Delhi High Court
Vinay Kumar @ Vinay Kumar vs State & Another on 23 April, 2010
Author: Sanjiv Khanna
19.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL.M.C. 1763/2007
Date of decision: 23rd April, 2010
VINAY KUMAR @ VINAY KUMAR KEDI ..... Petitioner
Through Mr. R.N. Mittal, Sr. Advocate with Mr.
Pawan Mittal & Mr. Manoj Kumar, Advocates.
versus
STATE & ANR. ..... Respondents
Through Ms. Inderjeet Sidhu & Mr. Kapil
Khanna, Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
1. Whether Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported
in the Digest ?
ORDER
1. Mr. Vinay Kumar the petitioner, has filed the present petition under
Section 482 of the Code of Criminal Procedure, 1973 for setting aside the
summoning order dated 28th March, 2003 passed by the learned
Metropolitan Magistrate, taking cognizance and issuing summons to appear
in a complaint filed by the respondent No. 2, International Travel House
Limited, under Section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred to as the Act, for short). In the said complaint, it is
alleged that M/s Kedia Power Limited, accused No. 1, had issued a cheque
for Rs.5 lacs dated 24th September, 1996 but on presentation the cheque was
CRL.M.C. No. 1763/2007 Page 1
not honoured and was returned back with the remarks "payment stopped by
the drawer vide note dated 25th September, 1996". It is stated in the
complaint that the said cheque was issued by accused No. 1 company, i.e.,
M/s Kedia Power Limited. With regard to the present petitioner, allegations
are made in paragraphs 3 and 15 of the said complaint, which for the sake
of convenience are reproduced below:-
"3. That accused No. 1 is a company
incorporated under the Companies Act 1956
and is having its principal office of business in
New Delhi at J-66, South Extension I, New
Delhi and belongs to The Kedia Group of
Companies. Accused Nos. 2 to 4 are the
Chairman/Vice-Chairmen of the Kedia Group
of Companies. Accused No. 5 is a Director of
Accused No. 1.
15. That the accused No. 2 is the Chairman and
Accused No. 3 to 4 are Vice-Chairmen of the
is a Director of accused No. 1 and are
responsible and liable for the acts of the accused
company. A copy of the legal notice was also
served upon each one of them, but they failed to
make the payment."
2. The aforesaid requirements do not meet and satisfy the requirements
of Section 141 of the Act, which for the sake of convenience is reproduced
below:-
"141.
(1) Offences by companies. If the person
committing an offence under section 138 is a
company, every person who, at the time the
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
CRL.M.C. No. 1763/2007 Page 2
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.
(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."
3. It is well settled that a person cannot be prosecuted under Section
141 of the Act merely on the ground that he is a Director of the company.
The requirement is that the person, who is made vicariously liable should be
in charge and responsible for conduct of business. The allegations in the
complaint quoted above do not state and make any allegation against the
petitioner that he was in charge of and responsible for conduct of business
of the accused No.1. The allegations made in paragraph 3 of the complaint
are that the petitioner, who is accused No. 4 in the complaint, was
CRL.M.C. No. 1763/2007 Page 3
Chairman/Vice-Chairman of Kedia Group of Companies. The allegation
made in paragraph 15 is that the petitioner was Vice-Chairman of Kedia
Group of Companies and "are responsible and liable for the acts of the
accused company". The aforesaid averments and allegations do not satisfy
the need and requirement of Section 141 of the Act. Merely because the
petitioner is a Chairman or Vice-Chairman of Kedia Group of Companies,
does not show and establish that he was in charge of and responsible for
conduct of business of the accused No. 1-Kedia Power Limited. Similarly,
the use of the words that the petitioner is "responsible and liable for the acts
of accused company" do not meet the need and requirements for vicarious
prosecution under Section 141 of the Act. There is no allegation in the
complaint that the petitioner was a person, who was incharge of a
responsible for looking after conduct of the accused No. 1-Kedia Power
Limited. A statement that the said person is liable and responsible for the
acts of an accused company, does not make him vicariously liable under
Section 141 of the Act. The requirements of Section 141 are different.
4. In view of the aforesaid, the present petition is allowed and the
summoning order dated 28th March, 2003 passed by the learned
Metropolitan Magistrate in complaint case No. 3243/01/04 titled M/s
International Travel House Limited versus Kedia Power Limited and
Others under Section 138 of the Act against the petitioner herein Mr. Vinay
Kumar is set aside/quashed.
SANJIV KHANNA, J.
APRIL 23, 2010
VKR/J
CRL.M.C. No. 1763/2007 Page 4
