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2005(1) Bankmann 336
MADHYA PRADESH HIGH COURT
Subhash Samvatsar, J.
Janak Gandhi — Petitioner
versus
State of M.P.
and others — Respondents
Misc. Cri. Case No. 3914 of 2004
Decided on 3.11.2004
For the Petitioner:Ankur Mody and Vijay Sunderam, Advocates.
For the Respondent No. 1:T.C. Singhal, Advocate.
IMPORTANT POINT
It is not necessary that notice under Section 138 Negotiable Instruments Act should be sent by registered A/D post. It can be sent UPC at proper address under Section 94 Negotiable Instruments Act.
Headnote:(i) Negotiable Instruments Act, 1881—Sections 138 and 141—Offence by Company—Petitioner was Managing Director of Company but he had not issued the cheque—Can he be prosecuted under Section 138?—(Yes).
Held: The Managing Director is responsible for conduct of the business of the company and, therefore, in view of Section 141 of the Negotiable Instruments Act is liable for the offence committed on behalf of the company. Moreover, the agreement entered into between the parties is on record. The said agreement was entered into on 19th December, 2000 and Clause 16 of the said agreement provides that any problem arising in the Joint Venture in dealing with OTG and GNT versus Staff shall be referred to Shri Janak Gandhi, Managing Director, OTG and his decision in the matter shall be final. This clause itself shows that the present petitioner was responsible for conducting the business of the company and, therefore, he cannot escape from his liability on this count. (Paras 6 & 7)
(ii) Negotiable Instruments Act, 1881—Sections 138 and 94—Service of notice under Section 138—Whether service by registered A/D necessary? (No)—Notice sent by UPC at proper address—There is presumption of service—Dispute as to date of service—Will be decided in trial—It cannot be used for invoking inherent powers to quash the prosecution (Cr. P.C. 1973—Section 482)
Held: As per this section it is not required that the notice must be given by registered post. The Bombay High Court has not considered impact of Section 94 of the Act, the said judgment as per incuriam and does not help the present petitioner. As regards the date of service of notice is concerned, the notice is issued on the correct address of the drawee. In such circumstances a presumption can be drawn about the service of notice and the question whether notice is served or not can be decided only after recording of evidence and, therefore, the criminal proceedings cannot be quashed under Section 482, Criminal Procedure Code at the stage of taking cognizance of the offence. (Paras 10, 11)
Result: Petition dismissed.
Subhash Samvatsar, J.—Disposal of this petition shall also govern the disposal of connected case. Misc. Cri. Case No: 3915 of 2004, Janak Gandhi v. Mohan Mandelia and two others.
2. The brief facts of the case are that the present petitioner, who is Managing Director of a Company, namely, M/s O.T.G. Global Finance Company Ltd., has filed the present petition under Section 482, Criminal Procedure Code challenging an Order dated 3-8-2004 passed in case No. 900/2004 whereby cognizance is taken against the present petitioner and other accused for committing offence under Section 138 of the Negotiable Instruments Act.
3. The brief facts of the case are that the respondent No.1 filed a complaint under Section 138 of the Negotiable Instruments Act on 11.6-2004 against the present petitioner and other co-accused. It is alleged that respondent No.1, the Company is owner of G.N.T. Television. It is further alleged that there was an agreement between respondent No. 1 and respondents Nos. 2 and 3 and the petitioner for carrying on cable television network in the city of Gwalior. The present petitioner carries on business of cable television network at Indore. A memorandum of undertaking was also entered into between the parties. As per the said agreement respondent No. 1 invested Rs. 42.46 lakhs while the petitioner invested Rs. 17.03 lakhs in the said business. There was some dispute between the parties and it was agreed upon that a sum of Rs. 31.96 lakhs will be paid to the petitioner by respondent No. 1. Towards this payment the cheque for Rs. 20 lakhs bearing Cheque No.532357 dated 16-3-2004 was issued against State Bank of India, Branch Guna, was delivered to respondent No.1. The said cheque was deposited for collection by respondent No.1 in his bank account. The said cheque was returned on 2-5-2004 with a memo of insufficient fund. Respondent No. 1 alleged that a notice dated 9-5-2004 was issued to the petitioner and respondents No. 2 and 3 about the dishonour of the cheque and a demand was raised for the said amount. Thereafter, a complaint under Section 138 of the Negotiable Instruments Act was filed. The Court below took cognizance of the said offence. Hence, this petition.
4. The main contention raised by the counsel for the petitioner is that as per the allegations made in the complaint the offence under Section 138 of the Negotiable Instruments Act is not made out and, therefore, the said proceedings should be quashed as even if the allegations in the complaint are taken to be true the present petitioner cannot be convicted for committing the said offence. The second contention raised by the counsel for the petitioner is that the cheque is not signed by him but it is signed by respondent No.3 on behalf of respondent No. 2. Counsel for the petitioner submits that as he has not signed the cheque he is not liable to be prosecuted for committing the said offence. From the perusal of cheque it appears that the cheque is issued on behalf of respondent No.2 M/s. O.T.G. Global Finance Company Ltd. Present petitioner is Managing Director of the said Company. The contention raised by the counsel for the petitioner is that complainant has nowhere averred in his complaint that the present petitioner is responsible for the payment of the said amount.
5. Counsel for the petitioner relied upon by the counsel for the petitioner is in the case of Katta Sujatha (Smt.) v. Fertilizers and Chemicals Travancore Ltd. and another1. That case is clearly distinguishable. In that case complaint was filed against all the persons of the firm without making any allegation that accused in that case was responsible for business of the firm. But in the present case the situation is different. The petitioner is a Managing Director in the Company and from the documents particularly, the agreement between the parties it is clear that he is responsible for carrying out the conduct of the company.
6. Section 141 of the Negotiable Instruments Act provides tha
