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2015 Supreme(Cal) 306

IN THE HIGH COURT OF CALCUTTA
R.K. BAG, J.
Davinder Kaur – Petitioner
Versus
State of West Bengal & Another – Opposite Parties
C.R.R. No. 1341 of 2015
Decided On : 22.7.2015

Advocates:
Advocate Appeared:
For the Petitioner: Mr. Sabyasachi Banerjee, Mr. Anirban Dutta, Mr. Arindam Chatterjee, Mr. Amritam Mandal.
For the Opposite Parties: Mr. Ayan Bhattacharjee.

A company secretary can be held vicariously liable under Section 141(1) of the Negotiable Instruments Act, 1881, and specific averments are not required in the complaint to prosecute a company secretary.

Headnote:

NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 138, 141 - COMPANY SECRETARY - VICARIOUS LIABILITY - QUASHING OF PROCEEDING - SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 - INORDINATE DELAY.

Fact of the Case:

The petitioner, a company secretary, challenged a criminal proceeding initiated against her and others for dishonoring a cheque issued by the accused company. The complaint alleged that the petitioner was in charge of and responsible for the day-to-day business of the accused company and was involved in the transaction with the complainant.

Finding of the Court:

The court held that the petitioner, as the company secretary, fell within the category of persons who could be held vicariously liable under Section 141(1) of the Negotiable Instruments Act, 1881. The court found that the averments in the complaint were sufficient to issue process against the petitioner and that there was no unimpeachable evidence to suggest that she was not involved in the issuance or dishonor of the cheque.

Issues: 1. Whether the petitioner, as the company secretary, could be held vicariously liable under Section 141(1) of the Negotiable Instruments Act, 1881? 2. Whether the averments in the complaint were sufficient to issue process against the petitioner? 3. Whether there was any unimpeachable evidence to suggest that the petitioner was not involved in the issuance or dishonor of the cheque?

Ratio Decidendi: 1. The term 'secretary' in Section 141(1) of the Negotiable Instruments Act, 1881 includes a company secretary appointed by the company. 2. Specific averments are required in the complaint to prosecute a director of the company under Section 141(1) of the Negotiable Instruments Act, 1881, but no such specific averments are required to prosecute a company secretary. 3. In the absence of unimpeachable evidence to suggest that the petitioner was not involved in the issuance or dishonor of the cheque, the criminal proceeding against her could not be quashed.

Final Decision: The court dismissed the petitioner's revision application, holding that she had failed to make out a case for interference by the court under Section 482 of the Code of Criminal Procedure, 1973.

JUDGMENT

R.K. BAG, J.

1. The petitioner has preferred this revision under Section 401 read with Section 482 of the Code of Criminal Procedure, 1973 praying for quashing the proceeding of Complaint Case No. C-30220 of 2011 pending before the Court of Learned Metropolitan Magistrate, 8th Court, Calcutta.

2. The backdrop of the revisional application, in brief, is as follows:-

The opposite party no. 2 filed a petition of complaint before the Court of Learned Magistrate against M/s. Gee Pee Infotech Pvt. Ltd. and three others including the petitioner on the allegation of committing offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 (hereinafter N.I. Act). It is alleged that M/s. Gee Pee Infotech Pvt. Ltd. (hereinafter referred to as accused company) and its two Directors – Bijay Kumar Agarwal and Kalpana Agarwal and the present petitioner being company secretary of the accused company approached opposite party no. 2 for providing short term loan to the tune of Rs. 50,00,000/- with an undertaking to refund the same within the stipulated period of time. The opposite party no. 2 agreed to the proposal of the accused company and credited a sum of Rs. 50,00,000/- in the account of the accused company through RTGS on September 10, 2011. The accused company in discharge of legal liability towards refund of the amount of loan issued an account payee cheque of Rs. 50,00,000/- drawn on ICICI Bank in favour of the opposite party no. 2. The cheque was dishonoured on presentation at Allahabad Bank, Red Cross Place Branch, Calcutta on October 31, 2011. The notice was issued under Section 138(b) of the N.I. Act calling upon the accused company to make payment of the amount of Rs. 50,00,000/-. The accused company paid Rs. 15,00,000/- in response to the notice, but the balance amount of Rs. 35,00,000/-was not paid by the accused company. As a result, opposite party no. 2 filed the petition of complaint before the Court of Learned Magistrate against the accused company, its two Directors and the petitioner who were in charge of and responsible for the day-to-day business of the accused company and they also enjoyed the overall control over the regular affairs of the accused company during the transaction of the opposite party no. 2 with the accused company.

3. The petitioner and the other accused persons appeared before the Court of Learned Magistrate in response to the summons issued by Learned Magistrate. The plea of the accused persons was recorded by Learned Magistrate and the evidence of one prosecution witness has already been recorded, but the cross-examination of second prosecution witness has not yet been completed before the trial court. The petitioner has challenged the above criminal proceeding in the instant revisional application.

4. Mr. Sabyasachi Banerjee, Learned Counsel appearing on behalf of the petitioner contends that the petitioner is the company secretary of the accused company. By referring to the provisions of Section 2(45) of the Companies Act, 1956 and Section 2(24) of the Companies Act, 2013 Mr. Banerjee submits that the term company secretary is introduced for the first time in the Companies Act of 2013 and that the Company Secretary is entrusted with the duty to perform administrative and ministerial functions of the company. He further submits that the averments in the petition of complaint to the effect that the Directors were in charge of and were responsible to the company for the conduct of the business of the company may be sufficient for issuance of summons to those Directors of the company to face the charge under Section 138 and under Section 141(1) of the N.I. Act. According to Mr. Banerjee, there is need of specific averments in the petition of complaint for issuance of summons against the company secretary of the company to the effect that there was specific role of the company secretary in the commission of the offence under Section 138 of the N.I. Act and the offence w





































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