., Thus , it cannot be said that there exists no averments which reflects participation of the petitioners in the affairs of the company.
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He has refuted the contentions of Mr. Basu that the allegation made in the paragraph 5 was absurd and was not believable and has contended that it is to be considered as to whether at the initial stage this Hon'ble Court would call upon to ascertain and adjudicate the genuineness or absurdity of any allegation contained in the petition of complaint . The test would be of possibility of performance of the act which is being termed of as absurd. It has been contended that it cannot be said to be impossible that the petitioners have come to Calcutta and handed over the said cheques at the office of the complainant company . In the event, the said act cannot be said to be impossible to have been performed by the petitioners, this Court without adducing of evidence in course of trial cannot decide on the issue regarding the fact as to whether said act had been performed or not by the petitioners.
Mr.Ganguly has contended further that it is apparent that the petition of complaint beside making averments at paragraph 3 has also dealt with the roles played by the accused persons/ petitioners at paragraphs 5 and 6 of the petition of complaint which thereby substantially complies with the requirement of Section 141 of the Negotiable Instruments Act, as also is in tune with the observation of the Hon'ble Supreme Court in the case of K.K. Ahuja (supra), National Small Industries Corporation Ltd. (supra) and Central Bank of India (supra). The compliance as to whether the absence of averments showing the role of the accused persons /petitoners in commission of the offence , the requirement of Section 141 of 7 the act cannot be said to be complied with is merely academic in the instant case. Mr. Ganguly has relied on the following decisions :
a) S.V.Mazumdar & Ors. Vs. Gujarat Fertilizers Co. Ltd. & Anr. (2005 SCC (Cri) 1020),
b) SMS Pharmaceuticals Ltd. Vs. Neeta Bhalla & Anr. (2005 )SCC (Cri) 1975),
c) Savita Ramamurthy & Anr. Vs. RBS Channa Vasava Radhya (2007) 1 SCC (Cri) 621),
d) SMS Pharmaceuticals Ltd. Vs. Neeta Bhalla & Anr. (2007) 2 SCC (Cri) 192 ,
e) Everest Advertising (P) Ltd. Vs. State Government of NCT of Delhi & Ors.
(2007) 2 SCC (Cri) 447,
f) N.Rangachari Vs. Bharat Sanchar Nigam Ltd.. (2007) 2 E.Cr. N. 568,
g) Paresh P . Rajda Vs. State of Maharashtra & Anr. (2008) 3 SCC (Cri) 118,
h) K.K. Ahuja Vs. V.K.Vohra & Anr. (2009) 10 SCC 48,
i) National Small Industries Corporation Ltdf. Vs. Harmeet Singh Paintal (2010) 2 SCC (Cri) 1113,
j) Manoj Jalan Vs. State of West Bengal and another (2010) 1 E.Cr. N. (Cal)
38. 8 He has contended that if all the judgments are considered , it is apparent that all the requisite averments required under Section 141 of the act, in order to implead an officer of a company , (which has committed an offence under Section 138 of the act) are made out from a harmonious reading of the paragraph 3, 5 and 6 of the petition of complaint of the proceeding. The stage of dissecting materials on record in order to find out whether an offence has been committed by an accused is only at the stage of trial and should be refrained from at the stage immediate to issuance of process when the complainant is yet to lead his evidence. He has contended that the opinion of the Court may vary about sufficient nature of the averment against an officer of the company for the purpose of impleading such officer under Section 141 of the act. Need thus arises for laying down the nature of averment required under Section 141 of the act. As otherwise there can complete judicial chaos where an averment in a petition of complaint may be considered sufficient by one Court while it may not be considered sufficient by another Court of equal and coordinate jurisdictions or by Court of superior jurisdiction. He has contended further that the designation of the petitioner No. 1 company as Director (Finance and Corporate affairs) itself indicates that he is a whole time director of the company and thus in- charge of and responsible for the management of the company. Mere in use of the word "in charge" is not sufficient through out a case against the petitioners when it is clearly averred that they are responsible for the management. Therefore, he has 9 submitted that the petition filed by the petitioners may be dismissed and a direction may be given for expeditious conclusion of the proceeding pending before the learned Court below.
