Criminal Revision Application No.327 of 2000

16th October, 2000

Petitioner Counsel: Shri. V.P.VAZE
Respondent Counsel: Shri. TEJAS H. BHATTA, Shri. D.T.PATIL

Cases Cited:
FMI Investments Pvt. Ltd. vs. State, 2000 ALL MR (Cri) JOURNAL 127 [Para 4]
Girish K.Bhandari vs. Laxhmi Finance and Industrial Corporation Ltd., 1999(2) ALL MR (JOURNAL) 22=2000 Do.Ch.1012 [Para 6]
N. Chandrsekhar vs. Allwyn, 1999(3) ALL MR (JOURNAL) 1=2000 DoCh. 1028 [Para 6]

JUDGMENT

JUDGMENT :- Heard Shri. V.P.Vaze for the applicant and Shri. Tejas Bhatt for respondent No.1 and D.T. Patil, APP for respondent No.4- state.

2. Rule. By consent. Rule is made returnable forthwith.

3. By this revision application, the applicant has impugned the order dated 22.9.2000 passed in Criminal Case No. 1261/S/ 1997 by the Additional Chief Metropolitan Magistrate, 38th Court, Esplanade, Mumbai. The learned Magistrate rejected the applicant's application for discharge. It may be pointed out that the above mentioned case was filed by respondent No.1 against respondent No.2 and 3 and the applicant alleging the commission of offence punishable under section 138 of the Negotiable Instruments Act. It is the case in connection with the dishonour of the cheque issued by respondent No.2. The learned Magistrate issued process against all the three accused including the applicant who is original accused No.3. Thereafter , the applicant moved an application for his discharge on the ground that at the relevant time he was only an employee i.e. Dy. General Manager of respondent No.2 and not its Director. He further contended that he was not incharge of and responsible for the conduct of the business of respondent No.2. The learned Magistrate, however, did not accept the contention raised by the applicant and rejected his prayer for discharge, observing that there are several allegations made against the applicant abut the role played by him and that whether the applicant is actually liable for the alleged offence, will have to be considered on the basis of the evidence.

4. Shri. V.P. Vaze took me through the averments made in the complaint and points out that there is nothing in it to show that the applicant was incharge of and responsible for the conduct of the business of respondent No.2. Shri. Vaze also referred to the relevant provisions of the Companies Act, 1956 to substantiate his contention that the applicant was only an employee and as such he cannot be held responsible for the dishonour of the cheque which was issued on behalf of respondent No.2 Company. It may be noted that sub-section (1) of Section 141 of the N.I.Act provides that when an offence under section 138 is alleged to have been committed by the company, every person who at the time of the commission of offence was incharge and or responsible to the company for the conduct of its business, can be made vicariously liable for the offence committed by the company. Shri. Vaze referred to the decision in FMI Investments Pvt. Ltd. V/s. State & Ors. (2000 ALL MR (Cri) JOURNAL 127) and he submitted that, in view of sub-section (2) of section 141, persons other than covered by sub-section (1), who are mere Directors, or Managers etc. can be hauled up only if the offence by the Company has been committed with the consent or connivance of the person falling in that category or is attributable to him, for which there should be averment in the complaint or prima facie proof for it. Perusal of the complaint shows that there are following averments. So far as the applicant is concerned, it is not in dispute that at the relevant time, the applicant was Dy. General Manager of respondent No.2 company. Para 1 of the complaint states that respondent No.3 and the applicant (original accused Nos. 2 and 3), are the General Manager and Deputy General Manager of respondent No.1 (original accused No.1) and are also incharge of and responsible to respondent No.1 for the day today activities. It is further averred in the same para that respondent No.3 and the applicant represented to the respondent No.1 ( original complainant ) that they were the persons incharge of and responsible to respondent No.2 for its day today activities. In para 2 of the complaint, it is further averred that respondent No. 2 under the express instructions of respondent No.3 and through the hand of the applicant entered into a contract of purchase of certain materials with respondent No.1. It is further averred that the said contract was placed by the applicant on the express directions of respondent No.3 for and on behalf of respondent No.2. With regard to the issue of cheque in question it is averred in para -4 of the complaint that the said cheque was issued by respondent No.2 under the instructions of respondent No.3 and the applicant. In para 6 of the complaint it is stated that the applicant under the instructions of respondent No.3, whole heartedly expressed regrets to respondent No.1 for dishonour of the said cheque and requested respondent No.1 to re-deposit the cheque. Referring to these averments Shri. Vaze contended before me that it is clear that the applicant was acting under the instructions of respondent Nos. 2 and 3 and therefore, he cannot be held liable for the alleged offence.

6. Shri. Bhatt on the other hand submitted that the averments in the complaint are prima facie sufficient to show the connection of the applicant with the alleged offence. Shri. Bhatt relied upon two decisions of the Andhra Pradesh High Court. First is Girish K. Bhandari v/s. Laxhmi Finance and Industrial Corporation Ltd., (2000 Do.Ch.1012 : {1999(2) ALL MR (JOURNAL) 22}), wherein there was a complaint against the Directors of the Company and the Directors sought to avoid their liability on the ground that they could not be held responsible unless it was shown that they were incharge of and responsible for the conduct of business of the company. It was held that the allegation in the complaint, that they were responsible for conduct of business and offence was committed with their connivance was sufficient to confirm / sustain the complaint. It was further held that whether actually they were so responsible for conduct of the business was a matter which could be decided at the trial stage. Second decision relied upon by Shri. Bhatt is N. Chandrsekhar & Ors. V/s. Allwyn & Anr. (2000 DoCh. 1028 : {1999(3) ALL MR (JOURNAL) 1}), wherein also the concerned learned Judge of the Andhra Pradesh High Court took the same view and observed that whether an assertion or accusation is correct or incorrect will have to be decided during the trial as it is a question of fact. It was further observed that under section 482 Cr. P.C. the court cannot transform itself into a Court of trial by examining the document such as returns of Income tax produced before it. In the instant case the complaint filed by respondent No.1 contains sufficient averments to indicate the role played by the applicant in the alleged commission of offence. Therefore, the learned Magistrate was right in issuing process against the applicant. Whether actually the applicant was incharge of and responsible to the company in the conduct of its business can be decided not at the preliminary stage but after evidence is laid before the court. It would, therefore, be premature to arrive at a conclusion that the applicant has no connection with the commission of the alleged offence. In view of this position, it cannot be said that the learned Magistrate has committed any serious illegality or error in rejecting the applicant's application for discharge. Consequently, no interference by this court, in its revisional jurisdiction, is called for.

7. In the result, the revision application is hereby dismissed. Rule is discharged.

Certified copy expedited.

Application dismissed.