Punjab-Haryana High Court
Sham Lal, Director, G.S. Auto ... vs Raj Kumar Aggarwal on 4 March, 2002
Author: Nirmal Singh
Bench: Nirmal Singh
JUDGMENT Nirmal Smgh, J.
1. The relevant facts for the disposal of this petition are that Raj Kumar Aggarwal, respondent filed a complaint under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the 'Act') read with Section 120, IPC against Ajay Kumar, the then Managing Director of M/s G.S. Auto Industries Pvt. Ltd. on the allegations that Ajay Kumar issued a cheque No. 527854 dated 26.6.1996 for Rs. 4,35,954/- in favour of the respondent drawn at State Bank of India. Ajay Kumar further assured the respondent that the cheque in question is good for value and will definitely be cashed when presented for the same purpose. The respondent accepted the cheque and presented it to Allahabad Bank, Mai Hiran Gate Branch, Talandhar City and the cheque was returned vide Bank memo dated 27.6.1996 with the remarks "Not arranged for". Respondent issued legal notice to Ajay Kumar on 4.7.1996. In spite of that, Ajay Kumar did not make payment to the respondent and the respondent filed the complaint under the Act. Ajay Kumar died on 13.12.1996 during the pendency of the complaint. Respondent filed an application dated 3.2.1997 for bringing on record the legal heirs of deceased Ajay Kumar and the Trial Court allowed the application and directed that complaint will proceed against Sham Lal, legal heir of Ajay Kumar. Sham Lal is the father of deceased Ajay Kumar.
2. The petitioner, Sham Lal filed a revision petition before the learned Sessions Judge, Jalandhar. The said petition came up for hearing before Addl. Sessions Judge, Jalandhar. The learned Addl. Sessions Judge vide order dated 19.9.2000 dismissed the revision petition.
3. Aggrieved by the said order, the petitioner filed present petition under Section 482. Cr.P.C. for quashing the order allowing the application of the respondent for bringing on record the legal heir of deceased Ajay Kumar and order dated 19.9.2000 passed by the learned Addl. Sessions Judge dismissing the revision filed by the petitioner.
4. Notice was given to the respondent. He raised a preliminary objection that petition under Section 482, Cr.P.C. is not maintainable as revision filed by the petitioner has already been dismissed by the Addl. Sessions Judge.
5. On merit, it was pleaded that Ajay Kumar has signed the cheque with the consent and connivance of Sham Lal, petitioner. Ajay Kumar has issued the cheque in due discharge of his legal liability after purchasing the raw nuterial for the accused company. It was further pleaded that Sham Lal is liable being incharge of the company and is responsible for running of the affairs of the company and also being the Director in whose active connivance, the disputed cheque was issued.
6. I have heard learned Counsel for the parties at length and perused the record.
7. The preliminary objection raised by learned Counsel for the respondent that second revision is not maintainable is unsustainable. The petitioner has not filed the revision against the order of learned Addl. Sessions Judge. The bar under Section 397(2), Cr.P.C. is applicable to the revisional power and not to the inherent power under Section 482, Cr.P.C. The powers under Section 482, Cr.P.C. are extraordinary powers in nature and should be used to prevent the abuse of process of any Court or otherwise to secure the ends of justice. When the Courts below overlook the mandatory provisions of law, the High Court has the power to correct the error committed by the Courts below by exercising the inherent powers under Section 482, Cr.P.C.
8. Respondent No. 2 filed complaint against Ajay Kumar, who was son of the present petitioner, Sham Lal. The complainant moved an application for impleading the petitioner as party respondent being the legal heir of deceased Ajay Kumar. The application has been brought on record as Annexure P-2. The relevant part of the same read as under :
"That respondent No. 2 Ajay Kumar died on 23.12.1996 and he was the Managing Director of respondent No. 1."
9. That Shri Sham Lal, father of late Ajay Kumar, respondent No. 2 is also one of the Directors of the respondent No. 1 and is also legal heir of Ajay Kumar respondent No. 2. Respondent No. 2 issued the cheque in question on behalf of respondent No. 1 and as such all the directors of the company are also liable to pay the amount of the cheque in question to the complainant.
10. It is, therefore, prayed that Shri Sham Lal, father of Ajay Kumar respondent No. 2 may kindly be allowed to bring on record in place of Ajay Kumar as respondent No. 2 and complaint be proceeded against him also.
11. Under the Criminal Procedure Code, when the accused died, the proceedings against him are abated. The legal heirs of the deceased-accused are not responsible for his act. Petitioner Sham Lal cannot be prosecuted for the act of his son. Even otherwise, in the application, it has not been mentioned that there was no other legal heir of deceased Ajay Kumar.
12. The other ground taken by the respondent is that Sham Lal, father of late Ajay Kumar is also one of the Directors of the company and, therefore, he be also prosecuted.
13. If the offence is committed by the Company, the company and its Directors can be prosecuted under Section 141 of the Act, which reads as under :
"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.
(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 be deemed to be guilty of that offence and shall be liable to be proceeded against the punished accordingly.
Explanation : xxx xxx xxx."
14. In Anil Hunda v. Indian Acrylic Ltd., X (1999) SLT 1 (SC)=IV (1999) CCR 285=(2000) 1 SCC 1, it has been held that three categories of persons can be discerned from the said provisions who are brought within the purview of the penalliability through the legal fiction envisaged in the section. They are : (1) the company which committed the offence, (2) everyone who was in charge of and was responsible for the business of the company, and (3) any other person who is a director or a manager or a secretary or officer of the company, with whose connivance or due to whose neglect the company has committed the offence.
15. Adverting to the facts of the present case, the complaint has been brought on record as Annexure P-1 filed by respondent against M/s G.S. Auto Pvt. Ltd. Preet Nagar, Jalandhar. The other respondent impleaded was Ajay Kumar, Managing Director of M/s. G.S. Auto Pvt. Ltd. The respondent has pleaded in the complaint that Ajay Kumar has signed and issued the cheque to the complainant being the Managing Director of the company and both the respondents are liable to be dealt with under the law. In the complaint, petitioner Sham Lal has not been arrayed as party respondent. Even it has not been mentioned that the said cheque w,as issued by Ajay Kumar with the consent and connivance of the petitioners. More so, it has not been mentioned that petitioner was also responsible for the conduct of business of the company at the time when the cheque was issued by Ajay Kumar. When a person is not the incharge of the company and is not responsible for the conduct of business of the company, he is not responsible to the company for the conduct of business of the company, as per Section 141 of the Act.
16. For the reasons recorded above, this petition is accepted qua petitioner Sham Lal and order passed by the Trial Court for bringing on record Sham Lal as legal heir of the deceased Ajay Kumar is set aside as Sham Lal cannot be prosecuted in this complaint.