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2011 Supreme(MP) 736
2012(1) JLJ 265
G.D. Saxena, J.
O.T.G. Global Finance Ltd. Co., Indore
v. Mohan Mandelia
Criminal Revision Nos.613 of 2006 and 999 of 2007 (Gwalior) : against judgment dated 21.7.2006, passed by Tenth Additional Sessions Judge, Gwalior in Criminal Appeal No.73/2006; Decided on 26.9.2011.
Smt. Nandita Dubey for petitioners No.1 and 2;
S.K. Shrivastava for petitioner No.3;
Prashant Sharma for respondent No.1;
R.K. Shrivastava, Panel Lawyer for respondent No.2/State.
Headnote:(1) Negotiable Instruments Act, 1881 -- Ss.138 and 141(1) -- complaint against Company and its Directors -- vicarious liability of -- necessary ingredients of -- Directors must be in-charge and responsible to conduct of its business -- fulfilment of both requirements not necessary -- cheque issued by Financial Director bounced -- no action taken on demand notice of payment -- Financial and Managing Directors are in-charge of Company and also responsible for conduct of its business -- they are vicariously liable.
Held : It is clear from perusal of the record that the petitioners No.2 and 3 are incharge of the business of the petitioner No.1-Company, which fact is brought on record and attracts negligence towards them.
Obviously by signing the cheque on behalf of the petitioner-Company, the accused-petitioner No.2, Financial Director, cannot disown his liability, as contemplated in sub-section (1) of section 141 of the N.I. Act.
It is thus seen that the vicarious liability of a person for being prosecuted for an offence committed under the Act by a Company arises if at the material time he was in-charge of and was also responsible to the company for the conduct of its business. Simply because a person is a Director of the company it does not necessarily mean that he fulfills both the above requirements so as to make him liable. Conversely, without being a Director a person can be in-charge of and responsible to the company for the conduct of its business. From the complaint in question this Court finds that there is specific allegation to indicate, even prima facie, that the petitioners were in-charge of the company and also responsible to the company for the conduct of its business. AIR 1998 SC 2327 and 2010 AIR SCW 1508 followed. 2000 Doch. (Mad.) 1070 and 1995 Cri.LJ 2306 referred to.
So far as the petitioner No.3-Managing Director is concerned, from the very nature of his duties it can be safely inferred that he would undoubtedly be vicariously liable for the offence, vicarious liability being an incident of an offence under the Act.
