TaxTMI 
TaxTMI 
2007 (1) TMI 655
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.... and also to pay a compensation of Rs. 4 crores to the complainant society (Air Force Group Insurance Society) and in default the petitioner was required to further undergo three months simple imprisonment. The main grievance of the petitioner is that the petitioner has been convicted and sentenced in this case when, according to him, he was not a summoned accused and that he has suffered conviction and sentence in a trial in which, according to the petitioner, he was not even an accused. It was contended on behalf of the petitioner that this has resulted in gross miscarriage of justice. 2. Before the aforesaid grievance of the petitioner can be examined, it would be necessary to set out the sequence of events that have taken place in connection with this case. On 12.03.1999 a complaint was filed on behalf of the said society under Section 138 of the said Act. The complaint disclosed that, on the representation of the said company, the said society invested a sum of Rs. 2 crores for a period of 36 months through a draft dated 05.01.1996. It is alleged that the said company issued a cheque for Rs. 9.5 lakhs as well as a cheque for Rs. 1,14,521/- towards interest and a third chequ....
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....titioner an accused independent of the said company. However, it does become apparent from a reading of the complaint that the grievance of the society was not only against the said company and, initially against the accused No. 2 but also against the petitioner being the Chairman of the said company and allegedly being responsible for the day-to-day functioning of the said company. 5. By an order dated 30.05.2000 the accused were directed to be summoned for 09.05.2001. The notice/summons was consequently issued on 28.06.2000 for 09.05.2001. The same was issued to the said company through its Chairman Dilip S Dhanukar i.e., (the petitioner). The same was received as per the endorsement on the said notice, on 01.08.2000. An application under Section 319 of the Code of Criminal Procedure, 1973 was apparently moved by the complainant society on 11.04.2002 for specifically summoning the petitioner. It appears that no formal order was passed on that application. It must also be noted that the society decided to drop proceedings against Dr Tushar D Pimpale who was arrayed as accused No. 2 in the complaint filed by the society. By an order dated 08.11.2002, the proceedings against the ....
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....ay to day business of accused No. 1 Company. All the above mentioned three cheques were dishonoured on presentation due to reason of "refer to drawer". Thereafter a legal notice dated 30.10.1999 was issued to you by registered post within the prescribed time and despite service of the same you failed to make the payment within the period of 15 days from the receipt of said notice and thereby committed an offence U/s. 138 of Negotiable Instrument Act which is within in my cognizance. I hereby direct you to be tried by this court for the said offence. Sd/ M.M./New Delhi 01.03.2004. (Underlining added). 7. Consequent upon the said notice, an order was passed on 01.03.2004 itself to the following effect: 01.03.2004 Present: AR of the complainant J. Singh with counsel for complainant. Accused No. 1's Director Dilip Dhanukar with counsel. From the material on record prima facie case U/S 138 Negotiable Instruments Act is made out against Accused No. 1. Notice U/S 251 Cr.P.C. framed, accordingly, to which the Director of Accused No. 1 pleads not guilty and claims trial. Further, Director of Accused No. ....
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....the three cheques in question were issued by him and were duly signed by him. The petitioner stated that he wished to lead defence evidence. He further stated that a false complaint had been filed against the said company and that he was not the paid director of the company. He further stated that he was not running the day-to-day affairs of the company. According to him, there was a full time paid director Dr. Tushar D Pimpale for running the affairs of the company on day-to-day basis. 11. The Section 313 CrPC statement of the pet itioner clearly indicates that he was made aware of the totality of circumstances as also the role that was ascribed to him in the said offence. Significantly, the petitioner had earlier admitted that the three cheques in question had been signed by him. There was no denial of this fact in the said statement. The petitioner was aware of the allegations against him and specific to him as distinct from that against the said company. It is because of this awareness that the petitioner in the said statement specifically stated that he was neither in-charge of the said company nor was he running the day-to-day affairs of the company. It is, therefore, clea....
