IN THE HIGH COURT OF ORISSA AT CUTTACK
G. Satapathy, J.
Bijaya Manjari Satpathy – Appellant
Versus
State of Orissa & Ors. – Respondents
Crl. M.C. No. 1392 of 2016
Decided On : 01-12-2022
N.I. Act - Maintainability of Complaint - Section 141 - [TRUST] - [N.I. Act, Section 138, Section 141] - The court discussed the provisions of Section 141 of the Negotiable Instruments Act, 1881, which imposes criminal liability for offenses under Section 138 on companies and individuals responsible for the conduct of the company's business. The court highlighted the requirement to arraign the trust as an accused to establish vicarious liability for dishonor of a cheque issued for the trust. The court emphasized the need for specific averments to make the accused vicariously liable and the principle that vicarious liability arises only when the company or firm commits the offense as the primary offender.
Fact of the Case:
The complaint was filed against the petitioner and another for dishonor of a cheque issued by the President of M/s. Bijay Laxmi Trust. The petitioner sought to quash the complaint on the grounds that the trust was not arraigned as an accused in accordance with Section 141 of the N.I. Act.
Finding of the Court:
The court found that the complaint was not maintainable as the trust was not implicated as an accused, and the petitioner, as the General Secretary, could not be vicariously liable without the trust being arraigned as an accused.
Issues: The main issue was the maintainability of the complaint in the absence of the trust as an accused person, as required by Section 141 of the N.I. Act.
Ratio Decidendi: The court relied on the principle that specific averments are required to establish vicarious liability and emphasized that vicarious liability arises only when the company or firm commits the offense as the primary offender.
Final Decision: The court quashed the complaint in 1.C.C. Case No.60 of 2014 of the Court of learned S.D.J.M., Angul, as it was found to be unsustainable in the eye of the law.
JUDGMENT
G. Satapathy, J. - The petitioner in this CRLMC seeks the indulgence of the Court U/S.482 of Cr.P.C. to quash the complaint in 1.C.C. Case No.60 of 2014 of the Court of learned S.D.J.M., Angul in an application U/S.482 of Cr.P.C. for not arraigning the trust as an accused in terms of Section 141 of Negotiable Instruments Act, 1881 (for short the N.I. Act).
2. Facts in precise are opposite party No.2-Kanheilal Choudhury instituted the complaint in 1.C.C. Case No.60 of 2014 against the petitioner as General Secretary, M/s. Bijay Laxmi Trust and opposite party No.3- Dinabandhu Mishra in the Court of learned S.D.J.M., Angul for commission of offences U/S.138 of N.I. Act on account of dishonour of cheque bearing No.083955 dated 31.12.2013 issued by opposite party No.3 as President of M/s. Bijay Laxmi Trust for an amount of Rs.7,30,550/- (Rupees Seven Lakh Thirty Thousand and Five Hundred Fifty) as the cheque on presentation returned back to opposite party No.2 as unpaid with endorsement from Bank of Baroda, Angul Branch on 18.02.2014 'account closed'. Opposite party No.2 accordingly issued Demand notice to petitioner and opposite party No.3 within the prescribed period and when they did not respond, opposite party No.2 instituted the aforesaid complaint. On perusal of complaint and initial statement of complainant filed in the shape of affidavit together with documents annexed with the affidavit, learned S.D.J.M., Angul by the impugned order took cognizance of offence U/S.138 of N.I. Act and issued process in the form of summons to the petitioner and opposite party No.3. On receipt of summon, the petitioner approach this Court by way of this CRLMC petition U/S.482 of Cr.P.C.
3. In the course of hearing of the CRLMC, Mr. Mohit Agarwal, learned counsel for the petitioner has raised a preliminary objection at the threshold on the maintainability of the complaint for want of trust arraigned as an accused in pursuance to the provision of Section 141 of N.I. Act. In raising such objection, learned counsel for the petitioner has submitted that the cheque in question was neither issued by the petitioner in individual capacity nor in the capacity of a General Secretary of the Trust, but the cheque was issued by the opposite party No.3 as the President of Trust and thereby, primarily the criminal liability cannot be fastened on the petitioner. It is further submitted by him that Section 141 of N.I. Act mandates impletion of the trust as a party since the cheque in question was issued by a person for/on behalf of the trust and when the mandatory provision has not been complied, the complaint itself is not maintainable. Learned counsel for the petitioner by submitting inter alia above issue of maintainability of the complaint prays to quash it by relying upon the decisions in Dillip Hariramani v. Bank of Baroda; AIR 2022 SC 2258 and Aparna A. Saha v. Self Developers Pvt. Ltd and others; AIR 2013 SC 3210.
4. In reply, Mr. Amit Prasad Bose, learned counsel for opposite party No.2 has submitted that although the trust has not been made as an accused in the complaint, but that per se would not absolve the petitioner from the liability arising out of cheque issued for the trust and she, accordingly, is vicariously liable as a General Secretary of the Trust with her husband-opposite party No.3 who had issued the cheque for the trust and the provisions of Section 141 of N.I. Act would not stand on the way of discharge of the liability of the petitioner and her husband arising out of the cheque which was dishonored and thereby, the complaint is squarely maintainable. It is, therefore, contended by the learned counsel for the opposite party No.2 that not only the complaint is maintainable but also the order passed by the learned S.D.J.M., Angul taking cognizance of offence is valid and the present CRLMC being unmerited is liable to be dismisse
Aparna A. Saha v. Self Developers Pvt. Ltd and others; AIR 2013 SC 3210
Dillip Hariramani v. Bank of Baroda; AIR 2022 SC 2258
National Small Industries Corporation Limited Vrs. Harmeet Singh Paintal; (2010) 3 SCC 330
Specific averments are required to establish vicarious liability, and vicarious liability arises only when the company or firm commits the offense as the primary offender.
The main legal point established in the judgment is the necessity of arraigning the company as an accused for maintaining the prosecution under Section 141 of the NI Act, and the requirement of speci....
Maintaining prosecution under section 138 of the NI Act requires arraigning the company as an accused, and the vicarious liability of individuals associated with the company is contingent upon the co....
(1) Dishonour of cheque – Offence by company – For fastening criminal liability, there is no legal requirement for complainant to show that accused partner of firm was aware about each and every tran....
Vicarious liability under Section 141 of the Negotiable Instruments Act requires specific allegations showing a person's responsibility for conduct of a company's affairs; mere involvement is insuffi....
An individual in a company cannot be vicariously liable for criminal offenses under the NI Act unless they are responsible for the company's conduct at the time of the offense.
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