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2008(1) Bankmann 295 (Del.)
DELHI HIGH COURT
Pradeep Nandrajog, J.
K.P.G. Nair —Petitioner
versus
State & Ors. —Respondents
Criminal M.C. No. 406 of 2005
Decided on 10.9.2007
For the Petitioner:Mr. Ravi Kumar Aggarwal and Mr. Manoj Taneja, Advocates.
For the Respondents:Ms. Rekha Aggarwal and Ms. Anju Aggarwal, Advocates.
IMPORTANT POINT
Where the main accused is a corporate entity, vis-à-vis living human beings impleaded as accused, there have to be positive averments that they were in-charge of and were responsible to the company for the conduct of the business of the company.
Headnote:Negotiable Instruments Act, 1881—Sections 138 and 141—Dishonour of cheque—Offence by Company—Liability of Principal officers—Petitioner impleaded as accused No. 4 in complaint filed by respondent No. 2—In the memo of parties he has been described as Executive—Material allegations against him and other human being impleaded as accused in para 10 of the complaint is that they are principal officers of accused No. 1 Company and have committed an offence punishable under Section 141 of Negotiable Instruments Act—The averments in the complaint fall short of actionable averments—There have to be positive averments that they were in-charge of and were responsible to the Company for the conduct of business of Company—Or that the offence has been committed with the consent or connivance of or is attributable to any neglect on their part—Further, in the summoning evidence not a word has been whispered vis-a-vis the liability of petitioner—Petition allowed—Petition and the summoning order against petitioner quashed—Criminal Procedure Code, 1973—Section 482. (Paras 2, 3, 4 and 7)
Facts of the Case:
Petitioner has been impleaded as accused No. 4 in the complaint filed by respondent No. 2 Material allegations against petitioner and others impleaded as co-accused, i.e. accused No. 2, 3 and 5 are in para 10 of the complaint which avers:
“10. That the accused No. 1 is the company and accused No. 2 to 15 are its principal officer and have committed an offence punishable under Section 141 of Negotiable Instruments Act as amended 1988”.
Findings of the Court:
The averments in the complaint fall short of actionable averments. Further, in the pre-summoning evidence recorded not a word has been whispered vis-a-vis the liability of the petitioner.
Result: Petition allowed.
Pradeep Nandrajog, J. (Oral)—Petitioner has been impleaded as accused No. 4 in the complaint filed by respondent No. 2. As accused No. 4, in the memo of parties he is described as under:
‘Mr. K.P.G. Nair, Executive’
2. Material allegations against the petitioner and other living human beings impleaded as co-accused, i.e. accused Nos. 2, 3 and 5 are in para 10 of the complaint. Following is averred:
“10. That the Accused No.1 is the company and accused Nos. 2 to 5 are its Principal Officer and have committed an offence punishable under Section 141 of Negotiable Instrument Act as amended, 1988.”
3. The averments in the complaint fall short of actionable averments in view of the law laid down as per the following judgments:
“1. K.P.G. Nair v. M/s. Jindal Menthol India Ltd.1
2. Katta Sujatha (Smt.) v. Fertilizers and Chemicals Travancore Ltd. & Anr.2
3. Monaben Ketanbhai Shah & Anr. v. State of Gujarat & Ors.3
4. S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr.4
5. Sabitha Ramamurthy & Anr. v. R.B.S. Channabasavardhy.5
6. S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr.6
7. Saroj Kumar Poddar v. State (NCT of Delhi) & Anr.7
8. P. Rajarathinam v. State of Maharashtra & Ors.8
9. N. Rangachari v. Bharat Sanchar Nigam Ltd.9
10. K. Srikanth Singh v. North East Securities Ltd. & Anr.10
11. Raghu Lakshminarayanan v.
M/s. Fine Tubes.11
4. Suffice would it be to note that where the main accused is a corporate entity, vis-a-vis living human beings impleaded as accused, there have to be positive averments that they were in-charge of and were responsible to the company for the conduct of the business of the company or that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of said living human being.
5. The reason is obvious. Under Section 141 of the N.I. Act, 1881 vicarious liability of a company is extended to the shoulders of such persons.
6. But for Section 141 of the N.I. Act, 1881, pertaining to a cheque issued by a company, such persons would not be vicariously liable for the debt of the company.
7. Before concluding, I may further note that in the pre-summoning evidence recorded, not a word has been whispered vis-a-vis the liability of the petitioner.
8. Petition is accordingly allowed.
9. The complaint and the summoning order dated 7.8.1998 against the petitioner is quashed.
10. No costs.
Petition allowed.
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