Bombay High Court
Smt. Vidya Wd/O Sharadchandra ... vs M/S. Brisk Marketing Thr. ... on 8 December, 2009
Bench: S.S. Shinde
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
Criminal Application No. 2763 of 2006
1) Smt. Vidya wd/o Sharadchandra Wairagade,
Aged about 52 years,
Occupation - Nil,
R/o Jaitala, Nagpur.
2) Smt. Kalpana wd/o Ashutosh Wairagade,
Aged about 47 years,
Occupation - Nil,
R/o Vanjari Nagar, Nagpur. .. APPLICANTS
.. Versus ..
1) M/s Brisk Marketing,
through its Proprietor,
Shri Jyotindra Patel, having its
office at Premium Plaza Complex,
1st Floor, Mata Mandir Road,
Dharampeth, Nagpur.
2) Wairagade Engineering Corporation,
through its Managing Partner,
Shri Shrikant Atmaram Wairagade,
3) Shri Shrikant Atmaram Wairagade,
Aged - Major, Occ.-Business,
Both 2 and 3 C/o W-5, M.I.D.C.,
Industrial Area, Hingna, Nagpur.
4) Shri Jagdishchandra Wairagade,
Aged - Major, Occ.- Retired,
R/o Ramdaspeth, Nagpur. .. NON-APPLICANTS
---------------------------------------------------------------------------------------
Mr. A.A. Sambaray, Advocate for the applicants,
None for the non-applicants.
---------------------------------------------------------------------------------------
::: Downloaded on - 02/08/2016 16:57:17 :::
2
CORAM:- S. S. SHINDE, J.
DATED :- 08th DECEMBER, 2009
JUDGMENT
1. This application is filed praying therein to quash and set
aside the proceeding of Criminal Complaint Case No. 1081 of
2004 pending before the Special Court under Section 138 of
Negotiable Instruments Act, Nagpur.
2. The applicants herein are the original accused Nos. 4 and 5
in the original proceedings. The non-applicant No.1 herein, who
is complainant has supplied materials to the non-applicant No.2-
Wairagade Engineering Corporation and against the same, the
managing partner, non-applicant No.3 Shri Shrikant Wairagade
has issued a cheque bearing No.09440 in favour of the
complainant of Rs. 8,83,425/-.
3. It was further contention of the original complainant that
they have deposited the said cheque with their bankers but it
was dishonoured for insufficient funds. The complainant issued
the notice demanding amount of cheque to the applicants and
non-applicant Nos. 2 to 4.
4. The original complainant filed a criminal complaint against
the present applicants along with non-applicant Nos.2 and 4
under Sections 138 and 142 of the Negotiable Instruments Act,
1881 for dishonour of cheque. According to the complainant, the
applicants are the partners of the non-applicant No.2-Wairagade
Engineering Corporation and as such they were also made the
accused.
5. The trial Court after perusal of the complaint was pleased
to issue process by observing that "Heard.
ig Perused the
complaint, statement and documents placed on record. It
appears that cheque is issued by accused in favour of
complainant and same is dishonoured by the Bank for insufficient
funds and he failed to pay inspite of deemed service of notice by
the complainant. Thus, prima facie case is made out against the
accused. Hence, issue process against the accused for the
offence punishable under Section 138 of the Negotiable
Instruments Act on payment of P.F." Thus the process came to be
issued against the accused/applicant on 20-12-2004.
6. The applicants were served and they came to know that
there was alleged transaction with the non-applicant No.1 and for
the same the applicants have been added as accused. As such
after the service of summons, the applicants appeared before the
lower Court and taken the bail.
7. The applicants herein filed an application before the trial
Court and prayed for dismissal of the complaint on the ground
that the original complainant/present non-applicant No.1 has not
made out any specific case against the applicants and notice
issued by the complainant and the complaint filed by the
complainant is totally silent about the role of the present
applicants and in absence of any specific allegations against the
applicants they cannot be made accused, thus the complaint
needs to be dismissed against the present applicants. Hence,
this application under Section 482 of the Criminal Procedure
Code filed by the applicants.
8. The learned Advocate appearing for the applicants
submitted that the trial Court has not taken into consideration
the case of the applicants that they have specifically stated on
oath that they are not the partners of the firm and there is no
material on record to show that they are the partners of the firm
and related with the activities of the firm. It is further submitted
that a bare perusal of the notice issued by the complainant/non-
applicant No.1 shows that it does not make any allegations
against the present applicants or attribute any role to them. On
the contrary, the notice is entirely silent about the present
applicants and it does not speak about the involvement of the
applicants in the day to day affairs of the firm or that the alleged
cheque was issued by the consent of the applicants.
