2017 (12) TMI 556 - HC - Indian Laws

Court Upholds Order on Offence under Section 138

Archana Bagle Versus M/s Betul Oil Limited

The court affirmed the trial court's order taking cognizance of the offence under Section 138 of the Negotiable Instruments Act. The application under ... Cognizance of offence under Section 138 of NI Act - Held that:- This Court is of the considered opinion that it was not necessary for the complainant to allege that even on the date of the issuance of the subsequent cheques the applicant was responsible and in-charge of day-to-day business of the Company. The averments made in paragraph 2 of the complaint are sufficient to proceed against the applicant for an offence under Section 138 of the Negotiable Instruments Act. The basic averments are that the accused no.1 M/s Amrit Feeds Limited. had purchased DOC and for payment of the said purchased material cheques of ₹ 16,66,75,992/- were issued and when they stood bounced, another set of cheques were issued by the accused no.2 Harish on 13/2/2016. Whether the second set of cheques issued on 13-2-2016 would also amount to acknowledgment in writing or not is also a question, which is to be decided he Trial Court. This Court is of the considered opinion that since the question of limitation is a mixed question of fact and law, which can be decided by the trial Court only after considering the evidence which would ultimately come on record, therefore, at this stage it is held that there is sufficient allegation in the complaint to proceed against the applicant under Section 138 of Negotiable Instruments Act. It is an undisputed fact that the Trial has reached to an advanced stage and the case is fixed for recording of accused statement. Even otherwise, on that ground also, the application under Section 482 of Cr.P.C. is liable to be dismissed. Thus, this Court is of the considered opinion that the Trial Court did not commit any mistake in taking cognizance of the offence under Section 138 of Negotiable Instruments Act, Issues Involved:1. Quashing of cognizance under Section 138 of the Negotiable Instruments Act.2. Vicarious liability of the applicant under Section 141 of the Negotiable Instruments Act.3. Limitation period for filing a complaint under Section 138 of the Negotiable Instruments Act.4. Advanced stage of trial and its impact on the application under Section 482 of Cr.P.C.Issue-Wise Detailed Analysis:1. Quashing of Cognizance under Section 138 of the Negotiable Instruments Act:The applicant sought to quash the order dated 23-9-2016, whereby cognizance of the offence under Section 138 of the Negotiable Instruments Act was taken. The complaint was filed by the respondent on the grounds that cheques issued by the accused company, M/s Amrit Feeds Limited, had bounced due to insufficient funds. Despite statutory notice, the accused failed to make the payment, leading to the filing of the complaint. The trial court took cognizance of the offence and issued summons to the accused persons.2. Vicarious Liability of the Applicant under Section 141 of the Negotiable Instruments Act:The applicant contended that there must be a specific allegation that she was responsible and in charge of the day-to-day business of the company to hold her vicariously liable. The complaint did contain such an averment, stating that the applicant, along with accused no.2 Harish Bagla, was responsible for the company's daily operations. The court referred to the Supreme Court's judgment in Standard Chartered Bank vs. State of Maharashtra, which mandates specific averments in the complaint to hold a director vicariously liable. The court found that the complaint met this requirement, making the applicant vicariously liable under Section 141 of the Negotiable Instruments Act.3. Limitation Period for Filing a Complaint under Section 138 of the Negotiable Instruments Act:The applicant argued that the complaint did not specify when the transactions took place, questioning whether the complaint was within the limitation period. The court held that the question of limitation is a mixed question of fact and law, which can only be decided by the trial court after considering the evidence. The court noted that the second set of cheques issued on 13-2-2016 could be considered an acknowledgment of the debt, thus potentially extending the limitation period.4. Advanced Stage of Trial and its Impact on the Application under Section 482 of Cr.P.C.:The court observed that the trial had reached an advanced stage, with the case fixed for recording the accused's statement under Section 313 of the Criminal Procedure Code. Given this advanced stage, the court found that the application under Section 482 of Cr.P.C. was not maintainable. The court emphasized that interference under Section 482 should be limited and directed the trial court to decide the case based on the evidence without being influenced by any observations made in this order.Conclusion:The court affirmed the trial court's order taking cognizance of the offence under Section 138 of the Negotiable Instruments Act. The application under Section 482 of Cr.P.C. was dismissed, and the trial court was directed to proceed with the trial based on the evidence presented.