Court No. - 69
Case :- APPLICATION U/S 482 No. - 1642 of 2010
Applicant :- Banwari Lal Goyal And Anr. Opposite Party :- State Of U.P. And Anr. Counsel for Applicant :- Sunil Vashisth Counsel for Opposite Party :- Govt. Advocate
Hon'ble Vivek Kumar Singh,J.
Heard Shri Sunil Vashisth, learned counsel for the applicant as well as Sri Abhinav Prasad, learned AGA appearing for the State and perused the entire record.
The present application u/s 482 CrPC has been filed with the prayer to quash the entire proceedings of Complaint Case No.743 of 2008, under section 138 N.I.Act, pending in the court of VIth Additional Chief Judicial Magistrate, Mathura.
It is submitted by the learned counsel for the applicant that summoning order issued in the matter is illegal. Cheques in question were not issued against any debt or liability. It is further submitted that the cheques in question were issued on behalf of the Company / Firm but the Company /Firm has not been arraigned as accused. Until and unless the Company is prosecuted, the applicant cannot be punished. In support of his submissions, learned counsel for the applicant has placed reliance on the decision of the Apex Court in Aneeta Hada vs. Godfather Travels and Tours Private Limited, (2012) 5 SCC 661. The concerned Court below did not consider this aspect of the matter and erred in passing the impugned order.
On the other hand, learned AGA appearing for the State opposing the prayer submitted that the complaint was filed after sending the legal notice. Cheque in question was dishonoured on account of insufficiency of fund, hence, there is no infirmity or illegality in the impugned order warranting interference by this Court. The revisional court has also considered the matter in detail and passed a reasoned order which is in accordance with law.
I have considered the rival submissions made by the learned counsel for the parties and have gone through the entire record including the case law cited by the learned counsel for the applicant.
In this matter, as is evident from the record, cheques in question were issued on behalf of the Company/ Firm in question. In the complaint, the said Company / Firm has not been arraigned as accused. Notice in this matter was also not sent in the name of the Firm / Company. Further, Hon'ble Supreme Court in Aneeta Hada case (supra) has held as under (paragraphs 58 to 64 of the said decision):
"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. 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. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is indicted.
59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh (supra) which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal (supra) does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada (supra) is overruled with the qualifier as stated in paragraph 51. The decision in Modi Distilleries (supra) has to be treated to be restricted to its own facts as has been explained by us hereinabove.
60. We will be failing in our duty if we do not state that all the decisions cited by the learned counsel for the respondents relate to service of notice, instructions for stopping of payment and certain other areas covered under Section 138 of the Act. The same really do not render any aid or assistance to the case of the respondents and, therefore, we refrain ourselves from dealing with the said authorities. Resultantly, the Criminal Appeal Nos. 838 of 2008 and 842 of 2008 are allowed and the proceedings initiated under Section 138 of the Act are quashed.
61. Presently, we shall advert to the other two appeals, i.e., Criminal Appeal Nos. 1483 of 2009 and 1484 of 2009 wherein the offence is under Section 67 read with Section 85 of the 2000 Act. In Criminal Appeal No. 1483 of 2009, the director of the company is the appellant and in Criminal Appeal No. 1484 of 2009, the company. Both of them have called in question the legal substantiality of the same order passed by the High Court.
62. In the said case, the High Court followed the decision in Sheoratan Agarwal (supra) and, while dealing with the application under Section 482 of the Code of Criminal Procedure at the instance of Avnish Bajaj, the Managing Director of the company, quashed the charges under Section 292 and 294 of the Indian Penal Code and directed the offences under Section 67 read with Section 85of the 2000 Act to continue. It is apt to note that the learned single Judge has observed that a prima facie case for the offence under Sections 292(2)(a) and 292 (2)(b) of the Indian Penal Code is also made out against the company."
63. Section 85 of the 2000 Act is as under: -
"85. Offences by companies - (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be guilty of the contravention and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place 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 the contravention and shall be liable to be proceeded against and punished accordingly."
64. Keeping in view the anatomy of the aforesaid provision, our analysis pertaining to Section 141 of the Act would squarely apply to the 2000 enactment. Thus adjudged, the director could not have been held liable for the offence under Section 85 of the 2000 Act. Resultantly, the Criminal Appeal No. 1483 of 2009 is allowed and the proceeding against the appellant is quashed. As far as the company is concerned, it was not arraigned as an accused. Ergo, the proceeding as initiated in the existing incarnation is not maintainable either against the company or against the director. As a logical sequeter, the appeals are allowed and the proceedings initiated against Avnish Bajaj as well as the company in the present form are quashed."
If the law laid down by the Apex Court in Aneeta Hada case (supra) is confronted with the facts and circumstances of the present case as also to the submissions made by the learned counsel for the parties, it is evident that the cheques in question were not issued by the applicant in personal capacity and also the same do not belong to the personal account of the applicant. The said cheques relate to the aforesaid Firm. A perusal of the complaint would also show that the Firm has not been arraigned as accused in the complaint. Although cheques in question were presented during validity period and the same were dishonoured due to insufficiency of fund yet in view of the law laid down by the Apex Court in Aneeta Hada case (supra), it was imperative to arraign the Firm as accused for maintaining the prosecution. Since the formalities, as required under law, have not been fulfilled by the opposite party no.2 while filing the complaint, in my view, the proceedings initiated against the applicant cannot be permitted to continue. The concerned court below also did not consider the true aspect of the matter and erred in passing the impugned order, which deserves to be set-aside.
Hence, there is force in the submissions made by the learned counsel for the applicant. The application is liable to be allowed and the proceedings of the aforesaid case as well as the concerned court below order are liable to be quashed / set-aside.
Accordingly, the application is allowed and the proceedings of Complaint Case No.743 of 2008, under section 138 N.I.Act, pending in the court of VIth Additional Chief Judicial Magistrate, Mathura against the applicant are quashed.
Order Date :- 26.4.2019 Dev/-