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Sections 138 and 141 of the Negotiable Instruments Act, 1881 – failure of complainant to plead – Directors, Manager, Secretary or other officers of the company for arraying as accused there must be specific pleadings that the accused were in charge of and responsible for the conduct of the business of the company – High court rightly quashed the complaint = Mannalal Chamaria & Anr. ….Appellants Versus State of West Bengal and Anr. …Respondents = 2014 (March.Part) judis.nic.in/supremecourt/filename=41331

 

 Sections  138  and  141 of    the    Negotiable    Instruments    Act,    1881  – failure of complainant to plead  – Directors,  Manager, Secretary or other officers of the company for arraying as accused there must be specific pleadings that the accused were in charge of and  responsible for the conduct of the business of the company – High court rightly quashed the complaint =

 

 failure (and consequential effect) of Pradip Sarkar  to

specifically state in  his  complaint  filed  under  Sections  138  and  141

 of    the    Negotiable    Instruments    Act,    1881    that    the appellants/accused  persons  were  in  charge   of   and   responsible   for the  conduct  of  the  business  of  M/s.  Heritage  Herbs  Ltd.  of  which they were said to be Directors.=

 

 Insofar  as  the  first

complaint is concerned, the  appellants  were  not  even  made  parties  and

therefore there is no question of any allegations being  made  against  them

in that complaint.  

As far as the second complaint is  concerned,  the  only

allegation made is to be  found  in  paragraph  6  thereof  which  reads  as

follows:-

            “That in this context your petitioner refers to  the  provisions

            of Section 141 of the Negotiable Instrument Act,  where  it  has

            been specifically stated that if the  offender  is  the  company

            then the 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,  other  Directors,  Manager,

            Secretary or other officers of the company shall  be  guilty  of

            the  offence,  unless  the  persons  referred  to  above   prove

            otherwise, as per the saving clause of  the  said  section.   In

            section 5  of  the  Companies  Act,  also  made  those  officers

            responsible for crime committed by the company.”

 

   The law on the subject  is  now  very  well-settled  by  a  series  of

decisions rendered by this Court and it  is  not  necessary  to  repeat  the

views expressed time and again.  Suffice it to say, that the  law  has  once

again been stated in 

 

A.K.Singhania  vs.  Gujarat  State  Fertilizer  Company Ltd.[1] to the effect that 

it is necessary for a  complainant  to  state  in

the complaint that the person accused was in charge of and  responsible  for

the conduct of the business of the company.  Although,  no  particular  form

for making such an allegation is prescribed, and it may not be necessary  to

reproduce the language of Section 138 of  the  Negotiable  Instruments  Act,

1881, but a reading of the complaint should show that the substance  of  the

accusation  discloses  that  the  accused  person  was  in  charge  of   and

responsible for the conduct of the business of the company at  the  relevant

time.  

From the averment made in the complaint, which is  reproduced  above,

it can safely  be  said  that  there  is  no  specific  or  even  a  general

allegation made against the appellants.

10.   Under  these  circumstances,  the  complaint  against  the  appellants

deserves dismissal.  A contrary view taken  by  the  High  Court  cannot  be

accepted.  Accordingly, the appeals are allowed and the order passed by  the

High Court is set aside.

 

2014 (March.Part) judis.nic.in/supremecourt/filename=41331

 

NON-REPORTABLE
IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 213 OF 2006

Mannalal Chamaria & Anr. ….Appellants

Versus

State of West Bengal and Anr.
…Respondents
WITH

CRIMINAL APPEAL NO. 215 OF 2006

AND

CRIMINAL APPEAL NO. 217 OF 2006
J U D G M E N T

Madan B. Lokur, J.

1. The question arising for consideration in these appeals relates
to the alleged failure (and consequential effect) of Pradip Sarkar to
specifically state in his complaint filed under Sections 138 and 141
of the Negotiable Instruments Act, 1881 that the
appellants/accused persons were in charge of and responsible for
the conduct of the business of M/s. Heritage Herbs Ltd. of which
they were said to be Directors.
2. In a complaint filed on 31st March, 2001, Pradip Sarkar alleged that
Heritage Herbs had made an offer for collecting money from the market with
a view to allot land to the intending investors. On the basis of the
offer made, Pradip Sarkar invested an amount of Rs.1,50,000/- and Heritage
Herbs issued three receipt-cum-allotment letters for three plots of land
to Pradip Sarkar. At the time of handing over the receipt-cum-allotment
letters, Pradip Sarkar was also handed over three cheques of Rs. 61,000/-
each post dated to 29th October, 2000. These cheques were issued by
Heritage Herbs and were signed by Raj Kumar Chamaria as Chairman of the
said concern.
3. All the three cheques were deposited by Pradip Sarkar but were
dishonoured by the concerned bank. This led Pradip Sarkar to take steps to
issue a notice to and initiate proceedings against Heritage Herbs and Raj
Kumar Chamaria under the provisions of Section 138 read with Section 141 of
the Negotiable Instruments Act, 1881.
4. During the pendency of the proceedings Raj Kumar Chamaria died on
10th December, 2003.
5. Thereafter, Pradip Sarkar moved an application for impleading the
appellants as accused persons. The application was allowed and the
appellants were impleaded as accused persons by the concerned Magistrate by
an order dated 28th April, 2004 and summons issued to them.
6. Feeling aggrieved by their impleadment and summons issued to them,
the appellants preferred Criminal Revision Petitions in the Calcutta High
Court, which dismissed the petitions.
7. The appellants have challenged the order of the Calcutta High Court
and the only contention urged is that no specific allegations were made
against them either in the complaint as originally filed on 31st March,
2001 or in the amended complaint filed on 28th April 2004.
8. We have been taken through both the complaints by learned counsel for
the appellants and find that there is no allegation worth the name against
any of the appellants in either of the complaints. Insofar as the first
complaint is concerned, the appellants were not even made parties and
therefore there is no question of any allegations being made against them
in that complaint. As far as the second complaint is concerned, the only
allegation made is to be found in paragraph 6 thereof which reads as
follows:-
“That in this context your petitioner refers to the provisions
of Section 141 of the Negotiable Instrument Act, where it has
been specifically stated that if the offender is the company
then the 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, other Directors, Manager,
Secretary or other officers of the company shall be guilty of
the offence, unless the persons referred to above prove
otherwise, as per the saving clause of the said section. In
section 5 of the Companies Act, also made those officers
responsible for crime committed by the company.”

 

9. The law on the subject is now very well-settled by a series of
decisions rendered by this Court and it is not necessary to repeat the
views expressed time and again. Suffice it to say, that the law has once
again been stated in A.K.Singhania vs. Gujarat State Fertilizer Company
Ltd.[1] to the effect that it is necessary for a complainant to state in
the complaint that the person accused was in charge of and responsible for
the conduct of the business of the company. Although, no particular form
for making such an allegation is prescribed, and it may not be necessary to
reproduce the language of Section 138 of the Negotiable Instruments Act,
1881, but a reading of the complaint should show that the substance of the
accusation discloses that the accused person was in charge of and
responsible for the conduct of the business of the company at the relevant
time. From the averment made in the complaint, which is reproduced above,
it can safely be said that there is no specific or even a general
allegation made against the appellants.
10. Under these circumstances, the complaint against the appellants
deserves dismissal. A contrary view taken by the High Court cannot be
accepted. Accordingly, the appeals are allowed and the order passed by the
High Court is set aside.
……………………………………J
(Ranjana Prakash Desai)

……………………………………J
(Madan B. Lokur)
New Delhi;
March 25, 2014
———————–
[1] MANU/SC/1081/2013

 

 

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