Madras High Court
Mrs.Anitha Kapoor vs / on 29 October, 2024
Author: G.Jayachandran
Bench: G.Jayachandran
Crl.O.P.No.24242 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 24.10.2024
Pronounced on :29.10.2024
Coram:
THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN
Crl.O.P.No.24242 of 2024
and
Crl.M.P.Nos.13649 & 13651 of 2024
Mrs.Anitha Kapoor .. Petitioner/3rd Accused
/versus/
Mr.Rakesh Harlalka .. Respondent/Complainant
Criminal Original Petition has been filed under Section 482 of
Cr.P.C., to call for the records in C.C.No.2117 of 2021 pending on the file
of learned Metropolitan Magistrate No.II, Fast Track Court, Allikulam,
Chennai and to quash the same.
For Petitioner :Mr.S.Thiruvengadam
For Respondent :Mr.M.Santhanaraman
ORDER
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The petitioner herein is the third accused in C.C.No.2117 of
2021 on the file of learned Metropolitan Magistrate No.II, Fast Track
Court, Allikulam, Chennai.
2. The private complaint is in respect of dishonour of two
cheques drawn from the account maintained by M/s HNS Chits Pvt Ltd,
Chennai at Yes Bank, Parrys Corner, Chennai. The Company is the First
Accused) and its two Directors are the second and third accused. The
Complaint states that the first accused Chit Fund Company run by the
second and third accused had collected totally a sum of Rs.32,40,288/-
between January 2018 and 09/05/2019 towards chit subscription from the
complainant. After repeated demand two cheques for: (1) Rs.10,00,000/-,
dated 30/11/2020 and (2) Rs.9,90,013/-, dated 01/12/2020; signed and
issued by the second accused returned without fund. For the statutory
notice issued by the complainant, the 2nd and 3rd accused replied making
unsustainable allegations. Hence, the Company and its two Directors
being incharge of the day to day affairs of the first accused company are
liable for prosecution under Sections 138 r/w 141 of Negotiable
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Instruments Act 1881.
3. The petition to quash the complaint is filed on the ground
that the third accused is neither signatory of the cheque nor the Director
incharge of the day to day affairs of the Company. The cheques were
issued by the second accused, who is all alone responsible for the day to
day affairs of the Company. Except rendering her name, there is no other
activity carried out by the petitioner. In the complaint, there is no
averment as to the specific participation by this petitioner in the affairs of
the Company. To the statutory notice, the petitioner has replied stating
that she has nothing to do with the company and the transaction. Hence,
the complaint being given against this petitioner is vexatious, so to be
quashed.
4. The Learned Counsel for the respondent/ Complainant
referring the averment in the complaint and the Master Data maintained
by Registrar of Chits, submits that this petitioner is wife of the second
accused, who is the signatory of the subject cheques. The first accused
company consists of only two directors namely, Surendranath, who is the
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second accused and his wife, Anitha Kappor, who is the third accused –
petitioner herein. In the reply notice, except making unsustainable
allegations, the petitioner has not stated that she has no knowledge about
the cheques or she is not involved in the day to day affairs of the
company. Even while cross examination of the complainant, no
suggestion was put to the complainant about her non-participation in the
affairs of the company. While so, the petitioner has to discharge the
reverse burden and cannot seek for quash of the complaint.
5. In support of the respective argument, the following
judgments are relied by the learned Counsels:
(1)S.P.Mani and Mohan Dairy –vs- Dr.Snehalatha Elangovan
reported in [2023 (10) SCC 685].
(2)Susela Padmavathy Amma –vs- Bharti Airtel Limited
reported in [2024 SCC OnLine SC 311].
6. This Court is of the view that the issue is no more a res
integra, after the judgement of the Hon'ble Supreme Court in S.P.Mani
and Mohan Dairy case cited supra. In this judgment, the Hon’ble
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Supreme Court has vividly explained the law of vicarious liability under
corporate crime by analysing Section 141 of the Negotiable Instruments
Act, 1881. In this judgment, the Hon'ble Supreme Court has distinguished
Sections 141(1) and 141(2) of Negotiable Instrumetns Act, 1881, and
what is the essential element for implicating a person under this Section.
7. The summary of the final conclusion of the judgment in
S.P.Mani and Mohan Dairy case cited supra at paragraph 58 is as below:
“58.Our final conclusions may be summarised as under:
58.1. The primary responsibility of the complainant
is to make specific averments in the complaint so as to make
the accused vicariously liable. For fastening the criminal
liability, there is no legal requirement for the complainant to
show that the accused partner of the firm was aware about each
and every transaction. On the other hand, the first proviso to
sub-section (1) of Section 141 of the Act clearly lays down that
if the accused is able to prove to the satisfaction of the Court
that the offence was committed without his/her knowledge or
he/she had exercised due diligence to prevent the commission
of such offence, he/she will not be liable of punishment.
58.2. The complainant is supposed to know only
generally as to who were in charge of the affairs of the
company or firm, as the case may be. The other administrative
matters would be within the special knowledge of the company
or the firm and those who are in charge of it. In such
circumstances, the complainant is expected to allege that the
persons named in the complaint are in charge of the affairs of
the company/firm. It is only the Directors of the company or
the partners of the firm, as the case may be, who have the
special knowledge about the role they had played in the
company or the partners in a firm to show before the Court that
at the relevant point of time they were not in charge of the
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affairs of the company. Advertence to Sections 138 and Section
141, respectively, of the NI Act shows that on the other
elements of an offence under Section 138 being satisfied, the
burden is on the Board of Directors or the officers in charge of
the affairs of the company/partners of a firm to show that they
were not liable to be convicted. The existence of any special
circumstance that makes them not liable is something that is
peculiarly within their knowledge and it is for them to establish
at the trial to show that at the relevant time they were not in
charge of the affairs of the company or the firm.
