- (1.) THE petitioner, N.K, Agarwal (accused No. 3 in Complaint Case No. C-2249/96) has taken out this application praying for quashing of the proceeding in C-2249/96 pending in the Court of learned Judicial Magistrate, 8th Court, Alipore, 24-Parganas (South), on the ground that in view of Section 141(1) of the Negotiable Instruments Act, 1881 (as Amended by Act 55 of 2002), he is not vicariously liable for the act of the principal offender, i.e., the company for commission of an offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as "the said Act").
(2.) THE opposite party, Biswanath Mukherjee, Secretary of Golden Securities Limited, lodged one petition of complaint in the year 1996 in the Court of learned Judicial Magistrate, 8th Court, Alipore, 24-Parganas (South), under Section 138 of the said Act alleging therein that Prakash Industries Limited, accused No. 1, was under obligation to pay rental dues. THE accused No. 2, V,P. Agarwal, being the Managing Director of the Company, drawn a cheque on behalf of M/s. Prakash Industries Limited for Rs.3.91,585/- towards payment of third instalment. That cheque was presented for encashment in the United Bank of India, Calcutta Stock Exchange Branch, Calcutta by the complainant Biswanath Mukherjee. THE said cheque was returned dishonoured due to insufficient fund. THE complainant Biswanath Mukherjee issued demand notice dated 14.11,1996 through his Advocate for payment of the dishonoured cheque amount upon all the accused persons, which was received by all of them on 01.12.1996. As the accused No. 1, being the company, accused No. 2 being the drawer of the cheque and other accused persons were the persons in control, management and responsible for the conduct of the business of the accused No. 1 company, were sought to be prosecuted under Section 138 of the said Act. After recording initial deposition of the complainant Bikash Chatterjee and upon consideration of the petition of complaint, the learned Magistrate directed issuance of process upon all the accused person including the petitioner herein (accused No. 3). THE petitioner has come up with this application praying for quashing of the proceeding on the sole ground that he is not vicariously liable for the act allegedly committed by the accused No. 1 company and the accused No. 2, the Managing Director of the accused No. 1 company. It is his claim that he was the Deputy General Manager (Finance) of the company, as shown in the petition of complaint, although there existed no such post in the accused No. 1 company. THE cheque in question was not issued in connivance with and in consultation with him by the accused No. 2. A question crops up in this revisional application is whether the petitioner is vicariously liable for the act done by the accused nos.1 and 2 in view of the provisions of Section 141 of the said Act. Mr. Mitra, learned Counsel appearing on behalf of the petitioner, contends that in order to attract the provisions of Section 141 of the said Act, the complainant is to, prima facie, establish that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the port of any Director, Manager, Secretary or other Officer of the company. Until and unless, Mr. Mitra submits, a specific case is averred in the petition of complaint against any such Director, Manager, Secretary and Officers of the company other than the Managing Director of the company and the company itself, the provisions of Section 141 of the said Act will not operate. In support of his contention Mr. Mitra refers to the decisions of the Apex Court in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Anr., reported in 2005 SCC (Cr) 1975 : (2005)2 C Cr LR (SC) 457 ; Saroj Kumar Poddarv. State (NCT of Delhi) and Anr., reported in (2007)2 SCC (Cr) 135 : (2007)2 C Cr LR (SC) 187 ; K.K. Ahuja v. V. K. Vora and Anr., reported in JT (2009)8 SC 691.
(3.) MR. R.P. Matilal, learned Advocate appearing on behalf of the opposite parties, contends that the petition of complaint filed by the opposite party in the Court of learned Magistrate contains clear averment which satisfied the requirement of Section 141 of the said Act. It has been mentioned clearly therein that the accused No. 2 is the drawer of the cheque and the accused Nos.3, 4 and 5 are the persons in control, management and responsible for the conduct of the business of the accused company and that, they were served with demand notice which they received on 1,12.1996 but, failed to make payment. These averments altogether is sufficient enough to meet the requirements of Section 141 of the said Act at least for the purpose of issuing process under Section 204 of the Code of Criminal Procedure. MR. Matilal contends further that whether the petitioner had knowledge or not in the matter of issuing the cheque in question or whether it was issued in connivance with him or not and that whether or not he was in control, management and responsible for the conduct of the business of the accused company is a question of fact supposed to be decided by the learned trial Court at the time of trial. In support of his contention, MR. Matilal refers, to the following decisions : 1. N. Rangachari v. Bharat Sanchar Nigam Limited, reported in 2007 Cr LJ 2448; 2. Rajesh Bajaj v. State NCT of Delhi and Ors., reported in AIR 1999 SC 1216 : 1999 C Cr LR (SC) 234; 3. S. V. Mazumdar and Ors. v. Gujarat State Fertilizer Co. Ltd. and Ors., reported in (2005)4 SCC 173 : (2005)2 C Cr LR (SC) 267; 4. Paresh P. Rajda v. State of Maharashtra and Anr., reported in (2008)7 SCC 442 : (2008)2 C Cr LR (SC) 153. To appreciate Section 141 of the said Act, it would be very pertinent to set out the same. Section 141 of the said Act runs as Follows : "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 : 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.'' ;