(2) Negotiable Instruments Act, 1881 -- S.138 -- Companies Act, 1956 -- S.292(1)(c) -- powers and liabilities of Board of Directors of Company -- cheque issued by Financial Director of Company in discharge of their financial liability -- cheque bounced -- no action taken by Managing Director after receipt of notice for payment -- both Directors are liable for offence committed under section 138 of Negotiable Instruments Act. AIR 1988 SC 1128 and 2011 AIR SCW 4175 followed. [Paras 26 to 28
(3) Negotiable Instruments Act, 1881 -- S.138 -- Criminal P.C., 1973 -- S.357(3) -- joint venture of firms dissolved and liabilities settled -- cheque issued by Financial Director for discharge their liabilities -- cheque bounced -- after receipt of demand notice -- no action taken by Managing Director -- complaint against Company and both Directors -- Company and its both Directors found guilty -- fine imposed upon Company -- Directors punished imprisonment with fine -- for loss of complainant Rs.8,00,000/- also awarded as compensation against Directors -- no limit prescribed for compensation of loss -- sentence set aside -- no interference made in conviction against Directors -- Company acquitted. AIR 2001 SC 567 followed. [Paras 29 to 32
(4) Negotiable Instruments Act, 1881 -- S.138 -- Criminal P.C., 1973 -- S.357 -- offence under section 138 of Negotiable Instruments Act -- sentence of imprisonment already suffered -- further punishment not necessary -- same is sufficient -- complainant must be compensated for his loss -- loss of complainant Rs.10,00,000/- instead of Rs.8,00,000/- awarded -- fine amount deleted. [Paras 33 & 34
(5) Criminal P.C., 1973 -- S.320 -- applicability of -- application for compounding of offence -- does not lie after pronouncement of judgment -- Court has no more seisin over the case after judgment -- compounding of offence is permissible only when case is pending. AIR 1979 SC 87 followed. (2010)1 SCC 798 referred to. [Paras 35 & 36
¼1½ ijØkE; fy[kr vf/kfu;e] 1881 && /kkjk 138 rFkk 141¼1½ && daiuh rFkk blds lapkydksa ds fo:) ifjokn && dk izfrfuf/kd nkf;Ro && vko‘;d la?kVd && lapkydksa dk izHkkjh rFkk blds dkjckj lapkyu ds fy, mÙkjnk;h gksuk pkfg, && nksuksa vis{kkvksa dh iwfrZ vko‘;d ugha && foÙkh; lapkyd }kjk tkjh pSd vLohd`r gqvk && Hkqxrku ds fy, ek¡x lwpuk&i= ij dksbZ dkjZokbZ ugha dh xbZ && foÙkh; rFkk izca/k lapkyd daiuh ds izHkkjh gSa rFkk blds dkjckj lapkyu ds fy, mÙkjnk;h Hkh gSa && os izfrfuf/kd :i ls mÙkjnk;h gSaA
vfHkfu/kkZfjr % vfHkys[k ds voyksdu ls ;g Li"V gS fd ;kphx.k Ø-2 rFkk 3 ;kph Ø-1&daiuh ds dkjckj ds izHkkjh gSa] tks rF; vfHkys[k ij yk;k x;k gS rFkk mudh vksj ls ykijokgh vkdf"kZr djrk gSA
;kph daiuh dh vksj ls pSd ij Li"Vr% gLrk{kj djus ls] vfHk;qDr&;kph Ø-2] foÙkh; lapkyd vius nkf;Ro dks vLohdkj ugha dj ldrk] tSlk fd /kkjk 141 dh mi/kkjk ¼1½ esa vuq/;kr gSA