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....upon the said two decisions observed that keeping in view the fact that there was a specific averment in the complaint that the petitioner was in charge of and responsible for the day-to-day affairs of the company coupled with the fact that he was also a signatory of the cheques in question, the petitioner would clearly be within the ambit of Section 141(2) of the said Act and that he could not be acquitted on this ground alone. 13. It was also urged before the learned Additional Sessions Judge, as it was urged before me, that the notice under Section 251 of the Code was not given to the petitioner. After examining the said notice under Section 251, the learned Additional Sessions Judge came to the conclusion that the notice was, in fact, given to the accused (petitioner) to which he pleaded not guilty. A reference to the said notice under Section 251 which has been set out in extenso earlier clearly indicates that the petitioner was also put to notice being the Chairman and Director of the said company and also having signed the said cheques. He was notified that he was in-charge and responsible for the day-to-day business of the said company. Therefore, the learned Additional ....
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....f dishonest intention, subject to any other liability, stands satisfied. 15. Both the courts below, after examining the facts and law on the subject, had acquitted the accused in respect of cheque No. 552062 which was for the amount of Rs. 9.5 lacs on account of the fact that the legal notice was not issued within the prescribed period of 15 days. As regards the other two cheques i.e., for the amount of Rs. 11,45,521/- and Rs. 2 crores, the notices were sent in time and, therefore, all the other ingredients of Section 138 having been satisfied the accused, which comprise of the said company and the present petitioner, were convicted and sentenced as mentioned above. 16. I have heard the learned counsel for the parties at length and I have also examined the written submissions submitted by the counsel for the petitioner as well as counsel for the respondent/complainant. The essential grievance of the petitioner, apart from the issue of merits, is that the petitioner has been convicted and sentenced without being summoned as an accused. This, according to him, has resulted in gross miscarriage of justice. While, it is true that the proceedings conducted pre-trial and the trial ....
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....rmative. 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 an 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. (underlining added) 18. This decision makes it absolutely clear that even where specific averments are not made in the complaint that the person accused was in charge of, or responsible for the conduct of the business of the company, the signatory of the cheque in question would clearly be responsible for the incriminating act and would be covered under sub-section (2) of Section 141 of the Act. In the present case, the petitioner admitted that he was the signatory of the cheques which were ....
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....any error, omission or irregularity in any proceeding under this Code, or any error, or irregularity in any sanction for the prosecution has occasioned a failure of justice, the Court shall have regard to the fact whether the objection could and should have been raised at an earlier stage in the proceedings. 20. A Constitution Bench of the Supreme Court in the case of Willie (William) Slaney v. State of M.P., AIR 1956 SC 116 with regard to the provisions of Sections 225, 232, 535 and 537 of the Code of Criminal Procedure, 1898 which correspond to Sections 215, 464(2), 464 and 465 of the 1973 Code, held as under: 44. Now, as we have said, Sections 225, 232, 535 and 537(a) between them, cover every conceivable type of error and irregularity referable to a charge that can possibly arise, ranging from cases in which there is a conviction with no charge at all from start to finish down to cases in which there is a charge but with errors, irregularities and omissions in it. The Code is emphatic that 'whatever' the irregularity it is not to be regarded as fatal unless there is prejudice. It is the substance that we must seek. Courts have to administer justice ....
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....he trial are regarded as venal by the Code and the trial is not vitiated unless the accused can show substantial prejudice. That, broadly speaking, is the basic principle on which the Code is based. 7. Now here, as in all procedural laws, certain things are regarded as vital. Disregard of a provision of that nature is fatal to the trial and at once invalidates the conviction. Others are not vital and whatever the irregularity they can be cured; and in that event the conviction must stand unless the Court is satisfied that there was prejudice. Some of these matters are dealt with by the Code and wherever that is the case full effect must be given to its provisions. 22. In State of M.P. v. Bhooraji, (2001) 7 SCC 679, the Supreme Court, with reference to the provision of Section 465 of the Code, held as under: 12. Section 465 of the Code falls within Chapter XXXV under the caption "Irregular Proceedings". The Chapter consists of seven sections starting with Section 460 containing a catalogue of irregularities which the legislature thought were not enough to axe down concluded proceedings in trials or enquiries. Section 461 of the Code contains another catalogue of....
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....slature as possible occurrences in criminal courts. Yet the legislature disfavoured axing down the proceedings or to direct repetition of the whole proceedings afresh. Hence, the legislature imposed a prohibition that unless such error, omission or irregularity has occasioned "a failure of justice" the superior court shall not quash the proceedings merely on the ground of such error, omission or irregularity. 16. What is meant by "a failure of justice" occasioned on account of such error, omission or irregularity? This Court has observed in Shamnsaheb M. Multtani v. State of Kamataka : (2000) 3 SCC 698; (2000) SC (Cri) 738 thus: (SCC p. 585, para 23) 23. We often hear about 'failure of justice' and quite often the submission in a criminal court is accentuated with the said expression. Perhaps it is too pliable or facile an expression which could be fitted in any situation of a case. The expression 'failure of justice' would appear, sometimes, as an etymological chameleon (the simile is borrowed from Lord Diplock in Town Investments Ltd. v. Deptt. of the Environment). The criminal court, particularly the superior court should make a close examinatio....