9. The learned Advocate further submitted that the contents
of the application does not attribute any role to the present
applicants nor it any way speaks about the involvement of the
present applicants in the transaction.
ig On the contrary, the
complaint is totally silent about the involvement of the present
applicants and therefore, the learned Advocate further invited my
attention to the provisions of Section 141 of the Negotiable
Instruments Act and submitted that the complaint are precisely
states that the applicants were responsible for day to day affairs
of the Company and in absence of that no further proceedings
can be gone into or continued against the applicants.
10. The learned Advocate further submitted that the applicants
were in no way involved in any of the transactions referred to in
the complaint and it was not stated that they were in-charge of
the business and was responsible for the conduct of the business
of the company. In terms of Section 141 of the Negotiable
Instruments Act nor was there any other allegation made against
the applicants that they had connived with any other partner in
the matter of issue of cheque.
11. The learned Advocate further invited my attention to the
judgment of the Hon'ble Apex Court to contend that "person in
charge" must mean that the person should be in overall control
of the day-to-day business of the company or firm. The person
should be a party to the policy being followed by a company and
yet not be in-charge of the business of the company or may be
in-charge of but not in overall charge or may be incharge of only
some part of the business." The sum and substance of the
arguments advanced by the learned Advocate for the applicants
is that in absence of any specific statement in the complaint to
the effect that the applicants are responsible and in-charge of
day-to-day affairs of the company, no further proceedings
whatsoever can be continued on the basis of the complaint filed
by the complainant. In support of this contention, learned
Advocate invited my attention to the reported judgment in the
case of S.M.S. Pharmaceuticals Limited v. Neeta Bhalla
and another, 2005(4) Mh.L.J. 731; Suman Madanlal Bora v.
State of Maharashtra and others, 2006(4) Mh.L.J. 369; and
Katta Sujatha v. Fertilizers and Chemicals Travancore Ltd.
and another, 2003(1) Bom. C.R. 517.
12. The learned Advocate for the applicants invited my
attention to the paragraph 20 of the reported judgment of the
Hon'ble Supreme Court in case of S.M.S. Pharmaceuticals Limited
v. Neeta Bhalla and another, 2005(4) Mh.L.J. 731; paragraph 8 of
the judgment of this Court in case of Suman Madanlal Bora v.
State of Maharashtra and others, 2006(4) Mh.L.J. 369; and
paragraphs 5,6,7 of the judgment in case of Katta Sujatha v.
Fertilizers and Chemicals Travancore Ltd. and another, 2003(1)
Bom. C.R. 517 and submitted that in view of the above
mentioned pronouncements by the Hon'ble Apex Court as well as
this Court, the application deserves to be allowed.
13. Though the non-applicants are duly served, none appears
for the non-applicants.
14. I have heard the learned Advocate for the applicants at
length. On perusal of the application, it appears that the
applicants have challenged the order passed by the Special Court
under Section 138 of the Negotiable Instruments Act. Though
the revision is maintainable against the impugned order, there is
no bar to entertain criminal application under Section 482 of the
Criminal Procedure Code. The Hon'ble Supreme Court in case of
Dhariwal Tobacco Products Limited and others v. State of
Maharashtra and another, (2009) 2 SCC 370 in para 12 held
that,
"The Apex Court's decision already
referred to above, nowhere prohibited or
expressly barred to invoke Section 482 of
the Criminal Procedure Code or Article
227 of the Constitution of India against
the order of issuance of process".
15. The Court has held that the availability of alternate remedy
of filing revision under Section 397 of Cr.P.C. could not be a
ground to dismiss application under Section 482 of the Criminal
Procedure Code. Therefore, the application filed by the applicants
can be entertained though it is filed challenging the order of
issuance of process by the Magistrate without challenging the
said order in revision.
16. On careful perusal of the provisions of Section 141 of the
Negotiable Instruments Act, the said Section in specific words
states that "if the person committing an offence under Section
138 is a company, every person who, at the time the offence was
committed, was incharge 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."
Therefore, unless there is a specific statement in the complaint to
the fact that, the concerned person against whom complaint is
filed, they should be in-charge of and responsible to the
company in the conduct of the business of the company, in
absence of specific statement to that effect, as the Hon'ble Apex
Court as well as this Court in number of pronouncements has
already taken a view that, no further proceedings based upon the
complaint in which such statement is missing can be continued.
