TaxTMI 
TaxTMI 
2017 (9) TMI 1
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....ents Act, 1881 (hereinafter referred to as "THE ACT"). The substance of the complaint is that the appellant herein drew a cheque bearing No. 064159 dated 10.8.2012 for a sum of Rs. 39 lakhs (Rs.39,00,000/-) on the Syndicate Bank, Armenian Street, Chennai in favour of the respondent. According to the complaint, the said amount of Rs. 39 lakhs is the amount due from the appellant towards the balance of the sale consideration in connection with the sale transactions referred to above. 4. The said cheque was presented for collection by the respondent through his bank (Indian Bank, High Court Branch, Chennai) on 28.8.2012 which was dishonoured on the ground that the account on which the cheque was drawn had been closed. 5. On 10.9.2012, the respondent issued a notice contemplated under clause (b) of the proviso to Section 138 of THE ACT. By the said notice, the appellant was informed that the cheque had been dishonored and further the appellant was called upon to pay the sum of Rs. 39 lakhs within 15 days from the date of the receipt of the notice. According to the complaint, the notice was served on the petitioner on 14.9.2012 but the petitioner neither responded to the notice no....
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.... appellant. There appears to be some dispute regarding the identity of the person who signed the cheque. It can be seen from para 2 of the complaint, the said cheque was handed over to the respondent through "an unknown person at Chennai High Court premises". 11. Assuming for the sake of argument that an amount of Rs. 39 lakhs was due towards the balance of the sale consideration of the above-mentioned three sales from the FIRM of which the appellant is said to be the Managing Partner. The cheque in question was drawn by a private company (DAKSHIN) (a third party to the sale transactions and such a payment is permissible under the Indian Contract Act) and allegedly signed by the appellant in his capacity as the Director of DAKSHIN. 12. The learned Counsel for the appellant argued; (a) Since the cheque in question was drawn on the account of DAKSHIN, the person primarily liable for punishment under Section 138 of THE ACT would be DAKSHIN. The appellant herein being the alleged signatory in his capacity as the Director of DAKSHIN would only be vicariously liable (if at all) for the offence committed by DAKSHIN. In view of the law declared by this Court in Aneeta Hada (....
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....rlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, 20 [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.") stipulates inter alia that (i) the payee of the cheque must give a notice in writing to the drawer of the cheque within 30 days from the "receipt of the information by him from the bank regarding the return of the cheque as unpaid"; (ii) the notice must contain a demand for the payment of the amount due on the cheque; and (iii) upon the receipt of the notice, if the drawer of the cheque fails to make payment within 15 days of the receipt of the notice, prosecution could be launched within one....
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....tand the decision of the trial court. We are given to understand that the order is made in vernacular and only a translated copy (We are not informed whether it is an official translation by either of the courts below or any one of the learned counsel who appeared in the case or by the parties.) of the same is placed before us. Be that as it may, the 'relevant' portion of the translated copies reads as follows:- "Hence whether cheque was drawn by company trial on the complaint can be possible only if company is impleaded in complaint. Hence as far as this case on hand, without impleading Dakshin Granite (P) Ltd trial can not be conducted for impleading the company and conditions as per Section 138 should be fulfilled. As per Section 138 Notice has been sent to Dakshin Granites - hence conditions fulfilled. It is prayed by complainant that he should be permitted to implead company and also condone the delay. As per Section 142, complaint is to be filed with one month which has been done. Hence as per Section 142(b) no separate petition is required after cognizance of offence. The offenders of crime can be decided. To take conginsance it is not req....
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....cognizance of any offence punishable under Section 138 unless a complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to Section 138. The relevant portion of Section 142 reads as follows:- "142 Cognizance of offences. -Notwithstanding anything contained in the Code of Criminal Procedure, 1973- (a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138: Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period." 19. The preliminary facts constituting an offence (However, this Court in MSR Leathers v. S. Palaniappan and Another, (2013) 1 SCC 177 held; 10. Proviso to Section 138, however, is all important and stipulates three distinct conditions precede....
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....f the offence against DAKSHIN is flawed. Section 141 stipulates the liability for the offence punishable under Section 138 of THE ACT when the person committing such an offence happens to be a company - in other words when the drawer of the cheque happens to be a company. Relevant portion of Section 141 reads as follows:- "Section 141. Offences by companies.- (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:" 21. This Court in Aneeta Hada, had an occasion to examine the question "whether an authorised signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 (for brevity "the Act") without the company being arraigned as an accused" and held as follows:- "59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141....
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....of the CrPC. 22. The CrPC is an enactment which is designed to regulate the procedures governing the investigation of crimes in order to get the perpetrators of the crime punished. A crime is an act or omission prohibited by law attracting certain legal consequences like imprisonment, fine etc. Obviously, acts or omissions constituting offences/crimes are capable of being committed only by persons either natural or juridical. The CrPC imposes a duty on the investigating agencies to gather evidence necessary to establish the occurrence of a crime and to trace out the perpetrators of the crime in order to get them punished. Punishment can be inflicted only by a competent Court but not by the investigating agency. Courts are authorised to inflict punishment if only they are satisfied that the evidence gathered by the investigating agency is sufficient to establish that (1) a crime had been committed; and (2) the persons charged with the offence (accused) and brought before the Court by the investigating agency for trial are the perpetrators of the crime. Under the Scheme of the CrPC, any investigating agency (normally the police) is bound to investigate by following the proce....
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....s that inspite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand. A fact which the complainant can only assert but not prove, the burden would essentially be on the drawer of the cheque to prove that he had in fact made the payment pursuant to the demand. 24. By the nature of the offence under Section 138 of THE ACT, the first ingredient constituting the offence is the fact that a person drew a cheque. The identity of the drawer of the cheque is necessarily required to be known to the complainant (payee) and needs investigation and would not normally be in dispute unless the person who is alleged to have drawn a cheque disputes that very fact. The other facts required to be proved for securing the punishment of the person who drew a cheque that eventually got dishonoured is that the payee of the cheque did in fact comply with each one of the steps contemplated under Section 138 of THE ACT before initiating prosecution. Because it is already held by this Court that failure to comply with any one of the steps contemplated under Section 138 would not provide "cause of act....