TaxTMI 
TaxTMI 
2019 (9) TMI 1540
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....o. 20 of 2016. A schedule of payment was set out and the Memorandum of Understanding also makes a mention to four post dated cheques and the issue in the present Criminal Application revolves around the third cheque bearing No. 034405 dated 31/01/2017 issued for an amount of Rs. 2,94,805/-. 3. The Complainant, being aggrieved by the dishonour of the cheque, on 13/02/2017 addressed a notice on three addressees viz. one Mr. Vali Mohamed Ismail Merchant, Director of Landmark Real Estate Developers Limited at his residence at 401, Khaiber Apartments, 83, Prof. Almeidia Road, Bandra (West), Mumbai. The second noticee is again Mr. Vali Mohamed Ismail Merchant, Director of Landmark Real Estate Developers Limited and the address is given as Digital Planet, 181, Hill Road, Bandra (West), Mumbai-400050. The third noticee is the Applicant Mr. Shehzad Vali Mohamed Ismail Merchant, Director of the Landmark Real Estate Developers Limited and the notice is addressed at his residence located at Andheri, Mumbai. Since there was no compliance of the said notice, complaint under Section 138 of the Negotiable Instruments Act, 1881 ("NI Act") came to be instituted which resulted into issuance of proce....
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.... Estate Developers Limited as "Developers" and he would rely upon the terms contained in the Memorandum of Understanding to advance his submission that the liability was accepted not only by the Company but also by the Directors of the Company and, since, it is the joint liability which was shared by the signatories of the Memorandum of Understanding, the Applicant cannot now be absolved from his responsibility and specifically by virtue of Section 141 of the NI Act. He would emphasize that the Additional Sessions Court has clearly appreciated the said stand and has held that since the Applicant was aware of the liability and was signatory to the Memorandum of Understanding, he is bound by the Memorandum of Understanding and the consequence prescribed under Section 141 of the NI Act must necessarily follow. 7 . It is not in dispute that the Applicant was a Director of Landmark Real Estate Developers Limited, which is a Company incorporated under the provisions of the Companies Act. The documents placed on record clearly reflect that on 28/12/2016 the Applicant tendered his resignation to the Board of Directors of the Company and it came to be accepted with effect from the same dat....
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....ing of notice is to give a chance to the drawer of the cheque to rectify his omissions and also to protect a honest drawer. Service of notice of demand as contemplated in Clause (b) of the proviso to Section 138 of the NI Act is a condition precedent for filing of a complaint under Section 138. By sending a notice to the Company as well as the persons in charge of and responsible for the conduct of business of the Company, the Complainant can make a demand asking him to pay the amount. The said notice can then be responded by denying that the addressee of the noticee is in no way responsible for the conduct of the business of the Company or another possibility is that efforts can be made by the Directors of the Company to make the payment and, in that event, the complainant may drop the action of filing of the complaint or on receipt of the response he may decide to file complaint only against the persons who are responsible for making the payment of the amount contained in the cheque. 10. Section 141 postulates the constructive liability of the Directors of the Company or other persons responsible for the conduct of the business of the Company and when offence is committed by the....
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....make the payment and escape the penal consequences. No other person is contemplated by Section 138 as being entitled to be issued such notice. The plain language of Section 138 is very clear and leaves no room for any doubt or ambiguity. There is nothing in Section 138 which may even remotely suggest issuance of notice to anyone other than the drawer." 12. The said judgment also deals with Section 141 of the NI Act and authoritatively lays down that Section 138 of the NI Act does not admit of any necessity or scope for reading into it the requirement that the Directors of the Company in question must also be issued individual notices under Section 138 of the NI Act. Such Directors who are in charge of affairs of the Company and responsible for the affairs of the Company would be aware of the receipt of the notice by the Company under Section 138 of the NI Act and, therefore, on the purposive interpretation such a requirement of issuance of individual notices cannot be read into Section 138. 13. The NI Act draw a succinct distinction between the provisions of Section 138 and Section 141. Merely because a Director of a Company can be vicariously held liable for the offence committe....