TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 326
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....lia" and "Wishful". In pursuance of the Franchisee Agreement dated 28.12.2012, A & A Enterprises was appointed as a retailer / retail operator of the products of the respondent company and was to establish and operate a retail outlet at Store No. 111, Moments Mall, Patel Road, New Delhi. It is alleged that various products were delivered to the petitioner through invoices in which Customer Code No. 119101 has been mentioned and the same have been received by the petitioner. It is alleged that a total sum of about Rs. 38,11,873/- is due on part of the petitioner. It is alleged that in discharge of its liability the petitioner issued two cheques, one bearing No. 000565 dated 27.09.2018 for a sum of Rs. 10,00,000/- and one being cheque No. 000566 dated 30.09.2018 for a sum of Rs. 7,50,000/- both drawn on HDFC Bank, G-14, Kirti Nagar Extension, New Delhi- 110015, in favour of the complainant. 3. It is alleged that the said cheques were dishonoured vide return memo dated 21.12.2018 for reasons "Funds Insufficient". Following the dishonour of the cheques, the complainant sent a legal notice dated 14.01.2019, calling upon the petitioner to make payment towards the dishonoured cheques w....
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....d dated 25.10.2012, executed between Sh. Usha Kalia, Rishi Kalia and the petitioner. 9. He submitted that the petitioner neither signed the cheques in question, nor issued them, and thus, the prosecution against the petitioner is not maintainable. 10. He further submitted, without prejudice, that the statutory notice was issued by the respondent on 14.01.2018, whereas the cheques in question were only issued in the month of September, 2018, and therefore the notice was defective, non-est and bad in law. He placed reliance on Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd. : (2009) 1 SCC 720 to argue that the respondent has failed to comply with the conditions with regard to service of notice, for establishing an offence under Section 138 of the NI Act. 11. The learned counsel for the respondent submitted that the petitioner represented himself as the sole proprietor of A & A Enterprises and entered into the Agreement dated 28.12.2012, as a proprietor. He submitted that the petitioner failed to disclose his actual identity while entering into the Agreement. 12. He submitted that the respondent had issued a Legal notice dated 14.01.2019 after the dishonor....
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....rm has not been arraigned as an accused. 18. At the outset, it is relevant to note that this Court can quash the proceedings in NI Act cases, in exercise of its inherent jurisdiction under Section 482 of the CrPC, if such unimpeachable material is brought forth by the accused persons which indicates that they were not concerned with the issuance of the cheques, or in case where legal lacuna of such nature is pointed out which goes to the root of the matter. 19. In the present case, the petitioner is seeking quashing of the summoning order dated 05.03.2019 and the complaint filed by the respondent under the NI Act, on the ground that despite knowing that A & A Enterprises is a partnership concern in which the petitioner is merely a partner, the respondent has deliberately proceeded against him in the capacity of a sole proprietor and has failed to arraign the partnership concern. It is also alleged that the statutory notice was issued upon the petitioner in his individual capacity while the cheques in question were issued by the partnership concern. 20. The petitioner has placed reliance on the judgments passed in Dilip Hariramani v. Bank of Baroda : (2022) 19 Comp Cas-OL 2....
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....e company and as there is a specific provision extending the liability to the officers, the conditions incorporated in Section 141 are to be satisfied. xxxx xxxx xxxx 41. After so stating, it has been further held that while analysing Section 141 of the Act, it will be seen that it operates in cases where an offence under Section 138 is committed by a company. In para 18 of the judgment, it has been clearly held as follows: (S.M.S. Pharmaceuticals Ltd. case [(2005) 8 SCC 89 : 2005 SCC (Cri) 1975], SCC p. 102) "18. ... there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person connected with a company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability." xxxx xxxx xxxx 43. A contention was raised before this Court on behalf of the State of Madras that the conviction could be made on the basis of Section 10 of the 1955 Act. The three-Judge Bench repelled the contention by stating thus: (C.V. P....
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....491 : 1971 SCC (Cri) 97] which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the company. Needless to emphasise, the matter would stand on a different footing where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted. 52. At this juncture, we may usefully refer to the decision in U.P. Pollution Control Board v. Modi Distillery [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] . In the said case, the company was not arraigned as an accused and, on that score, the High Court quashed the proceeding against the others. A two-Judge Bench of this Court observed as follows: (SCC p. 690, para 6) "6. ... Although as a pure proposition of law in the abstract the learned Single Judge's view that there can be no vicarious liability of the Chairman, Vice-Chairman, Managing Director and members of the Board of Directors under sub-section (1) or (2) of Section 47 of the Act unless there ....
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.... that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the company" appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted. 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining 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 drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which i....
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....the doctrine of lex non cogit ad impossibilia gets attracted). 24. Aneeta Hada v. Godfather Travels & Tours (P) Ltd. (supra) treated the ratio laid down in Anil Hada v. Indian Acrylic Ltd. (supra) to be incorrect law to the extent that it permits the prosecution of a Director or any other officer without the company being impleaded as an accused. 25. Aneeta Hada v. Godfather Travels & Tours (P) Ltd. (supra) affirmed the view taken by the two-Judge Bench in U.P. Pollution Control Board v. Modi Distillery (supra), directing the complainant to make a formal amendment in the complaint, noting that such a defect in the complaint was curable in nature. While the Hon'ble Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd. (supra) was of the opinion that the view taken in U.P. Pollution Control Board v. Modi Distillery (supra), was correct based on the factual matrix being the fault on the part of the company to furnish the requisite information called for by the complainant, in order to implead the company, however, it was underscored that since the liability under the NI Act is penal in nature, a strict construction of the provision must be made. [Ref: para 58 of Aneeta Hada....
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.... Notice is only a typographical error. 30. Perusal of the record reveals that the subject cheques drawn in the name of the respondent have been signed by Sh. Rishi Kalia who is one of the three partners in the alleged partnership firm of the petitioner. The memo of parties filed along with the complaint entails the name of the accused as "Sh. Himanshu (Proprietor of A and A Enterprises)". It appears that the name of the signatory of the subject cheque- Sh. Rishi Kalia has been added with a pen, subsequent to filing of the complaint. 31. It is pertinent to note that the Agreement dated 28.12.2012 placed on record by the respondent refers to the accused company/ firm as under: "A & A Enterprises, a proprietorship firm having its Registered Office at C-144 B, Moti Nagar, New Delhi-110015 represented proprietor Mr. Himanshu, hereinafter referred to as the "Retail Operator" 32. While the copy of the Agreement dated 28.12.2012 placed on record by the petitioner refers to the accused company/ firm as under: "A & A Enterprises, a partnership firm having its Registered Office at C-144 B, Moti Nagar, New Delhi-110015 represented by its partner Mr. Himanshu, hereina....
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.... the complaint being one for defamation. Fourthly, the publication of poem Khalnayakaru being in the nature of subsequent event created a new cause of action in favour of the respondent which could have been prosecuted by the respondent by filing a separate complaint and therefore, to avoid multiplicity of proceedings, the trial court allowed the amendment application. Considering these factors which weighed in the mind of the courts below, in our view, the High Court rightly declined to interfere with the order passed by the Magistrate allowing the amendment application and the impugned order does not suffer from any serious infirmity warranting interference in exercise of jurisdiction under Article 136 of the Constitution." (emphasis supplied) 36. As observed above, modification of a complaint may be permitted where cognizance has not yet been taken, the alteration does not alter the essential character of the complaint, the defect sought to be rectified is one which can be cured through a formal amendment, and where such modification does not result in prejudice to the accused or the opposite party. 37. In the present case, it is not in dispute that the complaint was in....