JUDGMENT Umeshwar Pandey, J.
1. Heard learned counsel for the petitioner and Learned A.G.A.
2. This petition has been presented for quashing the criminal complaint case No. 1208 of 2005, Continental Carbon India Ltd. v. Betul Tyre & Tube Industries Ltd. and two Ors.
3. The precise facts giving rise to this petition are that the opposite party has filed the aforesaid criminal complaint case against the petitioner for the offence punishable under Section 138 Negotiable Instruments Act, alleging that the aforesaid two companies had entered into the business transactions for certain supply of materials by the complainant to the accused company on credit. The supply was made and towards part payment as many as four cheques, as detailed in para-5 of the complaint (Annexure-1), were issued by the company. The complainant-company presented it to its banker for the payment by transfer of the amount from the account of accused company but those cheques were bounced. The complainant company received the cheques back from its banker where-after it reported these facts to the petitioner company on 4.3.2005 through a statutory notice under proviso (b) to Section 138 of the Negotiable Instruments Act. It was given by the complainant to the accused company on 29.3.2005 through registered AD post. Since the notice sent, as such, was not received back by the complainant, its service was presumed by 31.3.2005. No payment was also received thereafter by the complainant and hence the criminal complaint was filed on 12.5.2005.
4. The court below, after having recorded the necessary evidence under Section 200 Cr.P.C., passed the order dated 16.5.2005 and summoned the accused in the case.
5. Learned counsel representing the petitioner-accused, while placing his submissions has tried to emphasise on some points, which may be precisely placed below:-
(1) The learned counsel argued that the complainant has not made averment as to who had actually signed the cheques, though, he has not disputed the issue of cheques by the accused company. Therefore, the petitioner-Ambesh Balwapuri cannot be actually held responsible for the commission of offence punishable under Section 138 Negotiable Instruments Act.
"That the accused No. 1 is a company corporate & constituted under the Indian Companies Act 1956 and has been engaged in the business activities at the address given in the title of this complaint & accused No. 2 and 3 are the Chairman and Director respectively of the accused No. 1 and both are incharge and responsible for day to day business activities of the Accused No. 1 and also responsible for the acts and omission of the accused company concerning the conduct of its business in the relevant time. They also have been actively dealing with the complainant on behalf of the accused No. 1."
7. In the aforesaid paragraph specific averment is made that the accused No. 3-Mr. Balwapuri, the petitioner and the accused No. 1 - Sam Verma are the persons acting as Director and Chairman respectively of the company and both are in-charge and responsible in that capacity for day to day business activities of the company. They have been actively involved dealing with the complainant on behalf of the accused company. Obviously, with so much direct averment regarding straight involvement of the petitioner in the present transaction culminating in the issue of cheque by the company in favour of the complainant company is obviously sufficient to fulfill all the requirements, as are envisaged under Section 141 Negotiable Instruments Act. It would be worthwhile to reproduce the aforesaid provision of Section 141 Negotiable Instruments Act, as below:-
141. Offences by companies.-- (1) If the person committing an offence under section 138 is a company, every person who, at the time of 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:
[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.
8. The copy of evidence recorded under Section 200 Cr.P.C. (Annexure-5) also shows that the complainant's attorney- Praful Kumar Chaurasia had given Out in his statement before the court below that both the accused Nos. 2 and 3 being Sam Verma and the petitioner-Ambesh Balwapuri had been in their capacity as Chairman and Director of the company, were actively involved in day to day business activity of the accused company and are also the in-charge of the said company. They have been transacting in the present matter on behalf of the company with the complainant company. Obviously, their active involvement in the present transaction of which a very dear averment is made in the complaint as well as in the evidence recorded under Section 200 Cr.P.C. by the court below, goes to demonstrate that vicarious liability of the Chairman and the Director of the accused company has been very rightly fastened upon them by the court below and the aforesaid two cases namely S.M.S. Pharmaceuticals Ltd. (supra) and Monaben Ketanbhai Shah and another (supra), are not helpful even to the least extent to the present petitioner.
9. The judgment, as rendered in the case of S.M.S. Pharmaceuticals Ltd. (supra) was in the matter of certain references of which the answers have been given by the Hon'ble Bench of the Apex Court in para-20 of the reported case in the following terms:-
"In view of the above discussion, our answers to the questions posed in the Reference are as under:
(a) 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 requirements of Section 141 cannot be said to be satisfied.
(b) The answer to question posed in sub-para (b) has to be in negative. 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.
(c) The answer to question (c) has to be affirmative. The question notes that the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under subsection (2) of Section 141."
10. The Hon'ble Supreme Court in the aforesaid terms has interpreted the implication of Section 141 Negotiable Instruments Act, in the matters of criminal complaint filed before the Magistrate against a company for the offence under Section 138 Negotiable Instruments Act. It is true that merely being a Director of the company is not sufficient to hold him responsible to the company for the conduct of business but where there is direct averment and evidence given under Section 200 Cr.P.C. about this direct involvement of a Director as has been given in the present case by the complainant, the court should not make up its mind to give the protection, as has been sought in the arguments of the learned counsel for the petitioner.
