Augustine George Masih, J.@mdashBy this order, I propose to dispose of Crl. Misc. No. M-24666 of 2010, Crl.Misc.No.M-25003 of 2010, Crl.Misc.No.M-25004 of 2010 and Crl.Misc.No.M-25005 of 2010 as common questions of facts and law are involved in these cases. For the sake of convenience, facts are being taken from Crl. Misc. No. M-24666 of 2010.
2. A complaint u/s 138/142 of the Negotiable Instruments Act, 1881 (for short ''1881 Act'') and Section 420 IPC was filed by the respondent against M/s Yusuf Engineering Co. Pvt. Ltd. through its authorized signatory/Legal Advisor Shruti Parkash Pandey on 20.9.2006 in which the company was summoned as an accused vide order dated 31.10.2006 by the Judicial Magistrate, Ist Class, Palwal. During the pendency of the complaint, an application dated 14.3.2009 (Annexure P-4) was moved by the complainant praying for impleading the Directors of the company in the array of accused. The said application was allowed by the Court vide order dated 26.5.2009 and notices to the added accused were also issued by the Court. Prior to filing of the present complaint, the complainant had filed suit for declaration and permanent injunction that the sale deed dated 4.5.2006 registered in favour of M/s Yusuf Engineering Company Pvt. Ltd. be declared as null and void. It is at the stage of summoning of the petitioners that the present petition has been filed u/s 482 Cr.P.C. for quashing of the complaint, impleadment order as also the summoning order dated 26.5.2009 (Annexure P-5) passed by the Judicial Magistrate, Ist Class, Palwal.
3. It is the submission of the counsel for the petitioner that the present complaint against the petitioners cannot proceed as the provisions contained u/s 138 of the 1881 Act have not been complied with. As per the said Section, in case of dishonoring of cheque, a demand for payment of the amount of money has to be made by the payee or holder of the cheque by giving a notice in writing to the drawer of the cheque within 30 days from the date of receipt of information by him from the bank regarding the return of the cheque as unpaid. After such service of notice, if the drawer fails to make the payment of the amount within 15 days from the date of receipt of such notice, the payee or the holder of the cheque can proceed against the person u/s 138 of the 1881 Act. In the present case, notice as per clause (b) of Section 138 has been served only on the company and, therefore, the petitioners cannot be held liable and cannot be proceeded against u/s 138 of the 1881 Act. His further contention is that as per Section 142 of this Act, the Court could not have taken cognizance of the offence punishable u/s 138 of the 1881 Act as per clause (b) thereof, if the complaint is not made within a period of one month from the date of cause of action arisen under clause (c ) of proviso of Section 138. His further contention is that in the complaint it is nowhere mentioned as to how and in what manner the petitioners, who are the Directors of the Company, were responsible to the company for the conduct of its business. He, accordingly, prays for quashing of the impleadment order as also the summoning order dated 26.5.2009. In support of this contention, reliance has been placed on the judgment of this Court in the case of Surinder Singh and others vs. Punjab State Warehousing Corporation, 2010 (2) RCR (Cri.) 416.
4. On the other hand, counsel for the respondent submits that the cheque was issued by Vijay Kumar Sharma, who is petitioner No. 1. The petitioners are Directors of the company and, therefore, as per Section 141 of the Act, they are responsible to the company for the conduct of its business. His further contention is that as the notice has been issued and served on the company as per Section 138(b) of the 1881 Act, the requirement envisaged therein stands complied with and they were not required to be individually served in personal capacity. As regards Section 142(b), he contends that the complaint against the company was filed well within the time provided therein and, therefore, the bar as claimed for by the petitioners cannot be made applicable to the case in hand. His further contention is that the present petition cannot be entertained at this stage as it is a matter of evidence as to whether the petitioners were In-charge of and responsible to the company for conduct of its business. In support of this contention, he has placed reliance on a judgment of the Supreme Court in the case of Paresh P. Rajda vs. State of Haryana and another, 2008 (3) RCR (Civil) 254. Accordingly, he prays for the dismissal of this petition.
