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2005(1) Bankmann 357
KARNATAKA HIGH COURT
Huluvadi G. Ramesh, J.
Sri K. Chandrasekhar
& Anr. — Petitioners
versus
Mac Charles India Ltd. — Respondent
Criminal Petition
No. 2906 of 2004
Decided on 4.1.2005
Held: The provisions do not contain a condition that a prosecution of the company is sine qua non for prosecution of the other persons who fall within the second and the third categories mentioned above. No doubt a finding that the offence was committed by the Company is sine qua non for convicting those other persons. but if a company is not prosecuted due to any legal snag or otherwise, the other prosecuted persons cannot on that score alone, escape from the penal liability created through the legal fiction envisaged in Section 141 of the Act. (Para 11)
Held also: Further, as provided in the exception to the proviso to Section 141 of the Negotiable Instruments Act nothing contained in the 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. As per this proviso, it is for accused 11 and 12 to make out a case to the effect that the dishonour of cheque was without there being a role by them and also without their involvement and that they are not liable to be held guilty of the offence.(Para 12)
Held further: If summons and warrant could not be served, the next mode would be to take notice by way of substituted service i.e. by way of paper publication and to proceed against accused 1 to 9 holding sufficiency of service on such publication, on the non-appearance of accused 2 to 9 and not representing accused 1 on such publication, they can be proceeded ex parte, since Section 138 of the Negotiable Instruments Act prescribes for imposition of fine as well as order them to pay compensation/penalty apart from punishing them by way of imprisonment. (Para 13)
Held consequently: In view of the same and also in view of the specific provision provided under the proviso to Section 141 of the Negotiable Instruments Act, the petitioner/accused 11 and 12 cannot seek exemption and also for acquittal or discharge by filing an application under Section 255, Cr.P.C. as observed by the Magistrate as well as the Additional Sessions Judge in revision.(Para 14)
Held, therefore: In view of the discussion made above, the order of splitting of the case against accused 1 to 9 is liable to be quashed and the case has to be re-opened against accused 1 to 9 and proceeded simultaneously with a direction to the complainant respondent to take steps once against as provided under law.(Para 15)
Held finally: In the result, the impugned order of splitting the case against accused 1 to 9 is set aside. The petition is disposed of with a direction to the complainant to take steps to proceed against accused 1 to 9 as well in addition to accused 11 and 12. The petitioners herein are at liberty to take all the best defence available to them to prove their innocence in the conduct of business of the company. Thereafter, the trial Court shall pass orders according to law, keeping in view of the observations made above.(Para 16)
Result: The petition disposed of accordingly.
Huluvadi G. Ramesh, J.—This petition is filed under Section 482, Cr.P.C. seeking for calling the records in connection with Criminal Revision 394/04 on the file of the Additional District and Sessions Judge/Fast Track Court IV, Bangalore and to set aside the Order dated 17.8.2004 and also the Order passed by the XX Additional Chief Metropolitan Magistrate, Bangalore dated 5.8.2004 on the application filed by the petitioners under Section 255, Cr.P.C. in CC 23005/1997 and to allow the said application. Brief facts are:
2. The respondent has filed a complaint against petitioners who are arrayed as accused 11 and 12 along with ten others. For the alleged offence under Section 138 r/w 141 and 142 of the Negotiable Instruments Act. In the complaint it is alleged that the 1st accused is a company registered under the Companies Act, the 2nd accused is the Managing Director of the said company and the registered office of the company is located at Mumbai. The accused company is conducting business in dairy and dairy products and accused 3.10 are the Directors of the 1st accused company. Accused 11 and 12 petitioners herein, are the employees of the 1st accused company. It is stated that accused 2 to 10 were in-charge of the day to day affairs of the company at the time of commission of the alleged offence. It is further alleged that all the accused jointly conspired and connived in committing the offence as contemplated under the Negotiable Instruments Act. It is stated that on behalf of the 1st accused company, the other accused availed the facility of discounting of Bill of Exchange against the cheques paid by their suppliers in the course of business, from, the complainant. The complainant respondent had discounted two bills of exchange raised on the accused company – one No. 112 dated 26.9.1996 for Rs. 2,50,000 by C.S. Printers, Bombay and another No. 117 dated 12.10.1996 for Rs. 51,42,500 by C.S. Printers, Bombay. The accused, in repayment of the discounted bills on the above account, is said to have issued two cheques dated 23.11.1996 for Rs. 25,74,000 and Rs. 26,92,000 drawn on Canara Bank. Trinity Circle, Bangalore with a request to the complainant respondent to present the same for realization during the month of March 1997 and assured payment . As per the understanding, when, the cheques were presented for realization through their bankers M/s State Bank of India, Industrial Finance Branch, Bangalore, both the cheques were dishonoured due to insufficient funds. Thereafter, the complainant is said to have issued registered notices dated 15.3.1997 and 17.3.1997. Notices were said to be issued through certificate of posting also calling upon the accused to make payment within fifteen days. Since there is violation on the part of the accused persons to make payment, complaint is said to have been filed alleging that accused 11 and 12 who are the petitioners herein, are the authorized signatories of the 1st accused company; that all other accused were in-charge of the affairs and were aware of the financial transaction of the company, the operation of the bank account and availability of funds at the time of issuing cheques and in spite of the same, wilfully and with an intention to defraud the complainant, two cheques were issued and thereby the accused have committed offence under Section 138 of the Negotiable Instruments Act.
3. The complaint was presented before the XX Additional Chief Metropolitan Magistrate, Bangalore. It appears that cognizance was taken and thereafter, the matter was posted for sworn statement during 1997. Subsequently, during pendency of the matter before the Additional Chief Metropolitan, Magistrate, an application is said to have been filed by the present petitioners who are accused 11 and 12 in the complaint under Section 255, Cr.P.C. seeking for acquittal. The said application has been contested and thereafter Order has been passed on 8.8.2004 dismissing the application filed by the petitioners i
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