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        Companies Law

        2007 (4) TMI 625 - SC - Companies Law

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        Summons recall under criminal procedure is impermissible once process issues; cheque dishonour complaint had sufficient Section 141 averments. A Magistrate has no power to recall summons once process is validly issued under Section 204 CrPC after cognizance and preliminary statements, so the ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Summons recall under criminal procedure is impermissible once process issues; cheque dishonour complaint had sufficient Section 141 averments.

                          A Magistrate has no power to recall summons once process is validly issued under Section 204 CrPC after cognizance and preliminary statements, so the later recall was unsustainable. In prosecutions for dishonoured cheques, vicarious liability under Section 141 NI Act depends on specific averments that the accused was in charge of and responsible for the company's business, or that the offence occurred with consent, connivance, or neglect. Here, the complaint went beyond a bare recital and alleged participation in meetings and negotiations concerning the cheques and dues, so it disclosed sufficient material to proceed. The dismissal of the complaint proceedings was therefore set aside and summons restored.




                          Issues: (i) whether the Magistrate had jurisdiction to recall the order issuing summons under Section 204 of the Code of Criminal Procedure, 1973; (ii) whether the complaint contained the specific averments necessary to fasten vicarious liability on the directors under Section 141 of the Negotiable Instruments Act, 1881.

                          Issue (i): whether the Magistrate had jurisdiction to recall the order issuing summons under Section 204 of the Code of Criminal Procedure, 1973.

                          Analysis: Once process was issued after the Magistrate took cognizance and recorded the preliminary statements, the Code did not confer any power of review or recall at that stage. The later recall of summons was therefore contrary to the scheme of the Code and the binding law on the subject.

                          Conclusion: The Magistrate had no jurisdiction to recall the summons order.

                          Issue (ii): whether the complaint contained the specific averments necessary to fasten vicarious liability on the directors under Section 141 of the Negotiable Instruments Act, 1881.

                          Analysis: Liability under Section 141 arises only when the complaint specifically avers that, at the time of the offence, the accused was in charge of and responsible for the conduct of the business of the company, or that the offence was committed with the consent, connivance, or neglect of the officer concerned. Mere reproduction of the statutory language is not always enough, but the complaint here contained more than a mechanical recital and alleged participation in meetings and negotiations relating to the dishonoured cheques and outstanding dues.

                          Conclusion: The complaint disclosed sufficient material to proceed against the respondents under Section 141.

                          Final Conclusion: The dismissal of the complaint proceedings could not be sustained, and the summoning of the respondents was restored.

                          Ratio Decidendi: A complaint seeking to fasten vicarious liability for dishonoured cheques must contain specific averments satisfying Section 141, and a Magistrate cannot recall process once validly issued under Section 204 in the absence of statutory power to do so.


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                          ActsIncome Tax
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