Case: Maharashtra State Elect.Distrn.Co.L.&amp;Anr Vs. Datar Switchgear Ltd

It rather demonstrates that it was the Chief Engineer who was made responsible for looking after the interest of the appellant No. 1 in those proceedings. In this regard, it would be useful to advert to the observations made by a three judge bench of this Court in S.M.S. Pharmaceuticals (supra): “There is no universal rule that a director of a company is in charge of its everyday affairs. We have discussed about the position of a director in a company in order to illustrate the point that there is no magic as such in a particular word, be it director, manager or secretary. It all depends upon the respective roles assigned to the officers in a company. A company may have managers or secretaries for different departments, which means, it may have more than one manager or secretary.” 29. It is trite law that wherever by a legal fiction the principle of vicarious liability is attracted and a person who is otherwise not personally involved in the commission of an offence is made liable for the same, it has to be specifically provided in the statute concerned. In our opinion, neither Section 192, IPC nor Section 199, IPC, incorporate the principle of vicarious liability, and therefore, it was incumbent on the complainant to specifically aver the role of each of the accused in the complaint. It would be profitable to extract the following observations made in S.K. Alagh (supra): “As, admittedly, drafts were drawn in the name of the Company, even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or an employee cannot be held to be vicariously liable for any offence committed by the Company itself.” 30. Therefore, we are of the view that even the Board Resolution, adduced by the complainant, does not establish that appellant No. 2 was involved in the alleged fabrication of false evidence or adducing the same in evidence before the Arbitral Tribunal. In the absence of any such specific averment demonstrating the role of appellant No. 2 in the commission of the offence, we find it difficult to hold that the complaint, even assuming it to be correct in its entirety, discloses the commission of an offence by appellant No. 2 under Sections 192 and 199 of IPC.31. However, insofar as the case of appellant No. 1 company is concerned, bearing in mind the fact that Exhibit C-64 was submitted with the intention to support the averments in the written statement filed on their behalf, which could possibly influence the decision of the Arbitral Tribunal in relation to the conduct of the respondent No. 1 while discharging their obligations under the contract between them and appellant No. 1, we are unable to hold that prima facie, a case of offences under Sections 192 and 199, IPC is not made out against them. It is evident from the observations of the Tribunal quoted in para 9 (supra) that had the Tribunal not doubted the veracity of the said document, it could have made a material difference to the result of the arbitral proceedings.32. It was faintly argued that the arbitral award on the basis whereof the said complaint has been filed has been set aside and therefore, the complaint is liable to be quashed on this ground. The submission is untenable as the offences under Sections 192 and 199, IPC, if made out, exist independent of the final arbitral award. We are, therefore, of the opinion, that it is not a fit case for the exercise of power under Section 482 of the Code, in favour of appellant No. 1.33. We shall now examine whether appellant No. 2 could be made liable for the afore-mentioned offences by operation of Section 34 of IPC. It is trite that Section 34, IPC does not constitute a substantive offence, and is merely in the nature of a rule of evidence, and liability is fastened on a person who may have not been directly involved in the commission of the offence on the basis of a pre-arranged plan between that person and the persons who actually committed the offence. In order to attract Section 34, IPC, the following ingredients must be established: “(i) there was common intention in the sense of a pre-arranged plan;(ii) the person sought to be so held liable had participated in some manner in the act constituting the offence.” [See: Chandrakant Murgyappa Umrani & Ors. v. State of Maharashtra, 1998 SCC (Cr.) 698; Hamlet @ Sasi & Ors. v. State of Kerala, V (2003) SLT 33=III (2003) CCR 189 (SC)=(2003) 10 SCC 108 ; Surendra Chauhan v. State of M.P., III (2000) SLT 209=I (2009) CCR 343 (SC)=(2000) 4 SCC 110 ]34. It is manifest that common intention refers to a prior concert or meeting of minds, and though, it is not necessary that the existence of a distinct previous plan must be proved, as such common intention may develop at the spur of the moment, yet the meeting of minds must be prior to the commission of offence suggesting the existence of a pre-arranged plan. Therefore, in order to attract Section 34 of the IPC, the complaint must, prima facie, reflect a common prior concert or planning amongst all the accused. In our opinion, in the present case, the complaint does not indicate the existence of any pre-arranged plan whereby appellant No. 2 had, in collusion, with the other accused decided to fabricate the document in question and adduce it in evidence before the Arbitral Tribunal. There is not even a whisper in the complaint indicating any participation of appellant No. 2 in the acts constituting the offence, and that being the case we are convinced that Section 34, IPC is not attracted in his case.