SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2006 Supreme(J&K) 217

IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
Y.P. Nargotra, J.
Shekhar Suman - Appellant
Versus
Shiv Shanker Associates & Ors. - Respondent
561-A Cr.P.C. No. 28/2006
Decided On : 10 October, 2006

Advocates Appeared:
Advocate For Appellant: B.S. Salathia
Advocate For Appellant: Rakesh Dogra
Advocate For Respondent: K.S. Johal
Advocate For Appellant: D.S. Chouhan
Advocate For Appellant: R.S. Pathania
Advocate For Appellant: Munish Chopra
Advocate For Appellant: Rakesh Sharma
Advocate For Appellant: Akshay Anand

Necessary averments must be made in a complaint to establish a person's liability under Section 141 of the Negotiable Instruments Act. Liability arises from the role played in the company's affairs, not merely from holding a designation or office.

Headnote:

Section 141 - Criminal Liability - Negotiable Instruments Act - [KEYWORD] - Quashing of complaints - Section 138, Section 141 of Negotiable Instruments Act

Fact of the Case:

The accused/petitioner seeks to quash complaints pending in the Court for dishonoring cheques issued by the company. The accused claims to have no involvement in the company's affairs and argues against being held vicariously liable.

Finding of the Court:

The court found that the complaints lacked necessary averments to establish the accused's liability under Section 141 of the Negotiable Instruments Act. The court also rejected the submission to introduce a CD as evidence, leading to the quashing of the complaints against the accused/petitioner.

Issues: The issues revolved around the accused's vicarious liability under Section 141 of the Act, the sufficiency of averments in the complaints, and the admissibility of additional evidence.

Ratio Decidendi: The court emphasized that necessary averments must be made in a complaint to establish a person's liability under Section 141. It also clarified that liability arises from the role played in the company's affairs, not merely from holding a designation or office.

Final Decision: The court allowed the petitions, quashed the complaints against the accused/petitioner, and directed the return of the record of the Court below.

1. By this common order this batch of petitions based on common question of law and facts are being disposed of.

2. Through these petitions petitioner-accused No.5 Shekhar Suman seeks to invoke Section 561-A of the Code of Criminal Procedure for quashing the complaints pending in the Court of Spl. Excise Mobile Magistrate, Jammu by which cognizance has been taken and process has been issued against him. The accused/Company Growell Multi Trade India Ltd. issued cheques in favour of the complainant. On complainants producing the cheques in the Bank concerned through its banker, the same were dishonored and returned with the memo indicating that funds were insufficient in the account. Undoubtedly, cheques have been issued and signed on behalf of the company by the accused No.3/Director and Promoter of Growell Multi Company and not by the accused/petitioner, yet the complainants have filed the complaints for prosecuting the accused/petitioner for commission of the offence under Section 138 read with Section 141 of Negotiable Instruments Act, (here-in-after called the Act).

3. The case of the accused/petitioner is that he has unnecessarily been arrayed as an accused, whereas he has nothing to do with the affairs of the company. He is neither shareholder nor the Director, Managing Director or Chairman of the Company. He states that he has allowed the company to use his name as its Brand Ambassador and acted as a Brand Ambassador of the company at some selected occasions. The Brand Ambassador is totally alien to the business of the company and has nothing to do with its financial or operational aspects. In this view of the matter, the process issued by the trial court qua the petitioner cannot be sustained in law.

4. Mr. Salathia, learned counsel for the petitioner contends that since the petitioner has no concern whatsoever with the running of the business of the company at the relevant time and simply on the vague allegation which are not supported by any material in the complaint that he is Director/Co-ordinator or promoter of the company, he cannot prima facie be held to be vicariously liable for the alleged offence committed by the Company-accused.

5. On the other hand contention of Mr. Johal learned counsel for the Complainant/respondents is that though it is a fact that accused/petitioner is not a shareholder, Director, Managing director or Chairman of the company, yet he can be made liable because from the allegations made in the complaint, it is very well made out that he was connected with the running of the business of the company. He is in charge of the business. He was extending assurances on behalf of the company and only relying upon his assurances the complainants had invested a huge amount in the company. He further submits that at this stage of the case under Section 561-A Cr.P.C the petitioner/accused cannot be permitted to take a defence that he was not personally responsible for the conduct of the business of the company. The question whether he was or was not personally responsible for the business can be decided only during trial of the accused. According to Mr. Johal simply on his defence of denial, the complaints against him under law cannot be quashed at the threshold. In support of his contention he relies upon a case reported as S.V. Muzumdar and others Vs. Gujarat State Fertilizer Co. Ltd, (2005) 4 SCC 173, in which the Supreme Court observed as follows:--

"Under the scheme of the Act, if the person committing an offence under section 138of the Act is a company, by application of Section 141 it is deemed that every person who is in charge of and responsible to the company for conduct of the business of the company as well as the company are guilty of the offence. A person who proves that the offence was committed without his knowledge or that he had exercised all due diligence is exempted from becoming liable by operation of the proviso to Section 141(1). Whether or not the evidence led would establish the acc















































Click Here to Read the rest of this document

1
2
3
4
5
6
7
8
9
10
11
Judicial Analysis

AI

SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top