2022 (5) TMI 303 - HC - Indian Laws

Court upholds complaint implicating company officials in non-payment & dishonored cheque case, emphasizes detailed trial inquiry.

Smt. Banda Shobha, Sri Amuneedi Subrahmanyam, Smt. Komaravolu Naga Manju Lalitha Bhargavi Versus The State of A.P., rep., PP, M/s Supriya Spinning Mills (P) Ltd

The court dismissed the Criminal Petitions seeking to quash proceedings under Section 482 of Cr.P.C. The complaint alleged offenses under the Negotiable ... Dishonor of Cheque - insufficiency of funds - the basic averments that a Director was incharge of, and responsible to, the conduct of business of the company, would suffice or else a specific accusation showing as to how such Director is responsible for conduct of business of the company should also be made in the complaint? - Section 141 of NI Act, 1881 - HELD THAT:- A perusal of Section 141 of the Act, 1881 i.e. offences by the companies, Section 141 (1) specifically contemplates that if the person committing the offence is a company, every person who at the relevant point of time, was incharge of, and was responsible to, the company for conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall also liable to be proceeded against and punished accordingly. In the case on hand, A.3 to A.5 are the Directors of A.1 company and they are incharge of, and responsible to, the day to day affairs of the company. There is no dispute with regard to the fact that such an averment has been mentioned in the complaint as far as A.3 to A.5 are concerned. It is further averred in the complaint that A2 to A.6 are actively and physically participating in all the day to day business transactions of A.1 - this aspect has to be considered during the course of trial and it is a premature stage where this Court would not be in a position to conduct a roving enquiry to go into the details of the transactions that have taken place. Admittedly, prima facie, the basic ingredients of Section 141 (1) of the Act, 1881 has been satisfied and the ground that the specific role has to be stated in the complaint, is not necessary. As far as A.6 is concerned, this Court feels that a specific role is attributed as against A.6. It is essential that a specific role has to be attributed in the complaint as against A.6 is concerned, for the reason that prima facie he comes within the purview of Section 141 (2) of the Act, 1881. A perusal of the complaint and the additional material papers which were filed by 2nd respondent goes to show that there are certain messages which have been issued by A.6 to the complainant and certain letters were written by A.6 to the complainant - Truth or otherwise of the said accusations that are made in the complaint has to be established in the course of trial, and it is a premature stage where this Court is not inclined to go into the details of the case. This Court cannot conduct a roving enquiry with regard to the truth or otherwise of the allegations made. There are no merits in the present Criminal Petition - Petition dismissed. Issues:Quashing of proceedings in C.C. No. 582 of 2015 under Section 482 of Cr.P.C.Interpretation of Sections 138 of the Negotiable Instruments Act, 1881, and 409 and 420 IPC.Accusations against the accused regarding non-payment for purchased goods and dishonored cheque.Interpretation of Section 141 of the Negotiable Instruments Act, 1881 in relation to the liability of company officials.Analysis:The case involved Criminal Petitions filed to quash proceedings in C.C. No. 582 of 2015 under Section 482 of Cr.P.C. The complaint alleged offenses under Sections 138 of the Negotiable Instruments Act, 1881, and 409 and 420 IPC. The complainant, a limited company, accused the petitioners of purchasing goods on credit but failing to pay the due amount, leading to a dishonored cheque. The petitioners contested the lack of specific roles attributed to each accused in the complaint, citing a judgment emphasizing the necessity of detailing individual responsibilities.The respondent argued that the complaint adequately accused the petitioners as being in charge of the company's affairs, pointing to specific allegations against each accused. The court noted the admitted facts of the case, including the purchase of goods, sale to customers, and dishonor of the cheque. The complaint explicitly mentioned the relationships between the accused and their active involvement in the company's transactions, satisfying the requirements of Section 141 of the Act, 1881.The court analyzed Section 141 of the Act, 1881, which deems individuals guilty if in charge of the company's business at the time of the offense. It concluded that the complaint sufficiently implicated A.3 to A.5, the company directors, and A.2, who issued the dishonored cheque, under Section 141(1). The court found that specific roles need not be detailed for these accused as the basic averments were enough to establish their liability. However, regarding A.6, the court emphasized the need for a specific role attribution due to his involvement in the transactions, potentially falling under Section 141(2) of the Act, 1881.The court dismissed the Criminal Petitions, stating that the accusations against A.6 required further examination during the trial. It clarified that the truth of the allegations should be determined in due course and that a detailed inquiry was premature at the current stage. The judgment highlighted the distinction in liability assessment between the different accused based on their roles and involvement in the company's affairs, ultimately upholding the continuation of the legal proceedings.