IN THE HIGH COURT OF MADHYA PRADESH BENCH AT GWALIOR
Deepak Kumar Agarwal, J.
Raghvendra Singh Tomar – Appellant
Versus
Rakesh Kumar Tyagi & Ors. – Respondents
CRR No. 598 of 2009
Decided On : 23-02-2023
NI Act - Complaint under Section 138 of the NI Act - Section 141 of the NI Act - Summary of Acts and Sections: NI Act, Section 138, Section 141 - The court discussed the provisions of Section 141 of the NI Act, which imposes vicarious liability on individuals connected with a company for the conduct of its business. The court referred to the judgments in Aneeta Hada vs. M/s. Godfather Travels & Tours Pvt. Ltd. and Pawan Kumar Goel vs. State of UP & Another to emphasize the necessity of arraigning the company as an accused for maintaining the prosecution under Section 141 of the NI Act. The court also highlighted the requirement of specific averments in the complaint to establish the liability of individuals under Section 141.
Fact of the Case:
The complainant issued a cheque that was dishonoured, leading to a complaint under Section 138 of the NI Act. The accused, a director of the company, contested the complaint, arguing that the provisions of Section 141 of the NI Act were violated and that the complainant failed to prove his case as a petty contractor.
Finding of the Court:
The court found that the complaint was not maintainable under Section 141 of the NI Act as the company was not impleaded as an accused. Consequently, the accused was acquitted of the offence under Section 138 of the NI Act, and the complaint filed by the complainant was dismissed.
Issues: The issues revolved around the violation of Section 141 of the NI Act, the complainant's failure to prove his case, and the maintainability of the complaint without impleading the company as an accused.
Ratio Decidendi: The court's decision was based on the interpretation of Section 141 of the NI Act, which necessitates the arraignment of the company as an accused for maintaining the prosecution. The court emphasized the requirement of specific averments in the complaint to establish the liability of individuals under Section 141.
Final Decision: The accused was acquitted of the offence under Section 138 of the NI Act, and the complaint filed by the complainant was dismissed. The amount deposited in terms of the impugned judgments/orders was to be refunded to the accused.
ORDER
1. This Order shall also govern disposal of CRR No.706 of 2009 preferred by Rakesh Kumar Tyagi (hereinafter referred to as ''complainant'') u/S 397/401 of CrPC for enhancement of sentence awarded to Raghvendra Singh Tomar (hereinafter referred to as ''accused'') whereby the Court of JMFC, Jaura, District Morena in Criminal Case No.135 of 2007 vide judgment dated 27-08-2008 convicted accused for offence u/S 138 of Negotiable Instruments Act [ in short '' the NI Act''] and sentenced him to undergo one year rigorous imprisonment with fine of Rs.6 lac which has been affirmed by Additional Sessions Judge (Fast Track Court), Jaura, District Morena in Criminal Appeal No.151 of 2008 vide judgment dated 29-06-2009 maintaining the conviction of accused under Section 138 of the NI Act, sentenced him to remain under custody till rising of Court with fine of Rs.6 lac out of which Rs.5,75,000/- was directed to be given to complainant.
2. Similarly, CRR No.598 of 2009 has been preferred preferred by accused under Section 397/401 of CrPC challenging the judgment of his conviction and order of sentence passed by Trial Court as well as affirmed by lower appellate Court for offence under Section 138 of the NI Act. Since facts of both revisions are identical in nature, therefore, for the sake of convenience, they are heard simultaneously.
3. Necessary facts for disposal of present revisions, in short, are that complainant issued a notice through his Counsel to accused as well as M/s Hakim Singh Builders & Contractors Pvt. Ltd. (hereinafter referred to as ''Company'') stating therein that since accused is the Director of the said Company and is engaged in the business of construction, therefore, he is wholly responsible for the conduct of affairs of Company. On behalf of Company, he had executed an oral contract at Guna in regard to construction of work to be carried out under Pradhan Mantri Sadak Yojana and for that purpose, complainant was appointed as petty contractor. After completion of work by complainant, accused had issued a cheque dated 21-07-2006 on behalf of the Company and by putting signature, has given to complainant. When the said cheque bearing no.457451 amount of Rs.4 lac was deposited in the concerned Bank, the same was dishonoured. After expiry of period of 15 days, thereafter complainant filed a complaint under Section 138 of the NI Act before the Court of JMFC Jaura, District Morena. After giving notice, the accused denied the allegation inter alia contending that complainant never worked as a petty contractor either under him or the Company and there was not at all any oral contract with the complainant in regard to construction of work at Guna. In his defence, accused produced documents D1 to D3 stating therein that the alleged cheque was never issued for discharge of any debt or any liability towards complainant. On the basis of averments made in complaint and defence taken by accused as well as documents available therein, the trial Court convicted the accused under Section 138 of the NI act and sentenced him to undergo rigorous imprisonment of one year with fine of Rs. 6 lac vide judgment dated 27-08-2008. Being aggrieved, the accused preferred an appeal before lower appellate Court and lower Appellate Court confirming the conviction of accused under Section 138 of the NI Act, sentenced him to remain under custody till rising of Court with fine of Rs.6 lac out of which Rs.5,75,000/- was directed to be given to complainant. Being dissatisfied, the present revisions have been filed at the instance of accused and complainant.
4. Shri Lahoti, the learned counsel for accused submits that the judgments passed by both the Courts below are contrary to the evidence available on record and contrary to the settled proposition of law regarding discharge of debt and liability. It is further contended that the mandatory provisions of Section 141 of NI Act have been violated. The instant complaint was preferred only against accused wi
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....
Dishonour of cheque – Offence by company – For maintaining prosecution under Section 141 of NI Act, arraigning of company as an accused is imperative and non-impleadment of company would be fatal for....
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....
(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....
Directors can only be held vicariously liable under Section 141 of the Negotiable Instruments Act if specific averments are made in the complaint regarding their responsibility for the company's cond....
Specific averments regarding a director's responsibility for a company's conduct are essential for vicarious liability under Section 141 of the Negotiable Instruments Act.
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