5. I have heard counsel for the parties and gone through the records of the case. The facts as have been narrated above are not in dispute. The first question which requires to be determined is as to what is the mandate and requirement of Section 141 of the 1881 Act?
6. The Hon''ble Supreme Court in the case of N.K. Wahi vs. Shekhar Singh, 2007(2) RCR (Cri) 266, after discussing the provisions with regard to Section 138 and 141 of the Act, has culled out the following proposition of law as has been stated in para 19 of the judgment which reads as follows:-
19. In view of the above discussion, our answers to the questions posed in the reference are as under:-
(a) It is necessary to specifically aver in a complaint u/s 141 that at the time the offence was committed, the person accused was incharge of and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.
(b) The answer to the question posed in sub-para (b) has to be in the negative. Merely being a director of a company is not sufficient to make the person liable u/s 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible 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 u/s 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 u/s 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.
7. According to the above proposition, it is apparent from the complaint that no specific role or responsibility has been culled out with regard to the petitioners in the conduct of business of the company. If that be so, proceedings u/s 138 of the 1881 Act cannot be initiated against the petitioners except petitioner No. 1 who had signed the cheque.
8. That apart, mandate u/s 138(b) of the 1881 Act is that in case the cheque is presented to the bank and the said cheque is dishonoured, the payee or the holder in due course of the cheque, as the case may be, must make a demand for payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of receipt of information by him from the bank regarding the return of the cheque as unpaid. Admittedly, no notice had been issued in writing or served on any of the petitioners in their personal capacity. What has been done by the respondent-complainant is service of notice on the company only. When Section 138(b) is seen in the context and in the light of Section 141 of the Act, notice was required to be served on the person in his personal capacity if he has to held liable to be proceeded against and punished. Merely because the notice has been served on the company would not hold the Director of the company liable for prosecution u/s 138 as the mandated provision has not been complied with by the complainant qua him. The judgment of this Court in Surinder Singh''s case (supra) would cover the case of the petitioners in their favour.
9. The judgment relied upon by the counsel for the respondent would be applicable in Paresh P. Rajda''s case (supra) where the minimum mandate as per Section 141 stands complied for showing or stating them to be responsible for the working of the company which clause is missing in the present case.
10. The third issue which requires to be dealt with by this Court is whether an application at a subsequent stage i.e. during the pendency of the complaint u/s 138 of the 1881 Act for impleadment as an accused would be hit by the period of limitation?
11. The same also has to be answered in favour of the petitioners as u/s 142(b) of the 1881 Act, the complaint is to be made within a period of one month from the date on which the cause of action arose. Since admittedly when the complaint was filed, petitioners were not a party to the complaint and they only become a party/accused subsequently on moving of an application for their impleadment which would be on 14.3.2009 and the said application in any case was allowed on 26.5.2009 which was much beyond the period of 30 days from the date cause of action arose as per Section 138(c) of the 1881 Act. For this reason also, the present proceedings against the petitioners cannot survive.
12. The impugned summoning order in the present petition cannot also be sustained on the ground that there was nothing on record of the Court, before issuing the summoning order, in the form of an evidence of the complainant indicating whether the petitioners were in charge of and responsible for the conduct of business of the company. As merely on an application moved by the complainant, the petitioners have not only been impleaded as accused but summoned as well, which would violate the provisions of Section 200 of the Criminal Procedure Code.
13. In view of the above, these petitions are allowed. Order dated 26.5.2009 (Annexure P-5) passed by the Judicial Magistrate, Ist Class, Palwal, is hereby quashed as also all consequential proceedings arising therefrom.
14. For orders, see separate detailed order of even date passed in Crl. Misc. No. M-24666 of 2010 titled as Vijay Kumar Sharma and another vs. Chhida Mal.
