TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 1302
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....ccount". Thereupon the opposite party issued notices under Section 138(b) addressing it to Vijay Kumar Kanoria, son of Govind Prosad Kanoria, authorised signatory of Gena Marketing Pvt. Ltd. at the registered office of the company In spite of receipt of such notices, no payment was made and the impugned prosecutions were lodged. For the sake of adjudication, one of such notices sent under Section 138(b) of the Negotiable Instruments Act, 1881 is set out herein below:-- Date : 26.07.2010 To Sri Vijoy Kumar Kanoria Son of Govind Prosad Kanoria Authorized signatory of Gena Marketing Pvt. Ltd. 27A, Waterloo Street Kolkata - 700 069. Sub: Dishonour of cheque bearing cheque No. 272223 of State Bank of India, Esplanade, 9B, Esplanade Row Street, Calcutta, West Bengal - 700 069 dated 30.6.2010 amounting to Rs. 3,50,00,000/- My Client : Somnath Guin son of Sri Jamini Kanta Guin, Rajmata Bhawan, Burrabazar, Medinipur Town, District : Paschim Medinipur. Sir, "Under instructions from and on behalf of my client above named, this is to inform you that the cheque amounting to Rs. 3,50,00,000/- under reference has been deposited by my client to his Banker, Axis Bank Ltd., Kharagpur Bra....
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.... a chance to the drawer to rectify his omission [see Suman Sethi Vs. Ajay K. Churiwal And Another, (2000) SCC (Cri) 414 (Para-9)]. 10. Let me examine whether the notice under section 138(b) of the Act in this case meets such requirement. Petitioner No. 2 to whom the notices were addressed is the director and authorised signatory of the company who represented the company throughout the transaction which is the subject-matter of the impugned prosecution. It is claimed that he had signed the agreement from which the liability arose in respect whereof the dishonoured cheque was issued. He is also alleged to be the signatory of the cheque and had received the notice of dishonour at the registered office of the company. Under such premises, the petitioner No. 2 can be safely assumed to be the alter ego of the company. He is the principal director of the company and was the human agency representing the company in the transaction which is the subject matter of prosecution. A corporate entity has to function through a human agency and the mental state of such human agency is attributable to the company. Hence, knowledge of petitioner No. 2 of such notice and his response thereto can be a....
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....rovision. Traditionally, penal provisions call for strict interpretation but such view is increasingly yielding to a more purposive interpretation in recent times. While interpreting the requirement of sending a notice under section 138(b) of the Act in this perspective the object and intention of the legislature must not be lost sight of and a narrow pedantic approach ought not to be taken so that a defaulter may escape penal consequences. Negotiable Instruments Act is a legislation operating in the commercial field and section 138 thereof was incorporated to give tooth and claw to the legislation so as to ensure greater accountability and creditability in commercial transactions relating to cheques. This legislative intention ought to be the guiding principle while construing the validity of notice issued under the aforesaid provision of law. 15. In Standard Chartered Bank & Ors. Vs. Directorate of Enforcement & Ors., (2005) 4 SCC 530, a Constitution Bench while upholding purposive construction of penal statutes, inter alia, held that - "24. The distinction between a strict construction and a more free one has disappeared in modern times and now mostly the question is "what is ....
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....ld that a penal statute must be given a fair, pragmatic and commonsense interpretation so as to fulfil its object. In this perspective, I am unable to accept the contention of the petitioners that notice under section 138(b) of the Negotiable Instruments Act must receive a strict and pedantic interpretation. On the other hand, a pragmatic interpretation of such notice, which furthers the intention of the legislature is to be adhered to. 18. Finally, no prejudice has been caused to the petitioners in the instant case in the manner in which the notice was given. Admittedly, notice was received by the petitioner No. 2, that is, the alter ego of the company who was acting on its behalf and, hence, the company ought to be attributed with the requisite knowledge of such notices. The knowledge of petitioner No. 2 with regard to the notice of dishonor being imputed upon the accused company, there cannot be any escape from the conclusion that the drawer of the cheque, that is the company itself, had sufficient notice of dishonor of the cheque as required in law and no prejudice can be shown to have been caused to the petitioner company on such account. 19. The issue as to whether a notice....
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..... Godfather Travel & Tours Pvt. Ltd. reported in (2012) 5 SCC 661 and Krishna Texport and Capital Markets Limited Vs. Ila A. Agarwal and Ors. reported in (2015)8 SCC 28. 21. I am unable to subscribe such contention. The issue before me did not fall for consideration in the aforesaid cases relied on by Mr. Bhattacharjee. In Aneeta Hada the Apex Court was concerned as to whether prosecution of a director could be maintained in the absence of prosecution of the accused company. The Apex Court held that the prosecution of an accused company was sine qua non for prosecution of a director save and except where prosecution of the company is a legal impossibility. In Krishna Texport (supra) the issue was just the reverse. The notice had been served on the accused company but not on the directors. In such situation, the Apex Court while upholding such prosecution inter alia, held as follows: "The persons who are in charge of the affairs of the company and running its affairs must naturally be aware of the notice of demand under Section 138 of the Act issued to such company. It is precisely for this reason that no notice is additionally contemplated to be given to such Directors." 22. Hen....