Mr. Basu has countered the contention of Mr. Ganguly and contended that the judgment of S.V.Mazumdar and others -vs- Gujarat State Fertilizer company limited and others(Supra) was delivered on 25th April, 2005 which is prior to the judgment of SMS Pharmaceuticals-I which was delivered on 20th September, 2005. In Sabita Ramamurthy and another -vs- R.B.S. Channabasavaradhya (supra) reliance was placed on SMS Pharmaceuticals -I and the judgment of the High Court refusing to quash the order of issuance of process against the petitioners were set aside and the process issued by the Court of Additional Chief Judicial Magistrate was quashed. It has been contended further by Mr. Basu that the facts and circumstances of the case of Everest Advertising (P) Ltd. (supra) is different from the instant case and the same will be evident from paragraph 23 of the said case. It has been contended that in the instant petition of complaint no such averment has been made like that of averment made in the case of Everest Advertising (P) Ltd. A futile attempt has been made on behalf of the O.P. No. 2 by placing reliance on para 5 of the petition of complaint but this Court ought not to take into consideration of the fact which is patently absurd and inherently improbable . It is not at all believable proposition by any stretch of imagination that the accused nos. 2 to 7 being the 10 Charmin, Vice-chairman, Company Secretary, President, Director, General Manager and Executive Officer respectively of the accused company carried two leaves of cheques to the office of the complainant.
The judgment in the case of Ramraj Singh -vs- State of Madhya Pradesh as reported in (2009) 6 SCC 729 as relied on by the opposite party no. 2 also do not come to any aid. It has been contended that in the said case of Ramraj Singh(supra), the Hon'ble Supreme Court after conviction was awarded and affirmed by the learned Courts below set aside the conviction on the ground that the petition of complaint did not contain necessary averment and factual details as to how the person was sought to be made liable was absence in the petition of complaint. SMS Pharmaceuticals-I (Supra) and N.K.Wahi -vs Shekhar Singh as reported in (2007) 9 SCC 481 was relied on in the case of Ramraj Singh -vs- State of M.P. and another (supra). Mr. Basu has contended further that reliance was also placed by the o.p. no. 2 on the judgment of Manoj Jalan vs. State of West Bengal and another , reported in E.Cr. N. 2010 (1) (Cal) 38 which is a judgment of the Hon'ble Single Judge of this Court. However, it was humbly submitted that in view of two 3 Judges Benches of the Hon'ble Supreme Court the position of law has been settled and put to rest.
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This Court has gone through the revisional application, and take stock of the rival submissions of the learned counsel of the parties and perused the decisions cited by them. The main contention of the petitioners is with regard to absence of appropriate averment in the petition of complaint justifying implication of the petitioners as officers of the accused No. 1 company in terms of Section 141 of the act. The argument advanced by the learned counsel of the petitioners centers round the averment set forth in paragraphs 3, 5 and 6 of the petition of complaint. It is pertinent to reproduce those paragraphs for better appreciation , discussions and finding to be arrived at for disposal of this revisional application.
" 3. That the accused no. 1 carries on business of manufacturing of fans, having its registered office at 51, Ezra Street , Police Station Hare Street, Kolkata- 700 001 and the accused nos. 2,3 and 5 are the Directors of the accused no. 1 company, while the accused no. 4 is the Company Secretary of the accused No. 1 company and the accused nos. 6 and 7 are Senior Executive Offices of the accused no. 1 company . All the accused persons are responsible to the management and day to day affairs of the accused No. 1 company."
"5. That in discharge of the legal debts and liabilities and towards party payment of the aforesaid bill the accused persons issued following 2 cheques amounting to Rs. 6,23,500/-12
Cheque No. Date Drawn on Amount (in Rs. )
272385 9.7.2010 ICICI Bank Ltd. 3,75,000/-
Noida branch,
Goutam Buddha
Nagar, U.P.-
201301
272386 31.7.2010 ICCI Bank Ltd. 2,48,500
Noida branch,
Goutam Buddha
Nagar, U.P.-
201301
The aforesaid cheques were delivered by the accused persons at the registered office of the complainant at No. 1, Old Court House Corner, Police Station Hare street , Kolkata-700 001 within the jurisdiction of the Learned Court. That the complainant had accepted the said cheques in good faith."