58.3. Needless to say, the final judgment and order
would depend on the evidence adduced. Criminal liability is
attracted only on those, who at the time of commission of the
offence, were in charge of and were responsible for the conduct
of the business of the firm. But vicarious criminal liability can
be inferred against the partners of a firm when it is specifically
averred in the complaint about the status of the partners “qua”
the firm. This would make them liable to face the prosecution
but it does not lead to automatic conviction. Hence, they are
not adversely prejudiced if they are eventually found to be not
guilty, as a necessary consequence thereof would be acquittal.
58.4. If any Director wants the process to be
quashed by filing a petition under Section 482 of the Code on
the ground that only a bald averment is made in the complaint
and that he/she is really not concerned with the issuance of the
cheque, he/she must in order to persuade the High Court to
quash the process either furnish some sterling incontrovertible
material or acceptable circumstances to substantiate his/her
contention. He/she must make out a case that making him/her
stand the trial would be an abuse of process of Court.”
8. In Susela Padmavathy Amma case cited supra, the Hon’ble
Supreme Court has observed that,
“20. In other words, the law laid down by
this Court is that for making a Director of a company
liable for the offences committed by the company
under Section 141 of the NI Act, there must be
specific averments against the Director showing as to
how and in what manner the Director was responsible
for the conduct of the business of the company.
21. In Sabitha Ramamurthy v. R.B.S.
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Channabasavaradhya [Sabitha Ramamurthy v. R.B.S.
Channabasavaradhya, (2006) 10 SCC 581 : (2007) 1
SCC (Cri) 621], it was held by this Court that : (SCC
pp. 584-85, para 7)
“7. … it is not necessary for
the complainant to specifically
reproduce the wordings of the section
but what is required is a clear statement
of fact so as to enable the court to arrive
at a prima facie opinion that the accused
is vicariously liable. Section 141 raises
a legal fiction. By reason of the said
provision, a person although is not
personally liable for commission of
such an offence would be vicariously
liable therefor. Such vicarious liability
can be inferred so far as a company
registered or incorporated under the
Companies Act, 1956 is concerned only
if the requisite statements, which are
required to be averred in the complaint
petition, are made so as to make the
accused therein vicariously liable for
the offence committed by the
company.”
(emphasis supplied)
By verbatim reproducing the words of the section
without a clear statement of fact supported by proper
evidence, so as to make the accused vicariously liable,
is a ground for quashing proceedings initiated against
such person under Section 141 of the NI Act.”
9. Thus, a mere verbatim reproduction of the words in Section
141 of Negotiable Instruments Act, 1881, is not sufficient to prosecute a
person vicariously but a statement how he/she as a Director of the
company was responsible for the conduct of the business must be
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disclosed in the complaint. In the instant case, as per ROC record, the
petitioner and her husband are the Directors of the first accused
Company. She in her reply had specifically claimed that she is not
involved in the day to day affairs of the company. In the chief
examination, the complainant had not disclosed how this petitioner was
involved in the day to day affairs of the company and the issuance of the
subject cheques. As laid by the Hon’ble Supreme Court in para 58.4 of
S.P.Mani case to quash the complaint, the petitioner should have to place
before the High Court some sterling incontrovertible material or
acceptable circumstances to substantiate her contention. In this case, the
closure report of the Inspector of Police EOW, Chennai says, “on the
written complaint of one Gaurav Goyal is relied by the petitioner wherein
the Investigating Officer has categorically stated that, during the course
of investigation, documents received from ROC reflects Directors as: (1)
Surendranath and (2) Anitha Kapoor. The documents relating to
Registrar of Chits discloses only Surendranath, as Director and further
investigation and statement recorded discloses only R.J.Surendranath
participated and functioned as the foreman of HNS Chits Pvt Ltd and his
wife Anitha Kapoor had not participated in any of the day to day
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management affairs of the Chits” and deleted the name of the petitioner
while filing the final report. Hence, on the above point of view, I am the
Investigating Officer, deleting the FIR named Accused No.2, while filing
the final report.”
10. The complaint specifically say that the liability arose due to
the chit transaction with HNS Chits Pvt. Ltd. The closure report of the
police is an acceptable document to hold the petitioner was not involved
in the day to day affairs of the chit transaction. Therefore, it is a fit case to
quash in exercise of the power under Section 482 of the Code of Criminal
Procedure as per the dictum of the Hon’ble Supreme Court.
11. Accordingly, this Criminal Original Petition stands
allowed. The case in C.C.No.2117 of 2021 on the file of the Metropolitan
Magistrate No.II, Fast Track Court, Allikulam, Chennai, is hereby
quashed. Consequently, connected Miscellaneous Petitions are closed.
29.10.2024
Index:yes/no
https://www.mhc.tn.gov.in/judis
Internet:yes/no
Speaking order/non speaking order
Neutral Citation:yes/no
ari
To:
Metropolitan Magistrate No.II,
Fast Track Court, Allikulam, Chennai.
DR.G.JAYACHANDRAN,J.
ari
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delivery Order made in
and
Crl.M.P.Nos.13649 & 13651 of 2024
29.10.2024
https://www.mhc.tn.gov.in/judis