bl izdkj ;g ns[kuk gksrk gS fd O;fDr dk izfrfuf/kd nkf;Ro vf/kfu;e ds v/khu daiuh }kjk fd;k x;k vijk/k mRiUu gksus ij D;k og mldk izHkkjh Fkk rFkk blds dkjckj lapkyu ds fy, daiuh ds izfr mÙkjnk;h Hkh FkkA ek= blfy, fd O;fDr daiuh dk lapkyd gS blls vko‘;d :i ls ;g vfHkizsr ugha gksrk fd og mi;qZDr nksuksa vis{kkvksa dh iwfrZ djrk gS blfy, mls mÙkjnk;h cuk;k tk,A foykser%] ,d O;fDr lapkyd gq, fcuk bldk izHkkjh rFkk blds dkjckj ds lapkyu ds fy, daiuh ds izfr mÙkjnk;h gks ldrk gSA iz‘uxr ifjokn ls ;g U;k;ky; ikrk gS fd ;g bafxr djus ds fy, fofufnZ"V vkjksi gS] izFken`"V~;k Hkh] fd ;kphx.k daiuh ds izHkkjh rFkk blds dkjckj lapkyu ds fy, daiuh ds izfr mÙkjnk;h FksA , vkb vkj 1998 ,l lh 2327 rFkk 2010 , vkb vkj ,l lh MCY;w 1508 vuqlfjrA 2000 Mh vks lh ,p ¼enzkl½ 1070 rFkk 1995 lhvkj ,y ts 2306 fufnZ"VA
tgk¡ rd ;kph Ø-3 izca/k lapkyd dk laca/k gS mlds drZO;ksa dh ;FkkFkZ izd`fr ls fuf‘pr :i ls ;g fu"d"kZ fudkyk tk ldrk gS fd og fu%lansg :i ls vijk/k ds fy, mÙkjnk;h gksxk] vf/kfu;e ds varxZr vijk/k ds fy, izfrfuf/kd nkf;Ro ,d vkuq"kafxr rRo gSA
¼2½ ijØkE; fy[kr vf/kfu;e] 1881 && /kkjk 138 && daiuh vf/kfu;e] 1956 && /kkjk 292¼1½¼x½ && daiuh ds lapkyd eaMy dh ‘kfDr;k¡ rFkk mÙknkf;Ro && daiuh ds foÙkh; lapkyd }kjk mlds foÙkh; nkf;Ro ds fuoZgu esa pSd tkjh fd;k x;k && pSd vLohd`r gqvk && Hkqxrku ds fy, lwpuk&i= izkIr gksus ds i‘pkr~ laca/k lapkyd }kjk dksbZ dkjZokbZ ugha dh xbZ && ijØkE; fy[kr vf/kfu;e dh /kkjk 138 ds v/khu fd, x, vijk/k ds fy, nksuksa lapkyd mÙkjnk;h gSaA ¼iSjk 26 ls 28
¼3½ ijØkE; fyf[kr vf/kfu;e] 1881 && /kkjk 138 && naM izfØ;k lafgrk] 1973 && /kkjk 357¼3½ && daiuh ds la;qDr lkgfld dk;Z dk fo?kVu rFkk mÙkjnkf;Ro fu/kkZfjr && foÙkh; lapkyd }kjk mlds mÙkjnkf;Roksa ds fuoZgu esa pSd tkjh fd;k x;k && pSd vLohd`r && ek¡x lwpuk&i= izkIr gksus ds i‘pkr~ && izca/k lapkyd }kjk dksbZ dk;ZokbZ ugha dh xbZ && daiuh rFkk nksuksa lapkydksa ds fo:) ifjokn && daiuh rFkk blds nksuksa lapkyd nks"kh ik, x, && daiuh ij tqekZuk vf/kjksfir && lapkyd dkjkokl ds lkFk tqekZus ls nafMr && ifjoknh dh gkfu ds fy, {kfriwfrZ ds :i esa :-8]00]000@& lapkydksa ds fo:) vf/kfu.khZr fd, x, && gkfu dh {kfriwfrZ ds fy, dksbZ lhek fofgr ugha && naMkns‘k vikLr fd;k x;k && lapkydksa ds fo:) nks"kflf) esa gLr{ksi ugha fd;k x;k && daiuh nks"keqDr dh xbZA , vkb vkj 2001 ,l lh 567 vuqlfjrA ¼iSjk 29 ls 32
¼4½ ijØkE; fy[kr vf/kfu;e] 1881 && /kkjk 138 && naM izfØ;k lafgrk] 1973 && /kkjk 357 && ijØkE; fy[kr vf/kfu;e dh /kkjk 138 ds v/khu vijk/k && dkjkokl dk naMkns‘k igys&gh Hkqxr fy;k && vfrfjDr naM dh vko‘;drk ugha && ogh i;kZIr gS && ifjoknh dks mldh gkfu ls {kfriwfjr fd;k tkuk pkfg, && ifjoknh dh gkfu 8]00]000@& ds LFkku ij 10]00]000 vf/kfu.khZr dh xbZ && tqekZus dh jde foyksfir dh xbZA ¼iSjk 33 rFkk 34
¼5½ naM izfØ;k lafgrk] 1973 && /kkjk 320 && dk ykxw gksuk && vijk/k ‘keu djus ds fy, vkosnu && fu.kZ; lqukus ds i‘pkr~ xzkº; ugha gksrk && fu.kZ; ds i‘pkr~ U;k;ky; dk izdj.k ij dCtk ugha jgrk && vijk/kk dk ‘keu djuk dsoy rHkh vuqKs; gS tcfd ekeyk yafcr gksA , vkb vkj 1979 ,l lh 87 vuqlfjrA ¼2010½1 ,l lh lh 798 fufnZ"VA ¼iSjk 35 rFkk 36