"6. That relying upon the aforesaid representation and assurances of the accused persons the complainant company accepted the said cheques." 13
The petitioners has taken out a case that the aforequoted averment is not in consonance with the provisions laid down in Section 141 of the act to fasten the petitioners stating that they are vicariously liable to face the ordeal of the trial. Citing the decisions of the Hon'ble Apex Court , Mr. Basu has contended specifically that a bald cursory statement in the complaint that the Director was in charge of and responsible of the company without stating anything more as to the specific role of such person cannot be said to be sufficient for invoking the penal provisions of Section 141 of the act. It is necessary that the complaint must spelt out how and in what manner the person was in charge of or was responsible to the accused company for the conduct of its business in consonance with the strict interpretation of penal statutes , specially where such statutes create vicarious liability.
Now it is relevant to take a glance on the intention of the legislature reflected from Section 141 of the N.I. Act, 1881 as amended upto date. The said section reads as follows :
"141. Offences by Companies:- (1) If the person committing an offence under Section 138 is a company, every person who, as 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 company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly; 14
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 offence 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 officers shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly."
On close look of the averment made in paragraphs 3, 5 and 6 of the petition of complaint the word 'in charge of' are conspicuously absent. Now the questions comes as to whether absence of the words 'in charge of' has such an impact which may tell upon the entire complaint case regarding the petitioner at the threshold of 15 the proceeding. The next question automatically comes in as to what more are required to be stated in the petition of complaint to make a person vicariously liable.
In SMS Pharmaceuticals Ltd. vs. Neeta Bhalla and another, reported in AIR 2005 SC 3512 (SMS Pharma-I) , the Hon'ble Apex Court held :
" It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed , the person accused was in charge of, and responsible for the conduct of business of the company . This averment is an essential requirement of Section 141 and has to be made in a complaint . Without this averment being made in a complaint, the requirement of Section 141 cannot be said to be satisfied.
Merely being a Director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases."
Section 141 of the NI Act does not say that a Director of a company shall automatically be vicariously liable for commission of an offence on behalf of the 16 company. What is necessary is that sufficient averments should be made to show that the person who is sought to be proceeded against on the premise of his being vicariously liable for commission of an offence by the company must be in charge of , and shall also be responsible to the company for the conduct of its business.
* * * Section 141 is a penal provision creating vicarious liability , and which, as per settled law, must be strictly construed . It is therefore, not sufficient to make a bald cursory statement in a complaint that the Director (arrayed as an accused) is in charge of and responsible to the company for the conduct of the business of the company without anything more as to the role of the Director. The complaint should spell out as to how and in what manner co-accused was in charge of or was responsible to the accused Company for the conduct of its business. This is in consonance with strict interpretation of penal statutes , especially , where such statutes create vicarious liability. For fastening the criminal liability , there is no presumption that every Director knows about the transaction. Vicarious liability on the part of a person must be pleaded and proved and not inferred .
Liability depends on the role one plays in the affairs of a company and not on designation or status. If being a Director or manager or secretary was enough to cast criminal liability, the section would have said so. Instead of 'every person' the section would have said 'every Director, manager or secretary in a company is liable' 17 ... etc. The legislature is aware that it is a case of criminal liability which means serious consequences so far as the person sought to be made liable is concerned. Therefore, only persons who can be said to be connected with the commission of a crime at the relevant time have been subjected to action."
In SMS Pharmaceuticals Ltd.(supra) [SMS Pharma-2], the Hon'ble Supreme Court held :
"Section 141 of the NI Act does not say that a Director of a company shall automatically be vicariously liable for commission of an offence on behalf of the company. What is necessary is that sufficient averments should be made to show that the person who is sought to be proceeded against on the premise of his being vicariously liable for commission of an offence by the company must be in charge of , and shall also be responsible to the company for the conduct of its business. Thus, the averments must state that the said person was both in charge of and responsible for the conduct of the business of the company. Requirements laid down in Section 141 must be read conjointly and not disjunctively. The liability of a Director must be determined on the date on which the offence is committed."
