2017 Supreme(Ker) 1405

High Court of Kerala
Alexander Thomas, J.
P M Mathew - Appellant
Versus
State of Kerala & Ors - Respondent
Crl.M.C. No. 4884 of 2017 , Crl.M.C. No. 4888 of 2017 , Crl.M.C. No. 4893 of 2017
Decided On : 24-08-2017

The court held that even if accused No.1 (Co-operative Society) is convicted, the individual/official who is made to represent A-1 as per the description in the cause-title, cannot be individually made to suffer any substantive sentence, fine/compensation, default sentence, etc. and in the eventuality of such conviction, only fine (which may be disbursed as compensation) can be imposed on A-1 and any such unpaid fine could be realized only from the assets of that body corporate.

Headnote:

The complaints in Crl.M.C.Nos.4884, 4893 and 4888 are those in S.T.Nos.811, 815 and 816/2016 on the file of Judicial First Class Magistrate Court-I, Kanjirappally, which has been instituted by the 2nd respondent (company) herein. The gist of the allegations of those complaints are that in discharge of a total liability of Rs.12,39,384/- owed by the 1st accused/Co-operative society to the respondent complainant, cheques dated 18.06.2014 for Rs.5,00,000/-, Rs.5,00,000/- and Rs.2,39,384/- respectively were drawn from the account of the said Co-operative society (accused No.1) payable in favour of the complainant and that those cheques when presented were dishonoured on 30.09.2014, on the ground of insufficiency of funds. The main contention urged on behalf of the petitioner for quashment of the complaint to the extent it affects are as follows: (A). Firstly that there are no sufficient and proper averments in these three complaints that the petitioner was in charge and responsible for the affairs of the management of the 1st accused/Co-operative society at the time of the execution of the cheque and at the time of dishonour of the cheques. The Apex Court in the decisions Central Bank of India v. Asian Global Ltd. and others reported in AIR 2010 SC 2835 and N.K.Wahi v. Shekhar Singh and others (2007) 9 SCC 481 has clearly held that to maintain a prosecution in terms with the vicarious liability against the Directors and employees of a company under Section 141 of NI Act, necessarily there has to be specific allegations in the complaint with regard to the part played by each of such co-accused in the transactions which led to the liability in question. Accordingly it is contended that there are no specific and precise allegations in the complaint, with respect to any alleged role played by the petitioner in the transaction in question or in relation to the dishonour of the cheques in question. (B). The 2nd contention urged by the petitioner is to the effect that the petitioner has not been separately arrayed as a co-accused in these complaints, and that only the Co-operative society, and the individual incumbents, who are holding the posts of managing director and marketing manager of the Co-operative society are alone arrayed as accused in the complaint as Accused Nos.1, 2 and 3 respectively. Summons issued to A1 has been served on the petitioner only because the complainant has sued as accused No.1/Co-operative society through the name of the petitioner in his alleged capacity as the president of the said Co-operative society. The court held that even if accused No.1 (Co-operative Society) is convicted, the individual/official who is made to represent A-1 as per the description in the cause-title, cannot be individually made to suffer any substantive sentence, fine/compensation, default sentence, etc. and in the eventuality of such conviction, only fine (which may be disbursed as compensation) can be imposed on A-1 and any such unpaid fine could be realized only from the assets of that body corporate. Since the petitioner has not been separately arrayed as a co-accused, there is no necessity to consider the plea of quashment of the impugned complaint, at the instance of the petitioner herein. The submissions made on behalf of the 2nd respondent (complainant) that the complainant will forthwith take steps to file application for correction of the cause-title to the extent it arrays accused No.1 by deleting the representation through the petitioner's name and to ensure that A-1 is represented through the Managing Director of A-1 Co-operative Society, etc. are recorded and it is ordered that it is for the 2nd respondent (complainant) to proceed on that aspect in accordance with law. Resultantly, it is ordered that the name of the petitioner as described in arraying of accused No.1 in the cause-title of the complaint will stand struck out. But it is also ordered that accused No.1 (Co-operative Society) will remain in the accused array and it is for the 2nd respondent (complainant) to proceed further with the matter, in the manner known to law.