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information technology act

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whether an authorised signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 (for brevity ‘the Act’) without the company being arraigned as an accused. -apex court held No = “141. Offences by companies. – (1) If the person committing an offence under section 138 is a company, every person who, at the time 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 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.” 16. On a reading of the said provision, it is plain as day that if a person who commits offence under Section 138 of the Act is a company, the company as well as every person in charge of and responsible to the company for the conduct of business of the company at the time of commission of offence is deemed to be guilty of the offence. The first proviso carves out under what circumstances the criminal liability would not be fastened. Sub-section (2) enlarges the criminal liability by incorporating the concepts of connivance, negligence and consent that engulfs many categories of officers. It is worth noting that in both the provisions, there is a ‘deemed’ concept of criminal liability.- Resultantly, the Criminal Appeal Nos. 838 of 2008 and 842 of 2008 are allowed and the proceedings initiated under Section 138 of the Act are quashed. 46. Presently, we shall advert to the other two appeals, i.e., Criminal Appeal Nos. 1483 of 2009 and 1484 of 2009 wherein the offence is under Section 67 read with Section 85 of the 2000 Act. In Criminal Appeal No. 1483 of 2009, the director of the company is the appellant and in Criminal Appeal No. 1484 of 2009, the company. Both of them have called in question the legal substantiality of the same order passed by the High Court. In the said case, the High Court followed the decision in Sheoratan Agarwal (supra) and, while dealing with the application under Section 482 of the Code of Criminal Procedure at the instance of Avnish Bajaj, the Managing Director of the company, quashed the charges under Sections 292 and 294 of the Indian Penal Code and directed the offences under Section 67 read with Section 85 of the 2000 Act to continue. It is apt to note that the learned single Judge has observed that a prima facie case for the offence under Sections 292(2)(a) and 292(2)(b) of the Indian Penal Code is also made out against the company. 47. Section 85 of the 2000 Act is as under: – “85. Offences by companies – (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made there under has been committed by a company and it is proved that the contravention has taken place 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 the contravention and shall be liable to be proceeded against and punished accordingly.” 48. Keeping in view the anatomy of the aforesaid provision, our analysis pertaining to Section 141 of the Act would squarely apply to the 2000 enactment. Thus adjudged, the director could not have been held liable for the offence under Section 85 of the 2000 Act. Resultantly, the Criminal Appeal No. 1483 of 2009 is allowed and the proceeding against the appellant is quashed. As far as the company is concerned, it was not arraigned as an accused. Ergo, the proceeding as initiated in the existing incarnation is not maintainable either against the company or against the director. As a logical sequeter, the appeals are allowed and the proceedings initiated against Avnish Bajaj as well as the company in the present form are quashed. 49. Before we part with the case, we must record our uninhibited and unreserved appreciation for the able assistance rendered by the learned counsel for the parties and the learned amicus curiae. 50. In the ultimate analysis, all the appeals are allowed.

   published in   http://judis.nic.in/supremecourt/imgst.aspx?filename=39265 IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 838 OF 2008   Aneeta Hada …..……..Appellant Versus M/s. Godfather Travels & Tours Pvt. Ltd. ………Respondent WITH CRIMINAL APPEAL NO. 842 OF 2008 Anil Hada …………Appellant Versus M/s. Godfather Travels & Tours Pvt. Ltd. ………Respondent WITH CRIMINAL APPEAL NO. … Continue reading

CYBER APPELLATE TRIBUNAL=The Adjudicating Officer shall take the matter and permit the complainant to implead (i) CDSL (Central Depository Services (India) Ltd. (ii) BSE (Bombay Stock Exchange) and (iii) NSE (National Stock Exchange) as parties. The Adjudicating Officer shall direct the complainant to amend the complaint in accordance with the directions made above and thereafter dispose of the complaint in accordance with law expeditiously. In view of the above, the matter is remanded to the Adjudicating Officer, Gujarat State for deciding afresh in view of observations made above.

CYBER APPELLATE TRIBUNAL (Ministry of Communications & Information Technology) Jeevan Bharti (LIC) Building, Connaught Place, New Delhi APPEAL NO. 1/2009 Date of decision May 26,2010 SH. Harish Kumar C.Vakaria …..APPELLANT Through Mr.Manan S.Thakker, Advocate and Mr.Hardik Gupta,Advo Vs M/s India Infoline Ltd.. …..RESPONDENT Through Mr.Y.H.Motiramani,Advo. CORAM: HON’BLE MR. JUSTICE RAJESH TANDON, CHAIRPERSON 1. Whether the … Continue reading

CYBER APPELLATE TRIBUNAL=on 18th January,2008 Online Demat Account was opened by India Infoline Ltd. A/C No.1204470001776230 and POA ID was given as VAHARISH. It is stated that ownership of Online Trader Terminal Software was given i.e. access to Online Trader Terminal Software for the said POA ID (Client ID- VAHARISH). On 22nd February,2008, an application was made by the appellant for the Initial Public Offer of Rural Electrification Corporation Ltd. (REC Ltd.) in the name of Harishkumar Chandrakant Vakharia (HUF). Cheque Number was 163127, cheque amount was Rs.94,500/-, Bank name was ICICI Bank, S.G.Road branch and the Bank A/C number was 029501001050 of HUF saving account. Appellant has submitted that on 7th March,2008, Karvy.com displayed allotment of 121 (amount Rs.12,705/-) shares of REC Ltd. and remaining amount of Rs.81,795/- came to be credited into the above mentioned bank account. It is further submitted that the said shares were not credited in the appellant’s Online Demat Account after they were allotted. A message was alleged to have been displayed that Online Demat Account is closed.

CYBER APPELLATE TRIBUNAL (Ministry of Communications & Information Technology) Jeevan Bharti (LIC) Building, Connaught Place, New Delhi APPEAL NO. 1/2009 Date of decision May 26,2010 SH. Harish Kumar C.Vakaria …..APPELLANT Through Mr.Manan S.Thakker, Advocate and Mr.Hardik Gupta,Advo Vs M/s India Infoline Ltd.. …..RESPONDENT Through Mr.Y.H.Motiramani,Advo. CORAM: HON’BLE MR. JUSTICE RAJESH TANDON, CHAIRPERSON CYBER APPELLATE TRIBUNAL … Continue reading

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