In the cases of SMS Pharmaceuticals Ltd. vs. Neeta Bhall (for short SMS Pharma-2) and Everest Advertising (P) Ltd. vs. State, Govt. of NCT of Delhi relating to complaints against Directors of a company, the very same two-Judge Bench which decided Saroj Kumar Poddar clarified that the observations therein that the 18 complaint should contain averments as to how and in what manner the accused was responsible for the conduct of the business of the company, or otherwise responsible for its functioning were with reference to the particular facts of that case and should not be considered as a general proposition of law.
In Saroj Kumar Poddar (supra) the Hon'ble Supreme Court laid down the law that the complaint petition not only must contain averments satisfying the requirements of Section 141 of the N.I.Act but must show as to how and in what manner the accused was responsible for the conduct of the business of the company or otherwise responsible to it in regard to its functioning , cannot be accepted.
In Sabitha Ramamurthy vs. R.B.S. Channabasavaradhya (supra) wherein it was held (Paragraph 7 ) " 7. A bare perusal of the complaint petitions demonstrates that the statutory requirements contained in Section 141 of the Negotiable Instruments Act had not been complied with . It may be true that it is not necessary for the complainant to specifically reproduce the wordings of the section but what is required is a clear statement of fact so as to enable the court to arrive at a prima facie opinion that the accused are vicariously liable. Section 141 raises a legal fiction. By reason of the said provision, a person although is not personally liable for commission of such an offence would be vicariously liable therefor. Such vicarious liability can be inferred so far as a company registered or incorporated under the Companies Act, 19 1956 is concerned only if the requisite statements , which are required to be averred in the complaint petition, are made so as to make the accused therein vicariously liable for the offence committed by the company . Before a person can be made vicariously liable, strict compliance with the statutory requirements would be insisted."
In N.K.Wahi vs. Shekhar Singh (supra) it was observed as follows (para -8) "8. To launch a prosecution , therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. There should be clear and unambiguous allegation as to how the Directors are in -charge and responsible for the conduct of the business of the company. The description should be clear . It is true that precise words from the provisions of the Act need not be reproduced and the court can always come to a conclusion in facts of each case. But still , in the absence of any averment or specific evidence the net result would be that complaint would not be entertainable."
In case of K.K. Ahuja vs. V.K.Vora and another (supra), the Hon'ble Supreme Court held:
" If a mere reproduction of the wording of Section 141(1) in the complaint is sufficient to make a person liable to face prosecution, virtually every officer/employee of a company without exception could be impleaded as accused by merely making an averment that at the time when the offence was committed they 20 were in charge of and were responsible to the company for the conduct and business of the company. That would be absurd and not intended under the Act. As the trauma, harassment and hardship of criminal proceedings in such cases, may be more serious than the ultimate punishment, it is not proper to subject all and sundry to be impleaded as accused in a complaint against a company , even when the requirements of Section 138 read with Section 141 of the Act are not fulfilled. (para 28 and 29)."
In the above case it was further held :
" The words "person in charge of the business of the company" refer to a person who is in overall control of the day-to-day business of the company. A person may be a Director and thus belongs to the group of persons making the policy followed by the company , but yet may not be in charge of the business but may not be in overall charge of only some part of the business."
After noting Saroj Kumar Poddar case (supra) and N.K.Wahi case , this Court further noted in para 15 that : (K.K. Ahuja Case) "15. The prevailing trend appears to require the complainant to state how a Director who is sought to be made an accused , was in charge of the business of the company, as every Director need not be and is not in charge of the business of the company."
In para 17, the Court has further recorded that : (K.K.Ahuja Case) 21 "17. ... When conditions are prescribed for extending such constructive criminal liability to others , the courts will insist upon strict literal compliance. There is no question of inferential or implied compliance. Therefore, a specific averment complying with the requirements of Section 141 is imperative."
In case of National Small Industries Corporation Ltd. vs. Harmeet Singh Paintal (supra) ,the following principles emerge:
(i) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction.
