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Try out our Premium Member services: Free for one month and pay only if you like it. Supreme Court of India N. The cheques were dated The cheques were duly presented by the B. The payments not having been made, B.
In the complaint, B. The appellant herein and respondent No. The relevant statement in the complaint read: They are incharge of and responsible to accused No. They are jointly and severally liable for the acts of accused No. These statements were false and by not keeping sufficient funds in their account and failing to pay the cheque amount on the service of the notice, all the accused committed an offence as contemplated in Section of the Negotiable Instruments Act and they were liable to be proceeded against.
The complaint also asserted that all the accused were guilty of the offence in terms of Section of the Negotiable Instruments Act and were liable to be punished therefor. The appellant herein moved the High Court under Section of the Code of Criminal Procedure seeking the quashing of the complaint insofar as it related to him.
The appellant pleaded that he was nominated as Honorary Chairman without any remuneration, sitting fee etc.
Being a nominated Chairman and holding an Honorary post in the Company, he was never assigned with any of the Company's financial or other business activities. He was the Chairman for name sake and was never entrusted with any job or business or constituted a signing authority.
He had resigned effectively on The two cheques that were the subject matter of the complaint, were dated He had not signed those cheques. He was not liable. According to him, the Data Access India Limited had two Managing Directors at the relevant time and they were the ones who were invested with substantial powers of management of the Company and as such the Managing directors were involved in the day to day affairs of the Company and not himself, who had only acted for a short period as Honorary Chairman.
The complaint did not contain adequate averments to justify initiation of a criminal proceeding against him and hence the complaint was liable to be quashed. On behalf of B. The complaint disclosed sufficient materials justifying the commencement of the proceedings against Data Access India Limited and the other two accused including the appellant.
The appellant who was the Chairman of the Data Access India Limited was incharge of and responsible to the Company for the conduct of its business, and no occasion had arisen for quashing the complaint.
The question whether a person is incharge of and responsible for the conduct of the business of the Company, is to be adjudged during the trial on the basis of the materials to be placed on record by the parties.
That could not be decided at the stage of a motion under Section of the Code of Criminal Procedure.
The High Court, on going through the complaint in the context of Sections and of the Negotiable Instruments Act, came to the conclusion that the court could not decide the pleas put forward by the appellant in dealing with a petition filed under Section of the Code of Criminal Procedure and that the defences sought to be put forward by the accused had to be established at the trial.
Taking the view that the complaint disclosed adequate material for proceeding against the appellant in terms of Section read with Section of the Negotiable Instruments Act, the High Court refused to accede to the prayer of the appellant and dismissed the application filed under Section of the Code of Criminal Procedure.
Challenging the said order of the High Court, this appeal is filed by the appellant. Learned Senior Counsel for the appellant brought to our notice a number of decisions of this Court on what should constitute sufficient allegations in a complaint under Section of the Negotiable Instrument Act when a prosecution is sought against a Company and its officers, in terms of Section of the said Act.
Learned counsel placed considerable reliance on the decision of this Court in S. Therein, this Court observed: It primarily falls on the drawer company and is extended to officers of the Company. The normal rule in the cases involving criminal liability is against vicarious liability, that is, no one is to be held criminally liable for an act of another.
This normal rule is, however, subject to exception on account of specific provision being made in statutes extending liability to others. Section of the Act is an instance of specific provision which in case an offence under Section is committed by a Company, extends criminal liability for dishonour of cheque to officers of the Company.
Section contains conditions which have to be satisfied before the liability can be extended to officers of a company. Since the provision creates criminal liability, the conditions have to be strictly complied with. The conditions are intended to ensure that a person who is sought to be made vicariously liable for an offence of which the principal accused is the Company, had a role to play in relation to the incriminating act and further that such a person should know what is attributed to him to make him liable.
In other words, persons who had nothing to do with the matter need not be roped in. A company being a juristic person, all its deeds and functions are result of acts of others.
Therefore, officers of a Company who are responsible for acts done in the name of the Company are sought to be made personally liable for acts which result in criminal action being taken against the Company.Download Bharat Sanchar Nigam Limited (A Govt of India Enterprises book pdf free download link or read online here in PDF.
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