17. On careful perusal of the complaint, which is placed on the
record from page 15 to 19 at Annexure-2, there is nothing stated
in the said complaint except that "the offence punishable under
Section 138 of the Negotiable Instruments Act is made out
against all the accused persons and they deserve to be punished
in accordance with law."
18. The Hon'ble Supreme Court in case of S.M.S.
Pharmaceuticals Limited v. Neeta Bhalla and another,
2005(4) Mh.L.J. 731 in para 20 held as under;-
"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 incharge 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
incharge 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 incharge 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 in affirmative. The question notes that
the Managing Director or Joint Managing
Director would be admittedly incharge of
the company and responsible to the
company 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
incharge 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 sub-section
(2) of section 141."
19. This Court in case of Suman Madanlal Bora v. State of
Maharashtra and others, 2006(4) Mh.L.J. 369 in paragraph
8 reads thus:-
"The Supreme Court has rendered its
decision in the aforesaid matter in the
context of the phraseology of section 141
of the Negotiable Instruments Act.
Section 141 deals with offences by
companies. Whenever the person
committing an offence under section 138
is company then every person who at the
time the offence was committed was in-
charge of and/or responsible to the
company for the conduct of the business
of the company as well as company shall
be deemed to be guilty of the offences
and shall be liable to be proceeded and
punished accordingly. As to when an
offence under section 138 is committed is
clear from a reading thereof. It is upon
the bank.
the cheque being returned "unpaid" by
In the instant case, the
complaint is completely silent about this
material aspect. The complaint does not
state at the time when the cheque was
returned unpaid/dishonoured, the
petitioner was in any way in-charge of
and was responsible for the conduct of
the business of the company or to the
company. It is only thereupon that a
prima facie conclusion can be drawn
about the guilt of the partner of the firm
who issues a cheque and which is
dishonoured. It is not necessary to refer
to the Supreme Court decision because
after going through averments in the
complaint on the touchstone of section
141, in my view, as far as petitioner is
concerned, complaint cannot proceed.
No offence is committed by the petitioner
when admittedly it is not shown that on
the date of commission of offence,
petitioner was in-charge of and
responsible to or conducting business of
the firm. Complaint, therefore, discloses
no offence and allowing the same to
proceed as far as petitioner is concerned
would be a clear abuse of the process of
the Court. Therefore, the complaint being
not disclosing an offence and even
otherwise to secure the ends of justice by
not allowing a 62 years old ex-partner to
be dragged in criminal Court. Rule is
made absolute in terms of prayer clause
(a). Complaint stands quashed as far as
petitioner is concerned."
20. The Hon'ble Supreme Court in case of Katta Sujatha v.
Fertilizers and Chemicals Travancore Ltd. and another,
2003(1) Bom. C.R. 517 in paras 5, 6 and 7 held as under :-
"(5). In short the partner of a firm is
liable to be convicted for an offence
committed by the firm if he was in
charge of and was responsible to the
firm for the conduct of the business of
the firm or if it is proved that the offence
was committed with the consent or
connivance of, or was attributable to any
neglect on the part of the partner
concerned.
(6). To the same effect is the decision
of this Court in (K.P.G. Nair v. Jindal
Menthal India Ltd.), 2001(5) Bom.C.R.
(S.C.)555: 2002 DoCh.(S.C.)222:
2001(10) S.C.C. 218 : 2000(6) SCALE
578 and (Anil Hada v. Indian Acrylic
Ltd.), 2005(5) Bom.C.R.(S.C.) 391 :
2000(1) S.C.C. 1 : J.T. 1999(9) S.C. 223.
Examined in the light of the decisions
and the law enunciated, we find no case
as such has been made out for
proceeding against the appellant.
(7) The appeal is allowed and the
order of the High Court is set aside so far
as the appellant before us is concerned.
Proceedings in the criminal case are
quashed insofar as the appellant before
us is concerned."
21. On perusal of the judgment cited (Supra) and more
particularly, paragraphs which are cited by the learned Advocate
for the applicants, the present application deserves to be
allowed. On perusal of the complaint, there is nothing to indicate
that at the time when the cheque was returned unpaid
dishonoured, the applicants were in any way incharge of and was
responsible for the conduct of the business of the Company or to
the Company. Therefore, the application is allowed in terms of
prayer clause (3). The proceedings of the Criminal Complaint
Case No.1081 of 2004 qua the present application are quashed
and set aside. The rule is made absolute.
JUDGE
adgokar
