Ind Bank Merchant Banking Service Limited, rep. By its Vice President, R.Ravi, III Floor, Raja Annamalai Building, 19, Marshalls Road, Chennai-8. ...Respondent in Crl.O.P.21221/02] Criminal Original Petitions filed under Section 482 Cr.P.C. to call for the entire records relating to the proceedings in C.C.Nos.2612 and 2611 of 1998, respectively, on the file of the VII Metropolitan Magistrate, George Town, Chennai and quash the same in so far as the petitioner is concerned.
The petitioner, who is third and ninth accused, in C.C.Nos.2611 and 2612 of 1998, respectively, on the file of the VII Metropolitan Magistrate, George Town, Chennai and who is facing trial for the alleged offence under Section 138 of the Negotiable Instruments Act, has filed the above criminal original petitions seeking to quash all further proceedings therein.
2. The petitioner and the respective respondent in both the above criminal original petitions are one and the same. Since a common issue arises for consideration in both the above criminal original petitions, they are being disposed of by this common order.
3. The brief facts which are necessary for disposal of the above criminal original petitions are set out below:
The complainant/respondent herein filed a complaint before the learned Magistrate alleging that in partly discharge of its liability the accused issued cheques bearing Nos.373639 and 373640, dated 31.03.1997 and 30.06.1997, for a sum of Rs.8,10,000/- each, drawn on the bank account of the first accused maintained with the Punjab National Bank, Service Branch, Madurai. The said cheques were signed by the accused herein. When the said cheques were presented for encashment, they were returned / unpaid with endorsements "refer to drawer". In the complaints, it is further alleged that in the account, there was no sufficient funds to honour the cheques. After complying with the statutory requirements, the complaints were filed and the same have been taken on file. Aggrieved against the same, the above criminal original petitions are filed.
4. Heard both sides.
5. Mr.K.M.Vijayan, learned senior counsel appearing for the petitioner submitted that in paragraph 14 of the complaint in C.C.No.2611/98 and in paragraph 15 of the complaint in C.C.No.2612/98, the following similar averments have been made:-
"The Complainant states that the accused have therefore committed offences under Section 138 and 142 of the Negotiable Instruments Act. The second accused is the Managing Director of the first accused company the third to seventh accused were the Directors of the first accused company and the eighth accused the authorised signatory of the first accused company. The cheque was signed by the eighth accused. The second to eighth accused were at the time of offence was committed and still are in charge and responsible to the first accused for the conduct for the business of the first accused company. The offence was also committed with the consent and connivance of the second to eighth accused. All the accused have therefore committed the offence and are liable to be punished."
According to the learned senior counsel for the petitioner, the said averments are not sufficient to attract the provisions contained under Section 141 of the Negotiable Instruments Act and to array the petitioners as accused. The learned senior counsel submitted that it should be further averred in the complaints as to how the petitioner herein as Director of the first accused Company was incharge of the first accused company but such averments are conspicuously absent in the complaints. Therefore, the learned Magistrate has erred in taking cognizance of the complaints under Section 138 of the Negotiable Instruments Act as against the petitioner herein. In support of his contention, the learned senior counsel relied on the following decisions:-
i) 2009 (5) SCALE 670, (RAMARAJSINGH Vs. STATE OF M.P.)
ii) 2009 (5) CTC 81, (K.K.AHUJA Vs. V.K.VORA)
6. In 2009 (5) SCALE 670, (referred to supra) and 2009 (5) SCALE 670, (referred to supra), a three Judges Bench of the Apex Court, while considering the scope of 141 of the Negotiable Instruments Act, after referring to number of decisions, approved the future legal principles enumerated in the decision reported in 2007 (9) SCC 481, N.K.WAHI Vs. SHEKHAR SINGH AND OTHERS. In the said decision reported in 2009 (5) SCALE 670, (referred to supra) in paragraph 8, it has been laid down as under:
"8. To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. There should be clear and unambiguous allegation as to how the Directors are incharge and responsible for the conduct of the business of the company. The description should be clear. It is true that precise words from the provisions of the Act need not be reproduced and the Court can always come to a conclusion in facts of each case. But still in the absence of any averment or specific evidence the net result would be that complaint would not be entertainable."
7. In 2009 (5) CTC 81, (referred to supra) in paragraph 18, it has been laid down as under:-
"18.It should, however, be kept in view that even an Officer who was not in charge of, and was responsible to the Company for the conduct of the business of the company can be made liable under sub section (2) of Section 141. For making a person liable under
Section 141(2), the mechanical repetition of the requirements under
Section 141(1) will be of no assistance, but there should be necessary averments in the Complaint as to how and in what manner the accused was guilty of consent and connivance or negligence and therefore, responsible under sub-section (2) of Section 141 of the Act."
In the very same decision, in paragraph 21, it is further held as under:-
"21. If a mere reproduction of the wording of Section 141 (1) in the Complaint is sufficient to make a person liable to face prosecution, virtually every officer/employee of a Company without exception could be impleaded as accused by merely making an averment that at the time when the offence was committed they were in charge of and were responsible to the Company for the conduct and business of the Company."
Basing reliance on the aforesaid submissions, the learned senior counsel for the petitioner submitted that if the averments contained in the complaints are considered in the light of the law laid down in the aforesaid two decisions, the criminal original petitions are liable to be allowed.
8. While the learned counsel for the respondent is unable to repel the contentions advanced by the learned senior counsel for the petitioner based on the abovesaid decisions contended that in the reply notice sent by the accused it has not been stated by them that the petitioner herein is not incharge or responsible for the Company and therefore it has been averred in the complaints that the petitioner is incharge of any responsible for the conduct of the business of the first accused company and further details are not averred in the complaints. Except the aforesaid submission, no other submission has been made by the learned counsel for the respondent.
9. I have considered the aforesaid submissions made by the learned counsel for the petitioner and perused the allegations contained in the complaints and the decisions relied upon by the learned counsel.
10. If the allegations contained in paragraphs 14 and 15, respectively, of the complaints are considered in the light of the law laid down by Apex Court in the decisions reported in 2009 (5) SCALE 670 (referred to supra) and 2009 (5) CTC 81 (referred to supra), it could be held that the said averment in paragraphs 14 and 15, respectively, do not satisfy the requirements of Section 141 of the Act. Except reproducing the wordings contained in Section 141 of the Act, the complainants have not averred in the complaints as to the part played by the petitioner in the said transaction. There should be clear unambiguous allegation to show as to how the Directors are responsible for the conduct of business of the company but such unambiguous allegations are absent in the complaints. Therefore, the said contentions put forth by the learned senior counsel have to be countenanced.
9. As far as the contention of the learned counsel for the respondent that in the reply notice sent by the accused it has not been stated that the petitioner is not incharge or responsible for the conduct of the Company is concerned, it cannot be countenanced for the reason that it is the duty of the complainants to make the necessary details in the complaints to prima facie make out a case under Section 138 of the Negotiable Insturments Act.
10. For the aforesaid reasons, both the criminal original petitions are allowed and all further proceedings in C.C.Nos.2611 and 2612 of 1998 on the file of the VII Metropolitan Magistrate, George Town, Chennai, are quashed as far as the petitioners/A3 and A9 alone are concerned. Since C.C.Nos.2611 and 2612 of 1998 are pending right from the year 1998, the learned Magistrate is hereby directed to dispose of the same within a period of four months from the date of receipt of a copy of this order positively. The connected miscellaneous petitions are closed.
vri To
1. The VII Metropolitan Magistrate, George Town, Chennai
2.The Public Prosecutor, High Court of Madras, Chennai