TaxTMI 
TaxTMI 
2022 (4) TMI 246
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....ection 138 of Negotiable Instrument Act as the cheques issued by the petitioners on behalf of M/s. Saini Industries Limited were dishonoured for want of fund in the account. Thereafter, the statutory notice having been served, the repayment of the amount was not made, consequently different complaints under Section 138 of Negotiable Instruments Act were filed. 3. The facts show that initially after filing of the complaint, objections were raised by the petitioners by filing interlocutory applications about maintainability of the petition. The same having been dismissed, revision was preferred and the Sessions Judge dismissed the revision by holding that the Directors cannot be absolved of their criminal liability, despite the fact the company has not been arrayed as an accused. Having aggrieved by the said order, the present petitions. 4. The legal question which arises for consideration that whether the complaint under Section 138 of Negotiable Instruments Act without arraigning the company as an accused would be maintainable ? 5. Mr. K. Rohan, learned counsel for the petitioners contended in the memo of complaint the petitioners were described as either Directors of Sain....
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....complaint under Section 138 of Negotiable Instruments Act would not lie. In recent judgment in case of Hindustan Unilever Ltd. v. State of Madhya Pradesh (2020) 10 SCC 751, at para 23 the Court held the person who is in charge of and responsible to the company for the conduct of business would be guilty of the offence. Para 23 is reproduced hereinbelow : "23. Clause (a) of sub-section (1) of Section 17 of the Act makes the person nominated to be in charge of and responsible to the company for the conduct of business and the company shall be guilty of the offences under clause (b) of sub-section (1) of Section 17 of the Act. Therefore, there is no material distinction between Section 141 of the NI Act and Section 17 of the Act which makes the company as well as the nominated person to be held guilty of the offences and/or liable to be proceeded and punished accordingly. Clauses (a) and (b) are not in the alternative but conjoint. Therefore, in the absence of the company, the nominated person cannot be convicted or vice versa. Since the Company was not convicted by the trial court, we find that the finding of the High Court to revisit the judgment will be unfair to the appel....
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....g the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. 8. The judgment of the three-Judge Bench has since been followed by a two-Judge Bench of this Court in Charanjit Pal Jindal vs. L.N. Metalics (2015) 15 SCC 768. There is merit in the second submission which has been urged on behalf of the appellant as well. The proviso to Section 138 contains the pre-conditions which must be fulfilled before an offence under the provision is made out. These conditions are: (i) presentation of the cheque to the bank within six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (ii) a demand being made in writing by the payee or holder in due course by the issuance of a notice in writing to the drawer of the cheque within thirty days of the receipt of information from the bank of the return of the cheques; and (iii) the failure of the drawer to make payment of the amount of money to the payee or the ho....
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....que to payee; and (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid." 12. The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or 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. 13. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused." 11. In case of Aneeta Hada v. Godfather Travels & Tours Private Limited (2012) 5 SCC 661, the Supreme Court held th....
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....he view expressed in Sheoratan Agarwal v. State of M.P. [(1984) 4 SCC 352 : 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada v. Indian Acrylic Ltd. [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] is overruled with the qualifier as stated in paragraph 51. The decision in U.P. Pollution Control Board v. Modi Distillery [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove." 12. The Supreme Court further in case of Ramraj Singh v. State of M.P. (2009) 6 SCC 729 held that to launch a prosecution against the alleged Directors there must be a specific allegation in the complaint as to the part played by them in the transaction. It held that there should be clear and unambiguous allegation as to how that the Directors are incharge and responsible for the conduct of the business of the company. 13. Now referring back to the allegations and averments made in the complaint under Section 138 of Negotiable Instrument Act, though the petitioners have been described somewhere in the petition as Director in some petition for and on behalf of Saini Indus....