TaxTMI 
TaxTMI 
2019 (4) TMI 2
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.... Vide the impugned order it was observed to the effect: "01.06.2015 Fresh case U/s 138 of NI Act received. It be checked and registered. Present: AR of the Complainant alongwith Ld. Counsel. Pre-summoning evidence by way of affidavit has been tendered. Arguments have been heard upon the point of summoning of the accused. After going through the complaint, documents attached with it and testimony of the complainant, I am of the view that prima facie offence U/s 138 of Negotiable Instruments Act is made out. All the statutory requirements have been complied with. Case filed is within the period of limitation. Let the accused be summoned on filing of PF, RC/ Speed Post/approved Courier service as well as Email for 31.08.2015. Accused be served through affixation also in terms of section 65 of Code of Criminal Procedure 1972. Complainant is at liberty to accompany with the process server for service of the summons." 3. The averments made in the complaint that was filed by the respondent before the learned Trial Court state inter alia to the effect: "1.That the complainant is a Pvt. Ltd. Company having its registered office at the address mentioned hereinabove. Comp....
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....house and raised invoices upon accused no. 1 which needs to be paid by the accused nos. 2 and 3 in the capacity of Directors of the accused no. 1 for the supply of the said products. 8.That the said material was duly received by the accused persons to their complete satisfaction and there were no complaints whatsoever of any nature regarding the quality and quantity of the products supplied to the accused persons by the complainant Company. That the complainant Company was constrained to raise the invoices accordingly and the same were duly acknowledged by the accused persons. As the accused persons was irregular in making payments complainant Company was constrained to maintain a running account of the transactions made with the accused persons. 9.That the accused no. 2 on behalf of the accused no. 1 vide Purchase Order No. PO/029234 dated 29.1.2015 had placed an order for supplying 700 HTC mobile phones, Desire 820 Q/White 150 pieces and HTC mobile phone Desire 820 Q/Grey 550 pieces to the complainant Company worth Rs. 1,27,75,000/- (Rupees One Crore Twenty Seven Lacs Seventy Five Thousand only). 10.That the said HTC mobiles were duly supplied by complainant Company to t....
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.... of your existing legal liability. Details of the cheques are as under: Sr.No. Cheque No. Date Amount (Rs.) 1. 017015 12.2.2015 25,60,119/- 2. 017016 13.2.2015 25,60,119/- 3. 017017 14.2.2015 25,60,119/- 4. 017018 13.2.2015 6,98,214/- 5. 017019 15.2.2015 6,98,214/- 6. 017020 14.2.2015 6,98,214/- Total 97,75,000/- 16.That accused no. 2 on behalf of accused no. 1 while issuing the aforesaid cheques, assured and promised to complainant Company that the above said cheques would be duly honoured upon its presentation and further guaranteed to make the payments of legal debts and dues payable to complainant Company. 17.That the cheques mentioned in para 15 at sl. nos. 1 to 6, when presented for clearance by eomplainant Company to its banker, State Bank of India, South Ext. Part-I, New Delhi - 110049, within the statutory period; was returned back unpaid containing the remark "Payment Stopped By Drawer". 18.It is evident that the accused pe....
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....persons with malafide intentions issued the aforesaid cheques for the above amount payable to the complainant Company. The said cheques were issued towards the discharge of the debt and legal liability owed by the accused persons towards the complainant Company. Since the said cheques were returned back dishonoured and unpaid for the reasons and grounds stated above, the accused persons in those circumstances committed an offence as contemplated under Chapter XVII of the N.I. Act, 1881, as amended from time to time and therefore, held yourself liable to action in that behalf. 22. The above dishonor of the said cheques is in direct contravention of the promises and assurances made by the accused persons to the complainant Company assuring due encashment of the aforesaid cheques upon presentation for the second time also. 23. That within a period of 30 (thirty) days of the receipt of information from its banker that the said cheques have been returned unpaid due to above mentioned remarks. the complainant Company sent a legal Notice dated 17.4.2015 through registered post on 17.4.2015 at the aforementioned address of the accused persons demanding payment of the dishonoured cheq....
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....of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. 1. Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima-facie constitute any offence or make out a case against the accused. 2. Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers Under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. 3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. 4. Where, the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer wit....
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....ondents that in the case of directors or the officer of the company who signs the cheque on behalf of the company there is no need to make a specific averment that he was in-charge of and was responsible for the conduct of the business of the company or to make any specific allegation and that the mere fact that the dishonoured cheque was signed by the respondent No.2 on behalf of the company would give rise to the responsibilities under Section 141(2) of the Negotiable Instruments Act, 1881. 9. It was also submitted on behalf of the respondent that the averments in the complaint that the Directors, other than the director who signed the cheque in question on behalf of the plaintiff i.e. the petitioner No.1 company, would be liable to face the prosecution without an averment being made in a complaint that such director was in-charge and was responsible to the company for the conduct of the business of the company would suffice as petitioners No.2 and 3 in the present petition are in any event Directors of the petitioner No.1 since 1986 till date and as also indicated from the website of the Ministry of Corporate Affairs. 10. It was also submitted on behalf of the respondent t....
