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2020 Supreme(Kar) 1089
IN THE HIGH COURT OF KARNATAKA AT BENGALURU (DHARWAD BENCH)
B.A. Patil, J.
Vijayalakshmi - Appellant
Versus
Proprietor Of Ballari Agri - Respondent
Criminal Appeal No. 100313 of 2018
Decided On : 05-06-2020
Sathish M S, Advocate, B.C. Jnanayyaswamy, Advocate
The necessity of making the company a party in the prosecution under Section 141 of the N.I. Act.
Headnote:
N.I. Act - Complaint Maintainability - Section 141 - [N.I. Act] - [Section 141] - The court discussed the interpretation of Section 141 of the N.I. Act, which holds a company or its responsible individuals liable for offenses committed. The court emphasized the necessity of making the company a party in the prosecution under Section 141 and cited relevant case law to support its decision. The appeal challenging the judgment of acquittal was dismissed as the complaint against the proprietor without including the firm as an accused was deemed not maintainable.
Fact of the Case:
The complainant invested in a firm and filed a complaint under section 138 of the Negotiable Instruments Act when the accused failed to pay back the invested amount after issuing a dishonored cheque. The appeal was filed against the judgment of acquittal by the trial court.
Finding of the Court:
The court found that the complaint against the proprietor without including the firm as an accused was not maintainable under Section 141 of the N.I. Act.
Issues: The main issue was whether the complaint was maintainable without including the firm as an accused under Section 141 of the N.I. Act.
Ratio Decidendi: The court emphasized the necessity of making the company a party in the prosecution under Section 141 of the N.I. Act and cited relevant case law to support its decision.
Final Decision: The appeal challenging the judgment of acquittal was dismissed as the complaint against the proprietor without including the firm as an accused was deemed not maintainable.
JUDGMENT
B A Patil, J. - This appeal has been preferred by the complainant challenging the judgment passed by the learned II Addl. Civil Judge & JMFC, Ballari in C.C. No. 99/2017 dated 14.08.2018 whereunder the complaint filed u/s 138 of the Negotiable Instruments Act (for short 'N.I. Act') was dismissed by acquitting the accused.
2. I have heard the learned counsel for the appellant and perused the records. Learned counsel for the respondent is absent and there is no representation.
3. The brief facts of the case of the complainant are that, she filed a complaint u/s 200 of Cr.P.C. contending that the accused is the proprietor and Manager of Ballari Agro Gold Projects Pvt. Ltd., (for short 'firm). In pursuance of the advise of the accused, the complainant became member of the said firm and invested an amount of Rs.3,50,000/- on various dates. Subsequently, the accused deposited an amount of Rs.52,000/- on various dates towards benefits and interest to the complainant. Thereafter, he did not pay any amount towards investment made by the complainant. Subsequently, the complainant demanded the accused to pay back the invested amount for which the accused issued a cheque bearing No. 084526 dated 31.10.2011 for a sum of Rs.3,50,000/- drawn on HDFC Bank, Ballari. When the said cheque was presented on 10.12.2011 it was dishonoured with the sharah 'funds insufficient'. A legal notice was caused to be issued on 14.01.2012. Inspite of service of notice, the accused failed to pay the cheque amount. Hence, complaint was registered.
4. It is the contention of the learned counsel for the complainant that the impugned judgment of acquittal is contrary to the established principles of law, facts and circumstances of the case. The accused firm is an individual proprietory concern and that the proprietor is arrayed as an accused. Under such circumstances, the trial Court ought not to have dismissed the complaint by taking shelter u/s 141 of the N.I. Act. Further, the proprietory concern is only the business name where the person carries on the business and a case against properietory concern is by or against the proprietor of the business. Hence, the complaint is maintainable. In order to substantiate the said contention he relied upon a decision of the Hon'ble Apex Court in the case of Raghu Lakshminarayan Vs. M/s Fine Tubes, (2007) 5 SCC 103 .
5. It is his further submission that the definition of the term "Company" provided under the explanation to Section 141 of the N.I. Act has been interpreted in the above said decision and hence the trial Court ought not to have dismissed the complaint. Further, the accused has not denied the issuance of the cheque and also he has not replied to the notice issued in accordance with law. The trial Court by overlooking the material and circumstances has passed the impugned order. The same is liable to be set aside. On these grounds he prayed to allow the appeal and to set aside the impugned judgment of acquittal.
6. Though the learned counsel for the complainant has raised several contentions, the only point boiled out from his arguments is that whether the complaint is maintainable without arraying the firm or Company as an accused u/s 141 of the N.I. Act. For the purpose of brevity, I quote Section 141 of the N.I. Act, which reads as under:
Section 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