(ii) Section 141 does not make all the Directors liable for the offence.
The criminal liability can be fastened only on those who , at the time of the commission of the offence, were in charge of and were responsible for the conduct of the business of the company.
(iii) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements, which are required to be averred in the complaint/petition , are made so as to make the accused therein vicariously liable for offence committed by the company along with averments in the petition containing that the accused 22 were in charge of and responsible for the business of the company and by virtue of their position they are liable to be proceeded with.
(iv) Vicarious liability on the part of a person must be pleaded and proved and not inferred.
(v)) If the accused is a Managing Director or a Joint n Managing Director then it is not necessary to make specific averment in the complaint and by virtue of their position they are liable to be proceeded with.
(vi) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary to make specific averment in the complaint.
(vii) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a Director in such cases.
In case of N.Rangachari vs. BSNL , reported in (2007) 5 SCC 108, the learned counsel for the appellants further contended that a payee of cheque that is dishonoured can be expected to allege that the persons named in the complaint are in charge of its affairs and the Directors are prima facie in that position. However, it is pertinent to note that in this case it was specifically mentioned in the complaint that (i) Accused 2 was a Director and in charge of and responsible to the accused 23 Company for the conduct of its business ; and (ii) the response of Accused 2 to the notice issued by BSNL that the said accused is no longer the Chairman or Director of the accused company was false and by not keeping sufficient funds in their account and failing to pay the cheque amount on service of the notice, all the accused committed an offence. Therefore, this decision is clearly distinguishable on facts as in the said case necessary averments were made out in the complaint itself. Furthermore, this decision does not and could not have overruled the decisions in SMS Pharmaceuticals Ltd. (SMS Pharma case-I) case ( a three Judge Bench), Ramrajsingh Case ( a three-Judge Bench), Saroj Kumar Poddar case and N.K. Wahi Case wherein it is clearly held that specific averments have to be made against the accused Director."
Going by the decisions quoted above this Court finds that there is almost unanimous Judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process and made him/them vicariously liable. In the instant case the petition of complaint is silent regarding specific averment that the petitioners were " in charge of" and "responsible for the day to day affairs of the company at the relevant point of time" when the alleged offence was committed. It cannot be accepted that petitioners and other dignitaries of the company came down to Calcutta to hand over two leaves of cheques . The argument advanced by Mr. Ganguly regarding delivery of cheques does not inspire 24 confidence. On the contrary, the argument of Mr. Basu that it is not at all believable proposition by any stretch of imagination that accused Nos. 2 to 7 being the Chairman, Company Secretary, President, Director, General Manager and Executive Officer respectively of the accused company carried two leaves of cheques to the Calcutta office of the complaint is much more reasoned-worthy, sound and convincing. Furthermore, the factual details stating as to how the petitioners were responsible for the commission of the offence is nowhere in sight in the complaint. They cannot be deemed to be liable merely because they are the office bearers of the company. The role played by them in the affairs of the company at the relevant time is conspicuously absent in the body of the complaint. The bald statement in the petition of complaint does not appear to be sufficient enough to fasten them for alleged act committed by the company by invoking the provisions of Section 141 of the Negotiable Instruments Act. Petitioner No. 1 being the Director (Finance and Corporate Affairs) and petitioner No.2 being the Executive Officer cannot be said responsible for the management and day to day affairs of the company.
In view of two three Judges Bench of Hon'ble Supreme Court [(SMS Pharma-I (Supra) and Ramraj Singh(supra)] the position of law has been settled, 'that a penal statute is required to be construed strictly and a penal statue providing constructive vicarious liability should be construed much more strictly since the same puts a citizen into the rigours of the criminal law', and put to rest. 25
In view of the above discussions the application stands allowed. The prosecution pending against the petitioners , namely, Mahendra Kumar Rustagi and Vivek Sahay before the learned Court of Metropolitan Magistrate, 10th Court, Calcutta stand quashed. Interim order of stay , if any, stand vacated. Urgent photostat copies of this order, if applied for, be given to the parties as expeditiously as possible.
( Asim Kumar Ray, J. )