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....f, and was responsible to the company for the conduct of the business of the company as well as the company and such a director of the company would be liable to be prosecuted and punished. The proviso thereto to Section 141 of the Negotiable Instruments Act, 1881, however lays down that no person would be rendered liable to be punished if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the to commission of such offence. 17. As laid down by the Hon'ble Supreme Court in K.K.Ahuja (supra) while summarizing the Section 141 of Negotiable Instruments Act, 1881 it has been observed to the effect: 20. The position under section 141 of the Act can be summarized thus : (i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix `Managing' to the word `Director' makes it clea....
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....r putting her defence and can be so contended before the learned Trial Court at the stage of analysis of evidence that is led by either side. 20. Presently in view of the averments that have been made in the plaint coupled with the factum that the petitioner No.3 continues to be a director of the petitioner No.1, it cannot be held that there is an unimpeachable evidence or acceptable circumstances which can lead to the conclusion that the petitioner No.3 could not have been in charge or responsible for the conduct of the business at the relevant time and that making her stand the trial would be an abuse of the process of Court as no offence was made out against her. The same undoubtedly is a matter of evidence and the petitioner No.3 can undoubtedly lead her defence in relation thereto. 21. As regards the contention raised on behalf of the petitioner herein that in relation to the six cheques adverted to herein above, there was only one criminal complaint that had been filed i.e. CC No. 1529/2015 out of which the impugned order arises, in relation thereto it is essential to observe in as much as it was laid down by this Court in Sharma Contracts India Pvt. Ltd. V. State & Anr....
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....ogether for the dishonour of 27 cheques which in fact forms the same transactions. In this respect Mr. Sathyanarayanan referred to the decision in K. Govindaraj v. Ashwin Baral, I (1998) BC 581=1998 Crl.L.J 22, which was a case in respect of 6 dishonoured cheques given to the complaint within a period of three months. The Madras High Court held that the cheques through given on different dates, were presented on one particular date as requested by the accused, and, therefore, one offence must be deemed to have been committed in respect of the single transaction. It was further held that acts of giving the cheques were merged together to form the same transaction. Therefore, the accused should be charged and tried at one trial for such an offence. It was, however, held that even otherwise Section 220(1) of the Cr. P. Code permits for such a single trial. I am inclined to adopt the same view taken by the Madras High Court. Consequently, it will have to be held that the challenge given by the petitioners in this petition cannot be sustained. The learned Magistrate must be held to be right in holding that the petitioners can be tried at a single trial for the dishonour of all the 27....
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....C (Cri) 1471] is correct, there is no option for the holder to defer institution of judicial proceedings even when he may like to do so for so simple and innocuous a reason as to extend certain accommodation to the drawer to arrange the payment of the amount. Apart from the fact that an interpretation which curtails the right of the parties to negotiate a possible settlement without prejudice to the right of holder to institute proceedings within the outer period of limitation stipulated by law should be avoided we see no reason why the parties should, by a process of interpretation, be forced to launch complaints where they can or may like to defer such action for good and valid reasons. After all, neither the courts nor the parties stand to gain by institution of proceedings which may become unnecessary if cheque amount is paid by the drawer. The Magistracy in this country is overburdened by an avalanche of cases under Section 138 of the Negotiable Instruments Act. If the first default itself must in terms of the decision in Sadanandan case [(1998) 6 SCC 514 : 1998 SCC (Cri) 1471] result in filing of prosecution, avoidable litigation would become an inevitable bane of the legisla....
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....top Payment". No evidence of unimpeachable quality has been brought on record by the respondent nos. 1 and 2 to indicate that allowing the proceedings to continue would be an abuse of process of the court." 24. As regards the contention raised on behalf of the petitioner that there is nothing in the complaint to indicate that there was any insufficiency of funds in the accounts of the petitioners and thus the ingredients of Section 138 of the Negotiable Instruments Act, 1881 are not brought forth, it is essential to observe that it has also been laid down by the Hon'ble Supreme Court in HMT Watches Ltd. vs. M.A. Abida and Anr. (2015) 11 SCC 776, vide para 14 thereof to the effect: "14. Lastly, it is contended on behalf of Respondent 1 that it was not a case of insufficiency of fund, as such, ingredients of the offence punishable under Section 138 of the NI Act are not made out. We are not inclined to accept the contention of the learned counsel for Respondent 1. In this connection, it is sufficient to mention that in Pulsive Technologies (P) Ltd. v. State of Gujarat [Pulsive Technologies (P) Ltd. v. State of Gujarat, (2014) 13 SCC 18 : (2014) 5 SCC (Civ) 684 : (2014) 5 SCC (C....