IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Cr. M. M.O No. 86 of 2007 Date of decision: 27. 5. 2009 Kasturi Lal Malhotra …..Petitioner Versus Dharambir Pathania and others ……Respondents Coram: The Hon’ble Mr. Justice Surinder Singh, J. Whether approved for reporting ?1 . Yes For the petitioner: Mr. K.D. Sood, Advocate. For the respondents : None. Surinder Singh, J. (Oral) The petitioner herein was summoned as an accused in criminal complaint No. 162-III/2002, filed by respondent No. 1 under Section 138 of the Negotiable Instruments Act, for short “the Act”, which was assailed in revision petition No. 9 of 2003/50 of 2005 before the court of Sessions, which was dismissed by the learned Additional Sessions Judge (Fast Trace Court) vide order dated 9.7.2007. Thus, the present petition under Section 482 of the Code of Criminal Procedure has been filed, precisely on the ground that the allegations in the complaint and also in the preliminary evidence on record before the learned trial court, the complainant has failed to prove 1 Whether the reporters of Local Papers may be allowed to see the judgment ?. - 2 - the vicarious liability of the petitioner for the commission of the offence committed by M/s Golden Forest India Ltd., the complaint does not satisfy the ingredients of Section 141 of the Act and the learned Additional Sessions Judge did not appreciate the above contention, which has caused the miscarriage of justice. The notice of this petition was given to the complainant (respondent No. 1) but despite service he did not put in appearance. Sh. K.D. Sood, learned counsel appearing for the petitioner led me through the preliminary evidence on the record as well as the allegations made in the complaint and contended that it was not a case for issuing process against the petitioner to summon him as an accused in this case. To appreciate his arguments, I have gone through the complaint, the statutory notice issued by respondent No 1, reply filed by the petitioner, the preliminary evidence and the provisions of law. The allegations against the petitioner herein, are contained in para 3 and 4 of the complaint which can be usefully quoted as under:- “3.That amount was to mature into Rs. 60,000/- on the date 12.5.2002 which was due towards complainant on the dated 12.5.2002 and for which accused persons No. 1 to 4 had issued cheque to - 3 - complainant to discharge of their liability. 4. That cheque No. 77083 dated 12.5.2002 drawn on Union Bank of India Chandigarh was issued by the accused No. 1 cleared by accused persons No. 2 and 3 and handed over by accused No. 4 to complainant through marketing Agent Smt. Leena Sharma.” Precisely, the allegations as made out from the above averments are that the petitioner had only handed over the cheque through marketing agent to respondent No. 1. The statutory notice issued by respondent No. 1 to the petitioner also makes a reference to the effect that the cheque in question was issued by the accused persons to discharge the liability which fact has been specifically denied by the petitioner in reply to the notice dated 26.8.2002, wherein he averred that he was neither Manager of “M/s Golden Forest Company Ltd.” nor received any money, or issued any cheque as alleged. Further it was also denied that he had made any promise to him in any form, therefore, there was no question of any liability having been arisen against him by issuance of the said cheque by the said company. Respondent No. 1 when examined as CW-1 on 4.11.2002 before the learned trial court, before issuance of process, has admitted having received the reply Ext. CW-1/1, to the notice from the petitioner but he did not specifically allege any - 4 - where either in the complaint, notice or in his statement as CW-1 that the accused-petitioner was incharge of and was responsible to the company for the conduct of its business. Section 141 of the Act deals with offences committed by the companies, which reads as under:- “141. Offences by companies.- (1) If the person committing an offence under section 138 is a company, every person who, at the time of the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in sub-section (1), where any - 5 - offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.- For the purposes of this section,- (a) “Company” means any body corporate and includes a firm or other association of individuals; and (b) “Director”, in relation to a firm, means a partner in the firm.” In S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and another (2005) 8 SCC 89 the Supreme Court while interpreting the above provision held that under Section 141 what is required is that the persons who are sought to be made criminally liable should be, at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision. It is only those persons who were in charge of and responsible for the conduct of business of the company at the time of commission of an offence, who will be liable for criminal action. The - 6 - liability arises on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position in a company. Therefore, in order to bring a case within Section 141 of the Act the complaint must disclose the necessary facts which make a person liable. It is necessary to specifically aver in a complaint that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirement of Section 141 cannot be said to be satisfied. As already stated above, neither there is such averment in the complaint nor in the notice. On the top of it, even it was also not alleged in the statement when respondent (complainant) was examined in the court. Therefore, in these circumstances, it was not a fit case where the trial court should have issued the process against the petitioner as an accused, prima facie holding him responsible for the offence punishable under Section 138 of the Act. Learned trial court as well as the Revisional court failed to notice this fact. - 7 - Therefore, in view of the above, in my considered opinion, the order dated 17.12.2002 whereby the learned trial court summoned the petitioner as an accused and its affirmation in revision by the court of Sessions vide its order dated 9.7.2007, wrong and illegal as such set aside. Consequently, the complaint against the petitioner (Accused No. 4) only is dismissed and the petitioner stands discharged. The matter is accordingly disposed of. Send down the records. May 27, 2009 (Surinder Singh),J. (cm)