11. In the case of Monaben Ketanbhai Shah and another (supra), the Hon'ble Apex Court had found that the complaint was not entertainable as against the partners, who were made accused in the said case only on the ground that there was no averment against those accused that they were actively participating in the transaction of the business of the firm except that the complaint discloses only about their being partners. The complaint also did not contain any document as its part or as its annexure to show that those accused persons were active partners dealing with business affairs of the firm. The document of partnership deed subsequently filed by the complainant has not been considered as proper discharge of liability of the complainant in this context by the Hon'ble Court. Here, as already observed above, the complaint did contain specific averment to the aforesaid effect that the petitioner was active Director of the company making dates in day to day of its business and he also dealt with the transactions, which were entered into between the complainant company and the accused company. The aforesaid two cases, thus, are not helpful at all to the petitioner.
12. As regards the second point, in all arguments raised in the present case from the side of the petitioner, it has been stressed by the. learned counsel that no documentary proof of direct involvement of the petitioner has been filed by the complainant along with complaint. In fact, the entire evidence, which are required to prove the allegations of a criminal complaint, are not filed along with complaint Itself. The complainant has also an opportunity to file even the documentary evidence while leading his evidence during the trial. The trial has not yet started in this case, as such, it cannot be held that if no document except the disputed cheques, have been filed by the complainant, the whole complaint case is to be rejected at this stage by this court or by the court below. The complaint for want of any documentary evidence at this stage, cannot be said to be without basis " and the court below cannot be stopped from further proceeding in the matter.
13. Learned counsel had laid much emphasis on the fact that in the present case, the cheques were dishonoured way back 6.1.2005 and the notice has been given after a lapse of more than one month i.e. on 4.3.2005, therefore, there is non-compliance of the statutory provisions of proviso (b) to Section 138 of the Negotiable Instruments Act and the complaint cannot proceed. A perusal of the averment made in para-6 of the complaint makes it quite evident that the complainant banker had presented the disputed cheques for encashment to the banker of the accused company, which returned it with endorsement of "Exceeds arrangement". Thereafter, the complainant banker gave information of the bouncing of cheques to the complainant company and it was received by it on 4.3.2005. The notice under the aforesaid proviso (b) for payment of the amount was given by the complainant on 29.3.2005. If the period from 4.3.2005 till 29.3.2005 is counted, it is definitely less than 30 days, as enumerated in proviso (b) aforesaid. Obviously, the complaint in the case of the aforesaid averment cannot be rejected by this court and the trial court has rightly summoned the accused in this case. The arguments of the learned counsel for the petitioner on : the second point, thus, are also not acceptable.
14. As regards the third point, referred to above, I have already observed in the preceding paragraph that the evidence, which are to be produced to prove the case against the accused persons including the petitioner, are to be given after trial has commenced. The trial of the complaint case has not yet started and the stage of leading evidence is yet to come. Obviously, whatsoever evidence was given by the complainant company at this initial stage before the Magistrate, is definitely such which was sufficient for the court below to further proceed in the matter and in pursuance thereto the Magistrate has correctly passed the order dated 16.5.2005 further proceeding in the case and summoning the accused.
15. Learned counsel has also tried to place another submission that the complaint should not have been reasonably filed in Ghaziabad Court because the disputed cheques were presented by the complainant itself through banker for encashment at Delhi and that had bounced at Indore. Therefore, the jurisdiction of the case lies either with the Delhi Court or that of Indore. At this stage so-far-as the allocation of jurisdiction of the criminal complaint is concerned, the courts have to decide it only in the light of the facts and averments as are available in the complaint itself. Para-5 of the complaint filed by the opposite party company specifically mentions this fact that the cheques of State Bank of Mysore, Indore Branch, were issued and delivered by the accused to the complainant at its business place of Ghaziabad. Obviously, when the cheques have been delivered at Ghaziabad, as per the averment made in the complaint itself, the jurisdiction of Ghaziabad Court is very much there for entertaining this complaint. The argument of the learned counsel in this context also appears to have no legs to stand.
16. Learned counsel lastly submitted that in an identical petition No. 15673 of 2005 of the co-accused-Sam Verma, this court has passed an order dated 25.10.2005 permitting the petitioner to appear through counsel in the case and to move an exemption application from personal appearance and no coercive measures would be issued against him. Therefore, in the present case also at least the order i the aforesaid nature may be passed.
17. I do not agree with the submission and request made by the learned counsel in the aforesaid regard simply because those points, which have been argued in the present petition and have been dealt with as above, were not placed before the learned Judge passing orders in the aforesaid petition No. 15673 of 2005. A perusal of the order dated 25.10.2005 shows that the submission of the petitioner's counsel that information regarding the cheques Having been dishonoured, was given to the complainant on 16.1.2005, has persuaded the teamed Judge to grant the aforesaid relief in the petition but the submissions in the aforesaid nature in the present petition have already been dealt with above by me and have been rejected. Thus, in the circumstances, I do not intent to pass identical order, as has been passed in the criminal petition No. 15673 of 2005
18. In view of the aforesaid, the petition does not appear to have any force and is hereby dismissed.