HON’BLE Dr. JUSTICE K.G. SHANKAR
Crl. Petition No.12330 of 2013
Date: 04.08.2014
Between:
Ch. Venkateswarlu .. Petitioner/ Accused
AND
V. Suresh
and another. .. Respondents
HON’BLE Dr. JUSTICE K.G. SHANKAR
Crl. Petition No.12330 of 2013
ORDER:
The petitioner is the Managing Director of M/s. Suryodaya Infrastructures Private Limited.
The company is a civil contractor. The first respondent is a sub-contractor of the company. Two cheques were issued by the company for Rs.10 lakhs each in favour of the first respondent. As the cheques stood bounced when presented, the first respondent chose to file C.C.No.133 of 2013 on the file of IV Special Magistrate, Kukatpally at Miyapur. The petitioner contended that as the company is not a party, but the case is filed against the Managing Director, the case is not maintainable.
2. The petitioner allegedly entrusted work to the first respondent on 05.07.2009. It is alleged that the first respondent completed the work entrusted to him and has not been paid the cost of the work executed by him. M/s. Suryodaya Infrastructures Private Limited issued two cheques for Rs.10 lakhs each towards discharge of the amount due to the first respondent. It is these cheques, which were bounced.
3. As already pointed out, the learned counsel for the petitioner submitted that this claim by the first respondent is not maintainable. Be it noted that M/s. Suryodaya Infrastructures Private Limited issued two cheques for Rs.10 lakhs each. The cheques were duly signed by the petitioner as authorized signatory.
It is contended by the learned counsel for the petitioner on the basis of Sabitha Ramamurthy v. R.B.S.
[1] Channabasavaradhya that petition is not maintainable. In Sabitha Ramamurthy, the Supreme Court observed that there would be vicarious liability on the part of the Managing Director and other Directors of the Company and that the vicarious liability, however, can be inferred if clear statement of facts that the Directors were in-charge of business of the company is made in the complaint. The learned counsel for the petitioner submitted that there is no specific averment that the petitioner was in-charge of the affairs of the company.
4. I n D. Chandra Reddy v. Gowrisetty Prabhakar [2] Rao a learned single Judge of this Court observed that when a cheque was issued by the accused in his capacity as the Managing Director of the Company, the Managing Director of the Company alone could not be impleaded as the sole accused when the cheque stood dishonoured.
[3] I n Bommidipati Madhavi v. State of Andhra Pradesh , a cheque was issued by the petitioner as the Managing Partner and authorized signatory of the firm. Statutory notice was issued by the petitioner describing her as the sole proprietor. The petitioner did not reply such a statutory notice. It was observed by this Court that adverse inference against the petitioner could not be drawn. On the basis of these decisions, it is contended by the learned counsel for the petitioner that the case is not maintainable as the company which issued the cheques was not arrayed as an accused.
5. The learned counsel for the first respondent, on the other hand, placed reliance upon S.M.S.
[4] Pharmaceuticals Ltd., v. Neta Bhalla . In that case, it was noticed that the signatory of cheque which stood dishonoured is responsible for the incriminating act and is covered under Section 141 (2) of the Negotiable Instruments Act. Further, in National Small Industries [5] Corporation Limited v. Harmeet Singh Paintal , it was pointed out that vicarious liability on the part of a person must be pleaded in a vicarious terms and must be proved and that in the event the accused is a Managing Director or a Joint Managing Director of the Company, it would not be necessary to the complainant to make specific averments in the complaint on that count.
6. In the present case, the petitioner admittedly is the Managing Director. While the latest decision on the subject in Bommidipati Madhavi (3 supra) merely stated that when the person to whom notice was given was a Managing Partner, notice to him as a sole proprietor of the concerned was not justified to attract liability, in Harmeet Singh Paintal (5 supra) it was made very clear by the Court that if the cheque was issued by the Managing Director or a Joint Managing Director, it is not even necessary for the complainant to specifically aver about the liability of such a Managing Director or a Joint Managing Director since they would be liable by virtue of their position.
7. Indeed, the company has not been arrayed as a party. Nevertheless, the case is laid against the Managing Director of the Company. It is not as though the case was filed against him in his individual capacity. The petitioner herein was clearly shown as Managing Director of M/s. Suryodaya Infrastructures Private Limited. Where such Managing Director would be liable for prosecution in view of Harmeet Singh Paintal, I consider that the present criminal petition to quash the proceedings in C.C. No.133 of 2013 is not sustainable. Consequently, this Criminal Petition is dismissed.
The petitioner may face trial of C.C.No.133 of 2013.
The petitioner being the Managing Director of a company is granted permission not to attend the Court during the trial except on those occasions when the trial Court directs his presence for the purpose of examination and other reasons.
8. Miscellaneous Petitions, if any pending in this Criminal Petition, shall stand closed.
Dr. K.G. Shankar, J.
Date: 04.08.2014
Isn
[1] AIR 2006 SC 3086 (1)
[2] 1999 (2) ALD Crl. 722 (AP)
[3] 2014 (1) ALD (Crl.) 205 (AP)
[4] AIR 2005 SC 3512 (1)
[5] (2010) 3 SCC 330