TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 556
X X X X Extracts X X X X
X X X X Extracts X X X X
....d co-accused Harish Bagla are responsible and Incharge of day-to-day business of the Company and they are responsible for its act. The Company is carrying on its business at different places of the country. The complainant as well as accused no.1 M/s Amrit Feeds Limited had commercial relations for the last several years and the complainant was doing business with accused no.1 M/s Amrit Feeds Limited. Apart from accused no.1 M/s Amrit Feeds Limited., the applicant and accused no.2 Harish Bagla are managing as well as responsible and In-charge of other companies also. M/s Amrit Hatcheries Pvt. Limited and M/s Amricon Agrovet Private Limited are the sister concern of accused no. 1 M/s Amrit Feeds Limited. The applicant and the accused no.2 Harish Bagla, on behalf of the Company/ accused no.1 M/s Amrit Feeds Limited., approached the complainant for purchase of DOC and as per orders placed by the applicant and accused no.2, the DOC was supplied to different places through Indian railways or by road, which was received by accused persons. The accused no.1 M/s Amrit Feeds Limited. issued cheques of Rs. 16,66,75,992/- under the signatures of accused no.2 Harish Bagla and the said cheques ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inant against the accused persons and in one of the case this Court by order dated 9/3/2017 passed in M.Cr.C. No.17940/2016, has quashed the proceedings on the ground that the complaint does not contain the basic averment with regard to the fact that whether the applicant is responsible and in-charge of the day-to-day business of the Company or not? It is further submitted that the order of this Court has already been affirmed by the Supreme Court vide order dated 4/5/2017 passed in SLP (Criminal) No.3325/2017. Per contra, it is submitted by the counsel for the respondent that the order passed by this Court is distinguishable on facts. From para 12 of the order passed by this Court in M.Cr.C. No.17940/2016, it is clear that while deciding the said application under Section 482 of Cr.P.C., it was observed that nothing was averred against the applicant except mentioning that the accused no.2 is the wife of accused no.1 Harish Bagla and the Director of the Company. The Court was of the view that there was no allegation to the effect that the applicant is responsible and in-charge of day-to-day business of the Company and therefore, it was held that the complaint made by the complaina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l not be liable for prosecution under this chapter." (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-For the purposes of this section, - (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm. From the plain reading of the aforesaid provision, it is clear that where the offence has been committed by a Company, then not only the Company, but every person who is in charge of or responsible to the Company for the conduct of the business at the time of commission of offence shall be deemed to be guilty of the offence. Thus, Section 141 creates vicarious/constructive liability on the person responsible for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hairman, Managing Director, Executive Director, whole-time Director and authorised signatories of Accused 1, further the offence is attributable to Accused 2 to 7 on account of their neglect to ensure and make adequate arrangements to honour the cheque issued by Accused 1 and further on account of the neglect of Accused 1 to 7 to comply with the requisition made in the demand notice issued under the provisions of Section 138(c) of the Negotiable Instruments Act within the stipulated period. The accused are therefore liable to be proceeded. * * * 4. I say that Accused 1 through Accused 2 and 3 approached the complainant Bank at its branch situated at Mumbai for a short-term loan facility for a sum of Rs. 200 crores to meet the expenditure of four ORV vessels being built at ABG Shipyard. After verifying the documents submitted the complainant Bank vide its sanction letter dated 28-4-2012 sanctioned the said facility for the purpose mentioned therein. The said terms and conditions mentioned in the sanction letter dated 28-4-2012 were duly accepted by Accused 1 by signing the same. Accused 1 also agreed to pay interest at the negotiated rate by the complainant Bank. Hereto annexe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at he was in charge of and was responsible to the company for conduct of its business nor\sufficient -There is no presumption that every Director knows about the transaction- In the absence of specific averment as to the role of co-accused Director, trial Court's order summoning him, rightly quashed by High Court. (quoted from the placitum)" 14. In view of the above factual matrix and legal analysis and on a combined reading of Sections 138 and 141 of the Negotiable Instruments Act, this Court is of the opinion that, absence of a specific averment as regards the role of the petitioner and particularly in view of the allegations levelled in the complaint that Harish Bagla, Director of the Company- Amrit Feeds Ltd. was responsible for transactions who issued the apology letter and eight cheques in question, the petitioner who is the wife of Harish Bagla and is a dormant partner/ Director of the Company and there was no active role of the petitioner in transactions of the company, summoning her by the trial Court as accused seems to be not justified." Any observation made in a judgment has to be considered in the light of the facts of the said case. When the facts of the c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bsence of basic averment that the said person is responsible and in-charge of day-to-day business of the Company. Since in the said case, the basic averments were missing, therefore, this Court had quashed the proceedings. However, paragraph 2 of the complaint contains the basic averments with regard to the fact that the applicant is not only a Director of the Company but She is responsible and in-charge of day-today business of the Company and is also doing all the transactions on behalf of the Company. Thus, in the light of the judgment passed by the Supreme Court in the case of Standard Chartered Bank (supra) as well as considering the provision of Section 141 of Negotiable Instruments Act, this Court is of the considered opinion that the complaint contains the basic averments so as to prima facie make the applicant vicariously liable for the acts of accused no.1 M/s Amrit Feeds Limited. and accused no.2 Harish Bagla. It is next contended by the counsel for the applicant that in the complaint out of which MCrC No.17940/2016 had arisen, was also containing similar allegations as contained in the complaint of the present case, and since this Court has quashed the proceedings qua ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... his apology and issued new set of cheques. This cannot be said that the subsequent cheques were issued for certain liabilities which had accrued after the issuance of first cheques. The subsequent cheques were also issued of the consideration amount of DOC, which was initially supplied by the complainant. Under these circumstances, 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. It is next contended by the counsel for the applicant that there is no specific averments in the complaint to the effect that when the transactions took place and whether the legal liability is within limitation or not because it is well established principle of law that the cheques issued for repayment of an amount which has already become time barred cannot be a subject matter of proceeding under Section 138 of Negotiable Instruments Act. The subm....