TIRUCHANDOOR MURUHAN SPINNING MILLS P LTD Vs. MADANLAL RAMKUMAR COTTON AND GENERAL MERCHANTS

JUDGEMENT

(1.) THE respondent herein initiated criminal action for the offences punishable under Section 138 of the Negotiable Instruments Act against the petitioners who are the Chairman and Managing Director and Directors by presenting a complaint under Section 200 Cr. P. C. alleging that the petitioners purchased cotton from him and issued 10 cheques for different amounts drawn on Indian Overseas Bank, n. Paraipatti Post, Dindigui. On presentation, the cheques were returned with an endorsement 'insufficient funds in the drawer's account'. The complainant thereafter got issued a legal notice to the accused persons calling upon them to pay the cheque amount which they failed within the time stipulated therein. He therefore filed this complaint in respect of 10 cheques. The learned Magistrate before whom the complaint was filed, took cognizance of the offence alleged and ordered issue of summons to the accused - petitioners as in his opinion, there was sufficient material for proceeding against the accused. The order of the learned Magistrate is challenged on the following grounds:-Eventhough there are two causes of action, the complainant has filed a single complaint. Notices were served in respect of 5 cheques on one day and in respect of another 5 cheques on other day and therefore a single complaint, filed by the complainant in respect of all the chequee is not sustainable in view of the provisions of Section 219 Cr. P. C It is further contended that the advocate for the complainant has participated in the proceedings and hence the proceedings is in the contravention of the ratio laid down by the division french of this Court in the case reported in ILR 1997 KAR 2091.

(2.) I have heard the learned Counsel on both sides and perused the records. The learned Counsel for the respondent - complainant has justified the presentation of the complaint in so far as the cheques are concerned which give raise to a single cause of action and contended that the provisions of Section 219 Cr. P. C are not applicable to the facts of this case. Learned Counsel for the petitioners however contended that different causes of action arise in this case and the facts are governed by the provisions of Section 219 Cr. P. C. He further submitted that the allegations made in the complaint and the sworn statement do not disclose active participation of petitioners 2 to 4 who are the Directors and therefore there is no strict compliance of Section 141 of the Negotiable Instruments Act and the cognizance taken against them is not justifiable and is an abuse of process of Court which is liable to be set aside.

(3.) IN so far as this contention is concerned, learned Counsel for the respondent has not much to say as the complaint allegations and the sworn statement do not satisfy the provisions of Section 141 of the Negotiable Instruments Act where a Company is prosecuted for the offence represented by the Managing Director and other directors, it is for the complainant to aver in the complaint and place in on record that every person who, at the time the offence was committed, was incharge 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.