Ajitpal Singh Rajendrasingh ... vs State Of Gujarat
2021 Latest Caselaw 13825 Guj

     R/SCR.A/1790/2016                          ORDER DATED: 13/09/2021




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

           R/SPECIAL CRIMINAL APPLICATION NO. 1790 of 2016
                                With
           R/SPECIAL CRIMINAL APPLICATION NO. 1791 of 2016
                                With
           R/SPECIAL CRIMINAL APPLICATION NO. 1792 of 2016
                                With
           R/SPECIAL CRIMINAL APPLICATION NO. 1793 of 2016
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                AJITPAL SINGH RAJENDRASINGH CHHABARA
                                 Versus
                      STATE OF GUJARAT & 1 other(s)
==========================================================
Appearance:
MR P P MAJMUDAR(5284) for the Applicant(s) No. 1
NOTICE SERVED BY DS(5) for the Respondent(s) No. 2
MR PRANAV TRIVEDI, ADDL. PUBLIC PROSECUTOR(2) for the
Respondent(s) No. 1
==========================================================

 CORAM:HONOURABLE MS. JUSTICE GITA GOPI

                           Date : 13/09/2021

                            ORAL ORDER

1. Draft amendment is allowed. Since the petitioner in all the matters are same and the issue involved in also common, these matters are taken up together for final hearing.

2. The prayer is made to quash and set aside the order dated 18.02.2016 passed by the learned 4 th Additional Chief Judicial Magistrate, Jamnagar, in Criminal Cases No. 1983 of 2009, 1699 of 2009, 2485 of 2009 and 2486 of 2009.

3. The initial prayer which learned advocate for the petitioner submitted is the main prayer for an appropriate writ, order, or direction quashing and setting aside the aforesaid criminal cases pending against the petitioner under Section 138 of the Negotiable Instruments Act (for short

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"N.I.Act") wherein the process has been issued. The petition had been served to the respondent No.2, but has failed to file appearance.

4. Mr. Panthil P. Majmudar, learned advocate for the petitioner submitted that the cheques in question is allegedly given by Pan India Project Private Limited which continued to do business under the trade name M/s. Fintrack Inc., and it is alleged that the disputed cheques bears the seal of the said company, and therefore, without joining the company as an accused, the criminal complaint has been filed which is not maintainable in the eyes of law, and further the petitioner, in his capacity as a Director of the said company, cannot be made an accused by making him vicariously liable for the alleged offence.

4.1 Learned advocate for the petitioner submitted that the impugned order dated 18.02.2016 was passed by the learned 4th Additional Chief Judicial Magistrate, Jamnagar, wherein the petitioner had challenged the order of issuance of summons in all the criminal cases, to serve the Managing Director of the Company through the present petitioner, who is not the Managing Director of the Company. Mr. Majmudar, learned advocate further submitted that the trial would not be maintainable as the Company has not been made party to the proceedings.

4.2 Learned advocate for the petitioner submitted that the criminal complaint has been filed stating that the complainant is doing the work of digging the pipelines on contract basis and allegedly he was doing the said work for Sonal Engineering

R/SCR.A/1790/2016 ORDER DATED: 13/09/2021

which is allegedly of the group of M/s. Fintract Inc. Group, and for the said work, he was given the payment by way of cheque, and on presentation of the cheque, it came to be dishonoured, and therefore, the complainant had issued legal notice under Section 138 of the Negotiable Instruments Act and thereafter filed Criminal Cases No. 1983 of 2009, 1699 of 2009, 2485 of 2009 and 2486 of 2009 against the petitioner.

4.3 Learned advocate for the petitioner relying on the case of Hon'ble Supreme Court in Aneeta Hada vs. Godfather Travels and Tours Private Limited reported in [(2012) 5 SCC 661] submitted that the Apex Court has explained regarding the mandatory requirement of impleading company as one of the accused, and prosecution without arraigning of the company as accused would not be maintainable. Learned advocate for the petitioner stated that the present petitioner is not the Managing Director of the Company, and therefore, when he was not in charge of the affairs of the company, the petitioner cannot be prosecuted.

5. Before the learned Additional Chief Judicial Magistrate, Jamnagar, this issue was raised and the learned Judge, on hearing the parties, had come to the conclusion that the accused No.2 - the present petitioner Ajitpalsingh Rajendrasingh Chhabara in the aforesaid matters is the authorised signatory of Pan India Project Private Limited and it is an undisputed fact that the disputed cheque has been signed by him by that status. The learned Judge has further observed that it is for the complainant to prove the fact about the status of the accused No.2 in the company. It has been further observed by the learned Judge that it is the matter of

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evidence to prove whether the company has not been joined as party to the matters. The learned Judge has come to the conclusion that the accused No.2 is the Director and the authorised signatory of the said company, and therefore, it was just and legal to serve the summons to him.

