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TaxTMI 
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TaxTMI 
2021 (6) TMI 1137
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.... that the revision petitioner borrowed an amount of Rs. 8,00,000/- from the complainant and executed a cheque dated 31.1.2008 for an amount of Rs. 8,00,000/- in the name of the complainant from the State Bank of Travancore, Ernakulam Broadway branch. The complainant presented the cheque for collection through Catholic Syrian Bank, Market Road branch. The cheque on presentation was returned due to insufficiency of funds in the account of the accused. A legal notice was sent by the complainant to the accused. The notice was duly served, but the accused neither responded to the notice nor made any payment in furtherance thereto within the statutory period. The first accused is the Managing Partner of the firm and the second accused is the partner of the firm under name and style M/s. K. Velayudhan Pillai, Glass Merchant, Broadway, Ernakulam. 3. The first respondent/complainant recorded preliminary evidence before the trial court and thereafter, the accused was directed to be summoned for the offence punishable under S. 138 of the N.I. Act. Pursuant to the summons, the first accused entered appearance and the second accused was reported dead. After securing the presence of the first a....
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....ible for the business of the company and any other person, who was a director or managing director or secretary or officer of the company or due to whose neglect the company had committed the offence. According to the learned counsel for the revision petitioner, both the trial court and the first appellate court held that although the company is not an accused, the prosecution under S. 138 of the N.I. Act is sustainable. The learned counsel for the revision petitioner contended that on a plain reading of S. 141 of the N.I. Act, it is clear that a finding has to be entered that the company has committed the offence and such a finding cannot be recorded unless the company is before the court, more so, when it enjoys the status of a separate legal entity. According to the learned counsel for the revision petitioner, the company or firm, although a juristic person, is a separate entity. Its directors may come and go and the company remains maintaining its own reputation and standing. Thus, it is argued that unless the company or firm, the principal entity, is prosecuted as an accused, the subsidiary entity, the individual namely, accused 1 and 2 cannot be held liable for the offence pu....
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....Broadway, Ernakulam. In the affidavit dated 08.07.2008, the very same sentence is reiterated. Admittedly, the first accused is one of the partners of the firm. He himself had subscribed his signature in Ext. P1. Learned counsel for the revision petitioner would contend that even if the execution and handing over the cheque by the accused is proved by the complainant, the same would not help him to secure conviction since Ext. P1 cheque belongs to the firm, of which the accused 1 and 2 are partners and the firm is not made as a party in the case. In order to prove that Ext. P1 cheque belongs to the firm, D.W. 1 was examined and marked Exts. D1 to D5. Going by Exts. D1 to D3, it is clear that the same was relating to a new account opened by the accused after the case. At the same time, Exts. D4 and D5 would clarify that Ext. P1 cheque was drawn on the account maintained by the firm. Ext. D1 is relating to the current account No. 67089520826 in favour of Sri K. Velayudhan Pillai. It is in respect of a separate current account opening form. Ext. D4 would show that the old account number 62228 of Sri K. Velayudhan Pillai on migration to core-banking, changed as 57030066065. Ext. P1 cheq....
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.... depending on the averment made in the complaint petition. 13. At this juncture, the question arises for consideration is whether any person, who has been described under S. 141(1) and (2) of the N.I. Act can be prosecuted for the offence under S. 138 of the N.J. Act without the Company being impleaded as an accused. On a reading of Anil Hada's case, it is clear that the actual offence should have been committed by the company and then alone the other two categories of persons can also become liable for the offence and thereafter, proceed to state that if the company is not prosecuted due to legal snag or otherwise, the accused cannot escape from the penal consequences envisaged under S. 141 of the Act. In this context, it is profitable to take note of the three Judge Bench decision in Aneeta Hada v. Godfather Travels and Tools Private Ltd. (2012 (2) KLT 736 (SC)), wherein it has been held in paragraph 37 as follows: "37. We have already opined that the decision in Sheoratan Agarwal (supra) runs counter to the ratio laid down in the case of C.V. Parekh (supra) which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil H....
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....ght to have been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. The second condition is that the payee or the holder in due course of the cheque, as the case may be, ought to make a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. The third condition is that the drawer of such a cheque should have failed to make payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. It is only upon the satisfaction of all the three conditions mentioned above and enumerated under the proviso to S. 138 as clauses (a), (b) and (c) thereof that an offence under S. 138 can be said to have been committed by the person issuing the cheque." 18. It is clear from S. 138 of the N.I. Act that in spite of the demand notice referred to above, the drawer of the cheque failed to make payment within 15 days from the date of recei....