TaxTMI 
TaxTMI 
2024 (2) TMI 191
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.... are now taken up together for adjudication by dint of this common judgment. 2. The following are the accused persons, in the said complaint case:- (i) M/s. AKJ Mineral Limited, a company, (ii) Sanjay Jain, (iii) Navin Kumar Jain, (iv) Ajay Kumar Jain, (v) Vimal Kumar Jain, (vi) Ankit Jain, (vii) Hansraj Jain. 3. Amongst the said accused persons, accused persons no. 7, 5 and 6 respectively, namely (i) Hansraj Jain, (ii) Vimal Kumar Jain, (iii) Ankit Jain, have filed CRR 196 of 2016. 4. Similarly, accused persons no. 2, 3 and 4 respectively, namely, (i) Sanjay Jain, (ii) Navin Kumar Jain, (iii) Ajay Kumar Jain, have filed CRR 197 of 2016. 5. Also likewise, accused no. 1 in the said complaint case, that is, the company and a juridical person, namely, M/s. AKJ Mineral Limited is the petitioner in CRR No. 278 of 2016. 6. Basically, the petitioners respectively, in the said three criminal revision cases have challenged the maintainability of the complaint case and legality and propriety of the said complaint, as also the process undertaken by the trial Court subsequent to filing of the complaint, particularly ....
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....rsons had issued two cheques to the complainant being nos. 117588 and 117590 respectively, dated April 8, 2014, of the amounts of Rs. 2,50,00,000/- and Rs. 1,55,00,000/- respectively. 12. The complainant/O.P has further stated in the complaint that, the said two cheques were deposited in bank and were dishonoured and not enchased due to insufficiency of fund. 13. Matter was again outstretched as the petitioner/accused persons, even after dishonour of their cheques, promised to pay back the said amount of money, within 2/3 months more, but in vein. 14. Their alleged mischief was again fortified, as they issued a letter on December 29, 2014, undertaking therein, that by the date January 29, 2015, i.e, by the next one month from the date of the said letter, the entire advanced amount of money, as mentioned above, would be repaid by them. Subsequently, on January 29, 2015, a cheque was issued of an amount of Rs. 2,02,71,000/- to the complainant/O.P by the petitioners/accused persons. Additionally, they have issued two post dated cheques dated January 29, 2015, bearing Nos. 117614 and 117615 respectively. However, the complainant/O.P says that the petitioners/accused persons th....
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....the record be transferred to the file of Ld. Metropolitan magistrate 14th Court for enquiry and disposal according to law". 20. The subsequent proceedings, before the transferee Court may be mentioned in the following manner :- Date of Order Order 15.07.2015 "Received the case record by way of transfer from the Court Ld. C.M.M. Cal. Complainant is present and files an affidavit along with documents U/S. 145 of Negotiable Instruments Act. Perused the original documents, affidavit and petition of complainant. It appear form the case record that a prima facie case has been made out for the offence punishable U/S. 138 of Negotiable Instruments Act against the accused person viz. Accordingly issue summons, against the accused person." 24.08.2015 "Complainant is absent by petition and prays for time No SR is received. To 11.12.2015 for SR." 11.12.2015 "Complainant is present Ld. Advocate for the Complainant files a petition along with postal track report and praying for issuance of W/A & O/A against accused persons. Perused the petition. And postal track/A/D Card/report. Hd. Considered, prayer is allowed. ....
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.... thereof as well. According to him, in this case those specific requirements of law are not fulfilled against the "director" and "non-director" petitioners/accused persons. Hence, the prosecution against those persons cannot be sustained, he says. 23. So far as the petitioner company, in CRR No. 278 of 2016 is concerned, Mr. Bhattacharya has curlicued argument concerning and testing the applicability of the provisions of the statute regarding issuance of an order of attachment, against a juridical person, like it. He argues in favour of the proposition that an order of attachment against a company suffers from palpable illegality being beyond the four corners of law. He has emphasized on section 305(4) of the Cr.P.C. which according to him shows that in case of absence of company representative, the law restricts itself from applying the provisions, meant to be applied to a representative, to the company itself. He refers to a judgment of this Court reported in 2003 CCrLR (Cal) 634 [O.N. Goenka vs State of West Bengal & Anr], and also of Punjab & Haryana High Court reported in 2014 (3) RCR (Cri) 761 [Jay Switches India Private Limited vs State of Haryana], on this point. He has ....
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.... undertook to pay the entire amount and thus by misleading the Court could manage to secure an order of stay of the proceedings. According to Mr. Gupta, the same was misleading for the reason that the accused persons have never thereafter been prompted to pay the money back to the complainant. Also that such an order of stay was obtained from this court in absence of the complainant. It has been further pointed out that even in the Supreme Court, the accused persons have benefited themselves with lenient orders under the misrepresentation of fact that they are willing and agreeable to amicably settle the matter with the complainant. For this, Mr. Gupta has relied on various orders of this court passed in CRR No. 1397 of 2015 (with CRR No. 1475 of 2015 and CRR No. 1476 of 2015) and also of the Supreme Court. It has been submitted that the petitioner's intention has never been of repayment the amount of money deceitfully taken from the complainant. So far as the challenge made by the petitioners as to the maintainability of the complaint case, as mentioned above lodged by his client, before the Magistrate is concerned, Mr. Gupta has submitted that the complainant in his written compl....