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....at the grievances of the petitioner in the present case are not of the nature of a fundamental illegality but merely of a curable irregularity which could be cured by invoking the provision of Section 464 and or Section 465 CrPC. The only thing to be examined is whether there has been a failure of justice occasioned by the irregular proceedings. As pointed out in the aforesaid decisions as also in Kamalanantha v. State of T.N., (2005) S SCC 194, to determine whether or not there has been a failure of justice, it is the duty of the court to see whether the accused had a fair trial, whether he knew what he was being tried for, whether the main facts sought to be established against him were explained to him fairly and clearly and whether he was given a full and fair chance to defend himself. In the present case, it is apparent that the petitioner had a fair trial. There may have been irregularities such as in the format of the complaint or the summoning order but the petitioner had a fair trial. He had full opportunity to defend himself and indeed he led evidence by producing four defence witnesses. The petitioner knew exactly what he was being tried for. This is amply demonstrated b....
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....the petitioner could have had the surgery in the last seven years when he was facing trial. 28. The sentence given to the petitioner can be split into two parts. The first is the sentence simplicitor of one year of simple imprisonment and the second part is the compensation of Rs. 4 crores payable to the complainant and the in-default sentence of 3 months simple imprisonment. Insofar as the first part is concerned, I am of the view that, taking into account the fact that the petitioner has faced trial for over seven years and his health condition is not good, his period of imprisonment should be reduced from one year to six months simple imprisonment. There is another circumstance which has enabled me to come to this view. It must be remembered that initially the complaint was also directed against accused No. 2 (Dr Tushar D Pimpale). He was shown as the person who was incharge of the day-to-day affairs of the company. The petitioner's Section 313 CrPC statement also indicates this. DW 4 had also stated that the petitioner was an unpaid director of the company. Thus, it is clear that the complaint as originally instituted also included Dr. Pimpale as an accused on the ground....
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....e Metropolitan Magistrate were to utilize the fine that could be imposed by him for compensating the complainant, it would have to be under Section 357(1) of the Code and would, therefore, be limited to the maximum fine that could be imposed i.e., Rs. 5000/-. But, to alleviate the grievance of the complainant, the Magistrate, without imposing a fine, resorted to the provisions of section 357(3) of the Code. This is the view taken by the Supreme Court in K Bhaskaran (supra) as under:- 29. The trial in this case was held before a Judicial Magistrate of the First Class who could not have imposed a fine exceeding Rs. 5000/- besides imprisonment. The High Court while convicting the accused in the same case could not impose a sentence of fine exceeding the said limit. 30. It is true, if a judicial Magistrate of the First Class were to order compensation to be paid to the complainant from out of the fine realised the complainant will be the loser when the cheque amount exceeded the said limit. In such a case a complainant would get only the maximum amount of rupees five thousand. 31. However, the Magistrate in such cases can alleviate the grievance of the compla....
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....sly liable is bound to pay compensation it is only appropriate to direct payment by the accused who is guilty of causing an injury with the necessary mens rea to pay compensation for the person who has suffered injury. In Mangilal (supra), the Supreme Court, following Hari Singh v. Sukhbir Singh, (1988) 4 SCC 551 and Sarwan Singh (supra) held:- 8. The power of the court to award compensation to victims under Section 357 is not ancillary to other sentences but is in addition thereto. In Hari Singh v. Sukhbir Singh it was observed that the power under Section 357 is a measure of responding appropriately to crime as well as reconciling the victim with the offender. It is, to some extent, a recompensatory measure to rehabilitate to an extent the beleaguered victims of the crime; a modern constructive approach to crimes and a step forward in our criminal justice system. In Sarwan Singh v. State of Punjab it was held that in the awarding compensation, the court has to decide whether the case is a fit one in which compensation has to be awarded. If it is found that the compensation should be ordered to be paid, then while arriving at the quantum to be paid, courts are obliged ....