Aswad Construction Company vs Rakesh Singh

This petition under Section 482 has been filed to invoke the extra ordinary jurisdiction of this Court and to quash the Criminal Complaint case

bearing RCT No.3005097/2014 pending before the JMFC, Bhopal.

Bereft of the unnecessary details, the facts necessary for disposal of this petition are that the respondent has filed the criminal complaint Case against

the petitioner for offence under Section 138 of Negotiable Instruments Act, which has been registered as RCT No.3005097/2014. It is claimed that

cheque of Rs.8 Lacks has been executed by the petitioner No.2 on 19.05.2013 in favor of the respondent and same was placed for encashment which

was dishonored .

The complainant No.1 is the Construction company and complainant No.2 is one of the partners of the complainant. Allegedly the cheque was signed

by petitioner No.2 on behalf of the petitioner No.1 company as per allegation made by the complainant under Section 138 of Negotiable Instruments

Act dated 30.08.2013 but the respondent has not made it clear that the petitioner No.2Â was incharge of the affairs of the company and day to day

business of the company.

It is also not averred that the petitioner No.2 has been in-charge of day to day business of the company and while doing so has executed the

cheque.

On behalf of the petitioner, therefore, it is alleged that the entire memo of the company reveals that petitioner No.1 is the company under the

Companies Act, whereas in reality, it is a partnership firm. It is also contended that is the case of firm, the role of accused/Partner of the firm has

to be specifically pleaded that he/she is absolutely responsible for running the business of the firm.

 On behalf of the petitioner, reliance has been placed on M.A. Harin Iqbal and Another Vs. Hiralal Daheria and Another M.Cr.C. No.1758/2015

decided on 14.11.2017, whereby reliance has been placed in the case Standard Chartered Bank Vs. State of Maharastra repored in (2016) 6 SCC 62

and held that the basic allegation required for prosecuting the applicant is missing on the complaint and the applicant cannot be prosecuted

merely because they are the partners of the firm.

In Case of Sonali Thanewala Vs. Rahul Gining Industries reported as 2015 (1) MPLJ 117, a coordinate bench of this Court held that petitioner/director

of the company has been arrayed as a party. Petitioner neither signed the cheque in question nor there is allegation that petitioner is the Managing

Director of the Company. In absence of averments that the petitioner was incharge and responsible for the conduct of business of the company at the

relevant time, the trial Court committed error in taking cognizance of offence under Section 138 of Negotiable Instruments Act. The complaint filed

against the petitioner was dismissed.

The Apex Court in the case of National Small Industries Corporation Limited Vs Harmeet Singh Paintal and another reported as 2010 (3) MPLJ SC

86, laid down the following principle in respect of vicarious liabilities of the director and the requirements in this regard by holding as under:-

i.) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the

accused vicariously liable. For fastening the criminal liability, there is not presumption that every Director knows about the transaction.

ii.) Section 141 does not make all the Directors liable for the offence. The criminal liability can be fastened only on those who, at the time of the

commission of the offence, were in charge of and were responsible for the conduct of the business of the company.

iii.) Vicarious liability can be inferred against a company registered or incorporated under the Companies Act, 1956 only if the requisite statements,

which are required to be averred in the complaint/petition, are made so as to make the accused therein vicariously liable for offence committed by the

company along with averments in the petition containing that the accused were in charge of and responsible for the business of the company and by

virtue of their position they are liable to be proceeded with.

iv.) Vicarious liability on the part of a person must be pleaded an proved and not inferred.

v.) If the accused is a managing Director or a Joint Managing Director then it is not necessary to make specific averment in the complaint and by

virtue of their position they are liable to be proceeded with.

vi.) If the accused is a Director or an officer of a company who signed the cheques on behalf of the company then also it is not necessary to make

specific averment in the complaint.

vii.) The person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time.

This has to be averred as fact as there is not deemed liability of a Director in such cases.

Since the complaint dated 30.8.2013 in the present case does not contain specific averments against the present petitioner as required under the law,

therefore, the trial Court could not have taken cognizance against the present petitioner No.2 Sagufta Shahin. The vicarious liabilities on the petitioner

has not been clearly pleaded in the memo of complaint. There is no allegation also that the petitioner was incharge and responsible for conduct of

petitioner No.1/company at the relevant time.

In view of the above, the order impugned taking cognizance of the offence is not proper, therefore, the complaint case i.e. RCT No.3005097/2014 is

not maintainable and exercising the powers under Section 482 of Cr.P.C.the same is quashed.