Gauhati High Court
Partha Pratim Borthakur vs M/S Megha Technical & Engineers Pvt. Ltd on 31 July, 2017
Author: Hitesh Kumar Sarma
Bench: Hitesh Kumar Sarma
1
Crl.Pet. 788/2016
BEFORE
HON'BLE mr. JUSTICE HITESH KUMAR SARMA
:: O R D E R ::
31.07.2017 Heard Mr. D. Sarma, learned Counsel for the petitioner and also Mr. A.M. Bora, learned Senior Counsel appearing for the respondent on 26.7.2017.
2) By this order, this court proposes to dispose of the petition at this admission stage itself.
3) The fate of this petition under Section 482 CrPC is largely dependent on the consequences which follow from the averments made in paragraph 2 of the complaint petition in CR 42/11. For the sake of convenience the contents of paragraph 2 are reproduced as follows;
2. That the accused Shri ParthaBorthakur is the Director of NEFFS (India) Private Limited, a private limited company carrying on the business of contruction, having its head office at ABC, Bhangagarh and carries on business throughout the Assam. On 20.9.2010 he placed an order to the complainant company for supply of 3200 bags of PPC Cements at NEFFS (India) Private Limited, BPCL Project, Lepetkata, Dibrugarh, Assam for its own use.
4) It, thus, needs to be seen whether the complaint in the present form and manner would be maintainable.
5) In this regard Section 141 of the Negotiable Instruments Act, 1881, provides as follows;
Section 141. Offences by com panies.--(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: 2
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.
Explanation.--For the purposes of this section,--
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm.
6) Learned Counsel for the petitioner has referred to the cases of Pooja R avinderDevidasani vs State of M aharashtra and another, (2014) 16 SCC 1,Sharad K um ar Sanghi vs SangitaR ane, (2015) 12 SCC 781 and National Sm all Industries Corporation Ltd vs Harm eet Singh Paintal, (2010) 3 SCC 330 in order to buttress his case.
7) Learned Senior Counsel for the respondent, on the other hand, relied on the case of M alw a Cotton and Spinning M ills Ltd. Vs Virsa Singh Sidhu, (2008) 17 SCC 147.
8) Mr. Sarma, learned Counsel for the petitioner while referring to the case of National Sm all Industries Corpn. Ltd. v. Harm eet Singh Paintal, (2010) 3 SCC 330 argued that what is required under Section 141 is that the persons who are sought to be made vicariously liable for a criminal offence under Section 141 should be, 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. Every person connected with the company shall not fall within the ambit of the provision. Only those persons who were in charge of and responsible for the conduct of the business of the company at the time of commission of an offence will be liable for 3 criminal action. It follows from the fact that if a Director of a company who was not in charge of and was not responsible for the conduct of the business of the company at the relevant time, will not be liable for a criminal offence under the provisions. The liability arises from being in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company.It was also held in Harm eet Singh Paintal, (supra), that 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 Supreme Court in Harm eet Singh Paintal,(supra) went on to observe that a company may have a number of Directors and to make any or all the Directors as accused in a complaint merely on the basis of a statement that they are in charge of and responsible for the conduct of the business of the company without anything more is not a sufficient or adequate fulfilment of the requirements under Section 141.
9) A similar view was re-iterated in the case of Pooja R avinderDevidasani vs State of M aharashtra and another, (2014) 16 SCC 1.
10) Controverting the arguments of petitioner, Mr. Bora, the learned Senior Counsel for the respondent while referring to the case of Malwa Cotton and Spinning Mills Ltd. Vs Virsa Singh Sidhu, (2008) 17 SCC 147 argued that when disputed questions of fact have been raised in the complaint petition it may not be a proper course for an exercise of jurisdiction under Section 482 of CrPC and the adjudication of the disputed facts should be left for trial in regular course. 4
11) In the light of arguments made, when I turn to the complaint petition I find that it is an admitted fact that the Cheque in question was issued by Mrs. Rekha Khandelia, one of the Directors of the NEFFS (India) Private Limited, yet the complainant has chosen to implead the petitioner as accused in the case as all the transactions were carried out by the petitioner. In Para 2 of the complaint petition, the respondent states that the order for the cements were placed by the accused. In para 3 of the complaint petition, the respondent states that the petitioner took the delivery of goods and then issued the Cheque. Thus, according to respondent the only person who was involved in the entire business transaction was the respondent. Hence, irrespective of the fact that another Director, Mrs. Rekha Khandelia issued the Cheque, the respondent is equally responsible for the dishonor of the Cheque. Perusal of the Cheque reveals that Cheque was issued for NEFFS (India) Private Limited.
12) The mandate of Section 141, as interpreted in Harm eet Singh Paintal, (supra), is that only those persons who were in charge of and responsible for the conduct of the business of the company at the time of commission of an offence will be liable for criminal action. The liability arises from being in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company.
13) As would be noticed from the averments made in the complaint petition the respondent has attributed a definite role played by the petitioner in the business transaction and hence it would not be safe to hold that the complaint contains a bald statement not sufficient enough to define the role played by the petitioner who is, admittedly, a Director in the company. A determination of the fact as to whether the role of the petitioner as Director of the NEFFS (India) Private Limited vis-a-vis the 5 business transaction, as alleged, would be entering into the merits of the case and that would be highly prejudicial to the respondent's case.
14) Hence, in view of the facts of the present case, the reliance placed by Mr. Bora, learned Counsel for the respondent, on the case of M alw a Cotton and Spinning M ills Ltd (supra) is found to be applicable and it would not be proper to quash the complaint on the ground of lack of averments against the petitioner.
15) Now, let us deal with the argument proffered by Mr. Sarma, the learned Counsel for the petitioner, that since the company, NEFFS (India) Private Limited, has not been made an accused in this case the case is not maintainable.
16) Whether, without impleading the company, a complaint under Section 138 can be maintained against a Director of the Company, has been a subject matter of discussion in AneetaHada v. Godfather Travels And Tours (P) Ltd., (2012) 5 SCC 661. Since there was a difference of opinion among the Hon'ble Judges sitting in a Division Bench, the issue came to be settled in AneetaHada (supra). The point of contention was whether an authorised signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 without the company being arraigned as an accused?
17) While settling the issue, the Hon'ble Supreme Court in AneetaHada (supra), held 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 section 141 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.
18) The relevant paragraph of AneetaHada (supra) is reproduced 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. 6 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
19) Apparently, the company NEFFS (India) Private Limited has neither been impleaded as accused in the complaint case nor any cognizance has been taken by the Court against the company. In view of the fact that the entire transaction by the respondent was carried out in the name of NEFFS (India) Private Limited, a company, a prosecution for dishonor of Cheque would not be maintainable without impleading the said company as accused in view of the ratio laid down in the case of Aneeta Hada (supra).
20) As a result of the foregoing discussions, the learned trial Court could not have taken cognizance against the petitioner and as such the order of taking cognizance and consequent order of issuance of process is liable to quashed and set aside.
21) The instant petition, under Section 482 CrPC, thus, deserves to be allowed.
22) Accordingly, the complaint case CR 42/2011 pending in the Court of Judicial Magistrate 1st class Kamrup (Metro) is hereby quashed.
JUDGE Paul