6. Perused the criminal complaints filed by the respondent No.2- original complainant is Bajrang Construction through Hitesh Jeshabhai Gagalia, wherein the present petitioner - Ajitpalsingh Rajendrasingh Chhabara has been joined as accused No.2 on the basis that he was authorised signatory of M/s. Fintrack Inc., proprietor of Pan India Project Private Limited. The status of the present petitioner has been reflected in the cause title of the petition. It is for the complainant to prove the said fact during the trial. The learned Judge has considered the fact that the present petitioner - accused No.2 has signed the disputed cheques as authorised signatory. In the case of Anita Hada (supra), the Apex Court has observed in para 32 as under:

"The company can have criminal liability fastened on it, and if a group of persons that guide the business of the companies have the criminal intent, that would be imputed to the body corporate. Section 141 of the Act clearly stipulates that when a person which is a company commits an offence, then certain categories of persons in charge as well as the company would be deemed to be liable for the offences under Section

138. Thus, the statutory intendment is absolutely plain. The provision makes the functionaries and the companies to be liable and that is by deeming fiction. A deeming fiction has its own signification."

7. Thus the provisions of Section 138 read with Section 141 of the N.I. Act makes it clear that the company can have

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criminal liability fastened on it, and certain categories of persons in charge as well as the company, would be deemed to be liable for the offences under Section 138. The provision makes the functionaries and the companies liable, which is a deeming fiction having its own signification. Here, in this case, the petitioner as an authorised signatory of M/s. Fintrack Inc., proprietor of Pan India Project Private Limited, has been joined as party - accused No.2, and thus, it would be for the petitioner to further controvert the said fact by adducing rebuttal evidence during the trial. The learned Judge has accepted the fact of petitioner being an authorised signatory by way of his signature on the disputed cheque. The word "deemed" used in Section 141 of the N.I.Act applies to the company and the person responsible of the acts of the company, which has been explained in the judgment of Aneeta Hada (supra) which observes as under:

"The word 'deemed' used in Section 141 of the Act applies to the company and the persons responsible for the acts of the company. It crystallizes the corporate criminal liability and vicarious liability of a person who is in charge of the company. The criminal liability on account of dishonour of cheque primarily falls on the drawer company and is extended to the officers of the company and as there is a specific provision extending the liability to the officers, the conditions incorporated in Section 141 have to be strictly complied with. The conditions are intended to ensure that a person who is sought to be made vicariously liable for an offence of which the principal accused is the company, had a role to play in relation to the incriminating act and further that such a person should know what is attributed to him to make him liable."

8. It is required to be noted that the issue which has been

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raised by the learned advocate for the petitioner is that the company has not been joined as party; perusal of the complaint shows that the name of the company is shown as accused No.1. The learned counsel for the petitioner has raised grievance that the expression "managing director" with the name of the company suggest that it is not the company which has been joined but the Managing Director of the company as a party - accused in the matter. The learned Judge has not accepted the issue raised before him since it is observed that it is the director and the authorised signatory the accused No.2 has to accept the summons on behalf of the company, and therefore, that dispute would not be maintainable and whether the company has been joined or not would have been proved by way of adducing the evidence.

9. Section 141 uses the term "person" and refers it to a company. In Aneeta Hada (Supra) the said fact has been clarified with the following observations:

"Section 141 uses the term 'person' and refers it to a company. The company is a juristic person. The concept of corporate criminal liability is attracted to a corporation and company and it is so luminescent from the language employed under Section 141 of the Act. The present enactment is one where the company itself and certain categories of officers in certain circumstances are deemed to be guilty of the offence."

10. It is also required to be noted that M/s. Fintrack Inc., proprietor of Pan India Project Private Limited, has been shown in the complaint as accused No.1. Whether such arraignment in the complaint in the form of the company or the status is only a Managing Director would be the matter of

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evidence which the complainant is required to prove and present petitioner as an accused can challenge the same by way of rebuttal evidence. Prima facie, in the cause title, the company has been shown as accused No.1 and the present petitioner as an authorised signatory shown as accused No.2, and thus, in view of the observations made hereinabove and supported by the observations of the learned trial Judge, the applications are not maintainable; hence rejected.

It would be open for the petitioner to prove the said issue during the trial and the learned trial Judge will decide the said issue in accordance with law.

11. After declaring the order, the prayer was made to stay the implementation of the present order. The prayer cannot be acceded; as the criminal complaints before the trial court are of the year 2009.

(GITA GOPI,J) A.M.A. SAIYED