Crl.O.P.No.14801 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 01.11.2022
CORAM
THE HON'BLE Dr.JUSTICE G.JAYACHANDRAN
Crl.O.P.No.14801 of 2019
and
Crl.M.P.No.7244 of 2019
Rizwan Ahmed ... Petitioner
Vs.
M/s.Arunai Products & Services Private Limited,
Rep.by Mr.A.Kranthi Teja
S/o.A.Venkateshwarlu
General Manager ... Respondent
Prayer:- Criminal Original Petition has been filed under Section 482 of
Cr.P.C., praying to call for the records and to quash the C.C.No.11388 of
2018 on the file of the Fast Track Court-III, Metropolitan Magistrate at
Saidapet.
For Petitioner : Ms.Varsha Balasubramanian
For M/s.Subhang P.Nair
For Respondent : Mr.R.Muthukumar
For Mr.R.Lingakumar
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Crl.O.P.No.14801 of 2019
ORDER
This Criminal Original Petition is filed to quash the private
complaint filed under Section 138 of Negotiable Instruments Act, on the
sole ground that the petitioner is neither the signatory to the cheque nor the
company, which committed the alleged offence and arrayed as accused.
Hence the requirement under Section 141 of Negotiable Instruments Act,
to prosecute the company is not satisfied.
2. On reading the complaint which is impugned, this Court
finds that the complaint under Section 138 of Negotiable Instruments Act,
launched by M/s.Arunai Products & Services Private Limited represented
by Mr.A.Kranthi Teja, General Manager against Mr.Rizwan Ahmed,
Chairman and Managing Director of Oren Hydrocarbon Private Limited.
3. The learned counsel for the petitioner/accused contends
that the complaint is against an individual. Statutory notice was also issued
against the individual and not on the company. The petitioner is neither the
signatory to the cheque nor deals with the affairs of the company, more
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particularly, he has nothing to do with the impugned cheque.
4. Per contra, the learned counsel for the
respondent/complainant submits that the petitioner is the Chairman and
Managing Director of the company which has issued the cheque and if so
described with the complaint, and therefore, the complaint is maintainable.
In support of his submissions, the learned counsel for the respondent rely
upon the case in Bhupesh Rathod Vs. Dayashankar Prasad Chaurasia
and another reported in (2022) 2 Supreme Court Cases 355.
Section 141 in the Negotiable Instruments Act, 1881 reads as below:
“141 Offences by companies. — (1) 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 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:
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[Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.]
(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.]
5. The plain reading of the provisions clearly indicates that if
the offence is committed by a company, otherwise if the cheque is drawn
from the account maintained by the company and if such cheque gets
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dishonoured, he should be construed by the company. Since the company
though juristic body to be represented by a natural person, the signatory of
the cheque and whoever is responsible for the conduct of the business of
the company, will be held liable to be prosecuted. In the impugned
complaint it is stated that the complainant dealing with granite and
minerals used to supply goods on credit basis to the accused and in the
course of the business, a total sum of Rs.14,00,485/- fell as due and in
order to discharge the said due, a cheque was issued for a sum of
Rs.14,00,485/- dated 04.07.2018, drawn on Standard Chartered Bank
Limited, Rajaji Salai, Chennai by the accused. On presentation of the said
cheque for collection, it was returned with an endorsement “payment
stopped by the drawer”. Hence after causing statutory notice to the
accused, the complaint has been lodged.
6. Perusal of the cheque indicates that it is issued on behalf of
M/s.Oren Hydrocarbon Private Limited. There are two signatories to the
cheque. The petitioner herein is not any one of the signatories. The
statutory notice dated 23.08.2018 sent to the petitioner herein in his
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personal capacity, identifying him as the Chairman and Managing Director
of M/s.Oren Hydrocarbon Private Limited is not caused to the company
represented by the petitioner or the petitioner as a representative of the
company in the judgment relied by the learned counsel for the respondent.
7. The perusal of the complaint and the statutory notice it has
held that the complaint filed by the Managing Director on behalf of the
company cannot be dismissed on the ground that the name of the
Managing Director is mentioned first followed by the post held in
company. There is no specific format as to how a company which sues
should be described. Therefore, mentioning the name of the Managing
Director first followed by the post held by him is not a fundamental defect
warranting dismissal. However, this is not the case regarding description
of the accused. It is a case of omission to cause notice to the company and
prosecuting the company besides the petitioner who is responsible for the
management of the company. The sole accused in the complaint is neither
a signatory of the cheque nor described as a person responsible for the
affairs of the company. In the entire complaint there is no whisper as to
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how this petitioner liable and be prosecuted for the cheque drawn in the
name of M/s.Oren Hydrocarbon Private Limited
8. In such circumstances, this Court finds merit in the
submissions of the petitioner to quash the complaint. Accordingly, this
Criminal Original Petition is allowed. Consequently, the connected
Criminal Miscellaneous Petition is also closed. The complaint in
C.C.No.11388 of 2018 is quashed.
01.11.2022
rpl Index: Yes/No Speaking Order/Non Speaking Order
To
The Fast Track Court-III, Metropolitan Magistrate, Saidapet, Chennai.
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Dr.G.JAYACHANDRAN, J.
rpl
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