1. As the facts are the same, the aforementioned two revisions are heard together and disposed of by this common order.
2. Criminal Revision No.613/06 preferred under section 397/401 of the Code of Criminal Procedure 1973, by the petitioner No.1-accused OTG Global Finance Ltd. Company, Indore through its Director of Finance and Managing Director, namely, S.S. Yadav (petitioner No.2) and Janak Gandhi (petitioner No.3) is directed against a judgment dated 21st July 2006 passed in Criminal Appeal No.73/2006 by the Tenth Additional Sessions Judge, Gwalior (M.P.) arising out the impugned judgment dated 9th March 2006 in Criminal Case No.698/2004 by the Additional Chief Judicial Magistrate, Gwalior, convicting thereby the accused-appellants S.S. Yadav and Janak Gandhi for commission of offence punishable under section 138 of the Negotiable Instruments Act and sentenced each of them to suffer one year’s rigorous imprisonment with a fine Rs.5,000/- along with compensation to the tune of Rs.8,00,000/- (Rs. Eight lacs only), payable to the respondents whereas Criminal Revision No.999/07 is preferred by the revisionist against the said impugned judgment having been aggrieved with the modification of sentence. By the impugned judgment challenged in these revisions, though the conviction of the accused-petitioners for commission of offence under section 138 of the Act was maintained but the sentence of one year’s RI has been reduced to the sentence of one month’s SI without disturbing the findings in regard to payment of fine as well as compensation awarded under section 357 of CrPC. Further, the fine amount of Rs.5,000/- (Rs. Five thousand only) imposed on the petitioner No.1-Company by the trial Court along with punishment for default in payment of fine was maintained by the appellate Court.
3. The facts leading to filing the aforesaid revisions are adumbrated below :
(a) The O.T.G. Global Finance Ltd. is a registered company under the Companies Act having its Head Office at Indore. It is engaged in the business of Cable TV Net working systems at Indore with adjoining towns. Petitioners No.2 and 3, namely, S.S. Yadav and Janak Gandhi are its Financial Director and Managing Director, respectively.
(b) The respondent No.1-complainant Mohan Mandelia and Devendra Pal Singh are Directors/Partners of the Gwalior Network Television News Company called as GNTV and are engaged in the business of Cable Net working in the area.
(c) It is alleged that for running cable network in Gwalior, the petitioner-company O.T.G. Global Finance Ltd. collaborated with the respondent No.1’s company and executed a joint venture agreement with the partners of GNTV company on 19th December 2000, vide Ex.D-1 to give effect for starting network and channel in the name and style of OTG-GNTV in the city of Gwalior and surrounding areas. The MOU was signed by Janak Gandhi and S.S. Yadav on behalf of OTG Global Finance Ltd. Company Indore and Mohan Mandelia and Devendra Pal Singh on behalf of GNTV Gwalior. Both the companies had invested the capital for enhancement of Cable networking at Gwalior.
(d) Similarly, in the course of business, the petitioner O.T.G. Global Finance Ltd. Company collaborated with another company in Guna running its business in the name of Guna Cable Network (GCN) and executed a joint venture agreement with the partners of GCN company forming thereby a new Company in the name and style of OTG-GCN in Guna city, which was being looked after by partner Parmindar Singh. In the said business, MOU was signed by Janak Gandhi and S.S. Yadav on behalf of OTG Global Finance Ltd. Company Indore on one side and Parmindar Singh and other partners/directors on behalf of GCN Guna on other side. Both companies invested the capital for enhancement of Cable net working at Guna. For smooth running the business of joint venture, a saving account No.01000050564 was operated with State Bank of India at Guna branch. The said joint saving bank account of the company (above
