2018 (11) TMI 184 - HC - Indian Laws

Company's Director Served Notice = Company Liable for Offense

The High Court upheld the Metropolitan Magistrate's order summoning the company accused in a criminal case involving dishonored cheques. The court ... Dishonor of Cheque due to insufficiency of funds - Section 138 of the Negotiable Instruments Act, 1881 - Held that:- Since the evidence which has come on record does show the complicity of the second respondent in the crime, the cheques in question having been issued against its account, it having received the notice of demand and not having made any payment in response thereto satisfying the claim of the complainant arising out of the said cheques, the exercise of jurisdiction by the Metropolitan Magistrate under Section 319 Cr. PC could and should not have been interfered with by the revisional court. Petition allowed - decided in favor of petitioner. Issues:1. Summoning of the company accused additionally under Section 319 of Cr. PC.2. Jurisdiction of Metropolitan Magistrate under Section 319 Cr. PC.3. Revisional court setting aside summoning order against the company accused.4. Interpretation of legal notice of demand.5. Omission of the company from the array of accused in the complaint.6. Power of review by the Magistrate.7. Complicity of the second respondent in the crime.Analysis:1. The petitioner lodged a criminal case against the third respondent under Section 138 of the NI Act. The case involved three cheques issued by a company through its director, the third respondent, which were returned unpaid. The Metropolitan Magistrate issued process against the third respondent and later, the complainant sought to summon the company accused additionally under Section 319 Cr. PC.2. The case proceeded to trial, and the complainant moved an application to summon the company accused based on the evidence on record. The Magistrate allowed this application, but the revisional court set aside the order, questioning the jurisdiction of the Magistrate under Section 319 Cr. PC.3. The revisional court's decision was challenged through a petition under Section 482 Cr. PC. The High Court noted that the notice of demand was addressed to the third respondent as the director of the company accused, indicating that the company was the intended recipient of the demand.4. The High Court emphasized that notice to the director of a company is sufficient notice to the company itself, as established in legal precedents. The court found that the evidence showed the complicity of the company accused in the crime, as the cheques were issued against its account and it failed to make payment despite receiving the demand notice.5. It was revealed that the name of the company was inadvertently omitted from the array of accused in the complaint. An application was made to correct this, but due to the summoning order already being issued, the Magistrate granted liberty to file a fresh application under Section 319 Cr. PC, which was later done.6. The High Court reinstated the Magistrate's order summoning the company accused, stating that the revisional court had erred in interfering with the Magistrate's exercise of jurisdiction. The second respondent company was directed to face prosecution in the criminal complaint alongside other accused parties.7. The High Court set aside the revisional court's order and allowed the trial to proceed with the second respondent included as an accused. The petition and related applications were disposed of accordingly.