JUDGMENT

Crl. Appeal No. 400 of 2015 (Arising out of SLP (Crl.) No. 6422 of 2012)

1. Leave granted. This appeal has been preferred by the Appellant-accused against the judgment dated 20.04.2012 passed by the High Court of Karnataka at Bangalore in Criminal Revision Petition No. 404 of 2008.

2. By the impugned judgment, the High Court affirmed the conviction and sentenced imposed on the accused-appellant for offence Under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the 'Act' for short).

3. The Appellant is the accused whereas the Respondent is the complainant before the trial court. The accused-Ajith Balse is said to be the Managing Director of Tim Tim Far East Export Trading Company Private Limited, Patalganga, Raigad District, Maharashtra, whereas the complainant is the Managing Partner of a concern by name Yermal Fish Trading (YFT), carrying on the business of supplying fishes. An agreement was reached on 19.09.2001 between the company Tim Tim Far East Export Trading Company Private Limited and Yermal Fish Trading, wherein the complainant has supplied beheaded and gutter 'Rani fish' to the accused company. The accused was paying the amount through telegraphic transfer and under the terms of the agreement, the complainant was to send the statement of accounts by fax for every 15 days. At the end of fishing season, i.e., on 04.06.2002, the complainant sent the final statement, under which the accused was liable to pay Rs. 73,24,710-00 to the complainant. The accused had called the complainant to his company on 02.08.2002 to settle the debt and at that time, the accused issued three cheques of the State Bank of India (1) bearing No. 511693 dated 14.08.2002 for Rs. 20 lakhs, (2) bearing No. 511694 dated 05.09.2002 for Rs. 15 lakhs and (3) bearing No. 511695 dated 17.09.2002 for Rs. 20 lakhs. The accused on behalf of the company had undertaken to settle the balance amount of Rs. 18,24,710/- during the next fishing season.

4. It appears that the complainant presented the cheques dated 14.08.2002 for Rs. 20 lakhs to the Corporation Bank and the said cheque was returned with endorsement "payment stopped" and "funds insufficient". The complainant issued a legal notice dated 09.09.2002 by fax and also by registered post. In absence of any payment made, the complainant approached the trial court and submitted a complaint. The trial court on appreciating of evidence, convicted the accused-appellant for the offence under Section138 of the Act.

5. The Learned Counsel appearing on behalf of the Appellant submitted that the Appellant was the Managing Director of Tim Tim Far East Export Trading Company Private Limited. The cheque was issued on behalf of the aforesaid company but the said company was not impleaded as accused in the trial. According to the Appellant, in view of law laid down by this Court in 'Aneeta Hada v. Godfather Travels and Tours Private Limited' (2012) 5 SCC 661], the prosecution against the Appellant was void ab-initio.

6. In Aneeta Hada's case [2012 (5) SCC 661], the Court, inter alia, held:

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53. It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant.

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58. Applying the doctrine of strict construction, we are of the considered opinion 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 othe