Legal principle: Notice to director = Notice to company.

The court held that the notice addressed to the director/authorized signatory of the company was deemed as notice to the company itself, meeting the requirements of the law under Section 138(b) of the Negotiable Instruments Act, 1881. The court applied the alter ego principle, attributing the knowledge of the director/authorized signatory to the company. As a result, the petitioner company was found to have received sufficient notice of the dishonor of the cheques, leading to the dismissal of the revision petitions and direction for the trial court to proceed with the case expeditiously.

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Issues Involved:
1. Validity of notice issued under Section 138(b) of the Negotiable Instruments Act, 1881.
2. Whether the notice addressed to the director/authorized signatory of the company can be deemed as notice to the company itself.

Issue-wise Detailed Analysis:

1. Validity of notice issued under Section 138(b) of the Negotiable Instruments Act, 1881:

The proceedings under Sections 138/141 of the Negotiable Instruments Act, 1881 were challenged on the grounds that the notice issued under Section 138(b) was defective. The petitioners argued that the notice should have been issued to the drawer of the cheque, which is the petitioner company, and not to the director/authorized signatory, Vijay Kumar Kanoria. The court examined whether the notice addressed to the director/authorized signatory could be considered valid for the company. The court noted that the purpose of the notice under Section 138(b) is to give the drawer a chance to rectify the omission. The notice was sent to the registered office of the company and was received by the director/authorized signatory, who was the alter ego of the company. Therefore, the court concluded that the notice met the requirement of the law.

2. Whether the notice addressed to the director/authorized signatory of the company can be deemed as notice to the company itself:

The court analyzed whether the notice addressed to Vijay Kumar Kanoria, the director/authorized signatory, could be construed as notice to the company. The court applied the principle of alter ego, stating that the knowledge of the director/authorized signatory is attributable to the company. The court referred to the judgments in Iridium India Telecom Ltd. Vs. Motorola Incorporated & Ors. and Sunil Bharti Mittal Vs. Central Bureau of Investigation, which upheld that the criminal intent of the alter ego of the company can be imputed to the corporation. The court also cited Bilakchand Gyanchand Co. Vs. A. Chinnaswami and Rajneesh Aggarwal Vs. Amit J. Bhalla, where notices issued to the director/signatory were held valid under Section 138(b). The court rejected the petitioners' reliance on Aneeta Hada Vs. Godfather Travel & Tours Pvt. Ltd. and Krishna Texport and Capital Markets Limited Vs. Ila A. Agarwal and Ors., as these cases did not address the specific issue at hand. The court emphasized a pragmatic interpretation of the notice, aligning with the legislative intent to ensure accountability in commercial transactions.

Conclusion:

The court held that the petitioner company had sufficient notice of the dishonor of the cheques and failed to make payment within the stipulated time. Therefore, the impugned prosecutions were not liable to be quashed. Both revision petitions were dismissed, and the trial court was directed to proceed with the case expeditiously.

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