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]28. A bare perusal of the complaint shows that the gravamen of the allegation is that a fabricated document containing the offending endorsement was tendered in evidence before the Arbitral Tribunal on behalf of MSEB by accused No. 6, who wasof Shirpur Section. It is evident from theparagraphs of the complaint that other accused have been named in the complaint because, according to the complainant,No. 1 was acting under their control and management. It bears repetition that the only averment made against appellant No. 2 is that appellant No. 1, i.e. MSEB was acting under the control and management of appellant No. 2 along with other three accused. There is no denying the fact that appellant No. 2 happened to be the Chairman of MSEB at the relevant time but it is a settled proposition of law that one cannot draw a presumption that a Chairman of a company is responsible for all acts committed by or on behalf of the Company. In the entire body of the complaint there is no allegation that appellant No. 2 had personally participated in the arbitration proceedings or was monitoring them in his capacity as the Chairman of MSEB and it was at his instance the subject interpolation was made in ExhibitAt this stage, we may refer to the extract of a Board resolution, pressed into service by the respondents in support of their plea that appellant No. 2 was responsible for the conduct of business of appellant No. 1. The said resolution merely authorises the Chief Engineer to file counter claim before the Arbitral Tribunal in proceedings between appellant No. 1 and respondent No. 1. It rather demonstrates that it was the Chief Engineer who was made responsible for looking after the interest of the appellant No. 1 in those proceedings. In this regard, it would be useful to advert to the observations made by a three judge bench of this Court in S.M.S. Pharmaceuticalsis no universal rule that a director of a company is in charge of its everyday affairs. We have discussed about the position of a director in a company in order to illustrate the point that there is no magic as such in a particular word, be it director, manager or secretary. It all depends upon the respective roles assigned to the officers in a company. A company may have managers or secretaries for different departments, which means, it may have more than one manager or secretary.It is trite law that wherever by a legal fiction the principle of vicarious liability is attracted and a person who is otherwise not personally involved in the commission of an offence is made liable for the same, it has to be specifically provided in the statute concerned. In our opinion, neither Section 192, IPC nor Section 199, IPC, incorporate the principle of vicarious liability, and therefore, it was incumbent on the complainant to specifically aver the role of each of the accused in the complaint. It would be profitable to extract the following observations made in S.K. Alaghadmittedly, drafts were drawn in the name of the Company, even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or an employee cannot be held to be vicariously liable for any offence committed by the Company itself.Therefore, we are of the view that even the Board Resolution, adduced by the complainant, does not establish that appellant No. 2 was involved in the alleged fabrication of false evidence or adducing the same in evidence before the Arbitral Tribunal. In the absence of any such specific averment demonstrating the role of appellant No. 2 in the commission of the offence, we find it difficult to hold that the complaint, even assuming it to be correct in its entirety, discloses the commission of an offence by appellant No. 2 under Sections 192 and 199 of IPC.31. However, insofar as the case of appellant No. 1 company is concerned, bearing in mind the fact that Exhibitwas submitted with the intention to support the averments in the written statement filed on their behalf, which could possibly influence the decision of the Arbitral Tribunal in relation to the conduct of the respondent No. 1 while discharging their obligations under the contract between them and appellant No. 1, we are unable to hold that prima facie, a case of offences under Sections 192 and 199, IPC is not made out against them. It is evident from the observations of the Tribunal quoted in para 9 (supra) that had the Tribunal not doubted the veracity of the said document, it could have made a material difference to the result of the arbitral proceedings.32. It was faintly argued that the arbitral award on the basis whereof the said complaint has been filed has been set aside and therefore, the complaint is liable to be quashed on this ground. The submission is untenable as the offences under Sections 192 and 199, IPC, if made out, exist independent of the final arbitral award. We are, therefore, of the opinion, that it is not a fit case for the exercise of power under Section 482 of the Code, in favour of appellant No. 1.33. We shall now examine whether appellant No. 2 could be made liable for theoffences by operation of Section 34 of IPC. It is trite that Section 34, IPC does not constitute a substantive offence, and is merely in the nature of a rule of evidence, and liability is fastened on a person who may have not been directly involved in the commission of the offence on the basis of aplan between that person and the persons who actually committed the offence. In order to attract Section 34, IPC, the following ingredients must bethere was common intention in the sense of aplan;(ii) the person sought to be so held liable had participated in some manner in the act constituting theChandrakant Murgyappa Umrani & Ors. v. State of Maharashtra, 1998 SCC (Cr.) 698; Hamlet @ Sasi & Ors. v. State of Kerala, V (2003) SLT 33=III (2003) CCR 189 (SC)=(2003) 10 SCC 108 ; Surendra Chauhan v. State of M.P., III (2000) SLT 209=I (2009) CCR 343 (SC)=(2000) 4 SCC 110 ]34. It is manifest that common intention refers to a prior concert or meeting of minds, and though, it is not necessary that the existence of a distinct previous plan must be proved, as such common intention may develop at the spur of the moment, yet the meeting of minds must be prior to the commission of offence suggesting the existence of aplan. Therefore, in order to attract Section 34 of the IPC, the complaint must, prima facie, reflect a common prior concert or planning amongst all the accused. In our opinion, in the present case, the complaint does not indicate the existence of anyplan whereby appellant No. 2 had, in collusion, with the other accused decided to fabricate the document in question and adduce it in evidence before the Arbitral Tribunal. There is not even a whisper in the complaint indicating any participation of appellant No. 2 in the acts constituting the offence, and that being the case we are convinced that Section 34, IPC is not attracted in his case.