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....in India. This Act is not just a mere statute; it plays a crucial role in facilitating trade and commerce, ensuring financial certainty and credibility. The Negotiable Instruments Act, 1881, stands on certain unique features: o Transferability: It emphasizes the free transferability of the instrument from one party to another. o Rights of the Holder: The Act provides rights and protections to the holder of the instrument. o Legal Redress: It provides a legal mechanism to seek redressal in case of dishonour of the instrument. o Presumptions: The Act assumes certain presumptions regarding negotiable instruments. A Negotiable Instrument, in simple terms, refers to a document that guarantees payment of a specific amount from one party to another. The primary characteristics of these instruments are: o Transferability: The instrument can be transferred from one person to another. o Right to Payment: The person holding the instrument has the right to claim the payment. o Unconditional Payment: The payment guaranteed is to be made without any conditions. The law does not exactly define what a Negotiable Instrument is, but i....
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....n case of dishonour of a cheque by the bank, even upon instructions for non-payment by the drawer, would amount to be 'dishonour' within the meaning of section 138 of the said Act. Thus mere issuing of a cheque would constitute an offence, if it bounces. 27. Here, one may have regard to the provision under Section 141 of the said Act, as extracted below:- "141. Offences by companies. 1. If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and 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 accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or ....
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....ough the legal fiction envisaged in that Section. The status of the petitioners in CRR 196 of 2016 and CRR 197 of 2016 as the 'non directors' and 'directors' of the accused company respectively, is not denied in this case. They have made out a case that to impeach their liability or even involvement in the alleged offence, absence of any specific averment in the complaint, as required under the law for such an implication of them, would be sufficient and that should prompt any prosecution against them, to be halted immediately. As mentioned earlier, several verdicts have been relied on to invigorate this argument of the said petitioners. As to what would be the requisite averment to implicate a director of a company along with the company under Section 141 of the Negotiable Instruments Act, 1881, has been settled by the Supreme Court in the case of SMS Pharmaceuticals Ltd. vs Neeta Bhalla & Anr. reported in (2005) 8 SCC 89. The Supreme Court has exonerated directors of a company from any deemed liability and says that it is necessary to specifically aver in the complaint that at the time of the offence, the said person was in charge of and responsible for the conduct of the busines....
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....e for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases. (c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141." 30. This view has further been fortified with coming into the daylight of the subsequent judgments of the said Court of the SMS Pharmaceuticals Ltd. (2007) 4 SCC 70 (supra), K. Srikanth Singh (supra) and Pawan Kumar Goel (supra), as relied on by the petitioners. In Shaleen Khe....
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....elevant point of time, excepting the present petitioners, there were no other 'directors' or 'nondirectors', in the said company and also that the concerned cheques were issued by them. Considering the attending facts and circumstances as discussed above and the object and purpose of the statute itself as delineated above, this Court hardly finds any impropriety in the orders passed by the Metropolitan Magistrate regarding taking cognizance of offence under section 138 and 141 of the Negotiable Instruments Act. Hence, in view of availability of strong prima facie material against the present petitioners in CRR 196 of 2016 and CRR 197 of 2016, so far as the offence under Section 138/141 of the Negotiable Instruments Act, 1881 is concerned, this Court finds no cogent ground to set aside the complaint or quash the proceedings being Complaint Case No. 0023103 of 2015, in any manner what so ever. 33. On behalf, of the petitioner company in CRR 278 of 2016, further argument has been made that the statutory provision of issuance of warrant of arrest, would not be applicable in case of this petitioner and on this score the impugned order is liable to be set aside being illegal. As discu....
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....d be arrest and captivity of the concerned person, against whom warrant has been issued. The provision under Section 73 (1) is significant and noted, as below:- "73. Warrant may be directed to any person.- (1) The Chief Judicial Magistrate or a Magistrate of the first class may direct a warrant to any person within his local jurisdiction for the arrest of any escaped convict, proclaimed offender or of any person who is accused of a non-bailable offence and is evading arrest." The word 'arrest' would literally mean apprehending a person or take a person into custody. Court would require execution of warrant of arrest issued by it, by the police officer or any other person, so directed, to nail the accused and produce him before the Court. On this, Mr. Bhattacharya has elaborately argued that, a company being a juridical person, though comes within the purview of definition of a 'person', as provided under the law, but cannot be subjected to the said provisions of law and "warrant of arrest" cannot be issued against a company. Both the parties have relied on eloquent arguments and sagacious judicial pronouncements as regards this. 35. While enumerating p....
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....cribed under section 73(1) of the CrPC, that for issuance of a warrant, the Magistrate has to be satisfied that the person is evading arrest does not apply in case of a company. This is firstly because the actual physical apprehension in case of a body corporate, may not be a feasible proposition. Also that a company, physical existence of which is to be conceived through its Board of Directors and a permanent registered office, can hardly be perceived as a person evading arrest, as envisaged in section 73(1) of the Code. It would be pertinent to mention the portion of judgment of this Court has referred to by the petitioner in this connection, i.e, O.N. Goenka vs. State of West Bengal reported in 2003 C Cr LR (Cal) 634, the Hon'ble Court has held as follows:- "21. For such reasons and to obviate further difficulties with regard to the progress of the trial, I like to put it on record that while setting aside the portion of the aforesaid order as indicated above, I direct the learned Magistrate to invoke the provision of Section 63 of the Code of Criminal Procedure for inviting the attention of the accused No. 1 to select its representative for the purpose of conclusion of....